GOVT.’S NARROW WIN

Greymouth Evening Star, 7 September 1945, Page 2

GOVT.’S NARROW WIN

TAX BILL DIVISION BURDEN ON COMPANIES WELLINGTON, Sept. 6. A discussion of the appreciation of land values, and on the right of the State to appropriate portion ot that appreciation, by levying land tax, was initiated by Mr. Nash, when moving the second reading of the Land and Income Tax (annual) Bill in tn e House of Representatives this afternoon. Mr. Nash said that land tax was not levied for the purpose of providing some service, as were the local body rates. It was levied to ensure that portion of the appreciation of the value was retained for the State. He thought that the correct thing would be for the whole of the value that accrued to the land without the exertion of those occupying or owning the land, to go to the people as a whole. Dealing with the details of company taxation, Mr. Nash declared that the residue left to the companies after all of their taxation had been paid was more than they had ever had. In 1934, the residue left to the companies was seven point three millions. It was thirteen point one millions in 1937. In 1940, the residue was twelve point six millions. The reason that this total was below that for 1937, was because the companies began to pay social security tax and national security tax in 1940. Figures for the years from 1942 to 1944 were: Eleven point one millions; thirteen point two millions; and fourteen point seven millions respectively. ’ . Mr. Polson (Nat., Stratford) said that New Zealand had sustained high tax during the war in spite of the injustices thereby involved for such sections as the superannuitants and those who are on fixed incomes. He said the companies were labouring under conditions which restricted competition, and which reduced them to the level of tax collectors. The time [had now arisen for some downward [variation. The Minister of Finance I was in the position to make such adjustments. He now had nine and ahalf millions in the kitty, and he could go into reverse gear. Mr. Nash: Before you go into reverse, you have to go into neutral!” Mr. Polson: The Minister of Finance does not know the meaning of the word neutral! Mr. Polson added that the Government was no longer entitled to take from the people such an enormous amount of money now that the war was over. Mr. Polson moved the following amendment: “That this Bill be read the second time three weeks hence, to enable'the Government , to review its proposals, and to give much needed relief to the people in general, and particularly to those who are responsible for the upbringing, maintenance and education of children.” A division was then taken on Mr. Polson’s amendment. It was defeated by 37 votes to 34. Mr. Polson: “What a fright they had!” , , Mr. Bodkin (Nat., Central Otago) said that unless taxation concessions were made, it would be the returned servicemen who would suffer, because business would be unable to expand sufficiently to find jobs for them. If the Minister of Finance were frank, he would admit that the Government dare not reduce taxation because of the threat of inflation. But heavy taxation would not remedy this matter if the Government, at the same time, embarked on an orgy of expenditure.

DEPRECIATED CURRENCY Mr. Algie (Nat., Remuera), resuming the debate, made the suggestion that by increasing the social security benefits to two pounds, the Government was acknowledging the argument that the currency was being depreciated. •Mr. Langstone (Govt., Waimarmo) said it would be folly for the Government to let go one penny of taxation at the present, when it had re-

sponsibility for tremendous undertakings; and now was not the time lor anyone to quibble about taxation. Mr.’Clifton Webb (Nat., Kaipara) suggested that the men returning from active service should be exempted from taxation for a year or two, to enable them to cope better with the heavy expenditure which would face them. Mr. Nordmeyer said that . Mr. Algie, answering an interjection from the Government benches, had said he ' was proud of being a University man. Mr. Nordmeyer said that there were University men on both sides of the House, and the fact that Mr. Algie had been in University and had occupied a professorial chair, did not •entitle him to adopt an air of superiority or supercilious condescension so frequently seen in the House. At this stage there were several interjections from the Opposition side. Mr. Osborne (Govt., Onehunga) replied to the interjectors. He said: “A pack of dingoes!” He withdrew this remark at Mr. Speaker’s request. Mr. Nordmeyer. discussing the Budget estimates, said there were many commitments for war purposes still to be met. While it was true there would be some surplus assets to be disposed of, the Minister of Finance had already allowed for that, because, while he now estimated for an increased expenditure to cover the conclusion of our war expenses, he had not asked for any further taxation to meet - the estimated rise in expenditure involved in winding up the war effort. Provision had to' be made for meeting, during the present year, all of commitments relating to the war effort. An alternative to reducing taxation this year would be to borrow stil 1 further. Obviously, provision would have to be made by either this Parliament or the next one, for taxation to be reduced. But to reduce the taxation before the expenditure had been met and fully made known would be stupidity of the worst pos-

sible type. Mr. Oram (Nat., Manawatu) said Mr. Nordmeyer was an adept debater. His attack on Mr. Algie was hitting below the belt. Why did the Minister of Health give the House the cost of living ficures for .1920-21? The cost of living then, he said, was the highest it ever had been in New Zealand. . Mr?' Combs (Govt., Wellington Suburbs) said that we could not win the war or pay for the aftermath of the war on time payment. If the payment of the gratuities were to _be postponed, it would be asking soldiers to pay for them themselves. The debt services which were provided for in the budget would cost New Zealand twenty-two and a half millions, and that could only be paid out of taxation.

Mr. Aderman (Nat., New Plymouth) said that representations had been made to the Minister of Finance that any distribution of the patriotic canteen, or welfare funds should not be taken into account for taxation purposes. The Minister’s reply had not been entirely satisfactory. The Minister had given some assurance that small intermittent payments from patriotic funds might be exempted, but he had said that, if the nayments were regular or sustained in any way, he could not give such an assurance. The debate was interrupted by the adjournment at 10.30 p.m. TO-DAY’S PROCEEDINGS. WELLINGTON, September 7. Although urgency was taken for passing, the Land and Income Tax (Annual) Bill when the House of Representatives met at 10.30 a.m. io-

day, it is not expected that the House will be required to extend the usual sitting hours to complete the debate. Mr. Oram gave notice to ask the Prime Minister whether, in view of protests which had been made, he would have the census paper which was to be issued amended by the deletion of the question requiring people to disclose particulars of their private incomes. Mr. Macdonald gave notice to ask the Minister of Supply whether, m view of the increasing number of men being demobilised, steps would be taken to allot 40 per cent, additional supplies of tobacco and cigarettes to all registered tobacconists to assist them in meeting the demands of their regular customers. Mr. Fraser, answering an urgent question by Mr. Oram, said that a numbei' of young single men of the 16th Reinforcements were being retained in the Army in the meantime, to replace long-service personnel, married men with children and other priority groups. He understood that some of these men were being employed in base records to assist in the very heavy pressure of work connected with the demobilisation of the forces. Members would agree that Base Records was, at the present time, a most essential occupation if the men were to be demobilised as soon as possible. Mr. Oram had asked the Government to take steps to release from manpower control youths aged 18 to 21 who were in the Services,, and cited the case of a lad in this age group who, alter receiving notice that the Army was finished with him, resumed his civilian occupation' and was then recalled and manpowered to Base Records. Mr. Fraser said that he had not had the time to examine the individual case cited, but there was apparently some confusion regarding it. If, as it appeared likely, the man concerned was a member of the 16th Reinforcements, he must have already attained his 21st birthday and would not have been given any indication of his release being granted because of the need to retain single men from that draft in the meantime.

MEAT PRICES Mr Sutherland, in an urgent question, asked the Minister of Supply to consider immediately raising the subsidy payable to butchers on all meat sola, on account of the high price being paid for fat stock at the present time. Mr Sutherland said that it was impossible at present for butchers to purchase without showing a big loss. The Minister’s recent suggestion that the butchers could obtain meat from freezing chambers for sale to the public was unsatisfactory in tie Auckland Province on account of die humidity of the weather. Ail the butchers’ shops in Waikato were being closed on Monday to allow the butchers to consider their future position. . . ~ , Mr Sullivan, replying, said that,, as he had previously indicated, the nigh prices being paid by butchers were due to the competitive auction system which the butchers generally were unwilling to abandon. Regarding the statement that frozen, meat was unsatisfactory for use m tne Auckland Province owing to the humidity, he pointed out that tne Armed Forces in the Pacific satisfactorily use large quantities of frozen meat under more humid .conditions, and it, therefore, was considered that arrangements made to release frozen meat would meet the position arising from any temporary shortage ol lai stock. The Government, therefore, did not contemplate raising the retail subsidy payable to butchers on account of the high prices being paid for fat stock at present. . Mr Polson: Does the Minister i ealise that the effect will be that farmers will not fatten stock for Wintei kill in The Minister replied that the question was, admittedly, a difficult one, but a solution had been found m the oast and, no doubt, would be found again on this occasion. Some aspects of it might have to be . looked again, and no hasty decision would be made.

TAXES AND THRIFT Mr. Goosman, resuming the Taxing Bill debate, said that the Nationa. Party advocated a reduction in the rate of taxation, and asserted that it something was not put back into the land nothing could be taken out. Ihe Government was farming people for taxes. Private enterprise required a tax structure that encouraged inventive thrift. All the money which the Government had distributed came out of industry for which private enterprise provided the money. The Minister of Finance had said that no more taxation could be derived from the top so he, therefore, went to the bottom. If the National Security Tax were remitted lower paid people with incomes under £5OO would be relieved to the extent of £14,000,000. He said that if the costs in primary industries were not kept down, we would be unable to export our goods. Primary industries were the foundation of our economy, and costs must be kept in proportion. Mr. Parry said the Government objected to and condemned people who bought land in wartime while soldiers were away fighting, and who put sharemilkers on that land. If private enterprise were allowed unfettered control, there would be an orgy of land speculation, preventing the settlement of soldiers. Mr. Parry said that the retention and increase of sales tax had been justified by the huge war expenditure. Asked why the Government, contrary to its promises before it took office, did not abolish the sales tax, Mr. Parry said that it was because of the extraordinary position in which the Government found itself with 160,000 unemployed. When the Government increased the sales tax it also altered its incidence and gave greater relief to those buying the necessaries of life. The sales tax to-day was mostly on luxuries. Mr. Hamilton said that the Opposition was not objecting to taxation because it was taxation, but because of the amount imposed and who paid it. The Government opinions on taxation and capital were really alarming. Britain was the leading capitalist’ country in the world, yet the New Zealand Government was condemning that system. He sought a clear definition of a capitalist. The Government apparently had in its mind that a man became a capitalist when he had a home and £BOO in the bank. (Proceeding).