BIG INCREASE OF NET REVENUE.

Poverty Bay Herald, Volume XLIII, Issue 14045, 15 July 1916, Page 8

BIG INCREASE OF NET REVENUE.

IMPERIAL BOND INVESTMENTS. PAYMENT OF WAB LOAN. HOW NEW TAXES BILL OPERATE^. LOCAL MONEY AND INTEREST ■ RATES, TIIfRD READItf G DEBATE. fFrom. Our Parliamentary Reporter.) t WELLINGTON, this day. V In moving the third reading , of the Finance Bill yesterday, Sir Joseph -Ward, after (expressing appreciation at th"e>'rapid work done by the House the previous day, explained the country's • present' financial position for the three months ended June 30th of this year. Permanent charges amounted to £1,383,128, an increase of £34,032 on the corresponding period last year, while under annual s?p-' propriations the expenditure was £1,584,---797, a, decrease of £26,541, totalling £2,967,925, as against £'2,960,434/ .an increase of £7491 for the quarterly period. The revenue of the period ended .June 30th .last was £3,091,210, as compared with £2,747,751 for the corresponding' quarter last year, a net increase of .£342,-' 459. Among Departmental returns the following showed increases :. Customs £41.553, death duties £81,675, post and telegraph £76.081, income tax £6144, beer duty £12,174, railways £154,675, miscellaneous £10,224, Territorial £728; The following showed decreases :. Land tax £21,590, registration and other fees £2092, marine £1163, national endowment £6684, other receipts £8266. Tak-' ing into qQnside J ra.tipn, the,. balance, as. at April Ist with the June quarterly receipts, it makes a total of £5,257,287,; which, after allowing for an expenditure' of £2,967,925; leaves a net credit of £2,289,362, which has been transferred to the /War Expenditure -Account. .A-.. , ; The Finance Minister iiroceoded to', say : I take the opportunity of saying these figures are exceedingly satisfactory, and it. is a very fine . thing for the country to think they will continue to be so. It is quite impossible at the present time for anyone to give any indication of .what the- balance over and above expenditure itiay be out of consolidated revenue this year.. It will be contingent on circumstances particularly difficult to estimate at pre-* sent, but there is every reason, to hope there will be a considerable baiahce on the right side, although it cannot be any--thing like as large as last year. At present thete. is £2,600,000 of ou* money invested m. liquid securities m m. Imperial Treasury- Bills, entirely for purposes connected .• jrcitli,, the .wa?>*.< ''-If hope .that the lamourit ,w!j[jt be increased from time to time, and"l am. looking forward, as an Oufcome of the taxation w,e are jDutting on for war purposes, t6 havhig available at the end of t4ftisse.ar m round figures £6,500,000. If \yehaye, that amount when the .war is over, iraclicaJly, all of it will be used Vfpr v the of reducing the war loan ■ (Hear/ iMsar..') ,We shall then be m, a strong position to prepare for a reduction of war loans by way of sinking fuiicL^yhil.e the financial position, of the counwy^vjiil: be. greatly strengthened. " ; .> \i' Vvi- ■''< .■■ Sir Joseph Ward went on to say that so long as the. Government, and, members worked together towards ; the eomitaon the consensus of opinion of' the cQuntiiy would be, he thought, thai tern-' pwary exigencies were. in the .• direction of placing the countiy in >a strong : and ! sound way for a future period ]ov. ;proV sperity after,. tlie present- terrible' iwar. was behind. (Hear, hear.) .'''.'.••' ' 1 HOW THE TAX WOKKS.^ ' „;, Sir Joseph Wjn'd gave two illustra- H tions of the operation of the income excess tax, proposals. Assuming t&e in-' ct)m&;;tax to be £10,000 and excess[profits £8000. First the 45, i Per. ; cent;,^ exe'ess profits tax was taken jv totalling £3600, leaving £4400 taxable income. If . the.; income was £5600 .and :excei& : pro-' fits £2000, the excess , profits .tax be £900, leaving; £4700. taxable income. Tjher. gpeakeiv quoted details ; of .the... private and public wealth. DOMINION'S INDEBTEDNESS; ' ' New, Zealand's private wealth equalled £260 per head, tlfe* State indebtedness 1 was £98 18s 4d per head, the local bodise' , indebtedness was £17 13s 6d . per head, taxation by the general Government- was £5 7s sd, and taxation -by local bodies £2 2s 6d pe.i} 4vead«,' .-New Zealand's assets were enormously on the right side from the point of view of the investor, who could regard the Dominion as the best possible field for : investment. The clause relating ta-.th^ issue .of .-5 per cent, debentures iiipaynientrfdr^larid would be operative until twelve' "montlis after the end of the war. No remission of income, tax on debentures was contained 'm the Bill. While payment for the war must come first m the country, they could not allow,. the sqcjal.-4ife.,iea-pecially that connected with the settlement of soldiers, to be jeopardised through not having means to acquire land. ■„•■-.'■,■ ; LOCAL WAR LOAN. '.':. v . Dr. Newman: Will there be a local war loan? Sir Joseph Ward ; ; Yes, it will be necessary to raise a portion of the money for war purposes m New Zealand. As for the amount, he preferred to wait until the prospectus now being prepared^ was issued.- It would be for a consider-' able sum, but no more than the country could provide. New Zealand must still rely on a portion of the money being obtained, from the Old Country. If the Government attempted to go for the full amount of its requirements he was quite sure it would have -an injurious- «ff€otri3fi trading business of people and tnose on the land. ... ', „ .^, . _ „,. ti . s ,^\-. Mr. Wilford : Will it be free of income tax? ■■'/'■ ■ Sir Joseph Ward: Yes. .*'..' Air. Wiljtord : It's very wrong. : Sir Joseph Ward: It would .commence to- lead us on the road to tight money and commercialvtrouble. r-VCOUNTER-RALANCING LOST . •— -. c REVENUE. "'■ N '"■' •<^T«e Minister remarked upon some ifjr&jfjj&ers protesting against giving income- tax m to subscribers to tha loan — .m; Wilford : It is not fair. '^Sir Joseph Ward contended that it \«aa much the best thing to do m the ijjt£re*s/of the country.- Mb went on to sa^Uhat legislation last year to produce t^v T millions extra taxation ,made- provj»ion, for this loss, of taxation. .The bjßtfeflfvtp the .country by.th^ Govetin-ments-.local loan at ; . 4- per cent, much than counter-balanced, the losf" of income tax; In ■ giving up income tax'^n. two millions the .Government afc most, gave f}2^,ooovper, y^ar. Supposing, on the othej-, hand,.^lw-y 'had com© but with

a loan ;iL fivi; per cmi. (he n\sull. would have been that every man ami local body that wanted money would have had to pay at least 1 ju-i 1 cunt. moi'i> for tlu> money than they would now. The Government had m fact only dque what the' powerful British Government did. "Bin; fore, they went for high rates they borrowed their money free of income 'tax. ■The ••New Zealand Government, they! could depend ui»on it, were guided to a large extent by similar motives. .. Speaking of the- last local loan and the effort to get, small investors m, Sir Joseph Ward explained that the response! •was so poor that only 120 applications were received for £5 bonds from tlje whole country. lie put it down to the fact that, people wjth from £5 to £20 to invest looked, for a better return than 4^- per cent, for their -money. Ho -thought, therefore, m connection with the next loan they issued that it would not he worth while to make provision for these small bonds, which entailed 'a tremendous amount of extra work, :and evidently did not appeal to small investors. In reply to a question from Air. Young, who asked if the Government's decision to prevent money from leavingthe country would be effective, the Minister declared that it could be made, effective under different laws they had on the statute book. "I think," he added, "there is a genuine tendency on the part of responsible men outside .of the Government to keep the money ia this country for investment, and m "presenting the depletion of money from .this country. I think, therefoVe, the provision made will prove very effective." , ...-.• . Mr. Wilford said it was absolutely cheaper to pay 5 per cent, than issue war loan debentures at 4£ per cent, free, of income tax, because freedom, from graduated tax meant a huge saving to •wealthy individuals. Subsequent speakers congratulated Sir Joseph Ward on meeting most of the' objections which had been raised against the original proposals, Mr. Walker, as a Labor member, declaring that the Minister was entitled to great credit for the way m which the big task had been , handled j and Dr. Newman assuring him that he had given more consideration than usually given by Ministers to suggestions from the House. ■ Messrs. McCombs and Webb were critical, denouncing the Government for not dealing with the cost of living. . Sir Joseph Ward replied that the National Government was m a position whjch prevented members of the Ministryr y dealing with party questions on wh jeh struggles might com© m, future. The- Bill - was ; read a third time and passed without division. . The Rouse rose at 11 p.m. till Tues- ?' ■ ■ -