INCOME TAX DEPARTMENT

Otago Daily Times, Issue 14699, 6 December 1909, Page 3

INCOME TAX DEPARTMENT

THK RECEiNT JUDICIAL INQUIRY. STRONG DEMAND FOR INFORMATION. (Fboxi Our Own Correspondent.) WELLINGTON, December 5. The Opposition, while the Estimates wero under discussion on Friday night and Saturday morning, made another demand foi- information about the trouble that has occurred in connection with the administration oi the Land and Income Tax Department. As the information was not forthcoming, Mr Wright moved a £5 reduction in the salary of the Commissioner of Taxes and Valuer-general. He said the rumours about the trouble that had occurred were very circumstantial. It was staled that the Commissioner of Taxes had been lending money virtually to himself on a certain piopc.rty in the city which had been valued 20 per cent, higher than the Government valuation.

.Mr Buick said the rumours that were current were doing the department more harm than the truth would do.

The Prime Minister: I can't help that.. Mr Herdman pointed out that in. fairness to tiro commissioner the Prime Minister should say what the exact position was. If then had been no misconduct a gross injustice was being done to an officer whose exceptional skill, ability, and organising capacity had been testified to by two judges.

The. Prime Minister: What about the court cases?

Mr Herdman said the House had no information about the court cases. The Prime Minister should not get angry. Sir Joseph Ward: I'm not angry. I am .surprised. I cannot give more information than I havf already given, For a time the discussion centred on statement by the Prime Minister and some of his supporters that the Opposition wanted hint to disclose private business. Tin's tho Opposition flatly denied. Tney said they did t.ot wish 'to know anything about private business. They pointed out that letters could be substituted for names in the judges' report. During the conrte of the discussion the Prime Minister stated that the principal charge against Mr Heyes was not supported by the finding of the judges. The Prime Minister also said he realised the seriousness of the position. Soon pfter this there was a sharp passage of question and retort between the Prime Minister and Mr Massey as to th<* rumours that persons in high places were implicated. It was during "this discussion that it came out that rumour stated that members of the Legislature wwe implicated. Mr Massey, however, was careful not to give names, nor would he even say which branch of the Legislature had b«en referred to.

The diccussion proceeded with considerable- vigour after tho Telegraph Office closed, and the demand for further information bscaine insistent.

Mr Massey said that there appeared to be three courses open, to the Government: (1) To lay the report of the judges without the names on the table of the House-, (2) for the Prime Minister to ten the House if any court cases were pending for, in that event, he would take the responsibility of advising Mr Wright to withdraw his amendment; or (3) for the Prime Minister to show the report to iome responsible member' on tho Opposition side.

Government Members: That would not be fair.

Sir Joseph Ward: Then why should members on the Government side not seo it?

Mr Massey: I hove no objection. If you do not adopt one of those courses you will make a mistake.

Tlie Prime Minister said that he was not. going to be a party to seeing the private affairs of anyone doing business with the department placed before the Leader of tho Opposition or anyone else, lie was not going to state whether any cases were pending, for it would not b° right to do so. If the House decided' that the report must be laid on the table of the House someone else might lay it there, for be would not do so.

Mr Herdman was referring to the Prime Minister's firmness, when Sir Joseph interjected : "If I was as jelly-backed as you I should have no firmness."

Mr Rhodes questioned the term " jelly backed." but

The Prime Minister replied that if there was any harm in jelly he had never heard of it.

In the early hours of the morning an extraordinary speech was made by Mr Lauronson (Government Whip). During the course of his remarks lie asserted that it was the business of the department to raise three-quarters of a million of taxation from the wealthiest class in the community, and therefore it was to the inteiest of this'class to blacken and injure tiie department to the' utmost of their ability. They were doing it through their representatives in Parliament,

Mr Massey: Are you speaking of the members of this side of the House ? The men who are blackening the departmentarc the Go\ernment in office.

Mr Laurenson went on to affirm that this was a department which lent money at low rates, and so clashed again with capitalistic interests. The men at the head of it had been enabling borrowers to keep clear of the legal shai'k and deprive him ol plunder, so they knew the class interested in blackening the department. He wished to give his testimony to the magnificent manner, so far as he could judge, in which Mr H'eyes had conducted the denartment.

At a later stage Mr Dive referred again' to a case mentioned by him previously in the House, in which a loan of £1500' was stated to have been made by the Advances to Settlers Department hi wrong civcmiislances. He hoped that an investi' gation would be made into the securities

for this loan. If he were a trustee he would no more" think of lending money on the security presented than lie would think of living. He "would not give tomorrow the amount, that was advanced on the security liy way of mortgage. If a commission were set up ho would he prepared to go into the matter. He did not mako chargbs unless he was prepared to prove them. There were other matters ■a regard to the Advances to Settlers Department, which, in his opinion, would not. hear the light of day. The Prime Minister said that when Mr Dive first made his charge, a month or fix weeks before, he (Sir Joseph Ward) askod him for particulars, but though he bad since spoken to Mr Dive, the latter had never made the slightest intimation to him regarding it. If there was anything wrong, and Mr Dive knew it, he was withholding the facts from him, and he must accept the. direct responsibility for not allowing the Government to investigate it. The department had lent nine millions of money in (his country, and advances had been received just as easily by Opposition as by Government supporter-;. .If the securities' were right, it was politically discreditable to suggest that political consider-'lions had entered into the operations of the department. In order to get information from Mr Dive Teg.irding the alleged loan of £1500, he would say that he doubted the accuracy of the facts.

Mr Dive said that if the Prime Minister would lay all the particulars from the Government point of view alongside the particulars which he could supply, be would accept, tho Prime Minister's challenge. He would ask: Did the money go through the ordinary channel? The Prime Minister: You should give me all information on the .point. Mr Wright said he had been informed that Mr Heyes, asvhead of the Land and Income Tax Department. bought a property in Wellington, at the Government valuation price—£ls4o. That .was all right. He wanted then to get a loan from the department, and in the ordinary course ho would have been entitled to a loan of £925, but apparently Mr Heyes was not satisfied with that amount, but wanted £1250. How did he get it? He was told that Mt Heyes got Mr Dugdale, an inspecting valuer in the Valuation Department, to value the property, with the lesult that it was valued at £2200. Ultimately the department advanced a loan of £1240 on the property. Ho wanted to know if what be had been told was true. That matter did not concern anybody else but Mr Heyes. It was a fair and square issue. It was either true or untrue. Then, again, he was further informed that none of the loan moneys had been paid off, and they were now on the books of the department. He would leave it to the Prime Minister to say whether what he had said was true or not. "If the judges' report is laid on the table," he said,'!'l am sure they will have something to say in regard to the transaction."

The Prime Minister said that no charge involving a transaction of the kind had formed the subject of investigation. Mr Wright's statement as to what the report would show on the matter was, therefore, unfounded. As a matter of fact, be (Sir Joseph) had a rumour of the kind, but- the information furnished him was different from that which had been furnished by Mr- Wright. The proper thingwas for Mr Wright to have ascertained whether his • information was correct. There had been jw Government valuation of the properly of £2240. Mr Wright! £2200?

Sir Joseph Ward: That is also wrong. I might also a'dd that the certificate 'of value is signed by the former Valuergeneral.

Mr Wright said that the property he had referred lo was brought through" a commission agent by Mr Heyes for £1500, and nobody else would have received a loan to the extent which he did on the property.

The amendment was lost by 10 votes to

Mr Massey denied that the Opposition had desired to bait or persecute Mr Heyes. Ho_ sympathised with Mr Hayes in his position, but if the Government wanted to maintain for the department the confidence of the public that was necessary for its success it could only be by throwing the light of day on what was occurring. The Dominion, in referring to the matter, says:—" Concealment of the facts, in view of the amount of publicity that has already been given to the subject, can only do still further harm. The excuse offered by the Prime Minister that if the names of the private individuals mentioned in the report were omitted the report of the judges would not be understanding, is singularly ineffective, because, if correct, it should remove any objection he might have to making the findings of the commission public. Thereis a very strong feeling here that there is more in the matter than meets the eye, and that it would be in the public interest to havo the working of this important department' of the State thoroughly investigated. Surely it is asking too much to expect the public to believe that the nature of the charges could not be stated without identifying any of the public with them, and we have no doubt that the findings of the judges could bs set out with equal clearness without any risk of disclosing the business of private individuals, Members would he quite justified in refusing to pass the Estimates until this information is - supplied.

The Post says:—" Tire very worst point of view from which the question should bo approached is that adopted by Mr Laurenson, whose transformation into a. Government Whip has converted him from an independent and candid critic into the most consistent of Ministerial claquers. The Opposition, he asks ns to believe, is attacking' the Land and Income Tax Department becaure wealthy people suffer most from its attentions and are therefore most anxious to see it discredited. That a wealthy man is necessarily a wicked man is a propositon which appeals with all the force of an axiom to a certain class of politicians, but that a wealthy man should bo such a fool as to desire to have the detai's of his private business published to the world is aji absurdity at which oven they might be expected to stop short."