A PHENOMENAL YEAR.

Poverty Bay Herald, Volume XLIII, Issue 14053, 25 July 1916, Page 4

A PHENOMENAL YEAR.

REVIEW FROM "FARMERS* STANDPOINT. StTTHK WAR AND TAXATION. -- £7-7 (Special^ Herald.) *7,77. WELLINGTON,, this day. enjoined tHat* the* President shall . "give"* a review of Jtnv. year at our '"■ annual gatherings, and the year that is past has-been a phenomenal one, said Mr. Janies G. Wilson, ;iii his presidential address to the .Farmers' Union 'to-day. How could it be otherwise? We are. spending our capital at the rate, of about a million a month, aud yet have-with-drawn 50,000 men ironist-he adult population. Those r -lpft;i m. occupation. ao*o therefore receiving more for their labor m occupation they may be engaged. Great is spending fivo millions a day, ' which is. circulating amongst the people, yet everything wo purchase costs more... Wool, which was just sufficient foi* the. wants of the world, is require!" everywhere, for those who are fighting. ' Every p^onnd we can -send Home is quickly, .beitig turned info kbji-ki or underclothing for the soldier. »The meat? <ye produce goes now to feed the njen. at tlie front, and .only the surplus goes into the ordinary channels. The i "'"consumption" of cheese hi the army ,hn,s ,it>cr£asad the. demand efiormously,7anjJj...ls per -pound, Jias; been reached as a selling, -price .since the freezimyproeesß .enabled us to sell our produce "'■'. m Britain. . With such prices for our food and,. .clothing products, all have to pay more, to ,feed and, clothe their families. The; Vv ii?M\ease?, of 'noji-in-terest-bearing ( -'r>vith" the , banks show'- that '.•"'.t'heW' dieilts 'are holding re-serves,-'bw-'H" is gratifying to '3ibte that the -worker, is saving ..'.some of his increased returns, for during -tlie war the Post Office Savings 'Banks' 'fehow a net increase, m the fnnds'of? oyeiV^thred; millvor.s sincije, the war .began, Of ttijs two millions is, the increase during the past year. As our 'bills,: have reached such an enprmoiVs total we ■ must- ■ expect further taxatJOM'tb be a certainty. How is tln's^p^be^-ai^ec^^. I-iam ; sure you do riOt"Wis?b mV to trouble' yon with figures. There have been 'sib niany issued lately as to bewilder, ..<;--:-.•;'?. '„ •"■• The Ghairman. T/ pj( r the,- Bank of New Z4»W&£?&t«r; ' if V. verg pared review* of tli*e fi'iiancial , situation of the world : though probably "we did not "agree with, some' - ' of his eonclusioris. the .Budget bristles,, with., figures, so I will lake round* figures which bring out the point--- of interest/* first of all, our exports hni.ve , exceeded those of last year-^oiKpajJer by six piillions. For the two yjea'rs ending March 31st, the, exports*" w.ore : — r ,:'... ' Z . "•■--* ""'"''■"• " '. "£•.:' '1915-16 ■.;.- ... 33,108,069 j. 1914-15 '.:'. ... 27,153,947' :"". A ■■■>.*:■:; '-- £5,954,12^ I; The difference, however, is- very much exaggerated by the": fact that m both cases these amounts" are. estimates. I am sure tliat m 1914-15- the prices idealised were much higher than the estimates shown, -in the "above- figures. Exports must always' -be., estimates for the reason that there is ho means of ascertaining, what the- actual values are. Imports,- however, are exact. ' Tlie invoices gfve.'fliehi correctly. „,L.,should not be surprised i f the , d iff ererice m actual value of oiir exports for the two years m qfte»<tiOn. "was m reality ho more than JE»,qOO,OdO. There- m*ust have been a considerable difference', m the estimated and "actual value m. ."wool, jn eat, butter, cheese, and hides. .7 .Whether we hitve been .over sanguine i in^Pur^bstiniates , this year remains to be seen, but' it should: be noted that much of this last ...year's pSports has, yet to be paid for. , " ' Of tlie £33,155,992 . of-> exports, the produce from the land m the year end- • ing 31st March, 1916, amounts* to £30,---635,719-^-a truly stupendous amount for a million people, to take fi'om the land. \ Besides which the people liave -been fed, ' and to some extent/ clothed out of it it. Practically the whole- "of this has been taken from 4he land by sheep^ cattle, and pigs — with the assistance of horses m the agricultural portions'. •■' We may safely say, I think, that not more than four millions at the outside ia tho result of- war. .y albas,, .have risen above the previous year/, but. this has to bo discounted by' the fact that.it has cost a great deal more to raise and market the produce; hut we have been,decreasing out* imports in -comparison tb our spending _ power, although .., the« higher , values bring the total . of l^st year to a little more than that of 1914-15, so that ' w« have a margip .of twelve millions of excess.- of, exports m. comparison to imports. This is. shown m the bank- : ing returns, -^hereys . an; increase of over, four, millions f in iion-interest-bearing deposits. There are-, politicians who say the -Government, should take from the farmer the extra six millions^Of increased value of .exports which ; he N 'has not got, and the nineteen million of. free deposits Jtp .pay war expeceea.'The year's balanos-'shpet •m the 1 Budget : . begins with, a credit balance of £149,000, and ends with a surplus of £2,166,000. So Sir, Joseph. Ward was very 'jiear: the mark when lie said' the' new taxation of last session would;, bring m £2,000,000. Who. then paid-- this extra taxation? ,7 According to the Budget, Customs, with the 1 p?r cen/t.' primage duty, -has brought m £200,000; beer duty, £30,---000, and: presumably all pay towards these -incvease'sy ' Stamp., and Death Duties are . higher ; ,by , laboutv. £53,000. Post aiid' : . Telegraph y, £336,500.' Land and , .Iheoine .Tax. the. outcome, of increased yates, -,£1,i02,516.-. - Railways : .show'''as"i\?:ceip>>s £377,000 more than the I previous year. The following table shows the . greater amount raised m the iteims .mentioned:-— '7,-. ; „.,y."v >y:- 'i- - ... ' ■£■''■'..' Stamp ;, and. DeatlivDutiea.: are :•>,- >.;.-. higher by abput ... ... 7 53,000 Post. 4iv.d .Telegraph ... ... 336^500 Railways (iiicluding 10 per ;.;,■, cent, increase m freights ••• 377,000 Lrfrtd *«nd Income,; Tax „ _■ .., 1,102,516 "'" „ Total, .... _[';';. ... 1,849,016 ■ 3lq££ eft" this would be paid by those who '- also pay land and . income taxes. AIL., this, is oVer and above the very hirge sum subscribed for war purposes and- -eoiitributions to the Def eAce" Minis: terVstbck for military purposes; patriotic funds ; Red Cross ; Hospital Ships, and- the thousand and one things the tftfmerr-criy New Zealand have , produced, as well as .relief funds raised .iii many ways'. " '■:.-. . . ' ?' . , When we turn to. the; • taxation -pro-' pbsaW "of the present war. ; time, it is s^ill fitrther'tp lie born© by the land, [t is of course true to-day >vhat Artaxr erxes, tlie Persian , monarch, said., over--2>opQ years- ago .'-'.Ultimately- all taxes must be. paid by. agriculture." Primary p^b'd'iript'iqn' is our, only source of wealth. The. vbii'lingof gold aoad, coa,! is. destructive produetionj ; once obtained)-, the products cannot be reproduced ; agriculture on;, the other hand,., gpes -, on , , wh.^le the world ie'JSsts. The Government of the country and the safety of the individual should be? assumed ,by , each paying a percentage of his earnings, as they pass through 'his hands. In our present case ■■. I am «lfraiq that „ there will be niany* 'hardships, "mostly amongst, those of the farming class, which iare least ahle to bear them. ;, In., later years Ayith the help of dairying .many meti. . .have put their savings into. land and.,.assumed more thun'us'ual. liabilities, '(,'hp' inprtgage tax has now b^en altered so, that the income from th is „ f «r m of „j pyestment has f icl p&ty '■ . income 'tax,. • ln. ; smail sums thisi will be a- relief to the lender^ but if the mortgagee iii.tforjie .comes under the gra.du^pd ..scale, it may be heavier, and thus tend to divert tb^is investment into other channels. The suggested legislation to restrict the rate of interest would only hasten the diversion. When the. time comes for renewal, - the? second -mortgages which so many have will be called up/, and if the rate is fixed the mari will -be- forced to sell aiicl the , farmer, wiil probably; lose his. sayings of a- lifetime.; He will; be thrown.- again ron tlie: -labour market. , Theii!.a_»in m oonnection- with the' graduated i tax, there is now -a certainty of a large amount of capital being taxed twice. The Government has considered this unjust, m the case of an income (derived elsewhere paying taxes m the

,"-,y- .•_-..-;*.*■-• ,-}y country of origin and here as well. Often we hear m the debates iv con tiection with this subject what is being done by Mr. McKenna. the Chaneelloi of the Exchequer, is novel pointed out that he has pointedly taken the 60 per* cent, from business and not from . the producer-recognising-' thai production is the life.blood of the nation. . In the case of graduation — which ■is now very, heavy, the owner of. 1 Inland pays graduated tax upon tin* tola' unimproved., value of. his land, vi?.. : his ovrn, interest m the land and that of the mortgagees. The mortgagee paysincome tax, possibly at a graduate* 1 rate upon the income derived from tin same amount. Thus the capital is first taxed and then the income from it. Tinfarmer is also taxed upon his capital m the laud and then upon his income thrived from it. Last year when the tax was a moderate amount — : thoug'h it brought m a great, deal more than the estimate—the farmers paid it cheerfully., but now that an* additional 5 percent, is added to, this and, a 45 per cent j- tax on all profits over, a certain percentage of , returns from capital, it certainly is? conscripting ' wealth to a greater extent than anticipated. . The 5 per cent additional income tax should not have been imposed on them, although Avai profits when they can be , f ainlv ascertained, are fair contributions ;*towardf the .expenses of -the war. What is to be ; the destination , oftl^ose piled-up millions., however is another point. It would certainly be more reassuring if . the additional millions ; were earmarked for the. payment : of . the war debt we owe to. thj§ British Government so long as they were not required for the expenses of our soldiers at the front/ The taxation would thus go towards paying the expenses oi the -war. Sir Joseph Ward has specifically stated- that the whole of ihis money invested' in London will go to the payment of -Our war debt to the British. Government when the time comes fo square accounts'. It must be remem.bered that- although the value .of our ■ products have gone up, the cost of production and distribution a-* well as improvements have- gone up by leaps.- If the cost of living baY gone up the farmer pays it just the same a's anyone else. One-Special feature is the remission of the 25 per' cent. additional j grad uated- taxes oil business' premises. This se.jms am just though it may be expedient. -Land on -which 'business preVniSes ate huilt are just as necessary ior the making of an income m that business «s J the land**, is -to -the -farmer' to make' h'isyarid moreover- m making jup costs, business men include all taxes and outgoings, and they are passed on ■to the purchaser. This* is- impossible hv .the case of the farinei*. The business jman can, increase, his. accpmtnpdataon «y going up m the air without further cost 'either m .-"taxes, or rates oft /tlie, land; t but the farmer is restricted to the area .of liis_ land ; if he imprtJves.it Sac .pays more m taxes and rates. However, even ;if we, may have. some feeling that the land user is paying more than his share ,m the new taxation; it. is thje law of the 'land, and it. must b.? paid whether we like it or not. One -significant" ' fact.'- one -cannot, help noting,, is that "during all the debates as t0.,. h0w the taxation should,,. be imposed. on others, there has not ♦feeen a suggestion that any remission of _ payment should be made either by Ministers ani* members. When, however, all js said and done,, however much hardship", may, 'result, "from taxation, the. Government has had to deal .with, very exceptional circumstance's, p. nd although they have been squeezed ' unduly by \ some ; sectioiis . of the community .and throwing the cost of the process on others, they ? must, have the money, and T am sure all ihose who have to find it, will hope that it.. Will be 'wisely and economically spent, and help to end the war m the ,'p'rily way' ! in whicli the Empire will permit: "' If we are to pay .all this, enormously inci'eased taxation (ai\d Sir Joseph. Ward warns us are. may have'- to pay . move inext year), what means has the cpuri;try got to.', meet it? It' 'must be remembered that the "Excess Profits Tax" will vanish, into thin ; air. as soon, as peace is declared and .prices resume the. normal, and it is 'stated to. be.. only foi' 1 one 'year, ; .".we .shall.; then have ;to meet the additional interest, on all the money we have borrowed for. war purposes At the least it i will. be 15 '.0r 20 millions, according, to the length. of the 'war. Assuming that the surplus which -the present taxation brings m goes tp4 wards repaying some of the , milliprts borrowed at Home, that means that pur interest charges, even withpnt, ,a sinking fund, wiH amount to a )miilion more than is,pa,id on our -'ordinary debt. : This means that we may look forward , to paying additional taxation \ in 'the future, and possibly with a much lo\ver level of prices. It is quite that,, if the produce of the larid.is 30/33rds of 'the exports of the Dominion, to restore "the dissipated Wealth of the world which jhas gone iii." this disastrous war, we m New Zealand must look to the production of the land -to again create it. No power on" this- earth can restore to' us the fine young lives ' which have been voluntarily given, to. allow us to retain our- liberty*, but, as a monument to their ■ self-sacrifice, I hope, that '.when peace . comes '" it- -will mean '. industrial peace as well as peace from- war." If that is assured by ; all, land we all : set Tcsolutely to work to increase production with due , economy, I have no doubt that before another decade is over we sholl have accomplished great things. The Dominion, however, will have to rely upon, the land to do this,- and it ■certainly would bs delayed and much 'harm, done, if .the- cry of "tax the land" which from a class of the community is so often heard, "were listened to by our politicians, and undue taxation, is ..levied. '.in 'cpnsequejic^......, . .,, - w . The chairnian' then' went on to deal with tho problem of how to ipcrense Ihe prorUuiiciii. ',' , '* .".'( '.' 77. '