EARTHQUAKE BILL

Timaru Herald, Volume CXXXIV, Issue 18848, 10 April 1931, Page 7

EARTHQUAKE BILL

DISCUSSION CONTINUED IN j HOUSE. By Telegraph—Pres* Association WELLINGTON. April 9. In the House of Representatives this afternoon, continuing the debate on the second reading of the Hawke's Bay Earthquake Bill, Mr W. D. Lysnar urged that assistance should only be given where it was necessary. He did not favour the granting of assistance to wealthy institutions and persons. Mr D. G. Sullivan (Christchurch) expressed the opinion that if the ruins were cleared up without delay there would be a beneficial psychological effect upon the people of Napier. He thought there should be more than one adjustment Court, and suggested that if the services of retired Judges were utilised it would be possible to avoid interfering with the work of the Supreme Court. Mr H. Harris (Waitemata), said he believed that if the Government had appealed to English investors immediately after the earthquake it would have been possible to have raised four millions at four per cent., in a few days. He had sugegsted such a course to the Prime Minister at the time. Even to-day the people of New Zealand would respond to a premium bonds loan, which would appeal to the gambling element in the community, and would be a better proposition than art unions. He made a plea for recognition of the work of Mr F. R. Field, who had made a study of earthquakes. It was stated that he had predicted the last earthquake. Mr Harris added that the Society behind Mr Field was prepared to guarantee his salary for six months if the Government would engage him. Mr W. J. Jordan (Manakau) agreed that the Government should give Mr Field an opportunity to continue his research work. He opposed the proposal to tax insurable property, declaring that it would tend to prevent the manufacture of goods for stock, and would thereby close avenues to

employment. It would be wiser for the Government to again look into th§ possibility of deriving more revenue from petrol. Mr Jordan stated that, considering the comparatively small volume of spirit used in this country, and the profit amounting to millions which was being made by the companies, there was surely a greater field in this quarter for taxation than there was in relation to people's homes and chattels. He supported the view that the Bill should be referred to a Select Committee. Mr J. S. Fletcher (Grey Lynn) said the Bill could be regarded as a friendly gesture on the part of the Government, and it was for the House to convert it into a measure that would interpret that gesture in a suitable manner. He did not favour a tax on insurable property. Mr C. E. Macmillan (Tauranga), ! said the insurance tax was something i in the nature of an earthquake insur- ; a nee levy, and should be made only on ■ those properties which could claim ! from the fund in the event of disaster. I Dairy produce was already insured ! against earthquake, and it seemed un- : fair to penalise this produce with a i levy, which meant that farmers would | have to pay twice. ! Mr H. G. R. Mason (Eden) said the j money-lending class, which was the i most obvious class to go to for taxation, would escape almost scotfree under the insurable property tax proposal. Mr W. H. Field (Otaki) favoured referring the Bill to a committee. He advocated setting up more than one adjustment Court. Mr W. E. Parry (Auckland) complained that members were not adequately supplied with information to enable them to consider the Bill satisfactorily. They did not know', for instance, what had been the insurance cover on properties destroyed. The Hon. A. J. Stallworthy: “Under three millions.” Mr Parry said this information should have been freely given to the House. It should not have to be dragged from the Government. Mr Holland (Christchurch North) urged the Government to pause before placing an additional burden on the public at a time like the present. He suggested deferring the building up of an earthquake fund for a year or two. Mr Barnard’s amendment was then put. and was defeated on the voices, there being no call for a division. The House adjourned at 5.30 p.m. Referred to Committee. The announcement of a decision to appoint a Committee to consider the Hawke’s Bay Earthquake Bill was made by the Prime Minister at the conclusion of his speech in reply to the second reading debate. Mr Forbes, speaking immediately upon resumption of the House at 7.30, said the discussion on the Bill had been very helpful. He thought it would be realised that if the country had been in a more prosperous state there would have been no difficulty in providing a larger sum than a million and a half which it was proposed to take from the reserve fund, but in the present circumstances he felt that the Government would not be Justified in placing upon the community any greater burden than was absolutely necessary. However, as he had said before, it was intended to place this sum at the disposal of the Commission, and if it was apparent that more

money was required, that money could and would be provided. Replying to criticism of the insurance tax, Mr Forbes said it was entirely a new principle, and would never have been brought into operation had it not been for exceptional circumstances. It was on a similar principle that action had been taken in Japan in connection with the recent earthquake and fire in Tokio. In that case insurance companies had been called upon to pay ten per cent of losses, and if they were not in possession of the money the Government had been empowered to lend it to them at four per cent. To recoup them for this outlay, they had been allowed to impose an extra levy which amounted practically to an insurance tax. The New Zealand Government’s proposals had been referred to the companies, and while there had been requests for minor alterations the companies had expressed the opinion that they would be able to work under

the scheme, and were only too anxious to assist the Government. It had been asserted by members that the insurance tax was a tax on property. It had to be agreed that this was so, but it must be remembered that the object of the levy was to enable rehabilitation of property. There was no doubt the biggest claim on the proceeds would come from those who had had big businesses. There would have to be discrimination. because businesses which were merely branches with resources outside would not be in the same need of assistance as those into which the owners had put all their money in one building or concern. It was those people who would have to receive substantial help. They would be owners of big properties, and it therefore was only reasonable to ask the property of the country to come to their assistance. Mr Party: “On what basis will assistance be given?” The Prime Minister said that the question would have to be considered when information was available. A questionnaire had already been prepared, and it was proposed to formulate general principles for the guidance of the Court. Continuing, Mr Forbes said the Leader of the Opposition had expressed the opinion that conciliation would have been a more suitable method of dealing with adjustment than referring questions to a Court. The Prime Minister said he hoped a good number of cases would be settled by voluntary arrangements, and that it would not be necessary to invoke the jurisdiction of a Court. Dealing with the point

a Court. Dealing with the point raised this afternoon by Mr Harris. Mr Forbes said there was a difference in relation to subscriptions and investments at the time of the time of the disaster. The first feeling following such an occurrence as the recent earthquake was a desire to subscribe assistance, but there was an entirely different atmosphere when it was a question of a loan. He pointed out that there had been a fall in prices of New Zealand securities immediately the news of the disaster had become known, and he was satisfied that it would not have been an opportune time to go on to the loan market. A reserve fund had been opened by Sir Joseph Ward years ago. and one of its objects had been to place the country in a position to meet any national emergency. It had later been supplemented by Mr Massey. The money had been invested in gilt-edged securities on which it was possible to realise immediately, and very satisfactorily. There had been a suggestion to realise on Bank of New Zealand shares, but he thought it would be argued that it was not such an easy matter to realise immediately on internal securities at a time of internal disaster, as to take similar action with funds in the Old Land. It was of great importance to re-establish the reserve fund at the earliest possible moment. It was a very fine testimony to New Zealand’s credit that in spite of the earthquake and the fact that the country was being called upon to face deficits, its securities were occupying such a satisfactory standing as they did at present. It also was important that the standard should be maintained. Such a position was well worth preserving. Replying to an interjection. Mr Forbes said it was estimated that the insurance tax would realise £318,000 while the tax on uninsured property would realise £20,000.” Members: “Then why not drop the tax on uninsured property.” Mr H. M. Campbell: “What will it cost to collect it?" Mr Forbes said he could not say what the cost of collecting would be. It was proposed to collect it through the Taxing Department. Continuing, the Prime Minister said it might be considered an easier method to deal with rehabilitation by means of a loan which would be repayable say in thirty years time. That would mean leaving repayment to others. He was of opinion that the correct method was to face the position ourselves. It would take five or six years under the Government's proposals to recoup the reserve fund, that was to say we would meet our liabilities in five or six years.

Concluding, the Prime Minister said he recognised when he introduced the measure that there were bound to be many alterations necessary. He had not looked upon it as perfect. He felt the request to set up a Special Committee was reasonable, and as soon as the second reading was completed he proposed to move for the appointment of such a Committee at once. it would then be able to commence taking evidence to-monow There were several people in the town at the present time who were ready to give evidence. He trusted that it be possible in this way to overcome weaknesses in the measure. Committee Appointed. The Bill having been read a second time, the House, on the motion of the Prime Minister, appointed the following Committee to which the Bill is to be referred: —Messrs Forbes, Ransom, Ansell, Barnard, Campbell. Endean, Jull. Langstone. Lysnar and Poison. The Bill was then formally referred to the Committee. OPPOSITION TO PROPERTY TAX. By Tel erraph—Press Association CHRISTCHURCH, April 9. Criticism of the proposed property tax under the Earthquake Relief Bill was made by the Chamber of Commerce in a resolution to-night. The Chamber opposes the tax on the ground that it is a levy on property, and not on income. It is inequitable as between one section of the community and another, as it taxes owners of property, machinery, merchandise, produce, and other goods, and does no; tax investments and other forms of capital. The Chamber suggests that a contribution fJioula be made from the public revenue, instead of. by the proposed “costly, inconvenient and inequitable taxation.”