HARDSHIP CLAUSE

New Zealand Herald, Volume LXXIV, Issue 22893, 23 November 1937, Page 13

HARDSHIP CLAUSE

GRADUATED LAND TAX COMMITTEE TO ADVISE MINISTER'S FINAL DECISION CRITICISM BY MR. HAMILTON [IJY TlOI.l'X 1! A I'll —SPKCIAT, HHIM UtTKll J "WEr,LrxoTON, Monili!y The arrangements made by the Government for granting relief in cases of proved hardship arising out of assessments for graduated land tax were explained by the Minister of Kinancc, the Hon. W. Nash, in moving the second reading of the Finance Bill in the House of Representatives to-night. A committee would be established, said Mr. Nash, and its duty would bo to determine where hardship existed in tho operation of the graduated land tax. It would be confined in its operations to tho tax levied during the two years ending March 31, 1938. The members of tho committee would be the Commissioner of Taxes, tho Secretary to the Treasury and tho SolicitorGeneral. Procedure Outlined " The committee will investigate all the circumstances of cases referred to it," Air. Nash continued, " and will determine the extent to which hardship exists. It will not be limited in any way with regard to the possible causes of hardship. Having determined the circumstances, it will recommend to the Minister the amount of relief which it thinks should bo given, and the Minister can then authorise tho granting of that relief. Ho cannot increase the amount of relief beyond the recommendations of the committee, but if ho thinks tlioso recommendations do not give justice to the claims of an applicant he may refer the case back to tho committee."

The lit. Hon. G. W. Forbes (Opposition —Hurunui): What happens then? The Minister: The case will bo given further consideration by tho committee and a fresh recommendation will bo made.

"A Vengeance Tax" " We appreciate the fact that the Minister has brought down a hardship clause in connection with payments of graduated land tax," said the Leader of the Opposition, the Hon. Adam Hamilton. "It seems that the Minister has had a year's experience and has found that there are cases of extreme hardship in the payment of the tax. On this side of the House we go further than that and say that the whole tax is unjust. I have already said that it is nothing more than a political tax; it can even be described as a vengeance tax. "The tax can be justified perhaps 10 per cent," Air. Hamilton continued, "but it is 90 per cent unjustifiable. It is wrong that a tax which proves so inequitable and which calls for the provision of a hardship clause should continue in operation." "Conservative Tribunal" Discussing the committee sot up to determine cases of hardship, Air. Hamilton said it seemed that the Minister had selected a "pretty conservative tribunal." The Commissioner of Taxes and the Secretary to the Treasury were both virtually tax collectors, whose duty it was to maintain revenue, and the only liberal or progressive mind on the committee was the SolicitorGeneral. "We cannot take any exception to the Treasury looking after the State's money," continued Air. Hamilton, "and we cannot expect that the Commissioner of Taxes will let much slip in the way of revenue. The committee may take the view that if a man can afford to pay the tax then he ought to pay it, even if he has to draw on his capital to do so. in that event the committee's investigation comes down to the institution of a means test." Double Taxation Mr. Hamilton said there were many large farmers who were on land which was wholly unsuitable for subdivision. In spite of that they were levied for the tax. Hardship should embrace a provision that if they made no profits on a year's working they should not he called on to pay the tax. if the tax had to be paid out of capital it resolved itself into a double income tax or else into a capital levy.

" I think the Minister realises that it is difficult to justify this tax in its entirety," said Mr. Hamilton. " However, under this bill he has the final word in determining whether or not the tax is to be paid. That is entirely wrong. It is not the Minister's job to determine whether or not taxation should be paid. It is his job to write the law and then let his officers administer it. In my opinion it is a serious weakness in the law for the Minister to take such powers for himself."