FISCAL OUTLOOK.

Northern Advocate, 26 August 1924, Page 5

FISCAL OUTLOOK.

INFLATED LAND VALUES,

SETTLERS SEVERELY HANDI-

CAPPED,

MORATORIUM WORTHLESS

(Special to "Northern Advocate. ,J ) WELLINGTON, This Day.. A further increase of capital for the State Advances Department may be announced shortly.

"One of the things Ave shall have t'o do this session," said the Prime Minister at Levin yesterday, "is to reduce taxation. The taxation of this country is far too heavy and we shall have to reduce it as much as we can. I hope we shall be able to make some very important reductions.

"There are other matters which trouble us in connection with finance. There is a scarcity of money for mortgages. Financial institutions are shy of lending to settlers 011 mortgages and we shall have to do something to help matters. One of the reasons is that the local bodies of the country have been borrowing very much m'ore than usual. They have come into competition with the farmers who require borrowed capital to carry on their operations and the security of the local bodies is lo'oked on at present as better than the security of the farmers. Local bodies have borrowed at up to 6£ per cent, and I am afraid we shall have to curtail their borrowing by reducing the rate of interest, though it has not come to that yet. Settlers complain that they cannot get all the money they need. We have, made an important .alteration in the law which allows settlers to borrow up to 75 per cent, on the valuation of their holdings and the Government has not been able to find all the money needed. We shall have to do something to meet the undoubted demand which exists. We have this thing in hand. Though lam not in a position to speak definitely at present. I may be able to be more definite in a week or two.

' 1 One 'of the difficulties which affects this particular position is the inflated value of land," Mr Massey added. "I do not think your values here in Levin are as inflated as they are in other districts, but inflated values is the direct trouble. Where you have inflated values the settler has to pay interest on mortgage. Then he is up against local taxation, and next he has to pay the land tax, whether he makes a profit 'or not. These are the things which are causing serious trouble at present. I believe we shall have to deal pretty drastically with these inflated values before long.

"I think the moratorium has been doing no good for the last two or three years," the Prime Minister concluded, "th'ough it did good, in the initial stages. People with money say they prefer to buy local body debentures. I hope we shall be able to adjust matters without difficulty during the session and I expect to be able to find an adequate supply of money for the settlers, but I am not able to make a definite statement at present.''