The N.Z. Times SATURDAY, SEPTEMBER 28, 1907. MORTGAGES AND THE GRADUATED TAX.

New Zealand Times, Volume XXIX, Issue 6326, 28 September 1907, Page 6

The N.Z. Times

SATURDAY, SEPTEMBER 28, 1907. MORTGAGES AND THE GRADUATED TAX.

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In committee on the Uand and Income Assessment Bill in the House yesterday, there was considerable discussion regarding clause 17. Mr Wilford moved to amend the wording of the section so that it should not be retroactive. As it was passed, subsequently, the clause reads that “no conveyance, transfer, declaration of trust, settlement, or other disposition of land, whether made before or after the passing of this Act, shall;be effective so as to exempt the person making the same, so long as he remains or is in possession ‘ or in receipt of the rents or profits of , any such land, whether on his own account or'on account of any other person, from any graduated land tax which would have become payable in respect of such land had no such conveyance, etc., taken place-” The amendment aimed at eliminating the words ' “whether” and “or before”; and though the member for the Hutt was very serious about it and carried the point to a division, it does not appear that the clause as it stands will press unduly upon anyone. It is not, as a matter of fact, retroactive at all, in the proper sense of the word, as it leaves unaffected those who may in the past have made such arrangements as it now bars. It only deals with cases which are still operative, in cases, that is to say, where owners continue to observe a practice which the Bill specifically declares to be illegal. But the amendment did not cover the ground, or any material portion of the ground upon which the Opposition based its objection to this particular clause, as well as to the whole measure. The member for Wakatinu, as the party representative on the Public Accounts Committee, took up the line that the twenty-five per cent, graduated tax would press very heavily upon the large owner whose land l is heavily mortgaged and who is unable to induce the mortgagee either to divide his mortgage amongst a number of purchasers or to accept repayment of the loan before maturity. Mr Fraser and Mr Massey, who followed him, argued that owners who found themselves in the predicament of not being able to dispose of their lands should not be asked to pay the twenty-five per cent, extra. At the first blush there would seem to be some hardship involved, but it is difficult to see how such special cases (and they must be very few) could bo dealt without prejudicing either the State or the individuals themselves. The Premier said he could only think of one expedient, and that 1 was the introduction of a clause making it compulsory upon mortgagees to agree to subdivision of their loans, but Mr Fraser showed no disposition to accept the suggestion, which indeed carried with it little promise of re-

lief. Mortgagees have ways of their own for meeting legislative interference with their interests, and the expense, in some shape or other, is always borne by the borrower. What the Opposition wanted, and this has been the object of their keenest solicitude throughout, was a recognition of the principle of exemption for mortgages, and' what they failed to carry by assault in the first division on the Bill they tried hard to gain last night by strategy. The Government, however, which is bent upon opening up the lands of the Dominion for settlement, aro not leaving any weak places in their works. Exemption in a few instances of the kind described by Mr Fraser might be justified both by the circumstances and the results, but the honourable gentleman must recognise, upon reflection, that the principle would have to bo applied all round, if at all, and that it would lead to evasion. What could be more simple than the creation of an understanding between the landowner and the mortgagee ? Some degree of hardship there necessarily must be, and unless the Government wore to abandon its land policy, it is not easy to see where complete relief is to come from. The Land and Income Assessment Bill was not framed with a view to penalise or oppress the large landowners, but neither was it drafted in their interest. What it apparently aims at, and what it promises to effect, is the maximum of good at the minimum of evil. With the time limit provided, it should not harass anybody, not even the victims of the most unrelenting of moneylenders.