Division Forced On Overtime Tax Issue

Northern Advocate, 29 August 1947, Page 4

Division Forced On Overtime Tax Issue

PARLIAMENT. . .

/p A ) WELLINGTON, This Day. THE Opposition forced a division in the House of Representatives yesterday afternoon on the Land and Income ' The amendment was defeated by 38 votes to 36, the Speaker (Mr McKeen) voting and Opposition pairs being given for the Prime Minister (Mr Fraser) and the Minister of Transport (Mr ° Bl Last night the financial debate was resumed There were many interjections and the Speaker named Mr W. A. Shea (O—Patea) in the course of a sharp rebuke.

Mr M. H. Oram (O— Manawatu) said the concession which had been made in respect of unearned income had been made grudgingly. If it were now recognised that hardship had been inflicted in the past, the concession should have been extended a good deal further. Taxation played an important part.in offering incentives to workers to develop skill and ability, and the necessity for thrift should also not be forgotten. Mr A. G. Osborne (G— Onehunga): Or high profits. Mr Cram; High profits will look after themselves. Mr W. A. Bodkin (O —Central Otago)': The Government is the biggest shareholder now. PROBE TAX SYSTEM Mr Oram said the National Party at the first opportunity would carry out an investigation into the entire taxation system, with special reference to the incidence of taxation, and would seek to remove anomalies and injustices. The Government declared that production should be increased, but it was bankrupt of ideas as to incentives to achieve that increase. Mr E. R. Neale (O—Nelson) said there was ample room for a review of anomalies in taxation as well as a review of the powers of the Commissioner of Taxes, who had absolute power in deciding certain matters. He suggested that a board of review should be set up to which taxpayers could appeal. The board should comprise an independent body of experts and its main duty should be to examine the whole taxation system. CASE FOR REDUCTION Mr R. M. f\lgie (O—Remuera) said there was a ease for the reduction of taxation, and a case had been made out for the redress of taxpayers’ grievances which sprang from anomalies. The thrifty had been penalised by the Government’s taxation policy. . Mr R. M. Macfarlane (G —Christchurch Central) considered there would be the utmost difficulty in setting up an independent board to deal with the ramifications of taxation.

The Opposition had not told the people what they received in return from taxation.

Mr Bodkin: High cost of living. Mr Macfarlane: Free hospital treatment ,

Opposition voice: If they can get in. Mr J. R. Hanan (O—lnvercargill) said no one would want to work harder or for longer hours just for the privilege of paying more taxation. The doctrine of “It’s what you have left that matters" meant nothing to the worker who, because of the high cost of living, had little left of his wages. Mr Hanan said he would like to see the overtime question put to the test. It should be classified at ordinary time for purposes of taxation. ABOLISH LAND TAX? Mr W. H. Gillespie (O—Hurunui) said it was likely that the day had come when land tax should be abolished altogether. A man who held land for the purpose of producing goods on which the whole economy of the community depended should not be penalised by a special land tax, but should meet his share of the public expenditure by income tax on the same basis as other people. Mr Nash, Minister of Finance, replying to the debate, objected to references to the remission of tax on unearned income as being grudging. He said no request had been made for such a remission, and every person with unearned income up to £6OO a year would benefit to some extent. When the Opposition talked of reducing taxation they should specify items of expenditure which should be removed from the estimates. WIIAT IS LEFT Mr Nash said income tax on companies today did not exceed 11/6 in the pound. The criterion was the amount that was left after tax had been paid. It was absurd to quote the rate of taxation on the last pound of an income without referring to the taxation paid on the whole of that income. Mr Nash said there was no period in the history of New Zealand when a married man with a wife and two children was better off from the taxation point of view than he was today. Today, on an income of £4OO, he actually had £422 after paying taxation, for the amount of the family benefit exceeded the amount paid in tax. Similarly, a man receiving £SOO, with a wife and two children, had £SOO net after paying taxation, for the amount of the 'family benefit equalled the amount of the tax.

Answering interjections by Mr Bodkin about sales tax, Mr Nash said there was less sales tax levied on foodstuffs today than when this Government took office, and sales tax on furniture had been abolished. MANY INTERJECTIONS

At this point there was a running fire of interjections from the Opposition benches, and the Speaker twice called the House to order, asking members to behave themselves better. Mr Nash said he would like to see how overtime could be applied to the shopkeeper, the professional man and the farmer. Replying to the suggestion that a taxation board should be established, Mr Nash said all that was in it was “Let someone else do your thinking for you.” What he was . concerned about was the profit made by withholding services from use. Answering the member for Hurunui, Mr Nash said he could not see any reason whatever for a reduction in land tax. The bill was read a second time. AMENDMENT MOVED Mr T. C. Webb (O—Rodney) moved e.n amendment in the committee stage, as follows: “Where the taxable income derived by a taxpayer includes income of any of the classes specified in paragraph (B) of section 87 of the Land and Income Tax Act, 1923, which has been earned in respect of overtime work, the basic rates prescribed by clause 4 of the schedule of the bill shall be computed as if the taxpayer had been paid for such overtime work at ordinary rates of pay.” A division was taken and the amendment was defeated by 38 votes to 36, the Speaker exercising his vote with the Government.

The bill was put through the remaining stages and passed.