POLITICAL POINTS

Lyttelton Times, Volume CXVII, Issue 17198, 19 June 1916, Page 10

POLITICAL POINTS

RECEPTION OF THE BUDGET.

HIGHER TAXATION WELCOMED

[From Ora Cokresfoxdf.xt.]

AVELLINGTON, June 17

The sensational two million surplus exceeds two millions even when the balance carried forward from last year is deducted. Jn ordinary times, with such a surplus, members would have demanded reduced taxation, but in face of heavy liabilities which arc incapable of exact assessment, the House will heartily and unanimously approve of the heavy additional burdens to be imposed. Not a word of complaint is heard on that score. Country members, who might have been expected to emit a sympathetic growl on behalf ol hardhit woolgrowei's or meat raisers, are content simply to wonder why the Minister of Finance did not take the even half of war profits while be was about it. The Radicals like the taxation, but arc disappointed with what 'hey call thetomissions of the Budget. The cost of living, it is pointed out, is only discussed. No fresh effort is to be made to solve the problem, except by controlling rents, which have not advanced throughout the country, though they are particularly high in the capital. Quite a substantial section of the House is discontented over the absenco of some smaller taxes from the new programme. “ The man in tho street does not recognise that, a war is on, say tho critics. They would like to remind him of it every time lie goes into a theatre or pays for other forms of entertainment. This feeling is taking definite shape and impetus, and may colour the supplementary taxing programme when it comes down a little later in the session. AVAR PROFIT TAXATION. AVe owe a good deal to British statesmen in connection with our war legislation. Perhaps it is not generally known that some of the emergency measures, like the moratorium, passed within a month ol the outbreak of hostilities. were cabled out from Home as a guide in a difficult situation, where no helpful precedents existed. Now wo are adopting the Lloyd George war taxation plan nearly two years after the ex-Chanecllor of the Exchequer originated it. The system is to take an average of the income earned by a firm or individual during the three years j prior to August, 19.14. To follow it by ■means of an illustration: —If the aver- ! ago turns out to be £.IOOO per annum, i and the firm earned £ISOO during a i war year, the State regarded the extra | £SOO as “ war profits,” and took 50 j per cent, or £250 of that sum. Australia eventually adopted the same system, though Britain did not,get the ! enormous yield which was expected. The Commonwealth takes 60 per cent of the war profits, and New Zealand will be content with 45 per cent. AVe will probably find it difficult to discover exactly what proportion of New Zealanders’ incomes may he set. down as “ war profits,” because the producing classes, who are supposed to have made most of these millions, have not in the mass been income tax payers prior to 1914. However, the “wool kings” arc usually good business men. possessing complete details of their transactions from year to year, and they will doubtless pay heavily. i THE PROBABLE YIELD.

Prices of primary products were on the rise during tho three years prior to tho war, but they have gono even higher since August, 1914, so that tho Stato should glean, a.suU&urfiaiJifu?*.

vest. AVhenever prices recede, the tax returns will disappear, bill it is looked upon ms a splendid revenue-producer for the present. The profits earned during the year ended March 3L last, in respect of which returns have already been sent to tho Land and Income Tax Department are to he assessed ior "war profits.” Where, as a consequence of .'war prosperity, iarmors and others have only begun to pay income tax during the'last year or two, there will naturally be some difficulty in getting at their pre-war average, on which the'whole question of profit assessment hinges. I understand that the Taxing Department will get, over this difficulty by securing particulars of the capital represented in the farm or business under consideration. If, for example, it, is £SOOO, the average income will be set down as the sum which would lie derived from a li per cent return on that investment. If the farmer or business man shows, bv his income return for last, year, that his profits exceeded t. per cent on his capital, he will pat 45 per cent of that amount over tho average return to tho State, to help to meet the interest on tho war millions. A fairly lengthy Finance Act is to he introduced to deal with this and many other problems raised by the new tax. For instance, a statutory definition of <■ war tax ” is wanted. Will it include the ordinary increments of salary received bv persons not directly profiting from the war? So far. the Minister ot Finance has left that thorny point alone. BTG THINGS “IN COMMITTEE.” Apart from the Budget, which is the central feature of the war session, the most interesting business of the week has been done in private by the M to Z Public Petitions Committee. Select Committee proceedings are rarely open to the Press, and very little is allowed

to leak out. until the report is presented] to the House. But it is obvious Horn tho appearance of well-known figures in the " trade,” and their rivals of the New Zealand Alliance, that big things have been happening in tho committee room. 'The Government took a definite line over the prohibition of “treating" during war tune, a. elansteffectively covering that practice being included ‘in the War Regulations Amendment Bill, hut it six i o’clock closing question undcciticd. lm> advocates of that proposal, strengthened bv the knowledge that a hundred thousand signatures were attached to petitions in its favour, urged the Government to take action. As the nolle Petitions Committee had not considered the petitions when the War Regulations Bill came down, the Government left the question open, though the Hon A. L. Herd mini, doubtless speaking his own mind, declared nis belief that Now South AA'ales would eventually realise that it had made a mistake in adopting early closing. A significant alteration took place in the personnel of the committee. aL L. M. Tsitt (Christchurch North) was taken off and' his place filled by Mr J. S. Dickson (Parnell). Tim reason for the change was made plain when tno committee got to work on its delicate task. Air M. Myers, a well-known AAVllington barrister, whose parliamentary committee experience is extensive, marshalled the forces and arguments opposed to. “early closing. ' while Mi Tsitt took the role of counsel tor petitioners. The public has undoubtedly ' missed much through the Hosed door, lor these gentlemen are capable ot fiignlv interesting and skilful work. An . J> Bedford, of Dunca'm, whose brim • hut vivid parliamentary record is still ' well remembered, came back into tno f arena on this notable occasion to pro- ; sent to the committee the economic j arguments in favour of the six o clock j closing proposal. If the House even- . tup.llv decides to impose limitations on the sale of intoxicants, the strongest argument, weighing with members who are not prohibition enthusiasts will be the necessity of doing something strikin'; to remind the public that it must ’ share in the sacrifices demanded by the struggle, and' nav some attention m personal economies, even though money ' circulates plentifully in the Dominion. i A BOLT FROM THE BLUE. | To demonstrate the practical value of ! prohibition in diminishing drunkenness , tlio member for Clutlia gave evidence upon what has happened in his mm “dry” constituency. His figures were i verv convincing, but an opponent pioi d viced a heavy volume of appendices to » the House of Representatives, turneu > up an official return, and staggered Mr Malcolm with what he showed him. ■ The witness had assured the commit; 1 tee that whereas there had been iw convictions for drunkenness m Clutlia ' during the three and a halt years prior 1 to prohibition, the number of such cases 1 . during the three and a half years ot ! Hio “dry” regime was only six. mm 1 then, like a bolt from the blue, came the evidence of “ figures which cannot ; lie” —108 convictions for drunkenness . in Clutlia during 1914. The bulky [ volume was handed to Mr Malcolm, : who could only explain it by the weli- ' I known fact that much depended on the , zeal of constables. This was not very ■ satisfying, and the advocate for the Ji- , ceusiug interest did not. fail to make - merry“over the huge discrepancy, lhe > witness had an uncomfortable ten ' minutes and the volume passed into i other hands. Again the figures were i studied, and the discovery made that everyone had been reading the wrong » column. The real figures showed' eight l convictions in Clutlia during 1914, so ' Mr Malcolm. smiled again.