TAXATION PROPOSALS.

Otago Daily Times, Issue 20833, 27 September 1929, Page 10

TAXATION PROPOSALS.

SUPER-TAX MORTGAGE EXEMPTION. SPIRITED OPPOSITION. FIRM STAND BY INDEPENDENT MEMBER. (From Our Pabliauestarv Reporter.) WELLINGTON, September 26. .Spirited opposition to the Government’s 'taxation proposals was displayed in the House of Representatives to-day by Mr C. A. Wilkinson (Independent membei for Egmont) during the second reading of the Land and Income Tax Amendment Bill. Mr Wilkinson, 1 who supported the Government on the recent no-confidence amendment, appealed to the Prime Minister to abandon the super-tax and the reduced mortgage exemption proposals notwithstanding that he could, with the support of the Labour Party, secure the passage of the legislation. Mr Wilkinson said that one of his objections was that the taxation was to be imposed regardless of the prosperity of the land. In that respect he was in disagreement with the United Party, although he considered the Prime Minister was* entitled to congratulation on the concession he had already made on the original Budget proposals. It was obvious, however, that the pro-, posals could be altered still further. He' suggested to the Prime Minister that he should drop the super-tax proposal and that he should allow the mortgage exemption to remain at the existing figure. Mr Wilkinson was strongly of the opinion that if the proposals were confined to the imposition of income tax oii the farmers, little objection would remain to the Bill “ Leave the land tax where it stands to'day,” was his advice to the Government. (Reform: “Hear, hears”) Continuing, Mr Wilkinson said that with the imposition of land tax and local body rates an impossible position would beventually reached for the man on tinland. There should be some form of coordination in regard to those two sets ot taxes in order that necessary and desirable adjustments could be made. Accord ing to information he had received With respect to the taxation of wheat areas in the South Island, the ordinary land tax on a certain good quality wheat farm was 11s per acre, while the super-tax proposed was 10s OJd, making to total of £1 Is Did per acre. In another instance the ordi nary land tax was 7s Aid and the supertax 12s 54d. The Minister of Lands (Mr G. W. Forbes): They are large farmers. Mr Wilkinson: The total unimproved . value is £50,000,, but at the same time the : tax is a high one aud amounts almost to confiscation. , , ■ m The Minister of Defence (Mr T. M. Wilford): Arc they suitable for subdivision ? Mr Wilkinson: Some of the lands may be. - Mr Wilkinson said that the hardship clause of the Bill was, at the best, of no great value, and he believed that a great number of the farmers affected would not bother about petitioning for the refund under that clause. The putting into effect of the proposals flight mean ruin to many farmers. ",

Renewing his contention that the pay-, ment of income tax was the fairer way out of the difficulty, Mr Wilkinson pointed out that at .present income tax payers were allowed to deduct the interest they paid on their mortgages as well as 5 per cent, of the eapital value, and he wanted to know why, if that principle were accepted in regard' to income tax, it could not also be approved with respect to land tax. .It seemed unfair to discriminate in that fashion, and. to his nrind; the, only reason for the differentiation was the desire of the Government to see land -Cut up. “ I am as anxious as ■ anybody else to see closer settlement in New Zealand.” added Mr Wilkinson, “but it does not appear to me to be a fair proposition to levy heavy taxation to effect that object. Surely some, better means could be devised to obtain lands for closer settlement before we tax the whole farming community to secure the subdivision of a few estates. The lands should he properly classified to enable the most suitable to be selected and dealt with accordingly., There seems to he no sense in taxing the whole farming community to bring about a few subdivisions.” In Mr Wilkinson’s, opinion, land taxation was being imposed regardless of profit or loss. A flat'tax took no account of seasons, prices, etc., whereas income tax was imposed only when profits wenmade. What was required for additional revenue could be derived from the. general application of income tax. Was it.worth while, he asked, to disturb 1800 farmers to bring in the sum of £25,000? It was, in his opinion, a case of using a big hammer to crack a very small nut. Mr Wilkinson issued an appeal to the Labour Party to assist in the matter When land taxation was before the House the Labour Party rushed in and supported the proposals regardless of the consequences. It would, perhaps, he a good thing for New Zealand if Labour were placed on the Treasury benches, because it would then become educated as to the necessities of the farming community. Mr M. J. Savage (Labour member for Auckland West): We don’t need any education on'that point. Mr W. D. Lysnar (Reform member for Gisborne): You don’t want it. That is the trouble. I

Mr Wilkinson said_ that if the Laboiiv Party wanted to get into power it should try to conciliate' the small farmers.' It was unfair for them to rush in and support the imposition of taxation on farmers simply because farmers were concerned. Mr Savage: That is not what we arttrying to do.

Mr Wilkinson reiterated that whenever land taxation was brought up in the House it always had the unanimous support of the Labour Party/ Farming was the greatest industry in New Zealand, so why should a man he taxed who was doing the work which kept everybody else prosperous.

Dir H. G. R, Mason (Labour member for Auckland Suburbs): This is not the Labour Party’s Bill. Dir Wilkinson: ’ No; but. the LabomParty is supporting it. The United Party would have no hope of putting this Bill through without the support of the Labour Party;—(Reform: “Hear! Hears! ”) A Labour member; You had better he careful of your ground. Dir Wilkinson; I am standing fair aud square to my ground.

Mr Savage; You will be running very soon.

Mr Wilkinson asked 'the Government whether it would suffer any lack of dignity l>y forgoing the proposals relating to the super-tax and the mortgage exemption. There was no doubt that on a division the Government could win through in spite of the Opposition. It was clear, therefore, that there would be ir, loss of dignity by abandoning the objectionable provisions, If that were done he felt sure the Prime Minister would obtain practically unanimous support for the infliction of income tax on farmers. The Minister of Defence (Mr T. M. Wilford); Whoever heard, of a House being unanimous on taxation? Mr Wilkinson suggested that if additional revenue were required one method of obtaining it would be to reduce the present 5 per cent, on the capital value allowed the business people. That exemption meant a tremendous saving to some payers of income tax, and he quoted an example to show tUat if the figure were lowered to 3A per cent, the individual concerned in that instance would have to pay double the amount in income tax, -which wou kl not be too heavy. The matter was of such importance as to warrant an investigation, and if the proposals .were dropped this year the Government would f tu. na i i con duct a close examination of the whole position and to ascertain from official records just what effect the taxation suggested would have on the people of the country. Mr D G. Sullivan (Labour member for Avon) challenged Mr Wilkinson to quote chapter and verse to prove a single instance upon which the Labour Party had -proposed increased taxation for the farmers. » Mr Wilkinson: \ou have never had a chance to propose it. Mr Sullivan emphatically denied that the Labour Party had ever rushed in to support increased taxation on the working

farmer. That party realised that the working farmers were, just a a much workers as manual workers or any other class of worker in New Zealand. When the Labour Party fought for the workers it also fought for the working farmers. It had the interest and welfare of ■ the small farmers at heart. MAIN PROPOSALS OF BILL. MR D. JONES’S .DISCLOSURE. (FeC|M Oun Parliamentary Reporter.) rn WELLINGTON, September 26. • r t * lsc * osure that the main proposals in the luxation Amendment Bill had been pigeon-holed since 1921-1922, when they were rejected by the late 'Mr Massey on account of their unjust nature, was made i^ r P", Jon e s _ (Reform member for Mid- I Canterbury) in the House to-night. The unfortunate thing is” said Mr Jones, “that the Government does not appear to realise the effect of the Bill, and the. Prime Minister in his introduction treated it very much as a "joke. The Bill was evidently conceived and drafted by an office man without farming experience, and the Prime Minister in' introducing it had no grasp of the widereaching effect of the proposals, and his speech was merely departmental notes on the Bill. The main, planks of the Bill have lain in a pigeon-hole since 1921 or 1922. They were brought before Mr 'Massey. but_ he saw their injustice, and promptly rejected them. ;They are now resurrected and form the basis for the present Bill. . “ Yesterday afternoon,” he added, “ we saw the Ministerial benches, in fact most of the United benches empty, while the Bill was being discussed. As a matter of fact one regrets to have to state that every member of this House realises that representative responsible government- has broken down, and the ship of State is simply drifting without a rudder, compass, or-course, and one wonders how long we shall be able, or indeed should conceal from the public, the true position into which this country has unfortunately drifted. Labour for some reason has failed to function. Unemployment, which is growing worse month by month, has failed to draw from the Labour Party that criticism with which it so bitterly attacked the Government when the condition of New Zealand was in a. much better position than to-day. Opposition from" the Labour Party 'has ceased. Labour, worrying over a possible election or for some other reason, is no longer a force in the House except to keep the Government in office. The Government laid a trap for the Labour Party and it swallowed the primage duty, putting an additional burdai of £450,000 a year and profits in addition —probably £7,000,000 to £8,000,000 a year—upon the people of the Dominion to get at, the alleged big farmers who, it was contended, were escaping payment. This Bill is. the price paid for_ the Government’s grab to ensure its big prospective spectacular surplus of next year from primage and land tax.”