PARLIAMENT.

Otago Daily Times, Issue 20832, 26 September 1929, Page 10

PARLIAMENT.

v YESTERDAY’S PROCEEDINGS. HOUSE OF REPRESENTATIVES / (Afijldged Irom Press Association Telegram.) WELLINGTON, September 25. The House of Representatives met at 2.30 p.m, to-day. Tix PROPOSALS.: Mr C. L. Garr {Timaru) asked the Prime Minister whether, in connection with the land tax proposals, he would take steps to protect the interests of rural partnerships. Sir Joseph Ward stated that, in order to prevent .evasion, a partnership was assessed as a single owner. There appeared to be no reason why there should be any departure from the ordinary provisions in relation to this tax. Sir Joseph Ward added that for income tax purposes the incomes of partners were assessed separately. " FOWL WHEAT PRICES. Replying to Mr W, J. Jordan (Manukau), the Minister of Agriculture (Mr G. W. Forbes) stated, that the representations of poultry-keepers requesting that wheat should 1 bo made available to them at export parity prices had been forwarded to the Wheat Commission. llnd AND INCOME TAX AMENDMENT BILL.

Sir Joseph Ward, in moving the second reading of the Land and Income Tax Amendment Bill, said he had intimated that he'would be willing to receive representations from deputations on the subjefct, provided they were made this week. This, however, did not affect the second reading of the Bill. ■ The Bill would not be in the committee stage till some time w ®ek. Tuesday nekt, oil possibly Wednesday, would be the last day on which he would he able to receive representations. ■ ■ Mr M-. J. Savage (ifuckland West) stated that he had not considered it fair in the post that taxation .paid on income ear S? i * ro . m isEji. should not be the same tt u j income earned in the city. He had always been of the opinion that taxation should be based on the principle l to pay. It had seemed in the past , that the landowner was receiving • r.. i. ef 8a, t in ent than the man in the oity, but now that the new proposals were Jpder consideration there was an outcry that the landowners /were being more harshly treated, and desired the same conditions as the city people. Mr Savage said he favoured the Bill because it gave some effect to the principle of ability to > regretted that Sir Joseph Ward fa ad amended the to reduee the mortgage exemption to £SOOO, and had now fixed the sum at ;7500. He approved of the principle of breaking up large estates. He considered we should aim at a uniform system of taxation applicable to all incomes, whatever might be the source, whether town or country, Xhere were owners in the qitfes of very fiighly-valued areas of lands from which they derived huge incomes, and the question, arose whether it was right to exempt 'that class of land -from. the operation of .the 1 super-tax. i Mr J A. Young (Hamilton) stressed the uselessness of breaking up certain classes of land, and stated that subdivision only depreciate the value of' the land. Even if suchi properties were large they should-not come into' the taxable category. The answer given .to this, . objection was the hardship clause, hut the principle of the clause was wrong, for it did not clearly express what constituted hardship. The clause referred to ' the financial position,” which was a rough-and-ready way out„of the difficulty. Continuing, Mr Young said the Prime Minister had stated that comparatively few landowners would he affected by the proposals. If .that .were put forward as a' defence of the increases it was wrong in principle. It was unfair to those who were affected. ' ' ! Armstrong (.Christchurch East) said it was agreed that additional rßV emie, was necessary. It had been stated that produce prices this year might be less satisfactory than'last year, and that landowners ■ would therefore be less wile to meet the increased demands on their resources. If prices did fall! the Government would also lose revenue, and there .would be even, greater need for extra taxation.; Mr Armstrong asked ia whose interest was the hopelessly niort.gaged property exempted from taxation? - who was strugling m vain to meet his interest bill would not benefit. taxation bill was nothing compared with his interest bill. It was the moneylender who would derive any benefit. Mr Armstrong added that he was not entirely ' avo ? r which he considered l did not go far enough, because it- con-* tamed no proposal to increase the tax on -incomes. However, taking the good with the had, the Bill was an improvem v l Ai on U l6 present conditions, and went a )ri. t e n ay in direction-he desired, the House adjourned at 5.30 p.m. EVENING SESSION.'

The debate on the second reading of the Land and Income Tax Amendment Bill was continued when the House resumed at /.on p.m. W. D. Lysnar l (Gisborne) stated that he regarded the Bilr aa a ■grave farreaching measure, and he thought that the proposals were ill-advised, confiscatory and extreme. If the legislation were placed on the Statute Book it would* drive many farmers into the bankruptcy court. * ft® did not regard it as an equitable l Bill. It would not encourage people to take up land. At the present time there was a demand for dairying land, but not for sHbep or pastoral • country. There was plenty of the farmer class available for closer settlement without the application of the measures contained in the Bill. Langstone (Waimarino) said he: considered the Prime Minister should not have departed from his original proposal m regard to mortgage exemption. He expressed the opinion, that the whole taxation system should be overhauled, and he particularly attacked' .the company tax, which he described asMotally unfair, as it imposed the same burden on the shareholders in a small way as it did on the shareholders in affluent circumstances. Mr Langstone said it had been asserted that the Government’s proposals would brim* down the price of land. That might be a very good thin? for the people of New Zealand. When land values conformed with money values a real benefit would have been created. The Minister of Lands: and of AgriO’ - Forbes) stated that important conceesiona had been made in fhe Bill, and he believed the country had appreciated Sir Joseph Ward’s reasonable attitude. The Reform Party had not uttered .a ’ word of thanks, and had continued to make party capital out of Us misrepresentation of the tanners _ position. Mr Forbes stated that It was incorrect to state there was any lack of demand for land. He had received letters from hundreds of young men who were anxious to .get on to the land, and the most effective way of establishing them there was by Government .assistance. The Reform Party had been judged on its.-iand settlement policy at the last election, and the United Party F°™. “e judged on the same basis. if it tailed in this respect it would suffer a fate similar :to that of the Reform Administration. The Minister stated that he was in favour of a uniform system of valuation, and it was his intention to conference with' leading officials ot the Valuation Department to endeavour to devise a more, equitable system than was in operation at present. There had been references to the classification or land put he asked where would the Prime Minis ter_ be in raising revenue if he delayed until land classification had been undertaken? Why had not the Reform Party dassified land while it was in office?

B -¥ r v, i- J - , Colson (Stratford) Sam he believed that closer land settlement was essential to’ -the progress of New Zealand. He had however, to.consider the interests of the tamers, anti while he realised that thPrime. Minister had made an honest endea™ur ’ , he |?. ad to say- that the Bill tyould not satisfy him. Mt placed too w\ C L° f t, a - b^ en / >n )e forking farmer.’ i ,ad . b , e en opposed to the primage duty , he had agreed to the increaseijaa a temporary , (Pleasure. He would have been prepared to support some increase of taxation on larger estates suitable for subdivision, but the Bill went too far. The methods proposed amounted . to confiscation. Had the Prime Minister gone back to the £IO,OOO mortgage exemption he would have gone some of the yvay towards ridding himself of the

opposition to the Bill. Sir Poison contended that farmers from one end of the country to the other were opposed to the increase in taxation as outlined in the Bill, and he hoped it was not yet too late for some modification to be introduced' There was no doubt that land values would fall, and it was wrong to say that lower land values would be in the interests of the public. High land values were an indication/of intensive production and of prosperitjr among the general community in New Zealand. Local rates imposed an enormous burden on the farming community, and he had hoped that the Government would have endeavoured to take some steps in the direction of de-rating “ ir ,ui lands as had been achieved in Great Britain.

-p- H. Clinkard (Rotorua) admitted * r, re were some lands that were not suitable for subdivision and it should not be necessary to impose a penal tax in such instances. He stressed-the necessity tor increased taxation, and stated it was right that the'extra burden should be placed where it would least be felt. He considered the land was well able to bear this burden. Personally he preferred income tax to land tax. Mr Clinkard contended that prosperity did not depend on land values, but that land values^ depended on the prosperity of the country.

Mr A. Hamilton (Wallace) urged that provision should be included in the Bill to enable persons whose land was not suitable for subdivision to appear before some tribunal with a claim for exemption. There were two main principles under the BUI. One was to tax the wealthy man and the other was to cut up properties. He would have no opposition to the proposal to tax wealth, and in that case the super-tax should begin after £20,000, but if the object was to tax wealth, then all wealth should be taxed, and not only farm lands. If taxation were designed to cut up large estates he hoped it would not be permitted to kill too many in the process. The two classes who would be hit by the Bill would be farmers on large' areas of low value land and those carrying heavy mortgages. The wealthy farmer would simply pay tax and hold on to his land. Mr C. L. Carr (Timaru) expressed the view that there were other avenues of .taxation that might have been employed. He believed the present proposals would be beneficial in that they would he instrumental in breaking up large estates, and he was glad that the Prime Minister had increased the amount of mortgage exemption from the,, sum originally proposed. The debate' was adjourned. The House rose at 10.30' p.m.