Farmers and the Excess Profits Bill

Manawatu Times, Volume 65, Issue 270, 2 November 1940, Page 3

Farmers and the Excess Profits Bill

MAY AFFECT INCREASED PRODUCTION IS TAXATION POSSIBLE WITH FIXED PRICES? In face of the fixed prices for all primary produce, it appeared a stupid thing to endeavour to apply the excess profits legislation to farmers’ incomes, remarked Mr, A. Howard (Marton) at yesterday’s meeting of the Wellington Provincial Executive of the Fanners’ Union at Feilding. The view of this speaker was that there could not be excess profits in the case of the farmer, because his prices were all fixed, and whatever additional income he obtained would be the result of his own hard work in an effort to increase production as called for by the Government, Mr. J. B, S. Dudding (Marton) alluded to the recent confession of the Minister of Finance when discussing the application of the measure to farmers. The Minister had stated that increased primary production would be partly due to the favourable season and partly because of hard work on the part of farmers. It was a curious situation to ask the farmer to work harder and increase his production and then apply the excess profits tax on him when all his prices were fixed. Mr. Lloyd Hammond (Rata.) said that the Excess Profits Bill did not apply to farmers in England and it should not apply in New Zealand. England had. asked the New Zealand farmer to increase production and the New Zealand Government, which had commandeered all the farmer's produce, proposed to apply an excess profits tax on the farmer. It seemed grossly unfair that the New Zealand farmer should be subject to such a tax while the English farmer escaped. It was not a question of the farmer receiving more for his produce as a consequence of the war. That was not the position, because the farmer could not get any more, as the prices had been fixed.

Mr. D. G. Gordon (president) remarked that the only thing lh<j Farmers’ Union could do was to go on pointing this fact out. Mr. Howard: We cannot make any additional profit because our prices are fixed. Mr. Dudding felt that the applies tion of the measure would tend to restrict the efforts now being made for increased production. The farmer was patriotic enough, but he could not see a farmer rushing in for extra production when he knew that he would be taxed because his total output might te greater than last year and exceed the amount allowed under the measure. It was resolved, on the motion of Messrs. Howard and Hammond, to represent to headquarters of the union that, in the opinion of the executive, the excess profits tax must cut at the root of increased production. The operation of the excess profits measure on farmers’ incomes was reviewed in a lengthy circular letter from headquarters of the union, and the opinion of members was that it was entirely unfair to include farmers in the Bill.