EXCESS PROFITS

Timaru Herald, Volume CXLVIII, Issue 21784, 14 October 1940, Page 6

EXCESS PROFITS

Bill Before House

Principle Supported

The Week’s Main Topic

(From Our Parliamentary Reporter) WELLINGTON, October 12.

Excess profits and how to divert them into the coffers of the State were the main topics for discussion in the House of Representatives during the week, but a number of measures, in addition to the Excess Profits Tax Bill, were passed. The debate proposed on government by Orders-in-Council was postponed by mutual arrangement between the parties to enable the House to adjourn by the end of the week and members were able to leave for their homes for a few weeks away from parliamentary life.

While all sections of the House were agreed that it would be wrong to allow those remaining in safety at home to make excessive profits out of essential supplies while the young men of the country are risking their lives overseas, there was a certain amount of difference of opinion regarding the methods to be taken to prune the profits, and Opposition members debated at length on the possible and even probable effects of such a tax. The Minister of Finance (the Hon. W. Nash), who piloted the Bill through the House, answered all arguments with the statement that if there were no excess profits there would be no tax, and if there were excess profits they were all agreed that a share should go into the war funds. He expressed the opinion that it would be unwise to attempt to make provision for all contingencies in the Bill and was emphatic that matters not provided for could be safely left to the Commissioner of Taxes and the appeals committee of three to be set up under the Bill. Profits from Land The position of the primary producers and anomalies and unfairness that might arise through the basis taken for assessing a standard income to secure a point from which excess profits would start, were well stated by two farming members of the Opposition. They made a good case for the farmer who would find himself penalised with a low standard income because of recent losses brought about by factors beyond his control, and the Bill was amended to provide for such cases. On the other hand it was generally agreed that the restricted marketing field for primary products x ould almost inevitably preclude sensational profits in the farming industry during the present war. The greater part of the discussion on the Bill centred around the necessity for making it a purely taxing measure and the danger of it becoming a penalising weapon for those who wore being asked to produce more to ’ielp the war effort. Members showed how it would be possible for the tax to prevent further expansion of businesses when such expansion was most wanted, and also how large profits might be made only by the outlay of large sums that might not be recoverable after the war. In such cases, it was stated, large profits could not rightly be called excess profits and their sequestration by the State might lead to financial disasters as soon as the plant used was no longer required for war purposes. Other Measures Passed Of the other measures passed, the Termites Bill and the War Pensions and Allowances (Mercantile Marine; Bill proved of greatest interest to members. Neither measure met with any objection. A recent lecture on the ravages of termites had made members au fait with these invaders and their dangerous habits, and consequently they were able to debate the measure with some authority. A number of interesting suggestions were put forward, probably the most important to the public being a plea for the control of remedies to prevent the sale of what one member graphically described as “white ant quack medicines.” An interesting point was raised when the provision of pensions for sailors was discussed. It was pointed ov that while the men working the ships carrying essential supplies were doing important. war work they were not in the same category as the men in the fighting forces because they were not employed by the State. To provide pensions for such workers raised the question of liability for injuries received by civilians because of enemy action, and the Leader of the Opposition (the Hon. A. Hamilton) pointed out that a further widening of the shelter afforded by pensions might be required before the war was over. Although not stated in so many words, there appeared to be a tacit agreement that as the State had seen fit to go to war the responsibility for war injuries to all citizens should rest on the State. Stormy Exchanges The injection of a subject far removed from the normal legislative serum—the pooling of Labour members’ salaries—into the political bloodstream on Wednesday brought violent reactions. The subject was raised by the Hon. Sir Alfred Ransom (National, Pahiatua), who pointed out possible implications in such a method. The effects came later. After the tea adjournment the Prime Minister (the Rt. Hon. P. Fraser) called the attention ff the House to the use of the word “corruption” by Sir Alfred and said that as there was an implication that the Governmen was guilty of corruption the whole matter should be cleared up. At ore stage he went so far as to suggest setting u x j a committee to inquire into the matter, but upon receiving the assurance of Sir Alfred that there was no such implication he agreed to the matter being dropped and the word was expunged from the records. There were some stormy exchanges during the half hour when the matter was under discussion, but as soon as it was cleared out of the political system members returned to their normal relations and all parted good friends when they dispersed at the week-end.