FINANCE BILL

Otago Daily Times, Issue 18198, 19 March 1921, Page 10

FINANCE BILL

PRIME MINISTER’S EXPLANATION. (From Our Own Correspondent.) WELLINGTON, March 18. The Finance Bill was introduced in the House of Representatives early this evening. The Prime Minister explained the main provision of the Bill. The principal clause, he said. Was Clause 2, which was intended to provide a considerable’ sum more than was provided by the present law in the way of unauthorised expenditure on the railways £650,0C0 instead of £150,000. The reason for this was that the Government was importing a large amount of rolling stock—2soo wagons, 45 engines, and 10,000 tons of rails. To enable it to pay for this there must be an extension of unauthorised expenditure. There was no other way. The Government had the money, but it had the authority. An Hon. Member: Where are they coming from ?

Mr Massey: From England. They are nil British manufacture, He -went on to state that one of the most. mp n tart piovisior.s of the Bill was the extension of the term to which the Parliamentary - Appropriation applied. At present it was to June 30. His own opinion was that the House would meet at the end of August-or the beginning of September, but he could not be absolutely certain of the date, and so, to bo on the safe side, he was asking for an extension to October 31. There was also a provision for a parallel extension of ahe ordinary unauthorised to the railway unauthorised. The Government was asking for £250,000 instead of £150,000. Then there was a new clause in connection with the taking over of the Westport Harbour in the direction of the 'setting up of a special account. The Minister would be allowed to transfer from ordinary revenue account such sums as he might from time to time require. A clause dealt with the fixing of the dates for the payment of the land and income tax. In the ordinary way land tax was collected during November. They were not going to interfere with that. The rate of the land tax should be the rate of the tax provided in the amending Bill of last year. They were standing by that; there was no reduction. There had been a slight error in the legislation of last year with regard to the exemption of stamp duty of declarations made for land and income tax. This was now being altered to provide for the exemption. _ In regard to the payment of tax in two instalments, he. repeated his former explanations that this could only be done by the payment of the first instalment early in the , year, otherwise they would be perpetually carrying forward half a year’s tax, and the finance would j>e crippled. He was > really surprised that people who professe’d to be financial experts had suggested such a thing. He was making provision now for the payment of the tax in two instalments. He would give the option of paying it in one instalment early in the year, and flie other later, or it could be paid in one instalment at the ordinary time, Mr D. Jones (Kaiapoi): Will you allow the payers interest on the first instalment?— (Laughter.) There was another point which ho might as well mention. It had been suggested that it might be possible to reduce taxation. He wished to be quite definite about this, because he did not know what conditions neift year would bring, • bat they should know by the time Parliament next met. He thought that the savings being mad© this year, taking the reduced subsidies into account, would not be less than £1,500,000.. The sum might be a little less, but net much. What he proposed to do, if it couid be managed, and ho. was anxious to do it because the people wanted some encouragement, was to reduce the income tax’ by about 10 per cent—that .was 10 per cent, off the whole amount, and, not off the increase. He took the income tax instead of the land tax because it was paid by both the farmers and the business people. Mr W, H. Field (Otaki): Will there be any reduction of the land tax? Mr Massey: No, because the farmers pay both income tax and land tax under the present law. Mr Field ; They may not have much income to pay their land tax this year. Mr. Massey: I do not know about that. People their income tax on the income up to March 31, and as far as I am able to judge, there will be some fairly substantial incomes this year. There will be up to March 31 all right. Mr Massey said that the incomes -were falling off,' but. he did not think that the fall would be so great as people imagined. What was causing the shortage of money was the enormous stocks of goods being held in all parts of the dominion and requiring to be paid for. Mr V. H., Rdfed (Bay of Islands): When will the reduction date from? Mr Massey: From March 51 or April 1. That would require legislation, but the House would meet in time to consider it. While ho could not promise it, that was what he was aiming at. Under the reduc. tion of the subsidies he hoped to be able to reduce tho income tax bv about £750,000.. The next clause of the Bill of any importance was one asked for by several members of the House. It was in regard to loans to local bodies. He did not quite know why, but he had been informed that people were quite willing to lend their money to local bodies for 10 years , where they would not lend it for 25 years. The clause would allow the Minister of Finance to alter the term if he saw good reason for it. Mr Wiiford; He still keeps control of the rat© of interest. Mr Massey. Oh, yes. There were one or two other proposals, but those which he had given were the principal. One of those remaining was to permit members of Parliament, both pf the Legislative Council and the House of Representatives, to hold positions on the Board of Health, without forfeiting their positions as members of the .Legislature.