LAND DEVELOPMENT IS CRUCIAL ITEM TO THE DOMINION FARMERS

Wanganui Chronicle, 27 November 1948, Page 9

LAND DEVELOPMENT IS CRUCIAL ITEM TO THE DOMINION FARMERS

“Land development has been a crucial item to the New Zealand iariner. It has been doubly or trebly crucial though, under the basic realities in which he has undertaken that land development.” 'lhis statement was included among lengtny evidence submitted to the Royal Commission on the Sheep industry yesterday by Mr. R. O. Montgomerie (Kakatahi).

“Sanity, plus logic, would have expected that the resultant value of this land developed should have been automatically accepted as an asset at its cost by banks, stock and station firms and GJovernment valuations to sustain the farmer's Ijnanciai position in times of economic stress, such as slumps. “But as we have found, the more the farmer developed his land the more financial .ground he lost. The price structure of New Zealand had robbed the farmer of the annual returns which would have justified these costs becoming at once an asset. This, and this alone, is why the farmer had to close up like a clam the moment period of low produce prices were upon him. And for the rest of the people of New Zealand, this was when they commenced to feel their shoe pinching a little.

“There' is that view which claims that the land belongs to the people. Why, then, this miserable reward from the people (as owners), when we contrast these conditions in our farming industry with the far more generous rewards they have seen to it that they secured for themselves, for their “indirect services - ' to farming? If the people are the virtual land owners, then let them accord their servants (the farmers) rewards fully parallel with their own.

ROBBED OF ECONOMIC RIGHTS.

“We have found that not only was the farmer robbed of his economic rights, but that he has also been robbed of the very assets he has created with his own hands, in so many cases. A great body of opinion exists within New Zealand' which opinion castigated as ‘that disgraceful removal’ by Parliament in 1922, of the liability by farmers, for the payment of income tax. We have had this measure characterised as ‘a flagrant favouring of the farmers at other people’s expense.’ In view of the reality of the conditions under which farming has been carried out in New Zealand, we could now justly claim ‘that when the payment of income tax was lifted off the shoulders of our farmers in the 1920 s, that it must have been the greatest piece of wholly unconscious justice that has even been enacted by the Parliament of New Zealand.’ The unfairness of the levying of income tax on farm income becomes evident (under the realities we have found) when these residues of income (after taxation) are invested by the farmer .‘in further land improvements’. These lana improvements, we have found, have been written down by as much as 70 and 80 per cent. The iniquity of this becomes at once evident, when we realise that after the farmer has paid his taxes aixl invests these ‘taxed residues of his income’ in further land development that that taxed residue is further taxed to the tune of 70 per cent, and more of that residue, on the basis of a later Government valuation of such further improvements.

“These, then, are the conditions we have wished on the returned serviceman. He too, will find that his income is taxed and that his ‘land improvements’ will also suffer that further ‘super-taxing’ of 70 per cent, ‘of the residues of his taxed income.’ We could commit no greater crime against the returned servicemen, than to condemn them to this. Let it not be overlooked that it was the 14/33 ratio of economic reward which broke the hearts of the returned soldiers of World War I, rather than the initial price of their land.”