BATTLE OPENED.

Auckland Star, Volume LX, Issue 228, 26 September 1929, Page 11

BATTLE OPENED.

REVIEW BY PREMIER.

LARGE LANDOWNERS.

'ESCAPING THEIR JUST TAXES'

(By Telegraph.—Parliamentary Reporter.)

WELLINGTON, this day.

In moving the second reading of the Taxation Amendment Bill in..the House of Representatives, the Prime Minister, Sir Joseph Ward, announced a further concession, to the extent that the new supertax on land will not be demanded on the usual date. It will be demanded on February 19.

Sir Joseph said he had not made this amendment as the result of any pressure from outside. "I did it because I want to treat the taxpayer fairly," he said. "We will get the revenue this year, but the supertax payer will not be asked to provide it at as early a date as the ordinary land and, income tax. Bv February the proceeds of the wool sent from this country will be within the reach of those who ship the wool, and it will give them ample time to be in receipt of the funds, so this point cannot longer be urged as a reason for deferring the land tax."

The Prime Minister went on to explain the operation of the supertax. He dealt with the effect of the mortgage exemption of £7500, which decreases £1 for £1 and disappears at £13,000 unimproved value. The number of taxpayers who would now be affected would be 1800; instead of the 4500 involved under the original Budget proposals. What he was recommending was that the supertax should rise 1 per cent for every £50 unimproved value from £14,000 to £16.500, at which figure 50 per cent would be reached, and thereafter the increase would be 1 per cent for every £270 unimproved value to £30,000, at which point 100 per cent would be reached. The supertax revenue under this scheme was estimated at £300,000, instead of the former £325,000, and the number of taxpayers affected would be approximately 1450 instead of 1750. Objects of the Supertax. The hardship clause would apply only v to supertax payers. The object of the supertax was to obtain additional revenue and to promote subdivision, so that it would appear that relief should be given only in cases which entailed serious hardship. The income tax demands on large landowners would involve a great deal of extra work by the .Tax Department, so that the time would be required to deal with, hardship claims; hence the delay in making supertax demands. Mortgage Exemption Operation. Sir Joseph proceded to quote a table showing the effect of the proposed alteration in mortgage exemption. It indicated that there would be no change in tax where an unimproved value of £10,000 and a mortgage of £1000 existed, as there the exemption would be £5000. From this point increases were set out as follow: —

Un-.-improved Mort- ExempValuc. gages, tion. Tax. Increase £ £ £ £ s. d. ; f 's. d. ]Q,.7,0 9.C00 4,500 29/13/0 23/11/J1 11.000 S,OOO 4,000 36/ 0/5 -7/W7 ll.oOii 7.000 3.500 42/15/0 21/!b/4 12,000 6,000 3.000 49/17/6 20/. o/9 12,000 5,000 2,500 STA/H 18/ i' ll "Ought to be Just." The Prime Minister quoted the land and income tax rates in six Australian States, and the Commonwealth land and income taxes, to demonstrate his contention that those who loudly proclaimed against the Government, in applying the system of land or income tax to large landowners, were doing something unjustifiable. _ Then tliere *vas the factor that in New Zealand a comparatively large number of people had escaped taxation during _ the last ten rears, yet were complaining cj >ut a just proposal to bring them under ihe income tax where their land was over a certain value. The total number of people affected by these proposals was 2400. of whom 1400" were affected by the supertax and 1000 by the changed mortgage exemption. He wished to suggest to the members who were taking up a cry on behalf of a comparatively small section of the community that they ought to be just. (Hear, hear.) Those people had neither been just nor fair. Mr. W. D. Lysnar (Gisborne): In what wav? Sir Joseph Ward: In every way that ingenuity can suggest to them to misrepresent.

"Escaping Their Responsibilities." Sir Joseph said so many people well able to pay had been escaping their legitimate taxation contributions that he*had to take steps to bring down the proposals, and in so doing he was largely influenced by the incessant representations which had been made to him and other members of the Government over a period of years. He had in mind those who had escaped their responsibilities for 12 or 14 years. The Leader of the Opposition, the Rt. Hon. J. G. Coates: Oh, no, sir. Sir Joseph: It is so long that the risrht honourable gentleman has forgotten. Mr. Coates: Your memory is not certain. (Loud Reform laughter.) Anyway, you are putting it into them now. The Cry of "Robbery." Sir Joseph said that might express a view as affecting 2400 people, but if the I Government added up the numbers quoted by their Opposition friends the I result would show that the Government would be taxing half of New Zealand. Such was not the case according to the official figures, and rather than accept Opposition members' statements he would prefer to accept those of the Taxation Commissioner, who had all the facts at his command and was a disinterested official. The Taxation Commissioner said 2400 people would be affected, and that was more accurate than the unanimous outcry of the Oppositionists, who tried to convert the number into a hideous number. (Laughter.) The proposals had been described as robbery. Mr. Coates: A raider. Sir Joseph: Well, it is a blessing that this country is relieved of the administration of those who think with the right hon. gentleman. Mr. Coates: Living in a fool's paradise. (Loyal Reform laughter.) Sir Joseph (good humouredly): lam prepared to accept the soft impeachment from my friend, who has had more experience of living in a fool's paradise than I. (Loud laughter.) It is accepted in the spirit in which it is given. I may say I submit my proposals to the House and the country with the utmost confidence. "Happy Fandango" in Wellington. The Prime Minister referred to the combined effort which had been made to arouse antagonism to his proposals by a certain section. He said it was almost hideous to read of the meetings which had been arranged and to note their similarity. First there was a meeting in the North, and then there would be one in the South, and so it went on till it wound up with a happy fandango in Wellington, where the travellers who had been used to tell the world the proposals were not congenial had collected. He could tell by .the. feeling of the House that there were some members who were to vote against the proposals who were praying that something; might happen in the interval .* to relieve them of such an anomalous and uncongenial position. "The Savage Limit." The Hon. W. Downie Stewart (Dunedin West) opened the debate from the Opposition benches. He pointed out that the Prime Minister, in detailing the operation of the mortgage exemption, had only quoted the figures confined to the sma'ller groups, "and really did not reach the point Where the proposals are what I. might call the savage limit." It . was a fallacy to suggest that all properties were capable of subdivision.. 'Some holdings were essential 1 to working high country. It was well known that small farmers annually drew, on the large stations for their high quality sheep. It was matter for grave consideration whether all these properties should be ruthlessly cut up. He had heard it argued that the supertax was not * serious because it only affected a I small number of people. That was an] extraordinary and monstrous proposition. Every tribunal which had investigated the position of recent' years had found that the aggregation evil did not exist, and the 1922 Taxation Commission definitely stated that the land tax need not be further: used in a graduated scale to burst up large estates, as-those existing had a definite economic value to the country and subdivision would ■ not improve their production. "Amounts to Nationalisation." Assuming, said Mr. Stewart, that graduated "tax was continued as a matter of precaution, he took strong exception to the higher graduations. "It a savage tax, which appropriates the whole annual value of property in the higher grades. It amounts to land nationalisation and makes a property not only worth nothing to its owner, but amounts to appropriation." If effective in forcing land on the market it would force it all on at one blow, and destroy-the value of all lands in the Dominion.. A more scientific system would aim first at the higher total areas.