Fifty Hours’ Tax Fight

Evening Star, Issue 20315, 25 October 1929, Page 2

Fifty Hours’ Tax Fight

Suspension of Hostilities

Reform Pleased with Hardship Clause

IFkom Ooa Paju.uukkti.ei Rspoexxs.]

WELLINGTON, October 24,

Fifty hours after the sitting had commenced there was a suspension of hostilities in the House of .Representatives on the Land and income Tax Amendment Bill at 5.15 p.ra. to-day. Practically a whole round of the clock had been spent on clause 2, and the committee was dealing with an even wider subject for talk—the hardship clause—when the position seemed to bo growing less several Reform members showing their' approval of the Government amendment, which would widen the scope of the hardship provisions. , „,, _ Mr Coates, tho Leader of the Opposition, who had expressed that view, then went a further stage, suggesting that the committee might agree to an adjournment until 8.30 that evening in order that he might dismiss the position with the members of his party. Mr Coates said he was very thankful to the Minister for what he had done in connection with the hardship clause, and in view of what had happened it might be possible to bring the debate to an earlier close than would have been possible otherwise. He had not yet consulted his party, but he was taking the responsibility for what he was suggestin2. Ho thought he could satisfy the members of his patry as to the reasons for the action ho was taking. Mr Sullivan (Avon) : Does that mean that you are going to make demands ? Mr Coates said that was not the position at all The action he was taking was definitely for the purpose of closing down the debate. It might be possible to dispose of other amendments or to agree to take them on the voices. There was still the question of niortfrage exemptions to be dealt with, but ho thought that could be overcome satisfactorily. There would bo no piotracted discussion. Mr Sullivan: It your proposal tveie accepted would you bo m a position to say we could close down at 0.30 tomorrow night? Mr Coates: Long before that. Tho Leader of the Labour Party (Mr Holland): “ Would it depend on whether you got what you wanted. Mr Coates: Not at all. .... The Minister of Lands (Mr I‘orbes) said ho was sure everybody wanted to see the end of tho debate. There was still a certain amount of business he wanted to put through before tho House adjourned to-morrow evening. I hero were the two taxation Bills, and theio were tho four remaining clauses of the Estimates. , . Mr Coates: If tho hon. the Minister intends to put tho Treasury Estimates through 1 am afraid he will have to make a statement in regard to the London loan negotiations; otherwise he will not get his Estimates through before The Minister said he would bo prepared to make a statement in that connection. If the House was agreeable to an adjournment he would raise no objection if it were going to facilitate the passage of the Bill. LABOUR’S VIEW. Mr Holland (Leader of tho Labour Party) suggested in regard to the hardship clause, then under discussion, that whatever else happened tho Minister should allow that to stand over until next day, and that in the meantime the Tax Department should got some details of examples that could bo icgarded as a reasonable request by the Reform Opposition. “If we get a definite assurance that tho postponement will mean the shortening of the debates,” ho continued, “ and that it will end to-morrow, I would be quite agreeable to any arrangement in that direction, so long as there is something definite. If wo cannot come to a definite arrangement of that sort, then let us go right ahead and go through with it. (Ministerial “Hears, hears.") i take it the Government has made np its mind to go through all stages. (Government assent.) Mr Dickie (Patoa) : We do not know what your party thinks. Mr Holland: The- Labour Party is quite ready to come to an arrangement to finish olf the whole discussion on this Bill some time to-morrow. Mr M Combs (Lyttelton); Finish it off to-night. Mr Holland; He could not finish it to-night because there will be third reading speeches, Mr Forbes (Minister in charge of the Bill) stated that it seemed to be the wish of tho House that it should get on with the business, it was being asked to put through the amending Hill and the annual taxing Bill, if there could be an agreement about the time of meeting the House could push the Bills through and have the third reading speecues in the morning. He would undertake to request tho Commissioner of Taxes to furnish examples of the operation of tho supertax tnat night or next morning, if that was understood -the committee could adjourn till 8.3 U p.m. There was a general agreement that the adjournment should bo taken, and proceedings were consequently suspended at 5.16 p.m. BEACHING AGREEMENT REFORM AND THE HARDSHIP CLAUSE Mr Coates made a statement when tho committee resumed at 8.3 U, following a conference ho had held with the Minister of Lands. Ho first repeated the various statements which Mr Forbes had made in explanation of _ the hardsnip clause as amended, adding: “We now have a clear indi"tition that the various questions we have represented in connection with hardship would, in tho Minister’s opinion, bo fairly met in the clause as amended. The House has decided that there shall be a supertax on lands over £14,000 unimproved value. And we assume that income tax will apply, because this side of the House has no objection to income tax.” So (he continued) it cam© down to the point of what was a fair interpretation of the commission’s power to give relief, and he would like to see included in its order of reference the words “Fair and reasonable grounds whatsoever,” making it clear that the commission has ample power to consider all grounds of hardship.

Mr M'Combs: All taxation is a hardship. Mr Coates retorted that there was no intention that if a man could pay he should not pay. Ho thought the word “may” should bo replaced by “shall,” so that the Tax Commissioner would bo obliged to carry out the commission’s recommendation. REVENUE AND CLOSER SETTLEMENT. Mr Forbes replied with a declaration that the Government desired to get the legislation on the Statute Book, and was willing to consider a fair and reasonable amendment. He could express the intentions of the Government in tho Bill as the securing of revenue, and, secondly, to bring about closer settlement by subdivision of land. Revenue was very important, and the Government, though increased taxation was always unpopular, had to face the position of the country’s finances. In his discussions with tho Leader of the Opposition he had pointed out that it was not the Government’s intention to cause serious hardship to landowners. It did not wish to get revenue at the expense of the taxpayer in regard to the working of his land, nor was it the Government’s desire in regard to mortgage exemption to create a situation which would force mortgagors off their land. Ho suggested that members could feel confident that tho tribunal ho had outlined tljjt afternoon would look at these questions in a fair and reasonable way, taking into consideration the interests of the taxpayer and tho revenue of - the Government. As for the suggestion to include the words “fair and reasonable” in the clause, ho thought that would bo expected of such a tribunal Some members had expressed fears that there would be no consideration for the taxpayer unless ho was in a state of bankruptcy, but ho had replied that the Government wanted the thing looked at reasonably, and ho would have no objection to those words going into the clause relating to the commission. But ho considered it_ necessary to retain the words which left the final decision on the recommendations to tho Tax Commissioner- This had always boon customary and he did not want the Minis ter to bo associated with any question affecting a taxpayer It would be wise to leave discretionary power with the Op™-:-.;-.. .u T n .-,.* Mr Poison: Supposing he pigeonholes their renort, Tho Minister: Tho lion, gentleman seems very suspicious of everything connected with Government departments, but I have confidence in the Commissioner of Taxes. (General “Hoar, hears.”) \

WHAT’S IN A WORD?

Mr Holland rose to complain that tho Labour Party had not been consulted in reaching this agi’eemcnt regarding details of the clause. It was unfortunate that his party had not been consulted; nothing remained now but to deal with the clauses as they came before the committee. Personally ho thought tho hardship clause wanted rediscussing Mr Forbes said tho Leader of tho Opposition had approached him on the subject during tho dinner adjournment just before it was time to resume, and the bells rang before the consultation ended, so it was impossible to consult tho Labou Party. Had the opportunity been given he would have been only too glad to consult tho Labour Leader. Mr Forbes said he was glad to have the support of all three parties. Mr Coates. Oh, you haven’t got our support for this Bill. (Laughter.) Mr Samuel: A little delay may now bo expected from the Labour Party. Another Reform Member: It will wake them up Mr Coates. 1 hope the Minister has not got tho idea that he has the support of the Opposition, and that we are in agreement with the policy of this Taxation Bill. Mr Fraser (sarcastically): Has not tho right lion, gentleman made that very tediously plain? (Laughter.) Mr Coates said the Opposition had not asked for anything except that the Minister should give a clear definition of what- the clause meant. Mr Barnard: Now you arc making a virtue of a necessity. Mr Coates: Nothing of the sort. We could make it a virtue if wo had the support of your party. Mr Martin (Labour member for Raglan) : What we want to know is whether you are going to let the Bill go through. Mr Bitchsner: What has that got to do with you? (Laughter.) Mr Martin; Your party led the House to believe you would withdraw opposition if the Minister did what you asked. Mr Coates. Oh, all right. Mr Forbes said tho addition of tho words “fair and reasonable” would make the clause better than any other additions could make it. Messrs Hamilton and Ansell then withdrew two amendments to the clause. , , , , Mr Coates asked that tho words “fair and reasonable whatsoever” be inserted. Mr Forbes said he would have to consult the law draftsman about putting in the word “ whatsoever.” He didn’t want the issue to be tangled, but to bo straight and clear. Mr Parry: You want a workable Bill. Mr Coates said there was no trickery implied, but tho word “whatsoever” represented a condensation of the thoughts expressed'by thoso whose duty it was to arrive at an understanding. A long argument ensued regarding the word “whatsoever,” and what it might lead to in a court of law. Finally Mr Forbes announced that he had consulted the law draftsman, who assured him that the word “ whatsoever ” meant nothing whatever. (Loud laughter.) “So if everyone is agreeable we can add it to the clause,” said Mr Forbes. Mr Fraser: Oh, add it or any other word that means nothing whatever. The chairman then put the amendment that the words “ on any fair and reasonable grounds whatsoever ” be added. Mr Parry: You are providing the baby’s rattle for the Reform Party. (Laughter.) The amendment was agreed to.

WHAT WAS WON A HOLLOW VICTORY After the exchange of fair words between the Leader of the Opposition and Mr Forbes (Minister in Charge of tho Land and Income Tax Amendment Bill) the House, in committee, to-night proceeded to pass tho various Government amendments desired, and to allow the large batch of Opposition motions either to be withdrawn or rejected on the voices. Labour members followed the process with hilarious amusement and funny interjections. They regarded the result of the stonewall as a hollow victory, and said so. Mr M'Combs gave point to their attitude in a cynical speech. “We are indulging in window dressing,” ho said. “A mock fight is going on with a pretence that something is being won for the farmers, and all the time the Crown law draftsman has had before us a clause which meets all reasonable requirements.” He pointed out that early in the discussion on the Bill, Labour members had asked for a hardship clause, stressing that it must be operative, and not like the hardship clause which the Reform Government put into the Public Expenditure Adjustment Act, which never worked. Mr Mason, another Labour member, declared that the hardship clause as altered contained no legal meaning. Ho held the same opinions as tho member for Lyttelton, but tho latter had got in first. (Laughter.) The hardship clause of the Bill, as finally amended by the Minister, authorised tho Governor-in-Conncil to set up a commission to report on any cases of hardship which arise from the imposition of the special land tax, and proceeds:— If, in any such case, the commission as aforesaid reports that in its opinion the payment of the special land tax has entailed, or would, on any fair and reasonable grounds whatsoever, entail serious hardship to the taxpayer, tho Commissioner of Taxes may, in accordance with the report of tho said commission, and without further authority - than this section, refund the whole, or any part, of the special land tax so paid, and release the taxpayer wholly or in part from his liability to pay such special land tax. PERSONNEL OF COMMISSION. What Reform members described as the only bright spot in the Bill was a modification of the hardship clause in relation to super-tax on land. It was explained by Mr Forbes (Minister of lands) that the amendments introduced by Governor’s Message on Tuesday would enable other considerations than purely financial to be taken into account _by the commission when investigating claims in respect to hardship. Mr Coates (Leader of the Opposition) agreed that tho clause had been improved, but suggested great care in the personnel of the commission. Mr Forbes replied that he had discussed this matter with tho Commissioner of Taxes, and the suggestion was that tho commission should bo composed of a magistrate (or ex-magisf trate), a representative of the farmers, and probably the Ex-Commissioner of Taxes. The commission would make definite recommendations to tho Commissioner of Taxes, who would thus be relieved of a great deai of responsibility. Ho did not think it would be wise for any Minister of the Crown to be a member of tho Hardship Commission. . Under an arrangement subsequently discussed this clause was deferred pending receipt of details from the Commissioner of Taxes as to its operation. It was quite evident that the proposed widening of the Hardship Commission’s order of reference and powers, had loci to a cessation of the fifty-hour stonewall on Short Title and first clause of the Bill.

STONEWALL HARDSHIPS ORGANISED TALK AND SLEEP THE QUORUM DIFFICULTY When the Land and Income Tax Bill had been fought by the Reformers in the House for forty-eight hours the real struggle was commencing against the handicaps of fatigue and difficulties of debate. Owing to the tedious repetition rule becoming a serious menace to even the most expert talker, the hope of an arrangement which suspended hostilities must have been generally welcomed. There bad been careful organisation to overcome the physical difficulties involved in a continuous stream of talk night and day. Reform’s talking Hue had been usually composed of eight shift operators, whose duty was to maintain the debate for three hours while the others slept. However, this system had been frequently broken into and some human effort wasted by tho occasional appearance of the full party While Reform’s task had been to maintain the talk, the Government members and Labourites shared equally in the heavy burden of maintaining the quorum of twenty, for if _ at any moment tho ringin'? of the division bells failed to produce this number the whole proceedings from Tuesday afternoon would have been invalidated. To keep a quorum nearly all tho Government members and a majority of the Labour ites have been obliged to take whatever sleep they can get in the brilliantlylighted Representative Chamber, disturbed by the constant talking, with the occasional necessity to walk into tho division lobbies to vote. The Senior Government Whip (Mr Murdoch, Marsden) has been constantly going for two days, snatching only one hours sleep on Tuesday night and nine minutes on Wednesday. With his associate 'Mr Black, Motueka) he has been responsible for maintaining not only the quorum, but a clear majority for all the clauses of the Bill. The organisation was so [crfect that Mr Murdoch has been able to tell the location of every favourable vote at any moment of the twenty-four hours and to produce that voter in the few minutes’ notice giver by the ringing of the division bells. A VIGILANT CHAIRMAN. The Oharman of Committees (Mr S. G. Smith. New Plymouth) has been carrying an exceptionally heavy load, for his duty has been to restrict discussion to relevant matter. No speech, however discursive, can be allowed 'to pass without careful analysis, and the effect of his efficiency in this respect was freely, though sadly, admitted by the speakers on Thursday afternoon, when twenty-four hours’ debate on clause 2 left them with no matter which could be regarded as anything but “tedious repetition”; consequently some stonewalling efforts wore reduced to mere exchanges with the Chairman, the speaker being called to order and raising another point, -only to be again stopped for irrelevancy or tedious repe tition. After two minutes of this, Mr Holland (Christchurch North), who had

come fresh on duty in the afternoon, gave it up, when ne realised how his material had already been turned over interminably fay others during the previous twenty-three hours. Mr Sykes (Masterton). who followed, provided another example. He had particulars of several local cases of hardship through the operation of the new legislation, but was quickly assured that typical examples were _at that., stage merely “ tedious repetition.” “ But these are two cases of tour brothers,” he protested. The Chairman: We have had typical cases of four brothers already. Mr Sykes looked astonished, and a Laboui member mischievously suggested that these might bo brothers-in-Jaw. Relief has been _ given to the Chairman by Mr Bodkin (Central Otago), Mr Broadfobt (Waitomo), amd Mr Macpherson (Oamaru). Fortunately for the Speaker (Sir Charles Statnam) his services have only been once required, but ho has had to be ready to appear at a moment's notice any time within the whole round of the clock. RESUME OF AMENDMENTS Clause 11. was passed at 3.38 p7m. without a division. . . Tfie House tnen proceeded to discuss amendments to clause Hi. of tho Bill dealing with hardsnip arising from the imposition of a special laud tax. In ail there were fourteen amendments to tho clause, the majority being put forward by the Opposition. The nrst to be dealt with was by Governor-Gen-eral's order, which amended sub-clause Z of section a to read as xollows: —“ li in any such case tuo commission appointed as aioresuid reports tnat in its opinion tho payment ol tno special land tax has entailed or would entail serious nardsmp to the taxpayer, the Commissioner oi Taxes may, 111 accordance with tho report ol the said commission and with lurther authority than this section, refund tue wnoie or any part oi the special laud tax so paid, or release me taxpayer wholly or in part irom ms liability to pay such special land tax.” a furtuer amendment to insert a subulause dealing with tn© commission’s inquiry into tho financial position ol the taxpayer alleging hardship and tho adaptability ot lauds to be used lor agricultural purposes was dropped by the Minister. Mr Tonies stated that the wnoie position of nardsmp was covered by tho clause. Both Mr Lysnar and Mr (Joates congratulated tno Minister on t-iie amended sub-clause, the amendment being carried on tho voices. The next amendment was oy Mr F. Waite (Cluthaj, who moved that the loilowing bo added to sub-clause 2 as above-mentioned:—“ Serious hardship , within tho meaning ot tins suh-section shall, without affecting tho generality ol the term, bo deenica to include the case ol wonting partners subject to the special land tax by reason of their joint ownership whore, in the event ol subdivision, tho several interests oi the partners do not exceed an unimproved value of £IU,uUU each.” 'The Minister, commenting on the amendment, said that sometmug should be leit to the commissions, which he assured tho House would bo competent to deal with tho problems which came before it. i\ir W aite stated that, in view of the Minister’s remarks, lie would bo satislied to let the amendment go on tho voices. Tho amendment was put to the House and defeated. Still another amendment to tho same clause was lorthcomuig from Mr Hamilton, wiio moved tnat serious hardship within the meaning ot the sub-section should include the case of an owner called on to pay special and ordinary land tax an amount m excess ot the sum tor which he would bo liable to be assessed tor both income and land lax under the principal Act. Mr Hamilton contended that such an amendment would have the effect of bringing tho city man and the country landowner into line. Later, on the Minister accepting the phrase “on any fair or reasonable grounds whatsoever,” tho amendments submitted by the Reform members were either withdrawn or allowed to bo defeated on the voices. On the motion ot Mr Forbes the hardship clause was then amended to include the words “ on any fair and reasonable grounds whatsoever.” Mr H. E. Holland suggested that the Minister should consider redrafting the whole clause before sending the Bill to tho Legislative Council. Clause 3 (tho hardship clause) was then passed. An amendment introduced by Gov-ernor-General’s message was passed altering clause 6, relating to the mortgage exemption, by adding sub-clauses enabling mortgages by way of an overdraft to be recognised for the purposes of exemption, the amount taken being averaged for the year, and enabling broken period mortgages also to bo recognised for exemption. Mr Coates said lie thought it would have been better to have left the mortgage exemption at £IO,OOO, _ Mr W. J. Broadfoot (Waitomo) supported this view, and moved an amendment to that effect, but it was ruled out of order on the ground that it would involve an appropriation. Mr J. T. Hogan (Rangitikei) also expressed regret that the mortgage extension had been reduced to £7.500. When clause 6, as amended, was put a division was called for. Tho Minister, replying to Mr M'Combs, stated that if tho clause were rejected the mortgage exemption would be restored to £lo,ooo.—The clause was adopted by 41 votes to 24.