LAND AND INCOME TAX.

Timaru Herald, Volume CXXV, Issue 18382, 28 September 1929, Page 17

LAND AND INCOME TAX.

Opposition Amendment Defeated. BILL PASSES SECOND BEADING By Tolegrapla—Praia Association. WELLINGTON, Sept. 27. The House of Representatives met at 10.30 this morning. On the motion of the Prime Minister urgency was accorded the second reading of the Land and Income Tax Amendment Bill, and of the Land and Income Tax (annual) Bill, and also the passage of the Imprest Supply Bill No.

The debate on the Land and Income Tax Amendment Bill was resumed by Mr G. R. Sykes (Masterton), who described the measure as a two-edged aword, declaring that after a season in which a landowner had suffered loss through drought or for some other reason, ho would ho called on to pay a penal lend tax. Then, should ho have an exceptionally good year, he would be called on to pay income tax, because it was greater than the penal land tax. This, Mr Sykes considered, was entirely unfair and inequitable. Ho alleged the Prime Minister, in endeavouring to get at the man with a rich, unencumbered estate had run amok, and was injuring many defenceless and less forinn-vte persons in the ppores*. Mr J. S. Fletcher refuted the suggestion that t l, e Bill would affect the smaller landholders, but he. stated thatwhen the Bill was in Committee he would move nil amendment- in relation to the hnrdsb'p clause. He did not believe that a Commission should ho anpomted by the Governor-in-Council. He objected +o the principle of Goveinment by Order-in-Oounoil, believing that Parliament should rule. Mr H. G. Dickie insisted that the proposed legislation would depress land values and in doing so it would affect every farmer in the Dominion. He doubted whether it would be possible >n many instances to get renewals of mortgaees. And he urged that when the Bill was in its committee stage it should at least lie amended to grant full exemption on all mortgages up to the statutory amount. Mr K. S. Williams suggested to the Prime Minister that the date for assessment of farmers’ incomes should be postponed from the end of March to the end of August or September, pointing out that by the end of March the farmer could only guess at wliat would be the financial result of his year’s operations. Mr Williams said he could not understand why any man, with an inclination to succeed on the land should be hampered in liis ambition. He had no objection at all to the landowner paying his fair share, but in the interests of the Dominion as a whole, his range of progress should not be limited. To a certain extent there seemed to be a general tendency to belittle the success of tlie man on the land. Mr H. Holland (Christchurch North), said he considered the fact that the Bill pre-supposed hardship was sufficient to condemn the measure. He did not think it would take two or three years to classify the land. It should be possible to obtain the classification of a largo estate in a very short time, and with such information at his command, it should he possible to formulate a more equitable system, and obviate the need for a hardship clause. Mr W. H. Field stated that he was satisfied that the Bill would operate in a very brutal way. He could understand the Labour Party’s support of tho proposal, because lie believed they saj' in them a big step towards the Socialisation of land. Mr W. E. Barnard stated that he hoped the Government, when acquiring land for closer settlement, would take up properly in Hawke’s Bay, in which district there was ample scope for progress in this respect. He hoped that tho Government would eventually revise the whole taxation system, though he realised that it could not be carried out immediately. Mr Coates said be had previously suggested that the Bill should have been referred to a Committee, of tho House. This would have been in direct line witli precedent. He referred 10 the extent of the alterations which this course had involved in tho past, and lie considered it would have been of considerable advantage to have followed that example in the present instance. The Leader ot the Labour Party had referred to the increase in

the value of the farmers’ products last year, but lie had made no reference to the increase in the farmers’ costs. That was an aspect which had to be taken into consideration. When the House resumed in the afternoon, Mr Coates stated that the increase in the returns from Drlinary products had been obtained only as a result of more intensive and scientific methods applied by the man on the land, who had had to bear extra expense to adopt this course. Mi Coates declared that the burden of local rates on the farmer was becoming one of the mos f serious problems that the country would have to. face and most inevitably increase the costs of production. If it was essential that landed income should be taxed further to supplement ~ie finances ot the country, then it should be taxeu on the same basis as incomes from any other source, and the Government should never lose sight of the principle of ability to pay. It was essential, in the interests of the country as a whole, that the costs of Industry should not be increased, and that the farmer who had to send his exports 12000 miles, to compete with other goods produced in close proximity to the overseas markets, should have his costs kept at the lowest possible level. Mr Coates contended that the hardship clause, as it stood, could not operate fairly. It would not meet the situation created by heavier taxation on the struggling farmers. Many areas were totally unsuitable for sub-division, and Instead oi being more formidably burdened, the ownei should be given every encouragement to improve it, and if possible, to turn a wilderness into an oasis. Mr coates said that he would ask Sir Joseph Ward across the floor of the House whether he would agree to the Bill going before a Select Committee The Prime Minister: “No."

The Leader of the Opposition stated that there was no immediate need for hurrying through with the Bill. He thought the Committee should hear representations on the subject, and he would move an amendment that further consideration of the Bill should be deferred until the effects of the provision of the Bill had been fully investigated, and reported on after evidence had been taken before the Public Accounts Committee.

The amendment was seconded by Mr A. M Samuel (Thames), who stated that any measure that imposed an annual tax of five to 5J per cent, must be a confiscating measure. Local rating, together with 6 per cent, on his mortgages, and 5 or 5£ per cent, super tax made it impossible for the farmer to carry on successfully. This taxation must mean deflation of land values, and that meant that farmers who had put in a life time on the land would see their assets swept away. Mr W. G. Lysnar (Gisborne) said that he hoped the Prime Minister would agree to refer the Bill to a committee, while Mr D. Jones (MidCanterbury) stated that he did not think Sir Joseph Ward could, iri view of all the representations made on the subject in and out of the House, deny that the request was a moderate one. He and other members of the Reform Party wanted an opportunity to bring evidence before a Committee, and prove to the hilt every statement that they had made. The Hon. T. M. Wilford (Minister of Justice) asserted that the amendment was designed to delay the Government’s legislation. If it was a genuine amendment, why was it not moved on the first day of debate? It was a “political fake.” This allegation was denied by Mr F. Waite (Clutha) who said that if the Prime Minister was willing to hear representations in relation to the Bill, he could not object to its going before a committee. Mr H. S. S. Kyle (Riccarton), stated that the amendment had not been moved on the first day of the debar* because representations to the Prime Minister were pending. Mr A. Harris (Waitemata) contended that as the Bill affected only one class it was only fair that that class should be given an opportunity tc place evidence before a committee in support uf the claim that the proposals were unsound Messrs A. Hamilton (Wallace), J. A. Young (Hamilton), W H. Field (Otaki) and C. E. MacMillan (Tauranga) also spoke in favour of the amendment. A division was then taken, and resulted as follows. For the amendment (27). Ansell, Lysnar, Bitchener, Macmillan, Campbell, Massey, Coates, Nash. Dickie, Poison, Field, Rushworth, Hall. Samuel, Hamilton, Syke, Harris, Waite, Henare, Wilkinson, H. Holland, Williams, Jones, Wright, Kyle. Young. Link later, Against the amendment (45): Armstrong, McDonald , Atmore, McDougail, Barnard, McKeen, Black;. Macpherson, Bodkin, Makatanara, : Broadfoot Martin, CaiT Mason, Clinlcard, Munns, Cobbe, Munro, de la Perrelle, Murdoch, Donald, Ngata, Fletcher, Parry, Forbes, Ransom, Fraser, Savage, Hawke, Semple Dealy, ; Smith, Hogan, Stallworthy, H. E. Holland, Sullivan, Howard, Tavener, Jenkins, Veitch, Jordan, Ward. • Langstone. Wilford.. McCombs, Pairs. For amendment:— Wright, Burnett, H. Holland, Pomare. Against. Sullivan, Armstrong Jordan, Parry. Sir Joseph Ward, in reply to the debate on the original motion, said that an effort had been made through the Farmers’ Union to create the impression that the Bill was injurious to the farmers of the Dominion as a whole, but he repeated his original contention as to the number of farmers who would be affected “There has not been any agitation among the farmers of Lite country, he stated. “Youre wrong,” interjected Mr W. J. Poison (Stratford). Sir Joseph Ward agreed that there

had been an agitation, among a few, but not among the farmers as a whole. It was nonsense to say that the whole farming community would be indirectly affected. The Prime Minister stated that he had inserted the hardship clause at the instigation of those who felt they would be injured, but if the House did not want it, he would take it out. Reform members: “It doesn’t go far enough.” 'Sir Joseph Ward said that he was prepared to consider that point during the committee stage of the Bill. Reformers: “Hear, Hear.” Continuing, the Prime Minister said one thing that had struck him during the debate had been the want or opposition members to recognise the Government's desire to make the Bill a fair one. The Bill was then read a second time, and the sitting was suspended at 5.50 till 7 30.