POSSIBLE FALL IN REVENUE

Southland Times, Issue 23331, 15 October 1937, Page 8

POSSIBLE FALL IN REVENUE

Inquiry About Steps To Be Taken MINISTERIAL REPLY DISCUSSED MR HAMILTON EXPRESSES DISAPPOINTMENT (From Our Parliamentary Reporter) WELLINGTON, October 14. A complaint that the Government still withheld information about the steps it proposed to follow if there was a fall in revenue was made by the Leader of the Opposition (the Hon. Adam Hamilton) during the committee stages of the Annual Taxing Bill in- the House of Representatives tonight. Mr Hamilton’s remarks drew an immediate reply from the Prime Minister (the Rt. Hon. M. J. Savage).

“The House and country are entitled to express disappointment at the reply made last night by the Minister of Finance,” said Mr Hamilton. “The Minister has not softened in any way in his capacity as tax gatherer. We have emphasized the point that the Government is embarking on a huge programme of expenditure and the £8,500,000 estimated as the yield from the taxes to be levied by this Bill will help to meet that expenditure. All we could get from the Government when we pointed out the extent of the expenditure was an inquiry about what we would be prepared to cut out. It is not necessary for us to reply to Liat. It is the Government which is on trial, not the Opposition.” The Minister of Finance (the Hon. W. Nash): You had your trial two years ago. Mr Hamilton: There will soon be another.

The Government had been asked what it would do in the event of a fall in revenue, Mr Hamilton continued. The Minister had certainly done his best to answer that question and up to a point the Opposition was grateful to him for his reply. He had said the first thing the Government would do would be to insulate New Zealand from the effects of a world depression. In all probability that would prove a difficult task. * Mr Nash: By “insulate” I meant that we would shelter New Zealand from the shock of depression. HARDSHIP CLAUSE A hardship clause regarding the land tax was to be included in future legislation, Mr Hamilton continued, and it would be helpful if the Government could give to the Commissioner of Taxes some direction as to what constituted hardship. A man who owned land which was not suitable for subdivision might reasonably be exempt from the tax or might at least be given relief. The tax also caused hardship to a man who owned land and was waiting for his sons to grow up in order that he might divide it among them. There were many” people, too, who could pay the tax, but instead of paying it out of profits they had to pay it out of capital. That surely represented hardship. As soon as Mr Hamilton had resumed his seat the Prime Minister rose in defence of the Government.

“I can quite understand that the Opposition was disappointed with the Minister’s reply,” he said. “It seemed to me that he left them without a feather to fly with. It was as complete a reply as I have ever heard from a Minister of Finance in this House.”

The Opposition was concerned with what the Government would do if prices fell and the Government lost a few millions in revenue, Mr Savage continued. If the Opposition’s amendment had succeeded the Government would have lost immediately £8,500,000 in revenue, as it would have been impossible to levy the land and income tax for the year. The Government would have been left to rely on the questionable forms of indirect taxation which the last Government imposed. The Rt. Hon G. W. Forbes (Nat., Hurunui): If the amendment had been carried there would not have been a Government.

The Prime Minister: The position might have been worse than that. The Opposition might have had a shot at being the Government. “We are asked what we are going to do if that big bad wolf round the corner turns up,” said Mr Savage. “Well, he’s not going to turn up, that’s all. As long as the people of New Zealand are capable of producing things we shall see that they are able to enjoy them and we are not going to be harnessed to the chariot wheels of other nations.”

Mr Savage repeated that the reply made to the Opposition by the Minister of Finance last night must have impressed everyone, although some of the people listening in might have been disturbed by the constant interjections from the Opposition. Mr H. G. Dickie (Nat., Patea): Satan rebuking sin. “We are not claiming credit for the present state of prosperity,” Mr Savage added, “but we are claiming credit for a more equitable distribution of that prosperity. Part of that method of distribution is represented by taxation and that is what the Opposition apparently wants to alter. I can’t for the life of me see how we could reduce taxation without reducing some of the social services.”