INSURANCE TAX IS INEQUITABLE.

Star (Christchurch), Volume XLIV, Issue 78, 1 April 1931, Page 6

INSURANCE TAX IS INEQUITABLE.

ABILITY TO PAY HAS NOT BEEN CONSIDERED. (Special to the “Star.") AUCKLAND. April 1. In a criticism of the proposed insurance tax. which formed part of the Ilawkes’ Bay 'Earthquake Bill. Mr A. M. Seaman, president of the Auckland ' namber of Commerce, said the worst feature about it was that it was a class tax, and ability to pay had apparently not been considered. Vet, ability to pay was a vital factor at the present time, as many property owners were suitering substantial losses. The tax was clearly inequitable as between different classes in the community. continued Mr Seaman, because * the investor who had virtually the whole of his capital locked up in giltedged securities would not come within the scope of the measure, whereas the trader .earning possibly a small income; lhit carrying heavy stocks, and possibly also a mortgaged property, would have to meet a very substantial addition to his insurance charges. A professional man also would scarcely be touched by the measure, as he usually had little in the way of insurable property, apart from his private possessions. At various seasons of the year traders accumulated heavy stocks, Mr Seaman said, and these were covered by shortterm covers, and there was provision that the policies in respect of them could be cancelled before maturity, a portion being rebated. Was the full Is 6d per cent to be charged and retained by the Government in these cases ? It appeared from the telegraphed summary of the provisions of the Bill that a great amount of work would be involved in assessments, and that the financial result was likely to be small in proportion to the expenses of collection. Then there was the position of the insurance companies themselves. Did the Bill provide that they should get remuneration for their -work as cqllecting agencies? They would certainly be involved in additional expense. If the Bill provided, as was originally suggested, that after reimbursement of the reserve funds for the full amount of £1,500,000, for which it was now raided, a fund should be established for future earthquake rehabilitation, the question arose as to whether the substantial fund that would thereby be built up might not become merely spoil for some politicians in the future. There had been instances in New Zealand’s political history where funds created for one purpose had been sacrificed on -the altar of expediency.