LAND AND INCOME TAXATION

Wanganui Chronicle, Volume 80, Issue 245, 15 October 1937, Page 8

LAND AND INCOME TAXATION

DEBATE ON ANNUAL BILL ITS PROVISIONS CRITICISED. THE MEASURE PASSED. [ Per Tress Association. ] • WELLINGTON, Oct. 14. This evening the House proceeded with the committee stages of the Land and Income Tax (Annual) Bill. The Leader of the Opposition (the Hon. Adam Hamilton) said the House was entitled to be disappointed with the Minister of Finance (Mr Walter Nash's) reply to the debate on the second reading of the Bill, as there were quite, a number of points which he had failed to clear up. The prosperity of the country to-day, he said, was more due to past Governments for the foundation they had built up than to the legislation of the present Government. The Minister of Finance had failed to make clear the Government’s policy if overseas prices fell.

Mr Hamilton continued that the Minister had also failed to define the hardship clause, and he asked was the Minister’s definition of the herdship confined to the case of a farmer whose net earnings did not show sufficient income to pay land tax?

The Prime Minister stated that if the Opposition’s amendment had been carried the Government would have lost 18,500,000 in revenue. What would the Opposition expect the Government to do then? I The Rt. Hon. J. G. Coates: You would not have been the Government if our amendment had been carried. Mr Savage: Well, thank the Lord we have sufficient majority to keep you from passing an amendment like that. Mr Savage continued that the Government’s policy was to see that as long as the people produced things they should be free to enjoy them. He proceeded to criticise the Opposition’s tactics in moving their amendment, and stated that Mr Nash’s reply was the most capable which had been made by a Minister of Finance in the House. Mr Hamilton: That’s only the Government's opinion Mr Savage: Surely the opinion of the Government is equal to that of the Opposition. Farmer Doubly Taxed. Sir Alfred Ransom (Opp., Pahiatua) said that the land tax and income tax levied on the farmer placed him in an entirely different category to the ordinary taxpayer. The farmer had to pay tax on his income and he was also called on to pay land tax out of that income as well. Most of the land which would pay heavy land tax, said Sir Alfred, was in the South Island and was not suitable for subdivision.

Mr S. G. Holland (Opp.. Christchurch North) said that it was no excuse for the Government to say that it had to carry out additional social services and, therefore, had to break a promise not to increase taxation. It should have thought of the cost of those social services before it made its promise, he stated. The Minister should give some consideration to the small investor in. large concerns, and he would also like to protest against the land tax being regarded as an ordinary business expense.

The Rt. Hon. G. W. Forbes (Opp., Hurunui) said the Opposition had not introduced their \mendment earlier in the debate with the object of defeating the Government but more with a view to registering a protest against what they thought was excessive taxation.

Mr H. S. S. Kyle (Opp., Riccarton) expressed an opinion that both the Prime Minister and the Minister of Finance were suffering from “taxitis.” If the Government’s present taxation were to be continued no undeveloped land would ever be developed, and he considered that a graduated land tax was a most iniquitous one. “Remarkable Arguments.” The Minister of Labour (the Hon. H. T. Armstrong) said that since this Bill was introduced they had heard some remarkable arguments. When the Opposition had been discussing the Budget they had been very worried on behalf of the small man. Under the present Bill they were expressing concern for the big man. Then they urged the Government to save the secondary industries and at the same time to abolish Customs taxation. He would ask the Opposition which taxation the present Government had increased? They had reimposed the graduated land tax, but that was only an increase in taxation. Mr S. G. Smith (Opp., New Plymouth) said that the Prime Minister should get up and apologise to the public for breaking the promise he made to the effect that he would reduce taxation. Would he get up and deny that he had promised to reduce taxation? Mr Savage: 1 deny it absolutely. Mr Smith, continuing, said that the reimposition of the graduated land tax was a burden on lhe small men of lhe community, both in the cities and the country districts, and he urged the Government to lighten the burden of taxation on private enterprise. Graduated Land Tax Objected To. Mr. 11. G. Dickie (Opp., Patca) said that if the Minister of Finance withdrew the whole of the land tax he would probably recoup the loss in revenue by the increased return from income tax in a prosperous year like the present. The Opposition contention that the graduated land tax was unfair in its incidence would, he thought, be admitted by most members of the Government, because it was levied on poor marginal lands. Mr. J. G. Barclay (Gov., Marsden) said that no farmer with property of an unimproved value of £5OOO paid graduated land tax, so the Opposition’s contention that it would fall so heavily upon the poor working farmer fell to the ground. The graduated tax had been imposed on land for 40 years, and during the whole of that period the value of the land had appreciated. If it were removed the value of the land would just go up. It would merely be a gift to the landholders of the value of the land tax which had been remitted. Mz. W. A. Bodkin (Opp., Central Otago) said he had originally supthe graduated land tax betause he had believed it would ac-

celerate the subdivision of large holdings, but in 1931, when he had seen the unfairness of its incidence in many cases, he had had no hesitation in voting for its withdrawal. Amendments Defeated. The short title and clause two of the Bill were passed at 12.20 a.m., but Mr. Bodkin moved an amendment to clause three, designed to exempt from income tax a family man with an assessible income of £3OO The amendment was defeated by 39 votes to 12. Mr. Bodkin was responsible for a further amendment to the same clause, seeking to deduct unemployment tax and charges from the asses sible income. This was also defeated by 39 votes to 12. Mr. Kyle then moved an amendment to the effect that there be a reduction of 10 per cent, on income tax payable under the Bill on incomes not exceeding £5OO. The proposal was lost by 39 votes to 12 and the Bill passed the remaining stages without amendment and the House rose at 12.52 a.m. until 10.30 a.m. to-day.