WHAT FIGHT WAS ABOUT

Poverty Bay Herald, Volume LV, Issue 17099, 4 November 1929, Page 12

WHAT FIGHT WAS ABOUT

REFORM PARTY AND LAND TAX To understand the reasons for the strenuous opposition of the Reform Party to the Land and Income Tax Bill, it is necessary to recall the, Budget proposals. These were : 1. Super-tax on all farm lands of an unimproved value of over £12,500. 2. Income tax on all farmers with similar unimproved value. 3. Reduction of mortgage exemption from the present amount of £IO,OOO (disappearing at £15,000) to £SOOO (disappearing at £10,000). Owing to the strenuous criticism of these, proposals by the. Reform Party during the Budget debate, the Government modified them very materially. When the Bill appeared, the supertax level was raised from £12,000 to £14.000 and the income-tax on farmers likewise, while the. mortgage exemption was increased from £SOOO (disappearing at £10,0C0) to £7500 (disappearing at £15.000), These amendments lessened the evils of the original proposals, bul failed to remove many others. The bill aims at a particular' class of! the community—tlie larger farmers—but it is overlooked that, the value of their lands being depreciated by the tax, the effect must be felt in all land values, large and small. Insofar as the Bill was intended for the purpose of raising more revenue, the Reform Party contended that it should have been raised on the basis of ability to pay; aiid for this reason the Reform Party did not oppose the income tax on farmers holding over £14,000 unimproved value. This fact should be borne in mind.

The Government also held that the Bill was for the purpose of biursting-up large estates; hence the super-tax on the graduated scale. The Reform Party also is in favor of cutting up all those large estates which are suitable for subdivision. But it has to be recognised that very many large estates in New Zealand are totally incapable of being worked in other than large holdings; arid the Reform Party opposed the application of what was explicitly.a "bursting" tax to all large estates—without regard to whether or not the land was capable of closer settlement. It was contended that lands which could not be worked in smaller holdings should be exempt from this" "bursting" tax. The Reform Party fought to get the Bill amended on the following lines:— (a) To make it apply to the present vear instead of being "so largely retrospective. It will be difficult for farmers to make up, at this late date, income tax returns for the period April 1, 1928 March 31, 1929. Also the super-tax goes back about eight months. Many farmers do not keep books; and it will be almost impossible to make up accurate returns for a period past. Amendment defeated by the Government. (b) To exempt lands that are not capable of economic subdivision. As pre-, viously'mentioned, the Reform Party s contention was that if the Bill was designed to break up large estates, there could be no justification for penalising the owners of" such largo estates as are not capable of being worked in smaller holdings. Amendment defeated by the Government; but a promise was extracted from the Minister that cases would be considered under the hardship clause. (e) To make provision for working partners. The Reform Party could see no reason whv two or more working partners should be forced to work separately— with separate farms—when experience showed that the larger farm worked by partners was more economic. Amendment defeated by the Government ; but a promise was extracted from the Minister that cases would be considered under the hardship clause. (d) To make provision for h parent with a family to get allowance for his family An "amendment was moved to allow eTemption up to £3OOO extra for each child. It was contended that the best nf all methods of closer settlement was when parents settled their own "nmilv on their own property, and parents 'should therefore be permitted to hold the additional land until the children we>'p rendv to take it over. Amendment defeated by the Government. Is) To allow the present inort»ace exemption to remain. The Reform Party contended that it was inequitable to tax a man on his debts—to tax land suhjeet to mnrt<ra<*e. As a result of tlio oimosition offered, the Pill was m"terinllv amended in this respect. There, were other minor amendments, hut the forecoiner indicate what the light was about.—Contributed.