TAXATION PROPOSALS.

Waikato Times, Volume 98, Issue 15318, 20 August 1923, Page 5

TAXATION PROPOSALS.

EXEMPTIONS LANDS. A CLOSE DIVISION. MINISTRY’S PRESTIGE IMPERILLED By Telegraph.— Special to Times. WELLINGTON, Saturday. It ■would be easy to over-estimate (he significance of the division in the House rif Representatives'.on Wednesday mm-ning, after an all-night sitting, when the Government carried its proposal for the exemption of agricultural land from the operation of income tax by one vote. There can be, however, no disguising the fact that the Prime Minister has a very difficult task in leading a House in which his pledged friends and his pledged opponents are so evenly balanced that the scale may tip either way in any critical division. On this particular occasion he was saved from defeat by Mr Murdock, the member for Mars'den, crossing the floor of the House to vote with the Reformers. Of course, had the scale tipped the other way the result of the division would not have necessitated the resignation of the Government, but in view of his promise to relieve the farmers - of the income tax imposed on them as a war -measure, it would have placed him in an extremely embarrassing position, and gravely impaired the prestige of the Ministry. “Letting Them Out.”

Referring to the exemption of the farmers from income tax, the New • Zealand Times denounces in tts oldV time style the relief given to "the ' plutooratio sheep farmers of New Zealand." "This unwarrantable concession to one already favoured and privileged class," it says, "is calculated to create strong- indignation and condemnation throughout the country. If there was'.one class more than another that benefited by our success in the war, at the enormous sacrifice of blood and treasure, it was that represented by the sheep farmers, who are the land monopolists' of the country. They are protected in the continued possession of their groat territorial estates which yield them immense revenues. This was achieved only atthe cost of the lives of many thousands of our most promising young men, and the health and prospects in life of many thousands of others'. And now the opulent sheep farmers are ' allowed to crawl out of their income tax liability at the expense of the rest of the inhabitants of New Zealand. It is intolerable." This vigorous language reflects much that was' used in the House. Other Criticism. The Dominion, does not harry the Prime Minister upon the results of his week's work. Its tone, indeed, is generally appreciative, though perhaps not so effusive as it might have been two or three years ago. The Post, however, Is not quite sure- that tne increase in the debenture tax is a wise move. "Public bodies," it says, must have a stable financial system, and short-termed loans, with constant renewals, are not generally suitable for them How will the new debenture tax affect their finances? Will it not weigh the balance against them? If they borrow now they will be compelled to offer a higher rate of m- ;'- terest, and they must pay that rate for 7 ten fifteen or twenty years. Higher X taxation makes higher interest necessary. In course of time taxation will be reduced, but the lender will profit thereby. The borrowing public body (and Hs ratepayers) will continue saddled with the highest interest, 'originallv imposed to compensate for high taxation." The debenture tax still will let off local bodies more lightly than companies and individuals are let off, and so. far leaves no cause for complaint. .