BLOCKING PROGRESS.

Taranaki Daily News, 19 January 1923, Page 8

BLOCKING PROGRESS.

HEAVY TAXES ON LAND. CAPITALIST’S COMPLAINT. UNDEVELOPED AREAS. The manner in which the taxation system of New Zealand is militating against investment in land is the subject of complaint in a letter received by the New Zealand Immigration and Land Settlement League. The writer states that he is at present in a position to introduce considerable British capital, also to influence the influx of the best class of immigrants into the Dominion from Britain. Apparently, however, he finds himself in a very anomalous position to recommend investment in approved land areas for development and settlement for reasons which he proceeds to set out.

Several extensive areas of highly suitable nature have been submitted to the writer of the letter, he states, for the purposes mentioned. He adds that he was much surprised to learn from a reliable legal source that under the taxation system in vogue in this country, any investment in lands within New Zealand, either for development or other purposes, is pratically prohibitive. For instance, he says:— (]i Apparently should any individual, syndicate, or company arrange for an option over any landed property, liability is at once incurred for full stamp duty, as though an actual sale had been effected. (2) Such opt ion-holders would be obliged to register as owners, and then be liable for land tax. (3) Tn the matters such as those in which the writer is interested, in connection with overseas principals, it appears that an absentee tax on the highest scale would be demanded. (4) Tn the event of such lands being acquired and divided up into approved sections for intensive cultivation, agriculture, dairying, or other farming pursuits. bv approved agriculturalist immigrants.‘they would be rendered liphle t( f a further taxation in the way of income tax on the highest scalp. INVESTMENT CANNOT BE ADVISED. The writer declares that such accumulation of taxation and other impediments I practically negatives any remunerative tjnturns. ’thus rendering futile any • nftiterial assistance toward the eettlemefri. and development of the vast fer;ile iTj-oas in the Dominion now lying idle, waste, and unproductive. It is, he says, nut of all question to recommend overseas principals to entertain land development and settlement in New Zealand unless some practical relief be afforded in connection with the above taxation. Progressive settle-

ment and development cannot possibly be effected under the existing negative conditions.

It is suggested by the writer that the league should advocate the introduction of legislation to remove the impediments complained of. which, he asserts, are calculated to prohibit a much -needed influx of agriculturalist population from Britain, with the view of settling unoccupied areas in the Dominion. Ho adds that unless he can learn of. some equitable reduction being made in connection with the taxation referred to. he must of necessity cancel his overseas principals’ proposed arrangements. In conclusion, the writer suggests that a still young country, barely on the threshold of nationality, surely ealls for active development and influx of population, rather than that capital should bo driven from its shores by reason of inequitable taxation, etc. *. PROHIBITIVE TAXES ON ENTERPRISE. Inquiries by the Auckland Herald elicited the fact that the case put by the league's correspondent is substantially correct. It was stated that if a group of financiers, a corporation or a company decided to invest, say, £250,000 in land in New Zealand—and assuming their intention to be merely to obtain a reasonable amount of interest on their money, or, at most to make a small profit on their capital —they would in the first place, be faced with an exceedingly heavy graduated land tax. This they would have to pay, although the land might comprise large unimproved areas, which at present would return nothing in the way of produce. The absentee tax would be another heavy burden upon the shoulders of outside investors. Another point ascertained was that such a combination, lhaving .invested in land in New Zealand, would be regarded as conducting the business of land selling, because it would acquire these blocks of land for the purpose of reselling to small landowners. Any profits •which it might make on these sales would accordingly be liable to income tax.

REMEDIAL LEGISLATION SUGGESTED.

The opinion was expressed that the Government might well consider, in the case of unimproved lands, which require a large capital expenditure before they can be rendered productive, or be subdivided into small areas, making them immune from land tax, provided that a substantial annual amount is spent on improvements. Such immunity could only be given for a comparatively short period of years, but. it would have to be for a sufficient!}’ long term to enable the land to be converted into small farms, capable of immediate production, which sduld suffice to enable an immigrant to become at once self-sup-porting. To remove the difficulties outlined in the correspondent’s letter the Government would have to introduce a Bill giving effect to the proposed remedial measures before capital from Britain or elsewhere could bo induced to come to the Dominion. The opinion was also expressed that tho present attitude of the Government in this matter is blocking progress. In effect the Government would seem to say to English and foreign capitalists: “\Ve need to develop the country, but wo do not want your money.’’