THE WEEK IN PARLIAMENT.

Otago Witness, Issue 3942, 1 October 1929, Page 22

THE WEEK IN PARLIAMENT.

LEGISLATIVE COUNCIL. WELLINGTON. September 24. The Council met at 2.30 p.m. IMPORTANCE OF METEOROLOGY. Mr G J Garland gave notice to move—’That in view of the vital importance »f meteorology to Imperial navigation, especially for airships, and also to agriculture. the Council urges the Government to take steps: (a) To ensure of meteorology in the secondary public schools and in one at least of the >’ n, 'eiBitv colleges: (b) to the still and equipment of the Meteorological. Office sufficiently to enable it to provide a complete modern service, particularly tor aviation and agriculture, and so enable it to devote adequate time to research into the special problems of the subject in Hie Dominion.” MARRIAGE AMENDMENT BILL. The Marriage Amendment Bill of Mr H G R Mason (Auckland Suburbs) was introduced from the House and read a first time. THE STANDING ORDERS. 4fter giving lengthy consideration in committee to the proposed amendments to the Standing Orders, the Council adjourned at 4.20 p.m. until Friday.

WELLINGTON. September 27. The Council met at 2.30 p.m. MARRIAGE AMENDMENT BILL. The second reading of the Marriage Amendment Bill introduced in the House by Mr IT. G. R. Mason 'Auckland Suburbs), was moved formally by Alt J. u. G°Sir Francis Bell objected to the principle contained in the measure and declared that the Council had P rc Y‘ OUS , I> rejected the Bill. Whatever might be the principle of permission to marry a deceased wife's sister, it the the case of marrying a child of t>)e deceased wife's sister, because the child in innumerable eases had been fought up under the man's roof and the relation had been that of parent and child. He wa„ not convinced there was an anomaly in the present law as the mover contended and he asked the Council not to pass the measure on the assumption it was to remove an anomaly. Francis Mr Gow maintained that Sir Liancis Bell's presumption would not occur ini the vast majority of cases. Hie Bill natural corollary to what the law already contained. ■ . .•> The second reading was carried by 13 "idle Council adjourned at 3 p.m.

HOUSE OF REPRESENTATIVES WELLINGTON. September 24. The House met at 2.30 p.m. government business. On Sir Joseph Ward's motion it was decided that Government business should take precedence on Wednesdays. Replying to a question, the I lime Minister stated it all depended on the course of the Government business whether it would be possible to give private ™nibers an opportunity to go on with their 13iU». He hoped that the business would proceed at a more satisfactory speed than hitheito and that private members would hat e an opportunity of taking c B i’lint If ther Sir Joseph M ard stated that if Sir George Hunter were anxious to proceed with his Gaming Amendment Bill an opportunity would be given to test the feeling of the House on the subject. TRANSPORT LAW AMENDMENT. The. Transport Law Amendment Bill was also introduced by Governor-General s message and read a first time. A large number of questions was asked the Prime Minister, who stated that the provisions of the Bill did not interfere with the Highways Board, which would continue as under the present law to ha\e complete control of the public roads. An alteration ivas made, however, by which the South Island was given one extra member on the board, thus increasing the number of members by one, but it was provided that in matters affecting the North Island one South. Island member should be inactive, and in matters affecting the South Island one North Island member should be inactive. Sir Joseph Ward added that the Bill created a transport department to regulate and control the whole of the traffic in the Dominion. Under the present law no body had that power. There would be a broad system under which all matters relating to private and public motor and omnibus traffic would be handled. It was provided that drivers’ license fees, at present collected by local bodies, should be paid through the Post Office and handed over to local bodies. There would be no reduction in local bodies’ revenue. Mr J. M’Combs (Lyttelton) urged that proper supervision should be instituted in regard to the issue of driving licenses. He said that at the present time some local bodies were carrying out their duties in this respect very well, while others were scandalously lax and issued licenses to incompetent drivers. Sir Joseph Ward stated that there was a provision in the Bill for such supervision. THE ESTIMATES. The House dealt in Committee-o£-Supply with the Department of Lands and Survey votae (£186,795), which after discussion was passed. The vote for the Department of Agriculture (£435,383) was taken next. Replying to Sir George Hunter (Waipawa), Mr Forbes stated that every precaution was taken when stud stock was imported into the country in view of the possibility of their spreading fobt-and-mouth disease.

The Minister assured the House that there was no intention to alter the present practice in relation to the carriage of lime and manure. The reduction in the grant was merely a matter for financial rearrangement as between

the Department of Agriculture and the Railways Department. • In regard to the tobacco-growing industry, he pointed out that it would be an easy matter to reach a stage of over-production. Whether the market demand would increase was -dependent on the improved means of manufacture. Mr Forbes said he considered that the money furnished by the State for the destruction of rabbits was money well spent. It was a very small sum compared with the amount of work that had been done. Keeping down the numbers of rabbits had been a costly business to the landowners. Anything the Government could do to build up the poultry industry was also a step in the right direction. The purpose of the guarantee was to test the overseas market and ascertain what was the prospect of building up the industry in New Zealand. He assured Mr Chapman that the local market did not suffer as a result of the export trade. The pork bonus was criticised by some members, and defended by others. The Minister stated that this method of assisting the industry had been selected after a careful investigation of the subject. If a better method could be suggested he would be pleased to consider it.

At 10.18 p.m. the Prime Minister moved that the committee report progress. On the motion being adopted he drew attention to the fact that up till then the whole evening had been expended in the discussion of one item. . It appeared that members had not given due consideration to future business. Quite an inadequate amouit of business had been put through, an 1 he moved the suspension of the Standing Orders to enable

a group of Estimates to be accorded urgency. The motion was opposed on the voices, but no division was called, for, and the House therein on resumed in committee. The debate was f sinned by Reform members, and the House continued sitting after 10.30 p.m. for the first time since the introduction of the new Standing Orders. The Minister replied at 11 p.m. to a number of minor points raised by Mr C. E. Macmillan, Mr H. S. S. Kyle, and Mr J. A. Nash. The. vote was passed at midnight, and the Mines Department vote (£42,651) was then taken.

Mr H. E. Holland (Buller) urged that the department should take up experiments in connection with the carbonisation of coal. The Minister of Mines (Mr W. A. Veitch) stated that the Government itself had not undertaken the development of this industry, but much was brnng done by private enterprise. The Department of Scientific and Industrial Research was carrying out experimental work. The Minister, replying to other questions, stated that there was ample in the mining law to-day to authorise anyone who desired to prospect for oil. The Mines Department was of the opinion that the prospects of finding oil in the Dominion were quite good. The Government was not offering sums of money for the assistance, of prospecting for oil because sucha task was one for people who possessed a good deal of capital.' Mr R. Semple (Wellington East) advocated an extension of prospecting to the coal industry for the purpose of ascertaining the extent of the • Dominion’s supplies

and safeguarding the public against investment in bogus or hopeless concerns. The Minister stated that investigations were "being made into the subject of asbestos deposits. The vote was passed. The vote for the State Coal Mines Account (£367,394) was under consideration at 2 a.m. WELLINGTON, September 25. The House of Representatives confined to deal with the Estimates in Committee of Supply after the Telegraph Office closed this morning. The following votes —State Fire Insurance Account (£40,809), Government Accident Insurance Account (£18,265), Government Insurance Account (£114,867), Audit Department (£28,399) —were passed after very brief discussion. When the vote of £72,351 for the tate Advances Account was under consideration, Mr D. Jones (Mid-Canter-bury) stated that while there appeared to be little difficulty in obtaining loans in the cities, there was not the same amount of money available for rural advances. Sir Joseph Ward stated that the system of advancing money on town and rural credits worked out as nearly as possible at 50 per cent each. The vote was passed. The House rose at~2.50 a.m. WELLINGTON. September 25. The House met at 2.30 p.m. TAX PROPOSALS. Mr C. L. Carr (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 thefe 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 be made available to them at export parity prices had been forwarded to the Wheat Commission. LAND AND INCOME TAX AMENDMENT BILL. " I submit these proposals to the House with confidence,” said the Prime Minister and Minister of Finance (Sir Joseph Ward), in moving in the House to-day the second reading of the Land and Income Tax Amendment Bill incorporating the Government’s taxation proposals as Varied since the presentation of the Budget. Sir Joseph Ward said that the new proposals would come into operation on February 19, the date having been extended in order not to inflict a hardship on the taxpayers. The revenue would be received this financial year, but those concerned would not be asked to pay earlier than under the ordinary Income Tax Bill. The farmers would be receiving their wool cheques in February. '■ And mortgages, too,” interjected Mr 11. 8. S. Kyle (Reform member for Riecarton).

” I am dealing with wool at the rec inent,” replied the Prime Minister, who went on to say that the plea for the postponement, of the Bill conld no longer fee put forward as a reasonable request, cir Joseph said that as a result of dcpunations which had waited upon him ami correspondence he had received from all over the country, he had gone into the matter very thoroughly. Ihe Bill now before the House differed in some maternal respects from that conveyed in the Bud-

I think that upon reflection members will say it has been desirable to give consideration to the special requests made io me.” proceeded the Prime Minister Manv people had been misled as to what was proposed, but they should now be more content than when the Budget w<u brought down. A reference to the bill would show that the mortgage was made £7500. decreasing £1 tor cieij £1 of value in excess of £7500. so as to leave no exemptiorf at £ la,ooo ' I am asking the House,’ said the Prime Minister. “ to amend the exemption for mortgaged land Horn t! ® J £ { - f £lO.OOO. disappearing £2 tor . value between £lO.OOO and £15.000 oun improved value to £7500, disappearing £1 for £1 between £7500 £ and £15.000. Ihe gain to the under that heading is estimated Stewart (Dunedin West): TlCnt is the mortgage exemption. ■ft : '1 hot .5 > the wt; Lyttelton): What reduction of i ome would that mean as against the timber

I>l Tlm S: prin l e Minister: I cannot tell you at Die moment, but 1 will do so before th- Bill goes through committee. 11 - Jiiang"i th» figure »« tax is to commence from f ’> will necessitate the modification of the graduation of the super-tax. What J am recommending is that the super-tax use 1 )C r cut for every £5O ot ununproved tallied from £14.000 to £16,000, at which figure 50 per cent, will be reached, instead of at £15.000 under the original proposal. and thereafter a further 1 per cent for everv £270 ot unimproved value from £16.500 ‘to £30.000, at which point 100 p->r cent, will be reached, ihe supertax received under this scheme is'estimated at £300,000 instead of £32.1,000 under the original proposal. Ihe number pf taxpavers affected will be approximately 1450. instead of liaO. ‘ Sir' Joseph said he was proposing to make provision for a hardship clause. I e was recommending that that should apply to the super-tax only. The increased tax pavable as a result of the modified mortgage exemption proposals would not t»e serious. As the object of the super-tax was the obtaining of additional revenue as well as the encouragement ot the subdivision of holdings, it would appear that relief would be granted only in cases where the exaction of the full amount of the super-tax would entail serious hardship. If other considerations, such as the suitability for subdivision, previous offers to the Government of prospective buyers and subdivision since March 31 last were to apply, it would appear that injustice as between one taxpayer and another would be unavoidable. Such considerations would have application even to the existing land tax, which was graduated in order to induce subdivision. He was recommending in the Bill the appointment of a commission to deal with applications for relief under the hardship clause, as the cases would require careful consideration, and he would be unable to cope with the difficulty without the assistance of a commission in addition to the commissioner of taxes. The income tax proposals for the larger would add considerably to the work of the department. As time would be required to deal with the cases of hardship, he was recommending in the Bill that the date for the payment of the super-tax be fixed at February 28 next. The due date for the payment of ordinary land tax had been fixed as November 7. The demand forms for. the ordinary tax had been printed. Mr W. Downie Stewart (Reform member for Dunedin West), who followed the Prime Minister. Mr Stewart expressed doubt whether the House would pass the legislation in its present form. He said that in quoting

A vigorous denunciation of the Bill's proposals was made by Mr W. Downie Stewart (Reform member for Dunedin West), who followed the Prime Minister. Mr Stewart expressed doubt whether the House would pass the legislation in its present form. He said that in quoting examples as to how the land tax was going to work the Prime Minister, in his second reading speech, had confined himself to the smaller groups where the increase was not really the point at which ttig. taxation reached a savage limit.— (‘‘Hear, hear!”) It was now proposed by the Prime Minister to postpone the payment of the super-tax until February 28 next, and also to listen next week to any representations in regard to the hardship imposed, while the Commissioner of Taxes had been apparently so overwhelmed by the instances given in the House as to suggest that there were hardship eases that would not be met by the hardship clause. The best suggested remedy offered was that the farmers adversely affected should petit’Sh Parliament for relief. That was indeed an extraordinary proposition. Petitions to Parliament for relief usually arose from the imposition of some unforeseen injustice, but where the House, with its eyes open, inflicted what was not only a hardship but an injustice, it was a different matter entirely.

Mr Stewart said he took it that practically everybody in New Zealand believed in closer settlement, the ch-ecking of land aggregation, and the stimulation of land subdivision. The Bill, however, seemed to him to be based on some unproved, assumptions and was not scientific in its construction. It hit out at random without any regard as to how it would affect the individual brought in under its scope.— (“Hear! Hear!”) The proposals went on the assumption that all the large farming lands were capable of subdivision, but it was well known

that there were some lands, the configuration of which was such as to render loading and subdivision an uneconomic proposition. The Prime Minister lad not indicated whether the hardship committee would deal with that problem. If it did the inquiry should precede the imposition of the taxation. Then again if all the lands were suitable for subdivision the further question arose whether, in the general interests of New Zealand, all portions should be subdivided, since right throughout the Dominion the smaller farmers drew for their annual supplies on the larger stations where the special breeding of high-grade flocks took place. It was an imperative necessity .to the smaller farmers to be able to improve the standard of thir flocks and the grade of their wool. While it might be a policy cry to declare for the cutting up of the big properties, Mr Stewart thought that, having regard to New Zealand’s destiny and its position as a primary producing country, it was a matter for grave consideration that the estates should be cut up ruthlessly and without mature consideration. It was a fallacy to suggest that the matter need not be considered because the number affected by the proposals was small compared with the total number of. landowners. Mr Stewart said it was. indeed, a strange pass for a Parliament to come to if it were to hold that because the affected group was small it was a matter of indifference whether that group was subjected to justice or injustice. “It is an extraordinary and monstrous proposition,” he declared. “Yet we hear it ad vocated by some of the members opposite. The Government has failed to realise that there is a fundamental difference between hardship and injustice. If Parliament, with its eyes open inflicts taxation that will absorb the whole annual value of a man’s property, it is a case of injustice to which Parliament should not lend itself.”—(“ Hear, hear.”) If it were the case that some large landholders were not paying their fair share of taxation, it might be suggested that he was to blame for not, .when Minister of Finance, seeking to lemedy the position Mr Stewart said his answer to that was that while he held the portfolio, farmers generally were passing through hard times, all his inquiries having shown that, taking the average over a period of years, the handsome profits of one term were not maintained, and that many had to pay their taxation out of capital. The payment of income tax in preference to land tax was not objected to by the large landowners. In fact, they preferred it. and in that regard there was no real grievance to the Bill. The problem was where to draw the line, because the smaller farmers preferred the land tax.

Referring again to the proposal to the forced subdivision by the imposition of a special tax. Mr Stewart said that every tribunal of recent years which had investigated such matters had pointed out that land aggregation in New Zealand was no longer an evil, and that the graduated land tax was no longer necessary. Assuming, however, that the graduated land tax was still required as a precautionary measure against future aggregation, his (Mr Stewart’s) complaint then was against the increase in the land tax in the higher grades. It was really a savage tax that appropriated the whole annual value of a property, and was for the first time in New Zealand to be applied. It simply made properties worth nothing to the owner and a positive burden to him. If the principle were wrong, he again affirmed that it did not matter whther those affected numbered 2000, 10,000. or 10. The tax had gone up by more than 5 per cent, on the unimproved value of the property, and if local rates were added it would be found that the burden became intolerable. In the higher grades the taxation would become a process of confiscation. It would have the effect also of forcing the sale of the lands affected at the one time without taking regard of the power of the market to absorb them. A proper and scientific method would suggest the imposition of reasonable taxation on the higher grades first, and then gradually work downwards to the others. The effect of. throwing all the properties on the market simultaneously would be to lower not only the value of the areas affected, but of all the lands of the Dominion. Mr Stewart drew attention to the fact that both local bodies and the Government were in regard to taxation reaping in the same field. Local taxes were, mounting up so steadily that it was impossible for both the Government and local authorities to continue in land taxation. The Government, of course, had recourse to the income tax. even if the local bodies bad not. Another point about the Government’s taxation proposals was that in the case of some farmers land had been taken up on the payment of a small deposit, leaving a heavy mortgage to be reduced. Yet the Bill would give them little chance of getting ahead of Mr M. J. Savage (Auckland West) stated that he had not considered it fair in the past that taxation paid on income earned from land should not be the same as that paid on income earned in the city. He had always been of the opinion that taxation should be based on the principle of ability to pay. It bad seemed in the nast that the landowner was receiving better treatment than the man in the city, but now that the new proposals were under, consideration there was an outcry that the landowners were being more harshly treated, and desired the same conditions as the cit.v people. Mr Savage said he favoured the Bill because it gave some effect to the principle of ability to pay, but he regretted that Sir Joseph Ward had amended the proposal to reduce the mortgage exemption to £5005, and had now fixed the sum at £7500.

Mr J. A. Young (Hamilton) stressed the uselessness of breaking up certain classes of land, and stated that subdivision would only depreciate the value of the land. Even if such properties were large they should not come into the taxable category.

Mr H. T. Armstrong (Christchurch East) said it was agreed that additional revenue was necessary. It had been stated that produce prices this year might be less satisfactory than last year, and that landoUuifcrs would therefore be less able 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 W. D. Lysnar (Gisborne) stated that he regarded the Bill as 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. He did not regard it as an equitable Bill. It would not encourage people to take up land. At the present time there was a demand for dairying land, but not for sheep or pastoral country. There was plenty of the farmer class available for closer settlement without the application of the measures contained in the Bill. Mr F. Langstone (Waimarino) said he considered the Prime Minister should not have departed from his original proposal in 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 as totally 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 bring down the price of land. That might be a very good thing for the people of Nev.Zealand. When land values conformed with money values a real benefit would have been created.

The Minister of Lands and of Agriculture (Mr G. IV. Forbes) stated that important concessions had been made in the Bill, and he believed the country had appreciated Sir Joseph Ward’s reasonable attitude. The Reform Party, however, had not uttered a word of thanks, and had continued to make party capital out of its misrepresentation of the farmers’ 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 land settlement policy at the last election, and the United Party would be judged on the same basis. If it failed 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 hold a conference with leading officials of the Valuation Department to endeavour to devise a more equitable system than was in operation at present. There had been references to the classification of land, but he asked where would the Prime Minister be in raising revenue it he delayed until land classification had been undertaken? Why had not the Reform Party classified land while it was in office?

Mr W. J. Po'son (Stratford) said he believed that closer land settlement was essential to the progress of New Zealand. He had, however, to consider the interests of the farmers, and while he realised that the Prime Minister had made an honest endeavour. he had to say that the Bill would not satisfy him. It placed too much of a burden on the working farmer. M hile he had been opposed to the primage duty he had agreed to the increase as a temporary measure. fie would have been prepared to support some increase of taxation on larger estates suitable for subdivision, but the Bill went too far. Ihe methods proposed amounted to confiscation Had the Prime Minister gone back to the £lO,OOO mortgage exemption he would have gone some of the w.ay towards ridding himself of the opposition to the Bill. Mr Polson 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 Ire in the interests of the public. High land values were an indication of intensive production and of prosperity among the genera] 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 iarm lands as had been achieved in Great Britain. '

Mr C. 11. Clinkard (Rotorua) admitted that there 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 for increased taxation, and stated it was right that tire 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 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 Bill. 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 be instrumental m 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. WELLINGTON. September 26. The House met at 2.30 p.m. WOMEN TEACHERS’ PETITION. Replying to Mr P. Fraser (Wellington Central), the Minister of Education (Mr H. Atmore) stated that he would make an announcement on the subject of the favourable recommendation of the Education Department of the House for 1928 in regard to the women teachers’ petition for equality of pay, responsibility, and. gene-

ral status, after the matter had been considered by Cabinet. HEALTH PROTECTION BILL. The Minister of Labour (Mr W. A. Veitch), replying to Mr Fraser, said it was not his intention to introduce this session the Painters and Decorators Health Protection Bill, which he had promoted for many years past. LAND AND INCOME TAX AMENDMENT BILL. The adjourned debate on the second reading of the Land and Income Tax Amendment Bill was resumed by Mr A. W. Hail (Hauraki), who claimed that the Government’s proposals would amount in some cases to taxing a man on his debts. The sup’er-tax was designed to break up large estates, but he considered the Government should concentrate on the settlement of unoccupied Crown land before paying higher prices for land, that at the present time was producing practically as much as it would if subdivided He thought that income tax would be much fairer than a super-tax. If, however, the Government was determined to apply the super-tax, it should first classify the land into three divisions: (1) Land suitable and immediate!}' required for subdivision; (2) land suitable but not immediately required for subdivision; and (3) land unsuitable for subdivision.

Mr W. A. Bodkin (Central Otago) said that Reform members had made much of the unsuitability of certain lands for subdivision, and reference had been made in this connection to the mountainous country in Central Otago. He agreed that there were areas on which stock could be grazed for only a few months in the year, because they were above the snow line, and that in such cases there had to be a sufficient area of low country grouped with the high country in order that stock might be carried through a severe winter. Experience had shown that the greatest loss of stock occurred where the areas were unduly large. He favoured limited subdivision into reasonably large areas, and this, he contended would be responsible for a large decrease in the death rate in consequence of the greater degree of care of stock which it would be possible to exercise. Mr 11. M. Campbell (Hawke’s Bay) said he was afraid the result of the proposed legislation would be to hinder the development of land and hundreds of thousands of acres, would lie idle. The Bill would have a disastrous effect on land values, and farmers would have great difficulty in securing renewals of mortgages. That was not going to affect the rich man who could afford to laugh at mortgages, but it was going to hurt the small, struggling farmer who was carrying a big mortgage. He predicted that the increased taxation would have a very serious effect on the workers, and would add to the army of unemployed. He anticipated one of the worst winters the country had ever had, and the Prime Minister would have it on his own shoulders. Mr Campbell described the Bill as a most masterly effort of inequity Mr C. A Wilkinson (Egmont) took exception to both the super-tax and the mortgage exemption proposals, and appealed for the ’support of the Labour Party in this matter. He said there was a tendency for Labour members to rush to support any proposal for land taxation, regardless of consequences. He thought if the Labour Party were to occupy the Treasury Benches it would learn that it would have to show more consideration for the man on the land. If that party wished to become the Government of this country one day it would have to learn to conciliate the small farmers at least. Mr Wilkinson said there would be no loss n f dignity to the Government if it dropped its super-tax and mortgage exemption proposals and relied on producing extra revenue by means of income tax.

Mr D. G. Sullivan (A von) challenged the statement that the Labour Party had no consideration for the man on the" land He said it was fully alive to the interests and the welfare of the small farmers and had never proposed to increase taxation on that class of the community. It had never supported any such proposals. The present Bill was designed to *ax the large landowners, and there was a clause to meet cases of hardship. Dissatisfaction had been expressed with that clause, but he imagined that if the need for its alteration were urgent it could be accomplished during the committee stage of the Bill. He added that if the Bill would increase land settlement without imposing any undue hardship he would be in favour of the proposals. Mr F. Waite (Clutha) stated that if the Bill were passed it would damage confidence in rural security and would drive capital out of the country. He agreed with the view that it was the poorer farmer carrying the heavy mortgage who would be injured by the Bill. He said the motto for the Government seemed to he “ its a virtue to get on to the land, hut it’s a crime to succeed there.” The Budget had been described as a “ get out ” Budget. It enabled the Prime Minister to get out of his election pledges and it forced the farmer to get out of bis holding. Mr C. E. Macmillan (Tauranga) said that the United members had complained of the alleged Government by heads of departments during the Reform administration. but now the final judge of the fairness of the present taxation proposals seemed to be the head of that department He could not see how the proposals of the Government could possibly assist in the settlement of the land, and he supported the statement that there would be a drop in confidence in rural securities.

Mr H. E. Holland (Buller) stated that the financial position to-day was largely due to the removal of income tax*on the farmers at the end of the war, and that fact had to be taken into consideration in relation to the present proposals. He stated that the Government had been faced with two alternatives —to cut down expenditure or to increase taxation. The former course would have necessitated a reduction in expenditure on the social services, and the only quarter in which this would have been possible without imposing some hardship on the general community would have been on defence, but when the Labour Party had sought a reduction in this vote the Reform and the United members had gone into the same lobby to uphold the vote. The position then called for extra taxation, -and in this

respect the only course open (to use a somewhat worn out phrase) was to place the burden on the shoulders of those best able to bear it. Mr Holland said lie was not going to say that taxation should be withheld for a number of years to enable land classification to be carried out, but he did think if the system outlined in the Bill was to function satisfactorily that the task would have to lx? taken in hand. Mr Stewart (Dunedin West) had stated that the farmers had been passing through hard times, but that argument was not borne out by the export figures, which showed that the volume and the value of production had increased enormously. Mr Holland stated that the Labour Party was prepared to join with other members in an endeavour to devise a satisfactory method of meeting cases of hardship. He contended that all incomes from whatever source should be taxed equally. It would, however, be impossible to achieve one of the nrincipal aims of the Bill—to break up estates—by a tax on incomes alone. Ihe I rune Minister had stated that he eoulU not lend money more cheaply, but 51i Holland said he had in his hand an advertisement from a Southland newsPjW in ," hlcll a reputable legal firm offered to lend money on freehold security at 5 2 per cent., and there were other instances of money being available at 41, 4<, and 5 per cent. Why could not the Government lend money at the same rates.'’ He believed it would pay the country to suffer a loss in making money cheaper Mr Holland attacked the statement that the high prices of land indi* rated a prosperous community. He said that there had been many instances of an artificial increase in the price of land as the result of frequent changes of ownership. and in such cases the prices by no means represented the values. Such a state was a bad thing for the man on the land, and a bad thing for the community consuming the produce from the land. In conclusion, the Leader of the Labour Party stated that inasmuch as the P.ill represented a step in the right direction it had his support. He hoped that modifications in certain respects would be made during the committee stage. Mr 11. M. Rushworth (Bay of Islands) stated that the increase in the land tax had the effect of being a capital *evy and one result would be that land prices would go down. He had no objection to a capital levy when it was necessary, but he did object to its being made on only one section of the community. He further stated that the Bill departed from the principle of ability to pay, because it provided that where his income was small the man was called upon to pay an arbitrary land tax. and was therefore taxed in excess of his ability to pay. Mr Rushworth said there was another feature to which he wished to draw attention. When the man in the city was called upon to pay extra taxation he was able to pass the increase on to the consumers, but the farmers, who had to sell their produce in competitive markets overseas, could not pass this added charge on. Mr Rushworth declared that he could not support the Bill as it stood. Hz> hoped it world be amended. Mr D. Jones (Mid-Canterbury) stated lie intended to prove that the Bill would affect thousands of farmers throughout the country. It was going to bring down land valueSj and in doing so it was going to destroy the equity of the farmer, the fruit of his life savings. This would be the lot of farmers throughout the Dominion and many' worthy men would be driven into the bankruptcy court. The Minister of Public Works (Mr E. A. Ransom) said the statement that farmers had to pay income tax through mortgages was one of the first arguments he had ever beard in favour of the £60.000.000 for state advances. It went to show that the time had arrived for the State to obtain money to lend to farmers at a lower rate of interest than the money-lenders were charging them. Mr Ransom said personally he had no anxiety that there would be a surplus of properties coming on the market as a result of the proposed legislation. He could foresee for this country an era of great prosperity in which unemployment would vanish as a result of the steady development of land settlement.

Mr H. S. S. Kyle (Riccarton) stated the farmers’ organisation of Canterbury which had placed the proposals before the Prime Minister was not asking for exemption from taxation. It was not asking for mercy, but for justice. He claimed that the taxation proposals would injure the middle-class farmers, and it was for them, as well as for the small farmers, that the Reform Party nought justice. The Minister of Labour (Mr W. A. Veitch) stated that the taxation proposals contained in the Bill were intended to meet a grave national need. At this stage (10.15 p.m.) Sir Joseph Ward rose to a point of order to move that urgency be accorded the debate, as he desired that the second reading should be completed that night. Th? Speaker stated that such a motion could only be moved prior to the order of the day. The debate could not be interrupted to move for urgency. . Sir Joseph Ward: How can I get out of the difficulty?—(Laughter.) The Speaker said he could only suggest that he should take the pleasure of the House.

Sir Joseph Ward agreed to this course, but as some members raised an objection the debate was not accorded urgency. Mr Veitch, continuing, stateu that land aggregation as it existed to-day was hindering production, hindering a solution of the unemployment problem, and generally standing in the way of the welfare of the community. Aggregators were standing behind the genuine farmers to protest against the Bill.

The debate was adjourned, and the House rose at 10.30 p.m.

WELLINGTON. September 27. The House met at 10.30 this morning. On the motion of the Prime Minister (Sir Joseph Ward) urgency was accorded the second reading of the Land and Income Tax Amendment Bill, and of the Land and Income Tax (Annual) Bill; and also the passage of the Imprest Supply Bill (No. 4). LAND AND INCOME TAX AMENDMENT BILL. The debate on the Land and Income Tax Amendment Bill was resumed by Mr G. R. Sykes (Mastertoil), who described the measure as a two-edged sword, declaring that after a season in which the land

nvner had suffered loss through drought »r for some other reason he would be silled upon to pay a penal land tax. Mr J. S. Fletcher (Grey Lynn) refuted the suggestion that the Bill would affect the smaller landholders, but he stated that when the Bill was in committee he would move an amendment in relation to clause. Mr H. G. Dickie (Patca) insisted that the proposed legislation would depress land values, and in doing so it would affect every farmer in the Dominion. Mr K. S. Williams (Bay of Plenty) suggested to the Prime Minister that the date for assessment of farmers’ incomes should be postponed from the end of March to the end of August, or September, pointing out that by the end of March the farmer could only guess at what would be the financial result of his year’s operations. Mr Williams said he could not understand why any man with the inclination to succeed on the land should be hampered in his ambition. Mr H. Holland (Christchurch South) said he considered that the fact that the Bill presupposed hardship was sufficient to condemn the measure. Mr W. H. Field (Otaki) stated that he was satisfied that the Bill would operate in a very brutal way. He could understand the Labour Party’s support of the proposals, because he believed it saw in them a big step tow-ards socialisation of the land.

The Leader of the Opposition (Mr J. G. Coates) said he had previously suggested that the Bill should have been referred to a committee of the House. This would have been in direct line with precedent. He referred to the extent of the alterations which this course had involved in the past, and he considered it would have been of considerable advantage to have followed that example in the present instance. The Leader of the Labour Party had referred to the increase in the value of farmers’ products last year, but he had made no reference to hte increase in the farmers’ costs. That was an aspect which had to be taken into consideration. Mr Coataa declared that the burden of

local rates on the farmer was becoming one of the most serious problems that the country would have to face, and must inevitably increase the costs of production. If it was essential that landed income should be taxed further tc supplement the finances of the country, then it should be taxed on the same basis as incomes from any other source were taxed, and the Government should never lose sight of the principle of ability to pay. It should be kept in mind that many areas were totally unsuitable for subdivision, and in such cases, instead of being more formidably burdened, the owner should be given every encouragement to improve it and, if possible, to turn a wilderness into an oasis. Mr Coates said he would ask Sir Joseph Ward across the floor of the House whether he would agree to the Bill going before a select committee.

The Prime Minister: No. Mr Coates stated that there was no immediate need for hurrying through with the Bill. He thought a committee should hear representations on the subject, and he would move an amendment —“ That further consideration of the Bill should be deferred until the effects of the provisions of the Bill had been fully investigated and reported on after evidence had been taken before the Public Accounts Committee.” The amendment was seconded by Mr A. M. Samuel (Thames), who stated that any measure that imposed an annual tax of 5 to 5} per cent, must be a confiscatory measure. Local rating together with 6 per cent, on his mortgages and 5 or 5J per cent, super-tax made it impossible for a farmer to carry on successfully. This taxation must mean a deflation of land values, and that meant that farmers who had put in a lifetime on the land would see their assets swept away. Mr W. D. Lysnar (Gisborne) said he hoped the Prime Minister would agree to refer the Bill to a committee. Mr D. Jones (Mid-Canterbury) stated that he did not think Sir Joseph Ward could, in view of all the representations made on the subject in and out of the

House, deny that the request was a moderate one. The Minister of Justice (Mr T. M. Wilford) asserted that the amendment was designed to delay the Governments legislation. This allegation was denied by’ Mr F. Waite (Clinton), who said that surely if the Prime Minister were willing to hear representations in relation to the Bill, he could not object to its going . before a committee. Mr A. Harris (Waitemata) contended that as the Bill affected only one class it was only fair that that class should be given an opportunity to place evidence before the committee in support of the claim that the proposals were unsound, Messrs A. Hamilton (Wallace), J. A. Young (Hamilton), W. H. Field (Otaki) and C. E. Macmillan (Tauranga) also spoke in favour of the amendment. A division was then taken and resulted as follows: — For the Amendment (27). Ansell Lysnar Bitchener Macmillan Campbell Massey Coates Nash Dickie Polson Field Rush worth Hall Samuel Hamilton Sykes Harris Waite Henare Wilkinson Holland, H. Williams Jones Wr’ght Kyle Young Linklater. Against the Amendment (45). Armstrong M'Donald Atmore M'Dougall Barnard M'Keen Black Macpherson Bodkin Makitanara Broadfoot Martin Carr Mason Ciinkard Munns Cobbe Munro de la Perrelle Murdoch Donald Ngata Fletcher Parry

Forbes Ransom Fraser Savage Hawke Semple Healy Smith Hogan Stallworthy Holland, 11. E. Sullivan Howard Taverner Jenkins Veitch Jordan Ward > Langstone Wi.ford M'Combs Pairs. For amendment: Wright, 11. Holland, Burnett, Pomare. Against the amendment: Sullivan, Armstrong, Jordan, Parry. Sir Joseph Ward, in reply to the debate on the original motion, said an effort had been made through the Farmers’ Union to create the impression that the Bill was injurious to the farmers of the Dominion as a whole. The Prime Minister repeated his original contention as to the number of farmers who would be affected. “ There has not been an agitation among the farmers of the country.” he stated. You’re wrong,” interjected Mr Polson. Sir Joseph Ward agreed that there had been an agitation among a few’, but not among the farmers as a whole. It was nonsense, he said, to say that the whole farming community would be indirectly affected. The Prime Minister stated that he had inserted a hardship clause at the instigation of those who felt they would be injured, but if the House did not want it he would take it out. Reform members: It doesn’t go far enough Sir Joseph Ward said he was prepared to consider that point during the committee stage of the Bill—(Reform: “ Hear! hear!”). One thing that had struck him during the debate had been the want of the Opposition members to recognise the Government’s desire to make the Bill a fair one. The Bill was then read a second time. IMPREST SUPPLY. The House resumed at 7.30 p.m. and went into conunittce-of-supply to deal with

the Imprest Supply Bill (No. 4), providing for appropriations amounting to £2,345,000.

Mr J. S. Fletcher (Grey Lynn) asked the Government whether it had any constructive scheme to deal with the pressing problem of unemployment. The resolution was put in committee and carried on the voices, Mr Fletcher’s being the only “ No.” Speaking on the second reading of the Bill, Mr M. J. Savage (Auckland West) also asked the Government what constructive proposals it had to offer. “ They will tell us what they have done, but some of us have a pretty shrewd idea what they have done,” he said. ” They have put 100 men on and taken 105 and 110 off. 1 don’t say they have done that all the time. There have been rises and falls, but the position is not getting any better.” Mr Savage said the Government had stated that it would absorb the men through its land settlement scheme, but it would probably'state that legislation would be necessary to carry out that scheme.

Mr Lysnar urged that the Government should see that the Meat Board functioned properly’ to enable the primary producers to receive fair prices for their exports, that encouragement should oe given for the investment of capital in th? primary’ industries, and that nothing should be done to hamper that class of the community.

Mr E. J. Howard (Christchurch South) stated that he considered the building industry would offer one of the most suitable means of employing labour because it set the wheels going in so many directions and was the cause of employing men in a wide range of trades. Mr J. A. Young (Waikato) raised the question of the dismissal of casual employees in the Post and Telegraph Department at Hamilton. Mr R. Semple (Wellington East) submitted that one of the gravest responsibilities resting on the shoulders of the House to-day was to open the door of opportunity to those people who could not find work. Mr Coates said that unemployment was not Parliament’s responsibility alone. Anyone who had followed the progress of the Industrial Conference must have been gratified at the feeling, manifested there by the employer and the employee in regard to al] questions affecting unemplovment. and it had beer anticipated summer that the conference would have be a called together again next summer, but the gene, al election had made that difficult. However, the conference should have been called so that the House might have had the recommendations before it on the unemployment question. He preferred to treat unemployment as a national rather than as a party’ question. Parliament looked for recommendations from the industrial world because statistics and records were available, and those in close association with the various branches of industry possessed valuable knowledge. At round table conferences he had found the worker was always readv to admit what was possible and reasonable. Mr Coates said that no reply had been given to Mr Fletcher and the Minister seemed to have dodged the point. Personally he agreed that something could be achieved along the lines suggested. The

United Party had promised that if it was elected to the Treasury Benches unemployment would disappear like mist before the sun. That had not happened. Men appealed to him daily to find them work. Mr P. Fraser (Wellington Central) supported the schemes outlined by his colleagues and by Mr Fletclrer. and declared that the people who had returned 19 Labour members to Parliament did not expect them to allow the session to end without some guarantee that the problem of unemployment would be dealt with. Mr A. E. Ansell (Chalmers) urged that the development of the secondary industries should not be overlooked. He advocated the appointment of a Minister of Unemployment as in Great Britain. Mr D. Jones (Mid-Canterbury) appealed for a decision in the matter of the education policy to enable the building of schools to be expedited, thereby absorbing surplus labour. The debate was continued until an early hour, when the Bill w-as passed.

FROM THE PRESS GALLERY.

WELLINGTON, September 24. GAMING AMENDMENT BILL. The Gaming Act Amentment Bill will be considered by the House of Representatives this session, according to an assurance given the Leader of the Opposition (Mr J. G. Coates) by the Prime Minister (Sir Joseph Ward) to-day. Mr Coates had pointed out that in previous parliaments the sponsor of the measure (Sir George Hunter) had had an opportunity given for the second reading of the Bill. He asked if the same facility would be given this session. Sir Joseph Ward replied that .an opportunity would be given Sir George Hunter of testing the feeling of the House on his Bill. ¥ ¥ ¥ SHIPMENT OF GOLD. An inquiry of the Prime Minister as to the effect which the recent shipment of gold from New Zealand would have on the local bank rate was made by Mr F. Langstone (Labour member for Wainiarino) in a question of which notice was given in the House of Representatives to-day. Mr Langstone inquired also whether the gold standard was the basis of the Dominion’s monetary system, whether contraction of the gold basis following the export referred to would lessen the credit available in New Zealand, and whether the Minister would, in the absence of an explanatory statement by the bank, make a statement of the position. * * * COMMISSIONER OF CROWN LANDS. Replying to suggestions that the position of the Commissioner of Crown Lands should be opened to men on the

clerical side of the Lands and Survey Department as well as those on the surveying side, the Minister of Lands (Mr G. W. Forbes) said in the House of Representatives to-day that such was the case in regard to certain appointments. He had agreed to a scheme whereby men occupying what might be termed junior commissionerships should apply for the four senior commissionerships at Auckland, Wellington, Christchurch, and Dunedin, while those applying for positions as commissioner of any other district might be drawn from either side of the service. The Public Service Commissioner made the appointments, and the claims of the men in. either division would be equally considered.

WELLINGTON, September 25. ATMORE-SAMUEL INCIDENT. “ In the opinion of the committee the words complained of do not constitute a breach of privilege as they were used in a jocular sense.” This was the finding which the Committee on Privilege reported to the House of Representatives to-day in regard ta the recent lobby incident in which the Minister of Education (Mr H. Atmore) said to Mr A. M. Samuel (Reform member for Thames), “I will tell them something about you in Egypt.” Speaking to the report, the Leader of the Opposition (Mr J. G. Coates) stated that the finding representd the consensus of opinion of the committee. The resolution would not have been arrived at had the members not been satisfied that the remarks were made in a jocular sense and that no deduction could be taken from them. The report was tabled.

ELLINGTON, September 29. PRIME MINISTER’S RESIDENCE. Sincere appeals to the Prime Minister to hand the site of “Arikitoa,” the Prime Ministerial residence at 260 Tinkori road, to the city of VS ellington for use as a reserve or park instead of showing the property to be subdivided and sold, were made by Reform and Labour members in the House of Representatives on Saturday morning during the passage of the Imprest Supply Bill. Members pointed to the historical and sentimental associations of the property, the wealth of native and other trees which adorned the grounds, the unsuitability of the place for ordinary dwellings, and the general need for more attention being paid to the preservation of historical spots in New Zealand. Members appealed to the aesthetic taste of the Prime Minister in the matter. Replying, Sir Joseph Ward said the House would have to ratify the subdivision and the disposal of the property. Legislation providing for this would appear later in the session. He mentioned that the residence at one time was a boarding house, and he could not see where sacredness attached to the residence when it had been allowd to be a boarding house. The house itself was, of course, to be retained. “As a boarding house?” queried the Leader of the Opposition (Mr J. G. •Coates), who added that some of the trees planted in the grounds could not be replaced for thousands of pounds. The Prime Minister: What is the use of them ? He added that the residence was an uncomfortable one to live in in winter time, and Mr Coates could confirm that if he spoke his mind. Mr Coates: Oh, no. There are very beautiful grounds.

PUBLIC SERVICE SALARY “ CUTS.”

It is understood that the question of restoring the salary “ cuts ” in the Post and Telegraph and Railway Services is to be considered to-morrow at a conference of three members from each of the threpolitical parties. The subject was briefly discussed in the House during the early hours of Saturday morning. Mr H. S. S. Kyle (Reform member for Riccarton) asked the Prime Minister (Sir Joseph Ward) whether he could indicate when the I’ost and Telegraph classification list would be available. He was particularly concerned about the position of boys employed as telegraph messengers.

The Leader of the Opposition (Mr J. C. Coates) referred to a similar point at a later stage, and asked that information should be given the House, as the question would be raised when the departmental estimates came forward. The Prime Minister said he had been considering the matter of the reclassification of the employees of the Post and Telegraph Department as well as the representations of the railway servants, •who were asking for a restoration of the salary “cuts” made during the war. He hoped to reach a decision within a month and the House would be given an opportunity to discuss the whole question.