REDUCTION OF TAXATION.

New Zealand Herald, Volume LIX, Issue 18206, 27 September 1922, Page 10

REDUCTION OF TAXATION.

GOVERNMENT'S NEW BILL. INCOME PAYMENT LOWER. SUPER-CHARGE ABOLISHED. FURTHER OUT IN LAND TAX. SUM OF £929,000 INVOLVED. [»r TJkLi;CRAPH.—SPECIAL REPORTER.] WELLINGTON. Tuesday. > Reductions of the land tax and tho »I income tax are proposed in the Land and , I Income Tax Amendment Bill, which was > j introduced in the House of Reprcsenta- . tive-s this afternoon. The super-tax on > land is to be reduced from 20 per cent, to 10 per cent., and the super-tax on i income is to be removed altogether. Tho Bill makes some other amendments ! in tho existing law. • i When the measure was introduced the j Prime Minister explained its provisions. , He reminded members that earlier in tho ! session the super-tax on land had been reduced from 33 1-3 per cent, to 20 per ; centf He was proposing now to reduce tho super-tax on land further to 10 per cent. " I am doing this because the financial outlook has somewhat improved," said Mr. Massey. "I know that in doing it , I am taking.a risk, but I have thought that matter out very carefully, and I believe that the proper thing to do is to take the risk and trust to the industry of the people and the productive capacity , of the country as a whole." The Leader of the Opposition, Mr. T. M. Wilford, said his side of the House had proposed that the super-tax should be taken off the estates below £20,000 in valueMr. Massey: I never knew of anything so • unstatesmanlike as that proposal—to reduce the taxation on everything below £20,000 and let the rest remain without taking into account the actual financial position of the people concerned. The Tax on Native Land. Another clause of the Bill, continued the Prime Minister, referred to the land tax on native land. Considerable blocks of native land had been leased in recent years, and it had been found that the land tax sometimes was greater than the amount of tho rent received from the land. That was an unfair position, and an amendment was being made. He did not know that the Government had gone far enough, but it had proposed a considerable concession. The Bill provided that the land tax should not exceed in any case 25 per cent, of the amount of "We are "reducing the amount of the income tax by knocking off the super-tax altogether," continued the Prime Minister. " There was 20 per cent, of super-tax left and we are knocking it off. That will effect a very considerable reduction, i estimate that taking the land tax and the income tax together, the concession that I am proposing to make will amount to £929 000. That is the estimated amount of the reduction of the revenue by these concessions." _ Mr. H. E. Holland (Buller): How are you going to get it back? Mr? Massey •» I have not forgotten that during the first five months of the presentfinancial year we mado a savinfe of over £2000,000 in expenditure. I hope that the amount being saved will increase as the year goes on. We spent during the five months £2,100,000 less than wo spent durine the same period of last year. Mr. Wilford : That is not a saving. Mr, Massey: Well, I do not know what the hon. gentleman calls it. Lightening Enormous Load. Mr. P. Fraser (Wellington Central): Does, that include the third cut? Mr. Massey: No. That is quite a dif- , ferent thing. It includes the second cut. Mr. W. Parrv (Auckland Central): That means.that you cut down wages by two millions? ' Mr. Massey: It does not mean anything of the sort. If we maintain this, enormous load of land tax and income tax, we are . going to run the country into disaster. We * are killinc industry by asking the people to pay such an enormous amount of taxation. There is no doubt about that. Mem- , hers on the Labour benches complain about > unemployment. .The reason for unemployment is partly that the p;sople who employ labour in normal times are not able to do , it order present conditions. There are ,' arrears of land and income tax to the amount of iiauO.OOO. A Member: When will the reductions '. commer.ee? , Mr. Massey: They will commence with this financial year. , . Mr. D. Jones (Kaiapoi) interjected that ' apparently the Labour'members sorry taxation was being reduced. Position of the Farmer. Mr. Massey: They will be sorry for the country if taxation is not reduced in the near future. Members have ali ready learnt that the number of sheep has decreased by four million in the last four years. Mr. W. B. Smith (Waimarino) : What is being done to prevent it? Farmers are being sold up every day and are going out and nothing is being done to prevent it. Mr. Massey: This is being done to prevent it. It appears that a number of men in the House are sorry to hear about anything in the nature of a reduction of taxation. After replying to some other interjections, the Prime Minister said the reduction in the number of sheep was due in part to the fact that farmers had been compelled to sell their flock sheep for fats. Mr. Smith : They will have to do it this year again. Mr. Massey : I hope that wool will go up and that we shall have a good lambing season. That will help us. Some more interruptions were made at this stage, and tho Prime Minister remarked that if Opposition members did not like the Bill they could vote against it. Exemption, for Children. Turning again to the clauses of the Bill, Mr. Massey said the present law allowed tho payer of income tax an exemption of £50 of assessable income for each child. The Bill proposed to extend this exemption to cover grandparents in cases where they were maintaining children. Another clause provided that for taxation purposes, coal lands as well as timber lands should be treated as depreciating assets. The present law recog- | nised depreciation in the case of sawI rnillirnr operations, but not in the case or coalmining. The Bill did not interfere with company taxation directly, but the companies would share in the general reduction. The Bill had other clauses of minor importance. Its chief features were the reduction of the land tax and tho income tax. Benefiting Wage-Earners. "I am not doing this to benefit, any class in particular, but the country as a whole," said Mr. Massey, in reply to further criticism. "If there is any one class that will benefit by this reduction, that class will be the wage-earners of thiscountry. What has happened already in • the country districts ? There were men who , were employed on the stations and farms , their numbers running into tens of thous- . ands. These men had been employed right . through the winter. They were men who i took as much interest in the employer's i work as did the employer himself, but . when the slump in prices «amc these , men had to be turned out in hundreds to s. do what they could. H it had not been if o9 tho heavy taxation a very large num-

ber of these men would have been kept j in their employment. They are an exceedingly useful set of men, men who; could be relied upon to do anything. | Most of them went to the groat war, and are prepared to go again if the necessity arose. These are the men who suffered in the winter months, and many of them had families who suffered with, them." Mr. H. E. Holland,' Leader of tho Labour" Party, said ho found it hard to reconcile the Prime Minister's attitude with the official figures. He quoted from • a return showing that the total assessable incomes in the country' had increased from £13,000,000 in 1914 to £48,000,000 in 1921. The private accumulated wealth ' had increased from £285,000,000 in 1915 to £562,000,000 in 1921. How could-Any-* one want relief when they had such incomes ? ; Mr. Massey: Among these men are ftnany who are business men, and who passed the taxation on to their customers by charging, more for their goods than ( otherwise would have been tho case. Mr. Holland: Will tho Prime Minister put legislation on tho Statute Book ! to prevent that? Mr. Massey: Yes. I have done it be- , fore, and if necessary I will do. it again. Reply to Criticism. i , "It seems to me," said the Prime , Minister, in replying, "that at this ' period of tho Parliamentary term there are certain members whom it is impost siblo to please. Most of the time they are telling us about the necessity for rc- , ducing taxation, for getting the finances of tho country into a sound condition, and for making it easier for tho mass of the ' public. Yet when, as Minister for i Finance, I bring down a Bill proposing • to reduce taxation, what am I met with 7 Nothing but abuse and misrepresentation. We are told that what is proposed is ■ intended to benefit the 'big man,' and I that we dp not caro two pins for the ■ ' small man.' I say it is not correct. " I commenced tho reduction of taxation by reducing the taxation on the ' small man' in the session before last. The first proposal to reduce taxation was that we should do away with the mortgage tax so far as the ' small man ' on the land was concerned. It had the effect of reducing taxation to 10,000 small farmers with mortgages, and it cost us a little ' over £100,000. I say that it was worth doing." :' 1 By the provisions of the present Bill, Mr. Massey added, the Government was increasing the wages fund of the country and making it easier for tSose who had been employers in the past to. be employers in the future, and to give occupation to men who would bo much better off in private employment than working on relief jobs provided by the State. The ' Government had pledged itself to reduce tho cost of government and to reduce taxation as far as possible and it had not been unsuccessful in fulfilling its pledge. He would take the House into his confidence in regard to the means by which he proposed to finance the reduction ' proposed by the Bill. Financing the Reduction. Some weeks ago, when the Land Tax i Bill was before tlie House, he had stated i that the reduction of tax&tion proposed « by that measure represented the same amount of money in the aggregate as the rebates given last year. He had thought at the time that it would not be possible i to go further. Conditions, however, had : somewhat improved. To reduce land and income tax by the same amount as thoy - had been reduced by last year would . cost about £450,000. He did not pro- '. pose to decrease the income of the Con- > solidated Fund this year*by more than > that amount for the purpose of reducing > taxation. The enormous importations of - the year before last had put some • £2,000,000 of extraordinary revenue into , the Consolidated Fund. He had set the . 1 sum apart as a reserve. A Labour Member: That is what you ■ are going to use the surplus for. Poor • unemployed! ■ Mr. Massey: Poor unemployed! I have 1 heard that political cry so often that I 1 am ashamed of the people who lose it. • Those crocodile tears we have got accusi tomed to. Picking up the thread of his speech again, the Prime Minister said that from i - tlie £2,000,000 mentioned he proposed to i take £500,000 foi* the purpose of reduc- i ing taxation. Any member who did not approve of this course might vote against 1 dt or move an amendment and see how . he got' on. , % - The Leader of the Opposition, Mr. T. tf. Wilford: You have a majority. You can do anything you like. Mr. Massey: Will the member say it is wrong? Mr. Wilford: No, nor have I done so, ' but all that is nonsense about voting. ; Yo".j have a majority that can swamp opposition. 1 Mr. Massey: The member does not look 1 at all pleased. Mr. Wilford •. No, I am not with all ' that bluff and nonsense you are talking. Mr. Massey, N. ow . don' l S 6t angry, and • ' don't get persona], for goodness sake, ' ' because it is a very wrong thing to do. ) Company Taxation. Mr. Massey proceeded to discuss Com- < 5 pany taxation. The Government could not reduce company taxation, he said, withi out increasing individual taxation, unless, as on the present occasion, it waa in a •„ position to make some reduction all r round. He did not see how the Government could alter the present system of taxation. The Labour members spoke as if reductions in the taxation of the banker, the business man, and the* pro- [ fessional man did not benefit _ the small ' man at all, but was not taxation always ' passed on? It was always the man on 1 the bottom rung of the ladder who paid. 1 Tlie Bill was going to benefit the producer and the working man. ' Continuing, Mr. Massey quoted figures 1 to show that since 1913-14 the amount 1 raised annually by the taxation of in- ' comes had increased by 982 per cent and the amount raised by taxation of land ' by 113 per cent. Mr. Holland: What was the increase in tbe taxable incomes? Mr. Massey: I know all about the increase in the taxcble incomes, because i there is £600,000 of income tax owing to me as Finance Minioter' since last year. 1 I cannot collect a penny of it just now. \ It is not much use having taxable in- ' comes when you Cannot get the income ' tax. 1 Tho Bill was read a first time. COALMINES AMENDMENT. < I COMMITTEE'S ALTERATIONS, j [B* TELE6BAPH.—SrECIAL RErOBTKR.] j WELLINGTON. Tuesday. « The Coalmines Amendment Bill was i reported from the Goldfields and Mines' j Committee to-day with slight amendments, dealing with the conditions in coal- . • mines. A new section is added by which compulsory overtime is provided for underground work, instead of being per- j missive as heretofore. Another new . clause provides that a man holding a j ; metal wire certificate and with three years' experience in underground coalmine workings may take charge of work in a coalmine. A further "new clause • states that where the services of a mem- , • ber of the Board of Examiners are not , available for the purpose of conducting i an examination under Section 9 of the , Coalmines Amendment Act, 1909, such \ examination may be conducted by an in- ] specter of mines, and the persons appointed by the Governor-General. The . Bill provides that coal leases and licenses , might bo granted in respect of scenic reserves, and an amendment by the Committee adds State forests to the lands* so available, subject to the consent of the commissioner of State forests. GAMBLING IN MARKS. [HT TELEGRAPH. —PRESS ASSOCIATION.] WELLINGTON. Tuesday. In reply to a question this afternoon '. the Prime Minister said the Government - Sfed considered the question of New Zea- I landers gambling in German marks, and had come to the conclusion that tho i publicity already given to the matter in the House and the press would be suificicnt to deter j