POLICY ATTACKED

Poverty Bay Herald, Volume LXIV, Issue 19454, 13 October 1937, Page 9

POLICY ATTACKED

INCREASE IN TAXATION ANNUAL BILL DEBATED OPPOSITION OPINIONS AMENDMENT REJECTED (Per Press Association.) WELLINGTON, last night. When the Land and Income Tax (Annual) Bill was introduced in the House of Representatives for the second reading, urgency war, granted the measure on the motion of the Prime Minister, the Rt. Hon. M. J. Savage. The Minister of Finance, the Hon. W. Nash, in moving the second reading, said the bill re-enacted the provisions of the Act passed last year, and the rates of taxation would be the same. The Government recognised that the hardship provisions in the existing taxation laws were not sufficient to allow full consideration to be given to deserving cases, and it was proposed to bring down a special bill giving wider powers to deal with cases of hardship in the payment of land tax. Other taxing legislation would be.submitted to the House during the present session. It would be designed to remove the existing anomalies and bring the law into line with modern principles in taxation. The Leader of the Opposition, the Hon. Adam Hamilton, said the burden of taxation was becoming heavier and heavier. The present measure made provision for £3,500,000 more land and income tax than two years ago. He thought the taxpayer would be justified to-day, in view of the general prosperity, to look for some relief in taxation. He criticised the Government's reimposition of the graduated land tax, and asked if the Minister of Finance would consider embodying in the bill the same hardship clause as was contained in the 1929 Act. If Revenue Falls? Mr. Hamilton reiterated a remark he made in his Budget speech that it was dangerous to keep up the high incidence of taxation when the revenue was high. What would happen, he asked, when the revenue fell? It was easy to make adjustments when you had the money, but it was not so easy to do so when the revenue was not there. He thought we might be undermining our whole financial system it we did not watch out. The Minister of Education, the Hon. P. Fz'aser, said that no Government could justify taxes that were not required, and could not profitably be expended, but he challenged the Opposition to state what taxes the Government was levying that could oe cut out. The Government believed that its present policy was the correct one and would lessen any inter-* 1 national catastrophe. \ Mr, H. S. S. Kyle (Nat., Riccar-) ton) stated that although the amount of taxation had shown a marked increase, it did not appear that any more was spent on social services than last year. Mr. S. G. Holland (Nat., Christchurch North) said the Government was apparently not prepared to show its hand, and state what it would do if the country's revenue fell to any appreciable extent. The country as a whole was anxious to get a reply to that question. "Slumps Must Come" Mr. W. J. Broadfoot (Nat. Waitomo) urged the lifting of the gold tax to -nable the development of the gold resources of the country on a fair basis. The Governments, he thought, was endeavouring to hamstring private enterprise by high taxation. Mr. W. A. Bodkin (Nat. Central Otago) said the graduated land tax was a penal tax and he knew of cases where properties that could not be subdivided were bearing far too heavy a burden. Mr. W. P. Endean (Nat. Parnell) stated that our taxation per capita was staggering when compared with that of other countries. The Rt. Hon. J. G. Coates (Nat. Kaipara) said he had been flatly contradicted when he stated in the House a little time ago that share prices had fallen. They had fallen, he said. A great block of industrial shares had fallen on the New Zealand markets. High taxation was bearing down harshly on the people with small incomes, and he asked if it were th» Government's desire to drive out, or drive to other means of living, the people who depended on small incomes from savings. There wn> nothing to be gained, he said, from the argument that we were going to have good times always. Slumps must come. He urged the Government to allow industry to build up reserves sufficient to carry them through the difficult periods ahead. "Violatici of Pledge"

Mr. Coates said the Prime Minister had stated that New Zealand led the world. She did, he said, in respect of taxation. Graduated land tax was a capital levy which made it impossible for the landowner profitably to carry on his farm. Mr. W. J. Poison (Nat. Stratford) said the bill was another evasion or violation of the pledge that taxation would be reduced. Reduction of taxation always increased the spending power, but this Government had reintroduced in all its savagery all the worst points of the taxation measures. Graduated land tax could not be defended because it frequently taxed the man. on his mortgage indebtedness. Mr. A. C. A. Sexton (Ind. Franklin) said anything that would tend,to i educe high costs was worthy of consideration. Just at present we were

experiencing good prices for woo\ mutton and lamb, but if prices fell and taxation was maintained at its present level, then the farmer would find himself-in considerably straitened circumstances. Mr. C. A. Wilkinson (Nat. Egmont) said that company taxation was so heavy that more was being paid iP taxation than in dividends, and to thai extent the cost of the commodities produced was being kept high. Many companies had been losing money foi years, and the first year they made ? profit the money was taken in taxation, which should have been used in making up losses.

"Piling Up Debt." •The Hon. J. G. Cobbe (Nat. Oroua) stated that all this expenditure meant piling up debt for the future;. Under the present system of taxation the people were not being encouraged to invest their money in new industry; in fact, it was placing r» imposition on the enterprising man and bringing all industry down to the same level. .

The Hon. S. G. Smith (Nat. New Plymouth) asked if the Bill could be taken back to the Cabinet and reviewed, to see if any relief could he given to the taxpayer. The Labour Party was on the; Treasury Benches to-day because it had promised to reduce taxation. Not only had the Government failed to reduce taxation, but it had increased it.

Mr. T. D. Burnett (Nat. Temuka) moved an amendment that the bill should not be proceeded with until the following means of meeting the Dominion's financial and economic difficulties and placing the national finances on a sound basis were considered by the House:— (1) That a full inquiry be first instituted into the effect of the proposed taxes: (a) On industry. (b) On primary production. (c) Fixed incomes. (d) The salary class, and, finally, oi> the employment of labour.

The amendment was seconded by Mr. K. J. Holyoake (Nat. Motueka). and the debate upon it was carried on by Mr. Hamilton, Mr. Poison and Mr. Kyle. The amendment was put to a division and defeated by 42 votes to 14, the voting being on purely party lines, and the debate was adjourned at 11.20 p.m. until to-morrow evening.