FARMERS AND TAXATION

Greymouth Evening Star, 8 August 1936, Page 7

FARMERS AND TAXATION

BUDGET PROPOSALS ATTACKED

UNION PRESIDENT’S VIEWS

[PER PEESS ASSOCIATION.]

PALMERSTON NORTH, August 7'. In an address to farmers at Feilding, Mr W. W. Mulholland, Dominion president of the Farmers’ Union, condemned the action of the Government in its budget proposals on the company and graduated land taxes. The Government, had stated its intention to reduce indirect taxation and, speaking generally, that coincided with the ideas of the union, but on

his good intention the Government

had failed badly. Taxation of company income -was, he claimed, indirect

axation, for the tax was passed on

to clients and customers of the conij pany and was, without doubt, one of the, worst forms of indirect taxation in the country. It had a tendency to check enterprise, and he was surprised to find the Government doubling that tax. One of the cardinal principles of taxation was that it should be levelled at where it remained, but this was not the case with company taxation, for it was passed on and not. carried by the shareholders. The only justification for the imposition of this tax was that it was easy to collect. Speaking of the imposition of the graduated land tax, Mr Mulholland said he was not surprised at the Government’s action. It had been introduced with a complete misconcep-

tion of its effect. The Government had spoken of helping the working farmer, but he considered that this tax would have the opposite effect. The sheep farmer, for instance, required a considerable area of land to make a living. As an illustration, he referred to a farm with an unimproved value of £13,000. That was not a large farm, and unless the owner worked himself he did not have much of an income. Actually, such a farm would produce an income of about £4OO if not heavily mortgaged, and out of that he would, under the tax, have to pay £lOB per annum, and would not. be allowed to deduct that sum from his income tax return. That was the position of the working farmer, and. if the Government considered that a fair thing, then all he could saj r was that the Government was daily losing money. It was an unfair tax, and so bad that in many instances it would undo the oppor-

(unity of recovering from the depression that the returning better prices offered. It was a very serious matter to have .£lOO deducted from a £4OO income. In the case of heavily moi tgaged farms it would mean that

the equity of the mortgagees would he cut down by at. least. 25 per cent. It appeared that that section of the community that had suffered considerably during the depression, the small mortgagee, would be a heavy sufferer, and he was confident that the Government had not appreciated

that point. The land tax related to psychology dating back 200 years, and was quite out of relation to actualities existing in New Zealand to-day. The farmers had to educate the Government to these matters. No dozen men in Wellington could know anything about New Zealand and unless these matters were placed strongly before the Government, fair treatment would not be forthcoming. No government, could deny treatment dial was fair and just.

WAIKATO RESOLUTIONS.

HAMILTON, August 7.

After a long discussion, the following resolution was passed by the Waikato branch of the Farmers’ Union: — “In our opinion the disclosed guaranteed price for dairy produce in no way meets the promises ot the Government to better the standard of living of primary producers, and this executive expresses its utmost disapproval and will retuse to accept it as final.”

A further resolution was carried: “That the Farmers’ Union branches organise meetings to which the local member of Parliament shall be invited and requested to explain the provisions of the guaranteed price in relation to its fulfilment of the Government’s pre-election promises, and Mr Nash’s promise that the payment to the farmer must be measured by the same tape as is used to measure payment, to others who render equal service.’’

MR NASH’S EXPLANATION

WELLINGTON, August 7

Two statements in portion of the Budget dealing with the guaranteed price for dairy products, apparently somewhat contradictory in their general application, -were explained by the Minister for Finance, Hon. W. Nash, in an interview to-night. The statements referred to the disposal of any possible surpluses in the dairy industry account, and Mr Nash stated that the reference to the self-Aalanc-ing account applied only to the operation of the scheme after the end of the first year of the State marketing. One section of the Budget states that if the proceeds of the sale of dairy products in the first year are greater than the amount guaranteed, the surplus will be used for the benefit of the dairy farmer and the industry after consulta'ion with its representatives. Later, it is stated that in some years there may be a deficit in the dairy industry account after the year's operations. In other years there might be a surplus to be offset against any deficit.

“I think the Budget makes it perfectly clear that the distribution to farmers or to the dairy industry of any possible surplus refers only to the first year of operation of the guaranteed price and marketing plan," Mr Nash said. “The question of future prices has still to be determined, but the question of balancing possible surpluses against possible deficits in th edairy industry account, will arise only during the season beginning on August 1 next year. Meanwhile the dairy farmers’ position is assured, just as it will be assured in all future seasons. The Government is guaranteeing the price, and if realisations on the London market fall below the aggregate of the total guarantee, the responsibility will be on the Government.”