TAXING BILLS

Otago Daily Times, Issue 22999, 30 September 1936, Page 10

TAXING BILLS

•DEBATE IN THE HOUSE AN UNEXPECTED CONCLUSION SECOND READING CARRIED (From Our Parliamentary Reporter) WELLINGTON, Sept. 29. The second-reading debate on the Government’s taxation legislation—the Land and Income Tax Amendment Bill and the Land and Income Tax (Annual) Bill—came to an unexpected conclusion in the House of Representatives ,late this afternoon. . After six speakers—four from the Opposition and two from the Government—had contributed to the debate there was no further move from any part of the House, and as the Minister of Finance (Mr W. Nash) was not in his place at the time the second reading of both Bills was passed without the benefit of a Ministerial ■ reply and the committee stages were immediately commenced. The suggestion that the Government’s proposals might Ij intended to assist in eliminating private enterprise in industry with ultimate State control as the objective was made by Mr W. J. Croadfoot (Opposition, Waitomo). “These proposals, it seems to me, amount to just one more effort to eliminate the private aspect in industry and to make way for State control," Mr Broadfoot said. “ These Bills and other legislation we have had from the Government will gradually place industry in a position where it will be impossible to make the profit necessary to induce the all-import-ant expansion and to encourage an increase of employment in industry.”

It was an extraordinary thing to notice how the 1 urden of the increases in income tax had been spread over that class which represented the moderate income earners, Mr Broadfoot said. For a married taxpayer without children and earning £SOO the increase was approximately 70 per cent. On the average the tax on income ir the £3OO to £6OO class was nearly doubled. In that group of income tax payers there were more than half of the total -number paying that tax. Last year that class paid £221,000 in income tax. In this coming year the

same class would have to pay £300,000. That same class was to be asked to pay one-fifth of the total

increase in the income tax revenue The people earning the bigger incomes v/ere being asked to meet nothing like the ratio of increase which faced the smaller class. A classification of land, if the present system of taxation was to continue, was advocated by Mr C. H. Burnett (Govt., Tauranga), It was inequitable, he said, to press taxation on land that was unsuitable for subdivision. Mr Burnett said that thousands of young men were looking for land, but, none was available. There should be a general stocktaking to see if there was land suitable for closer settlement. He looked forward to a flat tax on the unimproved value of land with an exemption of £SOO, and to a graduated income tax. The advisability of a thorough investigation into the system of taxation by a special committee so that taxation would rest as equitably as possible on the people of the Dominion was suggested by Mr Burnett. V Mr V/.. J. Poison (Opposition, Stratford): You are doubtful about the present taxation proposals then? Mr Burnett: Yes, and so is the Prime Minister, who has said he recognised there were anomalies in the present system. The Opposition, continued Mr Burnett, had offered no alternative to the Government’s proposals. The past Government had carried on for years without making any attempt to classify land, and it now asked the present Government why'it did not adopt a system of classification. Taxation, he claimed, rested on the people best able to pay it. Objection to any form of land tax on principle was expressed by Mr H. G. Dickie (Opposition, Patea), who described the graduated land tax as inequitable and unjust in that it was a charge upon people who. might havif no income from property. A tax on income was the only fair method. The old argument that a land tax served to break up large estates no longer applied. In any event the proper method of achieving such an object was the compulsory taking of big properties by the State. Criticism of the statements by members of the Opposition that the degree of taxation proposed by the Government was not necessary was expressed by Mr W. J. Lyon (Govt., Waitemata). “It has been stated by the Opposition that the natural increase in revenue as revealed in the Budget would be sufficient to cover the proposed increases in pensions,” said Mr Lyon, “ but when the Pensions Bill is met are there no other commitments the Government should make? . Are there no other classes we should look after? If we should have a surplus there are hundreds of humanitarian channels into which it could be diverted.” Mr Coates had stated that there would be many farmers who would not be able to pay the graduated land tax, Mr Lyon added, but if that was the case those farmers would not have to pay the tax. Mr Coates: You will take a lien over his property though. “Perhaps that is just as well, said Mr Lyon, “if we make sure that the land is properly farmed.” Mr K. J. Holyoake (Opposition, Motueka) agreed with the statement of Mr Lyon that land should be worked efficiently. Land, he said should never be held in idleness That principle had always been recbgnised and there was already legislation on the Statute Book whereby the Government could compulsorily take over land that was not farmed to the maximum or efficiency. . The Bill was read a second time After a long discussion in committee on the short title of the Land and Income Tax (Annual) Bill, the Prime Minister (Mr M. J. Savage) moved the closure, the motion being carried by 36 votes to 10. The Opposition called for a division on toe short title, which was retained by a similar vote. Members were discussing clause 2 of the Bill when the House rose at 10.30 p.m.