TAXATION REDUCTIONS

New Zealand Times, Volume LII, Issue 12204, 31 July 1925, Page 8

TAXATION REDUCTIONS

DAIRY FACTORIES’ REQUEST

Representatives of the National Dairy Association elicited a promise from the Prime Minister (the Hon. J. G. Coates) yesterday' that certain exemptions from taxation should be made in the case ot co-operative dairy companies. The deputation which sought this was headed by Mr J. B. Murdoch, chairman of the National Dairy Association. They represented co-operative . dairy companies in both Islands, he said, and came to seek Government subsidy for herd-testing. -The average yield of a cow in New Zealand was 1701 b of butter--fat. ..In some cases it went as high as 3001 b. If they, could get even aSO per cent, increase it would mean a great deal. They thought that the Government might subsidise them to the extent of one shilling per cow. The work was considered experimental, and for a time there would not be much result. A second question was that of the method of election to the Dairy Control Board. / A wal'd system was saggested for the North and South Islands. At present the voters did -'not know the men for whom they were voting, and the new system would enable them to. Taxation on dairy factories was another matter which they desired to bring before, the Government. They maintained that co-operative companies should he exempted from taxation. They did not consider themsglves entitled to freedom of taxation for investments in, freezing companies and. boxmaking companies. Usually co-operative dairy concerns distributed all their money, and often had to borrow for improvements. They suggested that sums set aside for these purposes should be exempted. A HOUSE DIVIDED . Mr F. Waite, representing South Island dairy factories, stated that there were two or threo schools of thought in the South concerning the election of representatives to tho Dairy Control Board, and just what Parliament worild, determine to be best he did not know.' But whatever course was followed there would be>a fair proportion .of dissatisfied'men. They thought that tho butter-fat account should he separated from the trading account, as far as taxation was concerned. If they put money/into reserve they were charged income-tax bri it, and smaller companies did ngt create reserves for that reason, v They knew that a co-opera-tive company could not carry on without a reserve. -So while admitting that the trading account should' be taxed, they should have exemption for the but-ter-fat account. .

■ The- Minister for Agriculture hdd been in touch jivith the position, said ,Mr Coates, and they proposed to revert to the law pridr to 1908. There would be no taxation on the balance of profit carried forward, upon amounts carried to •reserve, or depreciation. But they-could not.agree to dividends paid on share capital, or profits from trading accounts being free. This would be, put into effect during the- present year. It; was pointed out by a member' of the deputation that as a co-operative concorn ail their profits went to the members, -arid consideration of -this question was promised. : NO SUBSIDY -On,-the subject of ■ herd-testing, the Minister for Agriculture stated that they .had been' approached for a Buhsidy before, and on going into the< matter he .had considered that they should decline it; .'He. approvedvof . a herd-testing sys-. tern by which the Government did the testing at 2s per cow. He thought that this was the beet way, and he was quite prepared **o extbnd these operations. If they granted such a subsidy there would be a . great -many iprbtests, and the dodr would be opened for a great many other things to Be pushed upon the Government. ~: For this reason he had not recommended Cabinet to approve of euch action. . ,

Mr Coates: What would it amount tof. , Mr Nosworthy: At preseht~£lo,ooo a year, ultimately rising to, abput £30,000 a year. ■ . Dr. Bcakes: These are the figures of the Waikato JHiry Association.

_ Would not these aritounts-be lessened by the fact that the services of officers now engaged in herd-testing would be utilised? asked Mr Murdoch. : Mr Nosworthy : It means that ’ would- have to put on a good many jgbe officers, and that it would cost us much more. '

Hr Coates, askqd Whether the question rif co-operation between the Government and the farmers 'to evolve a somewhat similar scheme testing under the ' control of tho Minister for Agriculture' had been considered. If they could get to a position where /they knew when a -cow was . done, they worild accomplish much. Mr Nosworthy: We could do that, but it would raise a storm when the Govern, merit, commenced, dabbing the brand on the stock which it was considered would not pass the test. I don’t want anyone to, think that I am not whole-heartedly with you; • I am as you are. ' Concerning the question of election to the Dairy Control Boaid, he eaid that it was no use going, into the Souse' without some proposal- which they knew would .be acceptable to the dairymen. Opinion seemed divided. They had had l the college System dl. election thrown out by. the House before. He was in favour of the ward system, but he did not want to make thingß any worse than they were.