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THE FINANCIAL DEBATE.

[From Otjr Parliamentary Reporter.!

WELLINGTON, Auoust 13

The debate on the financial proposals of the Government, apropos of tho motion for the second reading of the Property Assessment Act Amendment Bill, and Mr Moss's amendment condemnatory of the Property Tax, was resumed at this afternoon's sitting. The speaking up till the dinner adjournment was entrusted to Dr Hodgkinson and Mr Cowan, but little interest was paid to their prosy orations, if one could judge from the empty Btate of the benches. At the evening sitting, in anticipation of a review of the whole question of incidence of taxation at the hands of tho Premier, moat of the hoD. members were in their place?. The Premier undoubtedly made the speech of the session ; indeed, I have not heard him to such advantage since ho took office at the beginning of the present Parliament. Dr Hodgkinson reviewed the Government policy at great length. He thought the Property Tax obnoxious, but would vote against Mr Moss's amendment if it were made a Ministerial question. He spoke approvingly of tho present Government's

effort at retrenchment and disapproved of the Opposition as at present constituted. I Amid cries of "Shame" and marks of disapprobation he said that Sir Robert Stout; was deserving of great censure for bringing j " that man Vogel" back to politics. He | oxpressed tho opinion that if the assets of t the colony could be realised by tlio sale of our railways, tho interest on tho coat of, which was L 750.000 a year, while they paid ■ only 2£ per ceut. tho Property Tax '. Thou be got rid of. Ho condemned the proposal for the construction of the Otago Central Railway as tending too much in tho direction of increasing the indebtedness of , the colony. I Mi- Cowan believed that the country was j opposed to disturbing tho incidence of taxa- j tioti. lie favored au income and property | tax, but was strongly opposed to a land tax. j In the course of ids long speech he generally , approved of tho policy of tho Government, j particularly of Mr Richardson's land nd- j ministration, and condemned Mr Balance's j borrowing tendencies, saying _ that tho enunciation of that doctrine as disclosed on the previous evening was against the best interests of the colony. Although the present Ministry were not immaculate, the country would be best served by their continuance in office.

Mr Taylor hoped that next session tho Government would legislate in the spirit of Mr Moss's amendment, which had his support. The Premier expressed his thanks to Mr Ballance for hia temperate speech, though ho could not compliment tho hon. gentlem: n upon its strength. For his own part, he had deferred his main speech till other members had spoken, lest the discussion should degenerate from the financial debate to one of a land tax versus the Property Tax. Mr Ballance was suppoited by many members, who expected that he would give them a land and iucome tax instead of the Property Tax, but he called those hon. gentlemen's attention to the fact that the Loader of the Opposition promised nothing of the kind, but departed from his old ground, and had declared for the Property Tax with certain modificatior.3. The only difference between the hon. gentleman and the Government was now that ho desired to exempt certain improvements and agricultural implements which the Government did not see their way to relieve. Amidst ironical laughter Sir Harry ridiculed the want of discipline amongst the Opposition, when an old member of the party could rise and move an amendment which ruined a debate for which the Leader had arranged with the Government. If the term was Parliamentary he would say that tlurc was a strong spirit of larrikinism and a desire to teaso the Government prevailing amongst the Opposition. What wa3 to become of the country while this state of disorganisation existed? (Laughter.) The serious work of the country would never bo carried on if party questions were to be fought in this way. He ridiculed the terms of the amendment, and ironically suggested that they should be altered so as to declare that all taxation was harassing in its effect, and an obstacle to the progress of the colony. The amendment, if it meant anything at all, would apply to e\ cry tax that could be imposed. Replying to Mr Ballance's strictures upon tho financial operations of the Government, he thought it extraordinary that the Opposition should object to the inclusion of the primage duty in the surplus. That duty was not applied to any special purpose, but was simply part of the ordinary revenue of tho year. As a matter of fact he had applied L 4,000, besides the primage fund, to the reduction of the debt, and it would be just as reasonable to say that that money could now be reckoned as part of the surplus. Those who tried to argue away the surplus were simply depreciating the country, at which he expre-sed astonishment. There being a bilance over and above the requirements of tho year, the amount he claimed must be a surplus. He denied that the Post Office Siviogs Bank's funds wero trust funds in the proper sense of the term. At the present moment the Post Office had L 324.000 invested in London in guarautfed debentures, or about double the amount of any possible run on the institution. The Government were quite alive to the necessity of having available funds to meet any possible emergency. Mr Ballance had advocated moderate borrowing, but oucc borrowing was begun it was hard to keep it within bounds. Ail his (Sir Harry's) official life had Ueen taken up in restraining borrowing.—(L,r,u-.\ laug'utur.) He waa not going to prove that assertion, but the time would come, and then ho would do so.— (A Voice: "You'll fi.nl it hard': a d another: Araludio ad absurd tun.) It was all very well to talk of earmarking loans. Both the present and late Governments had tried it, but without success. There was no safety in moderate borrowing, and the only wise course was to say : "Wo won't borrow any more."—(Chee;e.) The absolute pledge, and nothing but the pledge must, bo tiken.—(Applause.) As to railways, the Government had found that it was necessary to complete the Otago Central line, in order to get a return from tho L 500.000 already spent. The other lines were part of a perfect icheme of public works. If the House rejected that scheme further borrowing would be inevitable. If he had known in ISS7 what he now knew, ho would have put L' 200,000 for the- line into the schedule. of that yeir's loan. Now the choice lay between the use of the Land Fund and further borrowing. As to the Puhipuhi Tramway, Ministers had satisfied themselves by personal inspection that it could be completed by means of the sale of the forest, and a surplus remain towards the North of Auckland Trunk Hue. Regarding the North Island Trunk line, ho favored the Stratford route, on the ground that it was better to go through settled country. They therefore proposed to extcrd the southern end of the line, and connect both ends with the Stratford district by a road. Their policy was to avoid further borrowing, and yet complete tho railways to a point with which everybody would be satisfied for some years. Mr Ballance, on the other hand, wanted to spend all the available money as soon as possible, and then borrow more. Mr Buchanan : What about the Ekcthu-na-Woodville line ? i

The Premier : Well, if the hon. member wanted to kuow, he thought that that line could very well rest where it was for a while. As soon as it was completed it would take traffic away from the Welling-ton-Manawatu, which whs deserving of a better fate, seeing that the people of Wellington had undertaken with their own capital what was an importantcoloni.il work. With regard to the settlement of the land, he contended that hia Government were thoroughly in sympathy with the settler?, and had done a great deal moro than their predecessors, only that they had made lefs noise about it. The amendment, if carried, would not attain the imposition of a laud and income tax, for those who would have to take the place of the Government if it were carried did not advocate that tax. The real object of the amendment wa3 simply to discredit the Government, and he submitted to the House that it was useless to pass any such vote on such an abstract resolution. Very few members were agreed as to what a land and income tax really meant, and nob-uly had the least idea whsre the revenue was to come from which it was proposed to abaudon in favor of the proposed tax, Mr IJallpnc l , when formally in office, had, assisted by Sir R. Stout, Sir J. Vogcl, and Mr Lurnach, j shrnnk from carrying out their plcdgo to substitute a land and income tax. The fact was that he then spoke with i a sense of responsibility, and they had found • it to be impossible to carry out their pledge. No member of the Houso. could say how the thing could be done— | whether by a progressive or a fixed tax; j and he ventured to Bay that the country would never submit to a progressive tax. There was already a tax of one penny in the J £ on all improved lands in the colony ; so j that all they were now fighting about was j whether improvements or incomes should be taxed. When it was shown that the holding | of large estates was detrimental to the colony he was prepared to tako notion, to break them up, but in the meantime he . could not consent to any penal taxation, j Why should a bank with sovereigns in its coffers, or a warehouse filled with drapery goods, not have to contribute to the revenue as well as the farmer or the landholder ? He had ascertained that the large landholders paid more in property tax than under any land and income tax that could be collected. The [proof that a change was desirable and

practicable rested upon the other Bide, and they had already spent three years in office without carrying out their policy, tic regretted the amount to which the Pnpciiy Tax had risen, but claimed that without i; tho finances of the colony would have g-.ne j to the dogs, and that the country was quite satisfied with it and with the work of tho Government. What would the country and tho world think of the House for such a discussion just at a moment when our finances were being rehabilitated t Whether the Government which were bringing the colony out of financi.il chaos should continue in office was really the question. He was not wedded to tho Property Tax as against other forms of taxation. All his leanings were in favor of a land aud income tax, but he could not at present see any better form of taxation. If the House chose to carry the amendment, the responbibility must rest with the House and with those who with n l'glit heart entered upon work which they knew very little of. He was prepared to assist in making the tax a fair bearing tax, but he would not accept at the hands of the Opposition such an amendment as that of Mr Moss. Ministers, however, would listen to any reasonable amendment in committee. Jlo would adhere to the Public Works policy of the Government ; but they would submit to no further borrowieg if they could help it,—(Cries of " Oh.") Yes, be would resist that as far as he was able. In conclusion, he asked the House either to get on with the important business of the country, or straightforwardly put the Government off tho benches at once.— (Cheers.) Mr Walker thought it was refreshing; to hear the Premier talk about moderate borrowing, when he was the arch-borrower of New Zealand. He declined to prophesy, but he said that the Opposition were not satisfied with the financial operations of the present Government. He (the speaker) affirmed that Mr Ballance had not declared himself in favor of further borrowing, but said that borrowing was preferable to borrowing from Trust Funds, Mr Ward considered the Property Tax injurious to the interests of the colony, and that it would have to be either amended or abolished. He complained that the Premier had not given the House statistics that would enable them to judge between the alternative forms of taxation. Though he disapproved of a progressive land tax, he would like to see a tax placed upon unimproved lands. The statistics furnished by tho Property Tax Department showed that out of 28,000 payers of tho Property Tax 9,347 were of the farming and grazing class, besides those who must contribute through the loan companies. The farmers were thus very much larger contributors than any other class of people. Speaking at some length in opposition to the Property Tux, he was especially severe on the manner in which it bore upon the Wellington-Manawatu Railway Comnany, preventing the shareholders from getting any adequate return for their capital invested. He claimed that a land tax had been a success in Victoria. Against the Property Tax ho brought a long series of indictments to show how it handicapped industry of all kinds. He would strongly support Mr Moss's amendment whatever its consequences. On the motion of Mr Tanner the debate was adjourned till 2.30 next day, the House rising at 11.45 p.m.

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Bibliographic details

THE FINANCIAL DEBATE., Evening Star, Issue 7985, 14 August 1889

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THE FINANCIAL DEBATE. Evening Star, Issue 7985, 14 August 1889

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