CHANCE REGAINED.

Star (Christchurch), Issue 11731, 22 June 1916, Page 2

CHANCE REGAINED.

BUDGET PROPOSALS DEBATED SIR JOSEPH WARD REPLIES T8 CRITICISMS. TAXATION QUESTIONS. [From »oto Correspondent.] WELLINGTON, Juno 21. Tho lost debating opportunity on tho Financial Statement suddenly came back within members', grasp to-day when the Government desired tho, House to resolve itself into commit too to consider the Estimatos, Only on Fridays can this be done automatically. To-day such a motion could be debated and members scon discovered their chance, Mr Pearee making it more securo by moving an amendment directly attacking tho Budget proposals. \ Mr Witty was the first member to develop the debating opportunity. He declared that the Government ought to let tho House know its plans regarding Customs duties and cost of Jiving. Motor-cars wero coming in front" AmerI iea by thousands, also tyres not bearing duty. New Zealand was doing exactly tho same for America as the | British did for Germany, building up its financial strength either for actual war or commercial warfare. We ought to almost prohibit American cars. Cigarettes ought to bo heavily taxed. They idi 1 more harm than drink to our young, men. Ho advocated a farthing tax on threepenny tickets for -amusomen tt, a halfpenny oil sixpenny tickets and a penny on shilling tickets. Hundreds of thousands of pounds were spent o;i picture shows. Why not. tax them? ' Members: Amusements generally. Mr Witty: I'm not picking out picture shows. Tax amusements gonerally. Continuing, lie accused tho Government of deliberately evading tho question of "'the cost of living. It promised to deal with rents but avoided touching the enormous profits made by warehousemen through increasing prices on goods stocked prior to the war. Bonuses were to be paid to married men in the Government sendee. Why not married women who had tho same responsibilities. Th-e House had a right to know how the j enormous sums paid to Judges for travelling expenses had been expended. Some charged only a few pounds, but the amounts ran up to over £6OO to one, Judge. Surely the House had a right to know whether there had been extravagance, ( The House wanted I tho Government's undertaking to inj creaso the separation allowance. It was i all very •well for the Government to say that New Zealand ,was doing better I than any other country. It was better able than other countries to -provide more. The Financial-debate was allowed to collapse because some members were not ready. , _ 1 The Hon W. FL Ferries raised a point of order that matters not in tho Estimates could not be discussed. The Speaker concurred. Mr Witty said, that this was wide enough to enable members to make useful (suggestions, BUDGET AND PRODUCING INTERESTS. Mr G. V. Pearee gave the discussion a fresh and interesting turn by moving the following amendment to tho motion that tho House' go into committee: — "That in the opinion of this • House many of the proposals contained in the Budget are opposed to the best interests, of the country, especially the producing interests." Members showed tho liveliest concern. "Be very careful," interjected Mr Forbes. Other members shouted "Want of-confidence!" . Mr Pearee:-It's not. It "would not bo much good if it was, seeing iheiro is a National Government, but''l do want discussion on this Budget. My motion ; puts everyone on side. I don : t want any division. (Laughter.) Mr Pearee declared that ho was not opposed to the taxation of war profits, but was opposed to tho method proposed to be adopted in taxing war profits according to the Budget. He contended that if this tax were levied as proposed it would not mean a tax on actual war profits but a tax on increased output of products. 1 In his opinion it would bo very much better to levy an export tax. Ho was strongly opposed to tho principle of an export tax for ordinary taxation purposes, but this was only a proposal to take a proportion of war profits, quite a different thing. Under such conditions .an export tax would be tho easiest- and most acceptable iv'ay to i farmers. He believed that the Government would get from v 4 to 5 per cent more from an export, tax than it would get under the system proposed in the Budget. Our exports last year totalled £32.000,000, a 5 per cent tax on which would produce £1",600.000, while tho amount obtained from merchants through income tax would more than make up the balance of two millions estimated to be produced by the tax on war profits. Mr Pearee went on to express the opinion that there should bo a tax also to check the extravagance of the people. (Hear, hear.) x\mong farmers there had been a tremendous expenditure on American motor-cars, while in towns -there liad been equally extravagant expenditure on theatres and other amusements. ANOTHER COUNTRY DEMURRER. Mr Okey seconded Mr Pearee's amendment, though ho declared that lie was opposed to some of. tho previous speaker's remarks, especially the proposal to impose an export tax. He was of opinion that such a tax would fall heavily on the shoulders of a large number of poor men scarcely able to pay it. He contended that the Finance Minister's statement showed that the country's finances were so buoyant that if the war wero to end ai. an early date there would be little necessity for increased taxation. As a matter of fact he did not think thAt the war tax would result in much being obtained from farmers. He maintained that it was not the farmer but the middleman who was making fat war profits. Mr Hornsby: Companies are making it. Mr Okey: Well I am satisfied that tho farmers are not making it. THE FAIR BASIS. Mr Payne: Tho air is clearing. The woes of the farmers and the woes of the workers are due to tho middleman. The member went on to express the opinion tliat many of our financial difficulties would disappear if the I country's finances were not allowed to J bo in the hands of private enterprises. He declared that there wero no fewer than nineteen millions of money, a great part of it belonging to farmers, lying in banks and not returning a penny of interest, yet all the v.nile earning big dividends for banking institutions?. The banking octopus was the biggest octopus, sucking tho life blood oTfarmer and worker alike. Mr Pavno proceeded to contend that a fair way of taking war profits was to take'them by way of income tax. That tax was one fair basis of tax-, ation. He hoped there would bo no moro local loans floated at 4$ per cent leaving those loans free from income iax. "'Anyone who claimed to be a patriot should be satisfied to uvepfc

4J per cent without exemption. Mv Payne also dubbed the proposal tc remove doublo tax as iniquitous, ant ho trusted that the Houso would reject it. LAND TAXATION. Mr Nosworthy asked Labour members to realise that everything connected with the farmers' prosperity depended on tho prices of produce- They should noto the difference 'between taxation on land and taxation on money invested in Qther directions. A sum of £IOOO invested :n land was taxed £1 18s 4d, invested otherwise it paid no tax; £SOOO value of land paid £2l lis Sd, invested, otherwise it paid no tax. Tho speaker gn.ro comparative details up to £IOO,OOO capital invested in land, which then paid £2618 13s 4d taxation. The same amount, otherwise invested would pay £oG7 in taxation. Men on the land not only paid taxation on their interest in the land but also graduated land tax, war tax, and on top/of that a shilling in the £ income tax. It. wen unfair to tax men on their debts. II »> urged tho Minister of Finance to consider tho incidence of taxation upon men on the land. They were not trjring to dodge taxation, hut on behalf of a big majority ho urged the Minister to consider whether it was not time there was a change so that they should pay only upon actual property they possessed over and above their debts. Tax' war profits while they existed, but provide for equality of sacrifice every time. Every source of amusement should be taxed up to the hilt. It might not produce much, but tho moral lesson would be driven homo that tho Empire had to come before v pleasure. Tho income tax exemption should be lowered to £l5O. A lot of people not taxed to-day would welcnrno it compared with the continual cadging, which was improper and undignified. "I will light to tho last ditch on behalf of the man on the' laud against anything I consider an unjust imposition," concluded Mr Nosworthy. Tho Government which tries to impose it will have to appeal to tho country or thero will be such obstruction that no Government will bo able to stand \ip to it." Mr Payne: Don't threaten. (Laughter.) Mr Nosworthy: I am simply stating a fact. The people of the country, workers and all, when they realise what taxation is in front of them will analyse the situatiou as they never have analysed .it before. SOME SUGGESTIONS. Mr Anstoy described tho Budget as a good one, praising tho proposal to control the rate of interest amd careful husbanding of resources. War profits could bo collected better 'by moans of an export tax, which would havo tho good effect of reducing prices within Now Zealand. , The Government might havo gone a little further by taxing extravagances of all kinds. Opportunity should bo taken to recast the graduated lancV tax, which should bo on the occupier, not tho owner, because there was a good deal of aggregation of leasehold, with freehold. .Tt would have thc : effect of encouraging largo owners to subdivide their land on any terms on which settlers could be obtained. All loans, ought to be floated subject to current taxQ£, otherwise only large taxpayers woijld ho encouraged to take u:> loans. FINANCE MINISTER'S CRITICISM. Sir Joseph Ward said that he noticed a tendency of members to object to the debate not proceeding in the ordinary way. . The Government had made absolutely do attempt to burk discussion. v Everyone knew when tho defcate would open. If , the debate did not eventuate that was not tho fault or desire of tho Government. On the contrary, it would) havo been of assistance in affording - ' suggestions to the Government. So far no suggestion had boon made which tho Government had not already considered. It was about time to call a halt in this theory of more taxation, still moi:e taxation, whether we wanted it or not. Tlierfe was a demand, to , tax football and all amusements. (Heart hear.) Tho whole amount taken by New Zealand racing clubs at the gates last year was £3200. If wo levied taxes oh English lines upon attendances at raco meeting.?, football ■ matches, sports meetings, kinemas and theatres our. revenue in the same proportion to English receipts would bo £lll,OOO. New Zealand Required an additional three millions at least this year. Tho suggestion was to subordinate this nocessity to the creation of a fooling of gloom and depression in the country by taxation of amusements- Tho great majority of the people paying 3d and fcJd were poor people with families. Mr Nosworthy: Don't electioneer now. It's everybody's war. Sir Joseph Ward: I'm. not talking electioneering. We want this three millions for a specific purpose and what's the good of creating at this juncture an impression that we require to go down to smaller taxes which may be required a year or two from now. Sir Joseph Ward continued that with the increase of incomo tax last year, an addition or o per cent this year, and an excess war tax on profits of all kinds, ho believed places like picture theatres and all' amusements would pay in his opinion fully itheir share. It. haxl to be remembered that tho war tax would be based on a comparison of profits for three years prior to the war. It was not fair to say that it was proposed that the farmers should bo unduly taxed. Mr Peaxce: It is correctSir Joseph Ward : It is not correct. Tho Budget showed that over £BOO,OOO was collected in jncoruo tax last year, of which amount only £210,000 was paid on farmers' incomo tax, showing a difference of £'560,000 not collected from farmers at all under that heading. No taxation was absolutely equitable. It was impossible. In giving point to his argument that country taxpayers had not been treated harshly Sir Joseph quoted from tho Tax Commissioner's report, showing that last year tho incomo tax collected in towns totalled £1,029,883, as against £387,823 collected from tho country. Land tax collected in towns was £462,672 and from tho country £550,931, the total under both headings being:—Town £1,492,c00, country £938,756, showing that tho town paid an excess of £553,799 over tho country. He contended therefore that it ! was utterly wrong to say that the proposals in the Budget bore more heavily on farmers than on town people. WAR PROFITS. Proceeding to discuss tho proportion

of war profits to be levied tho Finance Minister said that if the Government were weak enough to adopt the suggestion of some members and take 75 per cent of war profits it would be doiftg a grave injustice. It was fallacious to say " Follow the lead of tho Old Country." In the Old Country for ages past there had been people accumulating wealth and there were great businesses which had existed ior hundreds of years. In tho Old Country those neoplo who were being assessed at CO per cent of war profits had been in the habit of getting money for accommodation required in carrying on their l|usiness at from 3J- io 4 p<i». cent, and of oaring for employment less than half tho amount paid 111 this country. FLEXIBILITY IX THE WAR. TAX. He had referred to the Taxing Department particulars regarding firms which would bo so heavily hit by the war tax proposals, if they were not flexible, that they must suspend operations, but the Government must avoid injustice. It wished to- obtain 45 per cent of excess profits, not war profits. • If war profits only wore taken wo could not get anything like two millions. L'nless there was flexibility we would impose tremendous injury upon taxpayers and the country itself. When a large sum was required, it was 110 use tinkering with small things. As for tho suggestion to tax American motor-cars, importations from Britain were almost, stopped because tho factories we.ro required for war purposes. New Zealand got its wool, butter and meat into America, and the only articles we required to help balance our trade were motors. Years ago it was fashionable to raise the cry of luxury in connection with motors, but they were an absolute business necessity. AN IMPOSSIBLE DEMAND. Conditions beyond Xcw Zealand in respect to tho cost of commodities were such that New Zealand would bo powerless to do anything elfective till tho war ended. Enormous increases in freight had occurred and ships were har<f to obtain. It was all very well to say " Foreo down tho cost of- food commodities." With one voice' it was proclaimed that heavier taxes should bo taken from the farmers and with another voice it was demanded that prices of commodities .should be forced down. If everything in the shape of produce were commandeered would any membsr go to his constituents and say he had been a party to taking commodities at lower than the actual and fair value? "I am at ono with any and every man," declared Joseph, ;; who says that the fcxploiter who is putting on unfair arid improper profits as the result of combination, ruber iu town or- country, during tho war period should bo severely dealt with. I would go so far rfe to make it a penal olTenco by which such men could be mulcted in heavy fines or imprisoned if they are discovered taking advantage of the war to extort unfair profits from the people of the country. (Hear, hear.) Members can make their minds quite easy that if the war is going on a year from now those who have got anvtlung to give will have to give a great, deal more than they nro giving now. To-day we are making; full provision for all the country's requirements to meet the altered position if the war stops and to carry on if the war does not stop, j Let us, theiefore, wliilo we may 'agree to differ, mako up our minds that it is no "so introducing taxation proposals of _ a minor nature and of a pinprickmg kind" -ii Country members combined to mako a vigorous protest against increasing taxation on farmers who, they urged, could not, like merchants, pass their share of the new taxation on. Mr Wilkinson suggested that besides income taxation the Government should

levy a duty of, say, threepence per lb' on tea and a farthing or a halfpenny on sugar, and strongly prged increasing liotei licenses. Ho said that the biggest hotel jn the country paid just tho sanip for its license as the smallest, and he suggested that the State should pay local bodies £SOOO a year and tako over tho collection of licenso moneys itself. He considered the railway tariff should also be revised. He believed that tho income tax exemption was too high at £3OO aild that it should bo reduced to £250. Mr Massey: That may havo to como yet. ABSOLUTELY APPALLED. Dr Newman said that- he was absolutely appalled at the amount .of taxation proposed in the Budget. 4 "'But," he added, " this debate had been very tamo and thero has been practically no criticism. It seems to foe a sign of tho political millennium when the lion from Ashburton lies down and frisks about with tho gentle lamb from Grey Lynn." (Loud laughter.) Dr NcAvmr.il went on to declare that the Budget defined every course of taxation and tha.t it was an unwise anl a vicious system of political economy to build up enormous surpluses and

then ask at least three mill'ons mere taxation. Where was there any »-vidence of real thrift? It whs not political thrift to pile up asjiug© surplus. Tho war had been in progress over eighteen months, yet, wo had more bloated estimates of revenue than ever. Mr M'Combs devoted a large portion of his speech about midnight to an elaborate definition of the respective positions of Reformers. Liberals and Labourites. Ho contended inat. the situation resolved itself into a line of cleavage between Labour and antiLabour. How could Li i:ur join a Cabinet in which it wouid havo one representative compared with rpposi tion interests? Ho contended '.hat the neglect of the Liberals :n "the Cabinet to deal actively with the_ cost of living problem and tin Board of Trade was merely a means of getting suggestions for a Government ccvoid of ideas. Tho debate was adjourned at 12.25 a.m. and the House rose.