ANNUAL TAXING BILL.

Otago Daily Times, Issue 19269, 5 September 1924, Page 8

ANNUAL TAXING BILL.

SEDUCTIONS ANNOUNCED. TOTAL ABOUT £OOO,OOO. STATEMENT BY PRIME MINISTER. (From Our Own Corresponded.) WELLINGTON, September 4. Reductions in taxation were announced by the Prime Minister to-night, when the Land and Income Tax (Annua!) Bill was introduced to the House of Representatives, bv Governor -General's Message. Mr Massey explained that this was the Annual Taxing Bill, and that later on there would be another more important Bill dealing with taxation. The present Bill authorised the collection of the tax for the next year, and gave the Finance Minister the necessary power to fix the dates for collection. The Bill reduced the land tax by 10 per cent, and the income tax by 13 1-3 per cent. It would be recollected that there was a reduction of 20 per cent, in income tax last year, and this year's reduction would make the total reduction 33 1-3 per cent. Mr Massey said he hoped to be able to propose other reductions as the session went on. He wanted to ask Parliament, and he hoped it would agree "to it, to reduce the amusement tax by £45,000. That would not wipe it out, but it would be a substantial reduction. He would like to wipe it out entirely, but did jiot think we could afford it this year. ' He wanted to reduce the duty on tobacco, which required more form and ceremony than reductions on these other things, and needed three months' notice. The reduction on tobacco would be little short of £IOO,OOO. The reduction would not be on cigarettes but on plug and out tobacco. Mr. Masters: What about cigarette tobacco ? Mr Massey: Not touching it. Mr Massey added that he regarded cigarettes as more a luxury than the other tobaccos. He was not a smoker himself, and did not pose as an authority, but he considered that smokers should share in any reductions that were going. Mr Masters: Ten shillings per lb is a very heavy duty. Mr Massey said that the company tax was not being touched at present. He thought the proposal of the commission 'was that it should not be interfered with for two years. He would not say that there would be nothing dealing with it in the next Bill that came along. Mr Holland asked if the Prime Minister would give the amounts of the reduction^. Mr Massey replied that the decrease in the land tax would be £'I3o.QOG. It would bo recollected that a substantial reduction was made last year. Income tax would be reduced by £53.000. He had said in the Financial Statement that he hoped to reduce taxation by about £1.000,000. This would not quite reach the million mark, but would run to about £900,000. Mr Hawken: Any relief for mortgagees? Mr Massey: No, not in this. Mr Massey said that the amusement tax would be reduced-by £45,000, and the reductions in tobacco would be a little less than £IOO,OOO. Mr H. E. Holland (Leader of the Labour Party) said that what occurred to one was that the reductions were not going to benefit the small man. When the 10 per cent, reduction was worked out it would seem that the land tax reduction would confer a benefit only on those fairly well to dp in the matter of land ownership, and the income tax reductions would be simply a gift to people w r ell enough placed to bear their share of taxation. Compared with these direct benefits the reduction to the individual by way of indirect taxation would be infinitesimal. Mr J. M'Combs (Lyttelton), who was called to order by Mr Speaker when he attempted to argue the matter in detail, contended that the proposed reduction in indirect taxation was very small and very unfair as compared with the reductions under the land and income taxes. But for the restrictions placed upon him, and very properly by Mr Speaker, he could prove his case up to the hilt, he said, and he declared that the Government was making the reductions in taxation at the expense of the Public Service. That was indeed the only way that the Government could, make them, and he protested against any reduction of land and income tax until the wages and salaries of the public servants had been restored to their pre-war value measured in purchasing power. Great Britain 'had done this, and prosperous little New Zealand, scarcely touched by the war, could well afford to do it. The Government's proposals, as the Labour Leader's speech had indicated, would be strenuously opposed by the Labour Party in the House in detail and at every stage. In reply the Prime Minister, probably hinting .at an appeal to the country, declared: "I am not going to put up with threats," and warned hon. members that "thore is a way out." Mr M'Combs: Then take the way out! That is no-idle threat. Mr F. Langstone (Waimarino) : That is what we want. The Prime Minister: Members ought to know perfectly well that I am not' one to put up with threats. Mir Langstone: You give them. Replying to what was said by the Labour Leader, Mr Massey continued: I think the hon. gentleman said that the Government proposed to take taxation off those well able to pay. What does he know about the land tax and about those on the land ? If the Minister of Lands could tell the House what happened to-day when a deputation of country settlers came to us, and said that they were not able to make ends meet, not able to pay local rates, and not able to pay land tax, hon. members would see what the position is. The land tax is payable by the people who made no profit off the land last year. Whether there is a. profit or not they have to pay, and whether mortgaged or not they have to pay land tax, and unfortunately there are many in that position to-day. I don't say that the country is not prosperous. It is bound to be prosperous with exports valued at over £50,000,000. Mr Langstone: How many country people are paying land tax? The Prime Minister: The hon. gentleman doesn't pay land tax and never will. Mr W. E. Parry (Auckland Central) : This is only a preliminary for the income tax. The Prime Minister: As to the income tax I am under a good deal of anxiety about the present position. Mr Parry: So are we. —(Laughter.) The Prime Minister: The Hon. membo' doesn't know it.—(Laughter). Let me put it in a very few words. Wo are trying to get back to the taxation imposed prior to the war. Mr Parry: The war debt has still to bo paid. The Prime Minister: I don't mind intelligent interjections, but I do object to interjections like that. The war taxation was imposed to enable us to do our full share during the war, and we did it, but we have got to foot the bill, and this is the position that lam afraid of. We notice what is going on in England whero there is a very serious depression, and it is not getting any better. They are out to increase customs taxation. We all hope that the present prices of our produce, our wool, meat, butter, and choose, will keep up. Nothing would please me belter. It would suit us down to the ground, but I think the time is coming, and in the next few years, when prices will be lower than they are' to-day. It cannot be avoided. Supposing our export s dropped to £40,000,000, and that is quite possible, though I hope it will not happen, with this enormous load of taxation where are we going to be? That is what I have to look forward to, and I would not bo doing my duty if I did not put the position before the House. I don't think we could with £40,000,000 of exports carry this heavy load, and while the opportunity offers I am trying to reduce it as much as I possibly can. I know lam taking risks, but they must be taken. The hon. member for Lyttelton referred to the wages and salaries of the public service, and no doubt we shall hear a groat deal more about them. Mr Holland: Hear, hear ! The Prime Minister: But I would like to remind hon. members that the increase on account of the scale increments went very near £400,000 for the current year. Mr M'Combs : That doesn't altor the basic wage. The Prime Minister: It cannot be said that we are not doing what is fair and just by the public service of the country. Mr Holland: It can easily !—(Laughter.) The Primo Minister: I don't want to be drawn into an argument on that just now. —(Laughter.) The salaries of the public service men have been going up ever since the cut, and honestly I believe the public servants are better off to-day than they were before the war. However, there is the position. It is ray duty to ask the House to reduce taxation and I am doing it. and I hope it will be agreed to because I know it is very necessary to be done. The Bill was read a first time on the voices.