THE PREMIER IN DEFENCE OF THE PROPERTY TAX.

Otago Witness, Issue 1943, 14 February 1889, Page 14

THE PREMIER IN DEFENCE OF THE PROPERTY TAX.

Adckland, February 6. The Premier, Sir Harry Atkinson, addressed a meeting of the citizens of Auckland this evening in the City Hall, on the property tax and its substitute a land tax and an income tax. Mr G. H. Upton occupied the chair, in the absence of the mayor through illness. There was a large attendance, and among those on the platform were Sir Frederick Whitaker, Hon. B. Mitchelson, Minister of Public Works, Sir Wm. Fox, and a number of members of the Legislature, and representative citizens. On Sir Harry Atkinson's appearance he was received with cheers. Sir H. Atkinson said he thanked the audience for their attendance and the cordial reception given to him. He knew there was dissatisfaction in Auckland at the property tax, and he had come to remove it, and to give reasons for it as a fair and equitable tax, and take counsel with them, and bear their reasons against it. He took it for granted that the £480,000 now raised by the property tax would still, have to be raised in some way or other, notwithstanding all the retrenchment that had been made. It was to be regretted, and he regretted, that so large an amount of taxation had to be borne by the people. No tax, he found, was agreeable, and all that could be done was to adopt the least disagreeable tax. He thought he had got it in the property tax, believing in meeting the increased liabilities by direct taxation. At first he looked at the income tax, but found it so harassing, uncertain, and difficult of collection that he put it aside at once. He then looked at direct taxation as in America, and it wa3 his investigations into it which led him to propose the property tax. The property tax was only levied above the exemption and on that property in every form which the taxpayer would leave behind him at death, and then taxed by the State. The income tax, on the contrary, demanded a slice of the means of the man every year, and without regard to his requirements. They could judge which was the best method. But the advocates of the income tax proposed to supplement it by a land tax. Did they mean to tax the farmers of the colony on the unimproved value of their laud, and then tax their income from) it. He wanted to be dear about that, Speaking for himself, he would at once state that he would be no party to a land tax alone. He would not be a party to ruining the agricultural interests of the colony, for he looked forward to the time i when the State would hold the land. If the ] farmers were handicapped by a land tax I they would be unable to compete in the markets of , the world with nations which bad no land tax. They were demanding— their newspapers were demanding — that the Government should settle the people on the land, and in the same breath they told the intending settler if he dared to invest his capital in land they would specially tax him, but if he put the moßey in trade he could go scot free. ' In South Australia they had a land and income taxj but the farmer who paid the land tax was entitled to deduct the income tax derivable from it, and that was fair. In a few years in this colony they wonld have wealthy men among them spending their thousands in pictures and articles ot luxury, and under an income and land tax all such property would escape scot free, ' whereas he thought it should bear taxation like any other form of property. The speaker here gave a series of illustrative cases to show how the property tax and an income tax on English lines would operate respectively, as the land tax was comprised | in the property tax and every landholder through that tax paid Id in the pound on unimproved lands. He had taken, out 146 names' of persons who paid property tax, 48 being the largest payers of the tax in the colony. They paid £42,000. He had the estates of these people carefully estimated by the Property Tax depart : ment, and a land tax of 6d in the pound would only be £17,000, or not half their present contribution. It would require a rate of 16d in the pound to raise their present contribution. He wanted to ask then! ' what would be the j effect outside the colony if it became known , that they' were putting on a rate of 16d in the pound, When these people put in their return be ventured to say they would return nothing like the amount, and the court would not be able to make them. It was said the property tax drove capital out of the colony. His answer was that there was plenty of capital in the colony — more than the colony had ever had, in factwhenever good security was forthcoming. The outcry arose simply from those who had given a high property tax valuation in order to borrow more money on their property. They had borrowed it and were unable to get rtf of their present mortgages and take advautage of the existing cheap rates of money. He would now look at the supposed operation of the property tax on unproductive property, which was a sore point in Auckland. He was sorry to see so many empty houses as he had seen that day ; but still he held that men did not pay the tax upon unproductive property, for the Government assessor had to accept the owner's valuation, or the Government had to take the property over with 10 per cent, added. Some people evidently did not know the provisions of the law, and thus some grievous oases of hardship had arisen which need not have occurred. The Finanoial News and other journals representing oapital in London deprecated New Zealand taxing capital coming into the colony. His view was that capital should bear its burdens in proportion to the benefit it secured from the State. The Government would not allow English capitalists to dictate how they should tax capital. The property tax was, he admitted, in some cases hard upon capital when it first came into the colony, according to whether it arrived shortly before the assessment was made or later on. It was also hard upon widows whose incomes weie derived from money out at low rates of interest, and certainly took a large slice ; and with regard to that matter, and also with r©gar4 to implements u,»ed \a the t^gripultyifal industry, some alteration might be made by Parliament. Ab to the objection that was made that the property tax was a tax on thrift, while the improvident escaped, he maintained that it was not so, as the thriftless man in various ways was taxed on his wasteful expenditure, and paid far more than those who are provident. Had they thought of the effect of an income tax on the colonial finances ? The officers of the Property Tax department and himself had worked out the figures. A sixpenny income tax on the people who raised thee incomes from property, would be £80,000, and a threepenny income tax from people who earned their income by their own labour was £20,000. Only £100,000 in all ! If they raised the first class to Is 6d in tbe pound, and the workers to Qd jn the pound, the amount raised would still be £80,000 short of the amount required to enable the colony to make both ends meet. Sir Julius Vogef had promised before Up went Into power to abolish I the property tax, but when h« got in he did j nothing of the kind. No doubt when he got into office he ascertained the real faot, and found that he could not dispense with it. Sir Julins was a man of resource, and if he could in his financing h»ve diapwoed. with the t«;

he would have done so. Did they want the harassing system in vogue in America, with its method of " betterments," Jq whioh the settler hadso note down almost every transaction of his life, and every dealing he made for the satisfaction of the public office and the board of reviewers ? If he sold « quantity of apples he had to put it down. If he sold half a sheep to a neighbour he had to enter it. It had been stated by Mr Moss, tutmber for Parnell, that not a State in America had a property tax. He applied to the American Consul to ascertain if this statement were true, and the Consul said he could not be certain, but he believed that nearly every one of the States had a property tax. He next sent to America for information which was lately laid before the English Parliament. He now stated on the authority of the Committee of the House of Commons that the whole of the States save in Delaware had a property tax. In some States the tax was levied twice— first on the holder, and then on the mortgagee ; while the incidence of the tax was heavier than in New Zealand, the tax being about £1 in £100. The Premier concluded by thanking his hearers for the patient hearing, and invited the opponents of the tax to state their objections, and he would endeavour to answer them. He sat down amidst hearty cheers.

Mr F. G. Ewingcon addressed tbe meeting, and gave a nnmber of frightful examples of the property tax, and stated that to his own knowledge large sums had been prevented from ooming into the colony from England, and sent to Australia, because of the property tax.

Sir Harry Atkinson replied, explaining these cases apparently to the satisfaction of the meeting. He said that in his young days it was observed that when one fly died two came to the funeral. So for every nervous capitalist who took his money away from the colony, two capitalists were coming in his stead.

Mr E. Bell moved, and Mr Samuel Vaile seconded—" That, while thanking the Premier for his address, this meeting condemns the property tax as being oppressive, inexpedient, and impolitic, owing to its discouraging the investment of capital and the influx of energetic immigrants into the country."

Mr H. Farnall moved, and Mr Gerald Peacock seconded, the following amendment : — " That this meeting thanks the Premier for his address, but records its most emphatic protest against a continuance of the property tax, believing it to be inimical to the real interests and progress of the country, and urges its immediate repeal, It also urges that a tax on land values, excluding improvements, should be imposed in lieu thereof." The amendment was carried by a large majority.

Mr J. Aitken Connell moved a further amendment of a vote of thanks to the Premier simply. This was rejected. Mr FarnalPs amendment was then put as a substantive resolution, and carried by a great majority.

. The Premier replied, laughingly,} that their orders, as, he understood them, were that every money lender and capitalist in the colony was to go scot free, while the unfortunate farmers were to be taxed. When he went South and told the people of the South about these orders they would simply laugh at them.

The meeting did not come to a close till past 11 o'clock.