FINANCIAL DEBATE.

New Zealand Herald, Volume LII, Issue 16019, 10 September 1915, Page 4

FINANCIAL DEBATE.

SIR J. WARD REPLIES.

CRITICISM ANSWERED.

SUGGESTIONS EXAMINED.

[BI TELXGXAPH. —PRESS ASSOCIATIOX.J WeliJ3?gtox; Thursday. The debate on the Budget was resumed in the House of Representatives this afternoon by Mr. R. A. Wright (Wellington Suburbs), who favoured a small exporttax. The petrol tax should go. If motorcars were to be taxed it should be on tyres, and there should be a preferential duty on foreign tyres. Mr. R. W. Smith (Waimarino) said the labouring classes had almost entirely escaped taxation. He hoped the Govern- I ment -would not be induced to impose, a tax of even 2d per lb on tea, as that would press on the workers. An in crease in the ordinary land tax would be unfair to the fanner. , Mr. A. H. Hindmarsh (Wellington South), said he urged the abolition of the ■ land tax exemption, but said it was a mistake to suppose the Labour Party wished to put all taxation on the land. Mr. J. A. Young (Waikato) said the railway freight on imported hardwood was unfair to the farmer, and should be no higher .than that on locally-grown timber. The Budget proposed to increase the graduated tax by 50 per cent. ■ This tax I had been inaugurated for the bursting up j of large estates, and to apply it to war ! taxation purposes was adopting a danger Sous principle. If it was for war purposes there should be no differentiation betweenthe country resident and the town resij dent If there was no exemption for land j tax they were going to hit the man who j could least afford it.

Protecting the Poor Kan. Replying, Sir Joseph Ward assured the House "that not one of the suggestions made but had been carefully and impartial.y considered. The fundamental principle of the Budget "was to keep the taxation off the poorer shoulders. There was i one exception to this, and -whatever that ' amount of taxation might be he thought the people who were asked to pay it should pay it. The Government should have at least £600,000 more than was asked for. Champagne had not been taxed because it- could only have realised £800 and was not worth bothering about. A mine tax had not been proposed because it would have interfered with our treaty with South Africa. The proposers of the bachelor tax had evidently overlooked the fact that we had spinsters in the country. The tax on picture shows had been rejected because of the difficulty of collection. He had gone carefully into the proposal to" tax amusement tickets, but more could be got out of the proprietors of picture theatres through the new income-tax. The tax on motor-cars was too difficult of imposition, and the best way out of the difficulty was the proposal in the Budget. He condemned the suggested scheme of graduated stamp duty, it requiring a business man to keep such a variety of stamps as to become impracticable. " The mortgage-tax was necessary to prevent evasions of the | land-tax.

Spirit and Beer Duties. He defended the proposal to raise the duty on spirits by Is per gallon, as against 4s suggested, and read a statement from the controller of Customs to show that it would not be wise to make it higher. In ' Australia the duty was 17s, the highest in the world, and great difficulties had been experienced there in conducting the j trade. They could not go further because ; they were not looking at the question from the point of view of the trade Or of the prohibitionist, but entirely from the point of view of an increased revenue. The change in the method of levying the beer duty was because the Customs Department regarded it as simpler and safer from, the revenue point of view. Ho believed in encouraging light ales, as against heavier beers, but he did not desire to take any credit for the proposal in the Budget. The credit of that was due to the Premier. He refuted a statement that the Hon. A. M. Myers was responsible for the idea. Such was not- the case, and he wished to make that plain. He also understood the brewers of the Dominion approved of the change. It had been suggested that this beer tax should be doubled, but the cost of much of the' material used in the manufacture of beer had increased. He anticipated getting £87,000 per annum from this source, and one of their great anxieties was that this tax was not passed on, as he believed 85 per cent, of the beer-drinkers were workers. With regard to the suggested increased duty on tobacco and cigarettes, he was prepared to see what could be dose, but it could not be done this session.

Tax on Kerosene. He admitted that the tax on kerosene was a tax on the necessaries of life. It must not be supposed he had not. adopted tho tax without consideration. When tho former duty was taken off he was told he had made a. gift to merchants, and the people had derived no benefit. Now he was told that the imposition of this small tax was going to ruin everybody. As a matter of fact they would not average more than £1 per "year from those who used kerosene, and that was all the poorer people were asked to contribute towards the war revenue. He recognised the case of the fishermen was a special one and he was making inquiry as to whether benzine could not be admitted for them free .of duty. At the same time he wanted to see where the £194,000 of revenue was coming from before he made any concessions in connection with the kerosene tax.

I Land Taxation. The graduated land tax could not be applied to the towns because there wa» no point in bursting up town properties, and the payments of graduated tax by country settlers was more than counterbalanced by the heavy income tax paid by city men. Therefore the graduated tax could not. be imposed in cities without unfairness. The Government had not approached this question from the point of view of land tax reform. They had approached it solely with the view of getting more revenue, and in that respect the system' of land income tax introduced by the late Mr. Ballance had served its purpose. Speaking of the suggestions that the State should issue paper monev. Sir Joseph warned the people that this was a very dangerous thing to do. We could not be Ended by what Australia had done. inked up as we are with ilk Bank of New Zealand, it was not advisable to take that step at present. With regard to the sinking funds the Government would not abandon them, as urged by Dr. Newman There was no foundation for the rumour that the Dominion's war loans would not be provided -bv the Imperial authorities. He was confident the two million loan would be raised. The shipI ping and allied companies were being ! taxed on a scale that was adequate.

Mortgages tad Incomes. Sir Joseph admitted that the mortgage tax was worthy of revision in some respects, with a view to getting more revenue. If the exemption in the income tax was reduced to £200, they would only get in £8500, and that from people who could ill afford it. He did, however, think the exemption might be graduated and made to disappear at an income of £600 per year. This would bring in about £50,000, but it could not be done this year. Sir Joseph Ward said he did not wish to raise a note of alarm, because there was no need for alarm, but it was necessary to observe the strictest economy, especially in the Public Service. He urged private employ, rs not to promote panic by discharging employees, but all classes must recognise that luxuries should not be indulged in, for it was impossible to say how long the war would last* and so much depended on that.