TAXATION SCHEMES

Manawatu Standard, Volume XLIX, Issue 227, 24 August 1929, Page 2

TAXATION SCHEMES

FARMERS’ OBJECTIONS*. DEPTUATION TO PRIME MINISTER. A deputation from tho conference of members of the New Zealand Farmers’ Union and other primary producers, held in Wellington yesterday to consider tho taxation proposals of the Government as they specially affect farmers, waited upon the Prime Minister _(Sir Joseph Ward) at Wellington yesterday, and brought before him the resolutions carried by the conference. Mr W. J. Poison, M.P., president of the New Zealand Farmers’ Union, in introducing the deputation, said it represented practically every section of the farming community. He wanted to say quite definitely that while there were certain points he personally did not agree with, he was very largely in agreement with what had been decided at the meeting of farmers on the previous day. This was not a party political question at all. He was not in sympathy with the party which moved the no-confidence motion. He, however, held strong views on these questions, and he hoped when tho bills came down embodying the views of the Government that considerable amendments would be made, and he would take part in getting some modification of what had been set out in the Budget. If the Government was going to steepen the graduated land tax, it seemed to him reasonable that there should bo no decrease in the amount of mortgage exemption. It did not seem reasonable to tax a man upon liis debts. It amounted in this case to a discrimination tax against tho farmin'; community. The farmers as a body, big and small, whether they would be hit by tho taxation or not, were standing together on this question. There was a class psychology amongst tho farming community just as there was amongst other sections of the community.

DOUBLE-BARRELLED PROPOSAL.

Mr J. S. Jessep, Wairoa, hoped the Prime Minister would consider the representations made quite apart from what they considered as tho ‘‘blighting curse of party politics.” They sympathised with the Prime Minister in the position in which ho was placed. The farmers did not want to escape taxation. There was a view held in some quarters that farmers had been escaping their fair share of taxation. Tho farmers did not hold that view at all. He alluded to the heavy hospital and charitable aid rate as it bore on country districts. The mortgage exemption proposals would hit the development work in tho country. It was held bv the farmers that the double-barrelled proposal with regard to land and income tax was unfair. Ho urged that every endeavour should bo made to create confidence in farm land as ft form of security. Mr J. Carr (Methven) presented the views, as he had gathered them, ot numbers of small farmers in the bouth Island, particularly those in the Ashburton County, and gave instances ot how the new taxation would bear heavilv upon many of them. Mr W. Morrison urged that the new taxation would press hard on many farmers in tho back country, and would be most injurious to the tat lamb industry. PRIME MINISTER’S REPLY. Sir Joseph Ward, Prime Minister, in reply, said the matter was one surrounded with great difficulties. it was duo to the large holdings in this country. Unquestionably the owners had not been contributing their share of taxation—at any rate, not since the repeal of the income-tax after tho war was over, and it was preventing settlement. If it were possible to have right through this country settlers upon land £15,000 or £30,000 in value there need not bo any disturbance by legislation at all. It was, however, the small number beyond those figures who held large areas of land that the legislation proposed was directed at. “We have to remember,” said tho Prirno Minister, “that many people who have large holdings have investments in many things outside of their land, and if the deduction of . mortgages was put into operation, m the case of that section of the community, they have only to get accommodation against their large holdings, and, with the investments they have in other things, they escape taxation altogether. That is one of the nuts that we have to crack.” „ • It was in the interest of the ordinany farmer as well as in that or other sections of the community, added Sir Joseph Ward, that those who were in tho position he lrad just described, the large holders, should contribute their fair share of taxation. That was one of the problems that the Government was - trying to , solve. He would be only too glad to give effect to the resolutions passed at the meeting on the previous day if Ire could do so. He certainly would carefully consider the resolutions. A “hardship clause” was one of the contemplated changes that , lie had in his mind, so as not to do injustice to anybody. In regard to the matter of preserving or promoting settlement in the interior which had been referred to, he wanted to preserve that settlement. He did not want to do anything that would disturb the settlement of the country in the ordinary sense. The Government had endeavoured to obtain land for smaller settlement on the. basis of purchase. The Government wanted to treat the bona fide farmers, in the broad sense of the word, with perfect fairness. Thev wanted to discriminate between those who were carrying on farming legitimately and those who held large and valuable areas and who were escaping their taxation, as they were in some cases doing no unquestionably. He had had evidence put before him since he had recently taken office, as well as when he was in office before which showed that certain sections were not contributing fairly to the land and income tax revenue. That, as he had said, .was a problem he had to tr yand solve. The resolutions of the conference would be considered with the most anxious care with a desire to meet the situation. He recognised that the farmers were entitled to criticise the proposals of the Government, but he did object to organised meetings being held and wholesale resolutions being passed, as if the whole of New Zealand was convulsed. He might mention that he had had representations on the other side from many of the districts from which those resolutions had come, so that he was in the position of being between two fighting armies—one intent on bringing about a change in the proposals and another intent upon keeping them. The Government had to go into the matter from the point of view of doing what they believed to be right and fair. TAXATION OF MORTGAGES. With regard to the question of taxing mortgages, lie wanted to remind tho deputation that only a few years ago all mortgages were taxed, and that went on for years. There was no .deduction. The position now being urged was that mortgages should be'entirely exempt. Mr W. J. Poison : Not entirely, sir. Sir Joseph Ward replied that that was the request that had been made. Mr W. J. Poison: We will give you the resolutions. Sir Joseph Ward replied that ho did

not want to injure the farming community; on tile contrary, he wanted no help it. He pointed out, however, that there was an amount of, roughly, £1,500,000, in taxation that had not been put into operation 'through the change in the system. The Government wanted to trv and get the taxation upon a fair basis, without doing injury to the larmers or anybody e ' S Mr W. J. Poison thanked the Prime Minister for the hearing lie had given them, and expressed the hope that as a result of the consideration of the representations of the larmers, the result would be to assist them along the lines indicated in the resolutions. COMPLETE LIST OF RESOLUTIONS Tho following is the complete list of resolutions carried by tho conference on Thursday of farmers, including one resolution overlooked in the contusion of amendments ; (1) That this conference favours a reduction in public expenditure instead of an increase.in taxation on the farm lands of the Dominion. (2) That this conference recommends the continued exemption of £IO,OOO on registered mortgages, but that the exemption be reduced £1 for £1 until it finally disappears at £20,000. (3) That this conference is of the strongest opinion that it is most inequitable for any taxpayer to pay taxation on debts. (4) That this conference recommends that in the assessment of taxation, all family partnerships be individualised. (5) That this conference protests against any super-tax on land commencing at £12,500 unimproved value, as it will penalise tho most useful producer of stock mid that a super-tax is wrong in principle, but if it has to bo imposed it should not start at less than £20,000 unimproved value. (6) That this conference protests against tlio_ Government’s decision to promote legislation to strike a levy on farm land! through a super-tax on land and a reduction in the amount of mortgage exemption, and that this meeting is convinced that the present system of land taxation is not equitable and suggests that a graduated income tax on all taxable incomes, however derived, should be substituted. (7) That this conference favours the insertion of a “hardship” clause in 1929 legislation relating to taxation so that any exceptional cases of undue hardship could be specially investigated by a Taxation Department tribunal with a view to removing existing hardships. (8) That this conference favours closer land settlement and considers this can be effected more equitably if tlie above resolutions are adopted. Furthermore, that in order to facilitate closer land settlement on a satisfactory basis it is desirable that a proper classification of rural lands lie made by a comifiittee of farmers for the purpose of ascertaining (a) what land is suitable for agricultural, pastoral and forestry purposes', and (b) what lands are suitable for closer settlement, and that the basis of valuation be adjusted on its productive -value. ■ • (9) 'That this conference is strongly opposed to an increase of taxation 1 upon one form of security only, namely, rural lands, (Carried unanimously).