FTNANCE MINISTER'S REPLY

Grey River Argus, 27 August 1917, Page 3

FTNANCE MINISTER'S REPLY

Sir Joseph Ward rose at 3.45 p.m. to reply. He thanked the House for the cordiality with which the Budget had been received. In spite of reasonable grounds pf difference on the many proposals in the Budget only a few had been criticised. Some exception had been taken to the proposal to spend .£250,000 on telephonic extension. but he answered the House that it was absolutely necessary to complete the obligation entered into before the war arfd to give many distant, parts of the Dominion the communication necessary to progress. He defended the payment of increases of large salaries for special services on the ground that all private business recognised such services and, unless the Government did so, it would have to pay a much .larger sum ,to special officers. ■_ ihe only remit was .£2OO spent in this way, not a penny of which came out of the £400,000 voted in war F onu s to men with small salaries. Ihe Government had been charged with want of courage in imposing the tax on tea but perhaps the opposition to it also arose " from a want of courage on the part of members wno were afraid that they would lose votes by supporting it. True, there were other avenues of taxation, but he warned the House that those other avenues might have to be fully utilised before the war was over He defended the abolition of the 'profits tax, on the grounds that it was incapable of producing the revenue required. He read a report from the J-'onumssioner of Taxes in support of this contention. High encomiums had been paid to the Commissioner which he endorsed,, for the manner in which ■v a carric<J out th e provisions of trie Act, and Ik: asked members to remember that it was a highly estemed officer who had reported that if "ie Profits tax were continued there would be a shortage this year of £2,000,000 m the revenue required l-nder these circumstances the tax was impossible and he preferred to rely on. the programme of land and income tax as being more reliable m estimate and equitable in incidence. H e contested the feasibility of a proposed price tax because it was inadvisable at this juncture to start out on .1 new method of collecting taxation which was full of pitfalls for both the Government' and tax-payers. Instances were quoted to show ' what those pitfalls were. i\o one, carefully considering these instances, could ever dream of imposing the profits tax on the basis of * price tax. haying regard to the ract mat A3, 000,000 renewal money was required. Referring to the land and income tax he declared that the proposals under the Budget would claim 40 per cent of mahey incomes and some business firms would be called upon to pay 13s in the £. He asked if the House desired to go further than that. He did not believe in extracting more taxation from the people than was necessary, as he believed that the country with the lowest taxation would be. ithe most flourishing after the war. Many members had urged increased taxatlon °n the land, but their proposal would lead to some land paying tSation higher than the unimjroved value of the land, and that would be simply ruinous. When th c Taxing liill came down. relief could.be given to small men, with mortgages. Mortgages as a fhole could not be exempt unless the whole of the land revenue was going to slip away, and no memoer on either side ot the House had suggested any substitute not full of danger to the country tjhe moment die door wag* left open. In connecuon with taxation n was surprising limy many people get through it and with the advice of clever lawyers .they frequently succeeded. It had been urged that death duties should be increased, but he preferred to wait Hie tax i n the Budget proposals was taking .t0.000.000 trom the peoole by means of taxation. There- had never been anything like it, but it was necessary to build up a great reserve. He would soon have £10,000,000 in this fund which if not used for war yurposes can later on be used for the reduction of war loans. -So- far as he knew JSew Zealand '- was the only country piling up such a reserve, and we -rejoiced to. see , the magnificent response to the call this made upon the taxpayers.- Many h e knew were even borrowing to pay their taxes tins year without' squealing, but this ■was a fact. He pointed to the care necessary not to ruin anyone byi taxation. - There would be proposals to relieve the small shareholders in companies in the Taxing Bill. The speech was interrupted- by the 5.30 p.m. adjournment. Continuing after the dinner ad-

journment Sir Joseph Ward defended the tea tax. He thought it unreason,able to object to pay the small impost when such heavy burdens were being placed on others, particularly when the money so raised was devoted to assist the aged and needy. Looking to the future of the liquor . traffic, he thought that the public- ' was tending in the direction of State- [ control and soon the Government; . would have to face the fact. Hie [ always favoured sobriety and this to . some extent was behind the change ; in the method of collecting beer duty. . me tendency being for the brewers to brew lighter beer. He deprecated the cry against luxuries, including motor cars. Too heavy taxation ; might have the effect of. keeping ; them out of the country and 01 destroying revenue, and revenue we must have. Reverting to the Was Loan he declared that unless the ' J loan was raised at 4^ per cent free of income tax it would have to. be floated at 6J- per cent and the effect; would unquestionably be that therates of interest would have to 'be raised by all lending institutions,: including advances to settlers and that was not desirable. He spoice appreciatively of General Godley and regretted that he had been attacked in the House before he (General God" ley) had had a chance to say .'any* thing in his own defence. THE ESTIMATES: The question that the House go into , Committee of Supply was' then put and carried and the ljouse went into Committee on the Estimates.. - - - : FIRST ITEM PASSED. .• "I Tlie discussion on the first item of " the Estimates— Legislative Cl. £ 2 ,-\ too— continued till 12.42 a.m. when" it was passed and the House rose.' •-.