FINANCE BILL

Greymouth Evening Star, 8 March 1933, Page 5

FINANCE BILL

UNPAID RATES PENALTY HOSPITAL BOARD OVERDRAFTS [PUB PBESB ASSOCIATION.] WELLINGTON, March 7. Authority for remission of the 10 per cent, penalty on unpaid rates, is an important provision in the Finance Bill (No. 4). Power to remit the penalty was given under legislation, 1931, and the authority was rsubsequentlt extended to apply to 1932. It is now proposed to extend legislation for another year. The clause follows the form of that originally enacted. Only one material alteration is made, and that is to give additional power to local authority to remit a portion of the 10 per cent, penalty. A measure of relief in respect of the obligations concerning bank overdrafts is given Hospital Boards under another clause. Mr. Coates said that owing to heavy calls made on their finances for charitable aid and unemployment relief, legislation was passed last year' validating the excess overdrafts of Hospital Boards for the year ended March 31, 1932, where such overdrafts had been previously approved by the Minister of Health. The excess overdrafts in all such cases were limited to one-fourth of the estimated contribution from local authorities, together with onefourth subsidy for the yeai’ then ended. In some instances, the Boards which had incurred such overdrafts last year had not yet been able to place their finances on a satisfactory basis, and certain other Board's had also found themselves in difficulties. It was proposed, therefore, to authorise cess overdrafts as at the end of the present financial year. Notwithstanding, the present economic conditions, it was anticipated that the aggregate of such excess overdrafts, as at the end of this financial year, would be lower than the corresponding figure last year, showing that Hospital Boards, as a whole, were making reasonable efforts to stabilise their finances.

RURAL CREDITS Another clause is intended to meet the position of a member of a Rural Intermediate Credit Association, to whom it desired to make further advance, in excess of the maximum which can at present be made to him. The clause gives power’ for the capital of the Association to be increased by allotting additional shares to the existing members.

Greater flexibility in administration of the Rural Intermediate Credit Act is the object of another clause. Under the present legislation, no loan is to be granted for a period exceeding five years. Owing to present economic conditions, it is considered impossible in certain cases for repayment to be made in that time, and the clause is designed to enable an extension of time to be given in appropriate cases.

SUPERANNUATION RIGHTS Several clauses deal with the rights of contributors to State superannuation funds, the principal object being to remove the anomalies which have been discovered'. One clause gives public servants the right to elect to contribute to funds on the basis of a higher salary, where reductions in pay have been made the National Expenditure Adjustment Act. It was explained by Mr. Coates that under that legislation, the contributor to the Government Superannuation Fund, had the right, on or before September 30, 1932, to elect to continue to contribute to such superannuation fund, as if his salary had not been reduced. It had been ascertained that certain officers, who elected to contribute on the higher amount when the salary cut was imposed in 1931, were of opinion that no further election by them was required, and as a result they had taken no action. It was proposed, therefore, to extend the time in which such election might be made, to the end of next May. Another' clause deals with the question of refund of contributions to superannuation funds. The Minister said that certain difficulties had arisen in the administration of the legislation dealing with moneys overpaid by contributors to various superannuation funds, where such contributors to various superannuation funds had not elected to continue their contributions on the higher basis after reductions in salaries were effected. The National Expenditure Adjustment Act provided such over-payments were to be held by the Superannuation Board for the credit of the contributor. Cases had arisen where, after adjustments had been made, dealing with the amounts overpaid, contributors had retired. The retiring allowance had been based on the average salary for the past three years, giving an' average salary higher than that on which such contributor had retired. This was inequitable in that such contributor received the full benefit of credit for overpaid contributions, and later retired on a higher average salary than that which he was deemed to have been paying in on. The clause made it clear that the credit to which such contributor was entitled, should be the difference in tho rate on the basis of salary on which the contributor’s retiring allowances was based, and the higher salary from which he had been reduced.

OLD AGE PENSION Under another clause., it is made clear that absence from New Zealand on account of service in the Naval, Military or Air Forces shall not disqualify a person from receiving the old age pension. PROFESSIONAL CERTIFICATES All medical practitioners, registered masseurs, nurses, maternity nurses and midwives and opticians practising in New Zealand, will, in future, b e required to obtain annual practising certificates, for which a lee will be paid. The principal object is to guarantee the expense of administering the various Acts under which these professional people are licensed. Discussing medical practitioners, Mr. Coates said that last year the cost of administering the Act governing them exceeded the registration fees by over £65. The present Bill would repeal the existing fees, and give the Go vei-ncr-G on (u-al-in-Council, power to introduce a new scale. At present the only income under the Nurses and Midwives’ Registration Act was from fees paid by pupil nurses sitting for their exams and obtaining registra-

tion. It would' appear that the whole profession should share the cost. The revenue under the Opticians Act had previously been adequate, but it was decreasing each year, and probably the revenue received next year would be insufficient to meet the costs of administration. Another clause in the Bill removes any doubt concerning the power to force registered plumbers to pay a license fee of 5/- yearly.

MINING PRIVILEGES. The right of Wardens to grant mining privileges is restricted by another clause. The object is to control the issue of mining privileges in districts where the Unemployment Board is assisting prospecting. Two other clauses relating to mining are contained in the Bill.

Mr Coates explained that experience had shown that the application of geophysical surveys had been the means of locating suitable sites for boring for gold. The Government had therefore purchased scientific instruments, and had carried out surveys in parts of Otago, based on the data disclosed. It was intended to bore selected areas. In some cases land was freehold, and in other cases the land might be taken by the Minister of Mines, under the Mining Act, 1926. In order, therefore, to enable the Government to carry out these important functions, it was absolutely necessary to obtain wider power to resume land for mining purposes under the Mining Act. A landowner was entitled to obtain compensation under the Public Works Act' for the loss of land resumed.

A clause in the Bill stated that, in respect to any land so resumed, the amount of compensation payable by the Crown should not include the value of any gold or minerals contained therein, but should include all sums reasonably expended by the owner or occupier, in carrying on mining operations on such land. Another clause would enable the Minister of Mines to dispose of lands geophysically surveyed, by open competition. The proceeds of the sale would be accredited to the Consolidated Fund, and should not be deemed to be goldfields revenue.

DOMINION’S COINAGE A clause empowering the Minister of Finance to arrange with the Royal Mint for the issue of special silver and copper coinage for New Zealand, forms one of the most important provisions in the Finance Bill, No. 4. “Silver coinage,” said Mi’ Coates, “is intended for internal circulation only, and in most countries there is no trouble in this respect, as each country has its own currency, and this is not acceptable elsewhere. In New Zealand, however, the British silver coin is used, and it has been found necessary to take steps to prevent its being used for purposes for which it. was never intended. Legislation was passed in the Finance Act No. 2 (1931) authorising the issue of regulations dealing with the export and import of coined silver, and providing that silver dealt with in contravention to the regulations was to be forfeited. That legislation, however, has been insufficient to stop the drift of silver from this country. Since the recent increase in exchange to 25 per cent., the position has become even more difficult, and to avoid endless trouble involved in making the prohibition effective, the Government has decided to arrange for the issue of special silver coinage for New Zealand, thus taking away the incentive to use silver as a means of evading exchange.” The Royal Mint has already been communicated with in this connection, and possible arrangements are under discussion. It will take some months for them to be completed, to have designs prepared and dies, etc., made, and have coins struck off and delivered in New Zealand. The present clause is designed to enable the Minister of Finance to proceed with the proposal, and a complete Coinage Act will probably be brought forward next session, when full information on all aspects of the matter will be available. Under the terms of the Bill, silver and bronze coins minted in accordance with this arrangement are to be legal tender in New Zealand, and the’Minister is empowered to purchase from the Royal Mint such amounts of coins as may be necessary for public requirements in New Zealand. The cost of the coins and of their carriage to New Zealand may be paid out of the public account. In order further to tighten up the restrictions against the exportation of silver coinage from New Zealand, until the Dominion possesses its own issue, another clause in the Bill enables the Crown to seize coinage which any person is attempting to take out of the country. Under the legislation passed in 1931, it was provided that coined silver’ imported into or exported from New Zealand, in breach of the regulations, was to be forfeited. In practice, the Minister explained, it had been found that the provision was not wide enough, in that silver seized was actually taken possession of before it was exported. In other’ words, it was in the act of being exported. The difficulty was being overcome by enabling silver, which a person was merely attempting to export, to be seized.

SOLDIERS’ SETTLEMENT Legislation dealing with the pledging oil discharged soldiers’ settlement securities by the Government, to th banks, is included in the Bill., Unc.ei the legislation passed in 1931, the Minister of Finance, was empowered to transfer to the Consolidated , Funs out of the Discharged Soldiers’ Settlement Account, an amount not exceeding that representing the former revenue surplus transferred to that account in 1920. That amount was originally £13,000,000, but it. was subsequently reduced to about £10,000,000. In order to provide cash to hypothecate mortgage securities m enable the transaction to be made, the Minister was further empowered to the. Discharged Soldiers' Settlement Account. The Bank of New Zealand and the National Bank agreed to lend on the security of the deed of hypothecation, but required that there should be a permanent appropriation of moneys required to pay interest and principal, in the same way as there is. a permanent appropriation for the interest and' principal of other Government loans, under the New Zealand Loans Act. The request of Ihe hanks seemed to the Government to be reasonable, and an undertaking was given to introduce legislation to give effect to it, said Mr. Coates, in explaining the clause.

Moneys have been advanced, and

..his clause carries out the undertak- ( ng. In addition to providing a permanent appropriation, the clause provides that any payments of interest made in the first place out of the Con- ; solidated Fund', and subsequently re- 1 couped to that fund out of future moneys in the Settlement* Account, shall not have the effect, of lowering th e limit of the Minister’s borrowing powers. The clause also makes it clear that the moneys transferred shall not be allowed to be part ot the public debt. Matters in the clause, other than provision for a permanent appropriation, do not concern the banks in my way, and are merely to clear up any possible technical doubt whatever of the existing legislation. P.O. CERTIFICATES Post Office investment certificates, which have been withdrawn from issue, pending the completion of the Government’s loan conversion scheme, form the subject of a clause in the Bill. Mr. Coates said that the present issues were for fixed periods of two years and five years, respectively, and the proceeds of sales were available toward' the general loan finance of the Government. It was desired to alter the present system, to bring it more into line with the British savings certificates scheme. Under the new proposal, certificates would be redeemable on a. table basis, at certain fixed periods prior to maturity, and would also bear interest beyond tb.e stated maturity date, to meet the convenience of investors in special circumstances where the holder was desirous of allowing the investment to run on after the maturing date, or where he failed to present the certificate for redemption. STAMP DUTY EXEMPTIONS Under the New Zealand' Debt. Conversion Act, and the Finance Bill which was passed by the House on Monday, all interest is reduced in effect to 4 per cent., and the existing 10 per cent, stamp duty imposed by the National Expenditure Adjustment Act of last year does not apply. The legislation passed by the House re-

cently, however, does nor apply to existing Government securities bearing < interest at 4 per cent., and under. ; Such securities are, therefore, still < subject to the 10 per cent, stamp duty. Tho clause in the Bill makes it clear that, with respect to interest accruing after March 31 next on all securities, the 10 per cent .stamp duty shall not apply, thus freeing from this duty securities bearing interest at 4 per cent., and under. MOTOR VEHICLES TAXATION A proposal to rax road vehicles, which are not using motor spirits, on mileage basis "which would be approximately the equivalent of the petrol tax is contained in the Finance Bill No. 4. The principal vehicles affected are those using kerosene or heavy oil as fuel, and those deriving power from steam and electrically-driven motor vehicles, including trackless trolley omnibuses. It was explained by Mr. Coates that special taxation of motor spirits, including the surtax, amounted to 101 d per gallon, and of this 6d was credited into Main Highways Revenue Account, the remaining 4?.d going to the Consolidated Fund. At present, vehicles using fuel or power for propulsion other than motor spirits did not pay this tax. ‘•Taking the ordinary two or three ton pay load, a motor truck doing ton miles to the gallon would pay one penny per vehicle mile,” said Mr. Coates, and one an annual mileage of 20,000, it would pay over £B3 a year in special motor taxation. It is stated there are at present 37 commercial vehicles operating in Auckland, not paying petrol tax, and the revenue from these vehicles would amount from £3OOO to £ 1000 a year. At a very small cost, an ordinary motor vehicle can be converted into a vehicle deriving power from non-taxable fuel, and ■ unless some sp.?ps are. taken it is oh- [ vious that revenue from the motor i spirit tax will he seriously affected. JI - is estimated that the niileiiiv tax will ; produce about £2u.000 for the. torihr coming year. However, it is the pojent tial loss of roveimo that is mainlj ' responsible for present. legislation. The Minister said the necessity for

the legislation was increased in view of the recent rise in the petrol tax, and if some steps were not taken to ensure this class of vehicle was placed in a similar position to the petroldriven vehicle, the tendency would be for owners to have their vehicles adapted to the use of other forms of fuel to evade taxation. The practice of using crude oil benzine and power kerosene as well as some other substi- . tures for pure spirits was growing. It was difficult to define just what vehicles would be subject io the tax, as a varying proportion of motor spirits might be used in conjunction with other forms of propulsion. However, if it were later ascertained that legislation was inequitable, adjustments could be made next session. The bill provides every owner of motor vehicles affected shall lodge before the seventh day of each month, beginning April next, a declaration showing the total number of miles of public highway over which the vehicle was used during the preceding month. The following scale of taxation is provided:— Heavy motor vehicles (Glass A. I per 100 miles ;>/-. Glass B, 5/3. Glass C. 6/-. Glass D. 6/9. Class E, 7/3. Class F, 7/(5. Class G. 8/3. Class 11. 9/-, Class I. 9/6. Class .1. 9/6. Class K, 10/3. Class L 10/9. Class M, 11/6. Class N, 12/-. Class O. 12/9. Class P, and Q, 13/15. Other motor vehicles 4/9. To each of these amounts will be added the additional 10 per emit, of the proscribed rate for every 10 miles or fraction by which, the total distance exceeds a multiple of 100 miles. It in any month the vehicle is used over less than 100 miles, the tax payable shall lor each complete mile over which the vehicle is used, be at the rate of l-100th part of tho appropriate amount for the complete 100 miles. The amount of 'v. ascertained by t the above commit ation shall (a) be reduced by 200 per cent, if the motor I vehicle- uses electricity as its motrte - power, and th) b - reduced or increased • proportionately io < very increase or decrease, in ('u-toms duty (exclusive I ot priiPJ-j' dm v surtax) imposed on spirits f l!i<‘ date oi tlie pass- - ing of the bill. Five per cent, of the ■ amount collected will be paid into the Rost Office account for administration ■ expenses. The balance will be divided

between the Main Highways Fund and Consolidated Fund, in the same proportion as the petrol tax is now divid ed. Failure to comply with the requirements of the bill, or the making of false declaration renders the owner liable on summitry conviction to a. fine of £lOO. A further clause in the bill clarifies the existing legislation and makes it ■ impossible for a refund of motor spirits taxation to be made in respect of a vehicle carrying demonstration registration plates. The bill also provides for retention in the Consolidated Fund of an amount not exceeding £500.000 of motor spirits taxation revenue which would otherwise have gone io Main Highways fund. Mr. Coates explained that, this amount would be retained for a further year, thus benefiting the genera! finances. TREASI’RY DILLS ISSUE. “A,uthorily for the issue of ’rroasury Bills io the’ extent of one-half of Bv> (■climated expenditure, instead of oiief.iiird, as at present, is sour,lit bv a rlati.se in tic' Finance Bill.” Mr Cobles said. “Fnlii recent years, where a largo balance was carried forward in the Consolidated Fund, it was unnecessary to utilise to any great, extent ibo provisions dealing with Treasury L’lls. Owing to the depletion of our resources. however, it is necessary to roly more extensively on Treasury Pills to meet, ordinary expenditure until the revenue comes to hand later in the year. This applies more particularly in the case of income tax, which provides a substantial amount cf revenue, but. which is- not received until near the end of the financial year, although the expenditure in anticipation of such revenue is more or less constant. ■ Unde’- the Imperial system,” continued the Minister. “Treasury Bills may bp issued up to the full extent of the estimated expenditure, but it. is net. considered necessary, for the time being, to widen out - legislation to such an extent. It may bn added llitir. the deficit, for last year and this vc.ir* will, in the meantime, bo financed on fiTeasury Bills. This will decrease the authority available, for

next financial year accordingly. In addition. we have to allow for the fact that, we will be budgeting foi' a deficit next financial year.” GENERAL. Contributions by local authorities toward the relief of earthquake sufferers in tho Gisborne and Wairoa districts, are validated by a clause in the Bill. t An amendment to the Mortgagors Relief Act is made by another clause. Mr Coates said that the Act of 1931 gave relief to mortgagors only in respect of mortgages executed before April 17. 1931. Mortgages included agreements for sale and purchase. The effect of the existing legislation, therefore. was that if money had been lent before that date, and interest commenced to run before that date, but the formal deed of mortgage was dated a single day after April 17, a mortgagor could not obtain relief. The present clause was designed to give the protection of the Mortgagors’ Relicf Act to mortgagors and purchasers in such cases. Wider powers in the investment of moneys by lhe Public Trustee, acting on behalf of infants or persons of unsound mind, are conferred. Amendments to the Local Authorities Interest. Reduction and Loans Conversion Bill were introduced _by Governor-General’s message, and Were agreed to. Mr. Coates said that they were purely verbal. The report of the discussion in the House, on the Finance Bill proposals, will be found on Page 12, of this issute.