LAND AND INCOME TAX

Nelson Evening Mail, Volume LXX, 7 October 1936, Page 2

LAND AND INCOME TAX

BILLS PASSED BY COUNCIL (United Press Association) WELLINGTON, This Day. The Land and Income Tax (Annual) Bill and the Land and Income Tax Amendment Bill were passed by the Legislative Council yesterday. Moving the second reading of the Land and Income Tax Amendment Bill, the Leader of the Council (Hon. Mark Fagan) explained that the measure was necessary in order that the Government might put its Budget proposals into effect. It was proposed to raise £1,000,000 from income tax and £Boo,ooo’ by the reimposition of the graduated land tax. The £1,800,000 so raised would be expended in. tire various new pension benefits. The Hon. V. Ward (Wellington) expressed regret that the Government had found it necessary to increase the burden of taxation, particularly when Australia had reduced taxation while increasing wages and pensions. New Zealand now had the heaviest per capita taxation in the world. In 1894 it amounted to £3 7s 9d a head, and in 1936 it was £l9 4s 2d. It had never been higher in the history of the countrv.

'The Hon. M. Connelly (Dunedin) said the graduated land tax was necessary to break up some of the large estates that si-ill existed. He would like to have seen the income tax more heavily graduated on the higher incomes and iess heavily on the lower incomes. He suggested a tax on the reserves, held by companies in excess of their paid-up capital. This would have the effect of causing dividends to be paid to the more needy shareholders. It was a pity that the Government had seen lit to increase the taxation when the country was .emerging from the depression, said the Hon. E. R. Davis (Auckland), who added that the previous speaker had omitted to point out that the graduated land tax applied equally to urban property and big estates. '

The graduated land tax would cause real hardship to the Maori people in many cases, said the Hon. R. Mawhete North). The Hon. ,1. Alexander (Auckland) said the people would not object if the increased taxation had been devoted to strengthening the defences of the country. Increased taxation, said the Hon. O. J. Carrington (Auckland), must result in higher prices through increased cost of production. The Hon. W. 11. Mclntyre (Nelson) advocated a tax on income not spent. Such an impost would cause money to circulate more freely.

Approval of the principle of taxation on income but opposition to the graduated land tax was expressed by the Hon. 11. A. Russell (Hawke’s Bay), who said that the average sheep farmer of his district would be hard hit by tlie tax. Replying to the debate, 'Mr Fagan promised to refer several anomalies mentioned by members to the Minister of Finance. The Bill was read a second time. The Land and Income Tax (Annual) Bill was read a second time without discussion. Both Bills were then put through the remaining stages and passed. The Council adjourned at 4.30 p.m. until 2.30 p.m. to-morrow.