BUDGET DEBATE CLOSED.

Press, Volume LIII, Issue 15989, 25 August 1917, Page 11

BUDGET DEBATE CLOSED.

SIR JOSEPH AVA-RD'S REPLY. (,\r.nrDGEu i-ress KErORT .) WKLLINCTOX. Au-ust 24. the debate on the Financial Statement in the House of Heprj-.-i-ntatives this atternoon. Mr A. Walker said at such time as the nrcsriit >-0 the (nil service * could be very well dispensed with. He thought future war taxation would have to go in the direction of direct conscription or wealth. Ju connexion with the cost ot living, the (iovernment might at the ouihreak of war have yone in ex-

tonsivolv lor eommandeering foodsttiffs. ' The Prime Minister wa.s too i)U>y a man to yive the necessary .-atteiuioii to the business oi the Jiixtrd of '( raclf. and .Mr Walker suggested a eitun;>e ju the presidency of the Board, indeed, a general reshuffling of Ministerial portfolios, which was necessary for the eilicicnt administration of tho Oovernmeru Departments. Failing a readjustment, of portfolios, the air should be. cleared by a general election at the termination of the term of Parliament. lie felt confident that the people wort! lint satisfied with the administration of tho Government, :ind an appeal to the electors was the only way to clear up the point. Sir Joseph SVard rose at 3.45 p.m. to reply. He. thanked the House for the cordiality with which the Budget had been received. Despite reasonable grounds for difference of opinion on many of the proposals in the Budget, only a few had been criticised. Sorrto exception had been taken to the proposal to spend £'1250,000 on telephonic extension, but be assured tho House that it was absolutely necessary to complete obligations entered into before the war, and to give many distant parts of the Dominion the communication necessary to progress. Ho defended the payment of bonuses to Civil Servants drawing large salaries, for special services, on the ground that all private businesses recognised sucn services, and unless the Government ; did so, they would, have to pay a much larger sum to special officers. Only £'2000 had been spent in this way, not one penny of which had come out c.i' the £400,000 voted for the payment of a war bonus to men with small salaries. The Government had been chargid with want of courage in imposing a tax on tea, but perhaps the opposition to it also arose from want of courage on the part of. members who were afraid to lose votes by supporting it. ,lt was true that there were other avenues of taxation, but he warned the House that those oth-?r avenues might have to be fully utilised before the war was over, fie defended the abolition of the profits tax on the ground that it was incapable of producing the revenue re- ! quired. He read a report from the Commissioner of Taxes in support of this contention. High encomiums had been paid to the Commissioner, which be endorsed, for the manner in which he had. carried out the provisions of the Act, and ho asked memhors to remember that it was this highly esteemed officer who had reported that if the profits tax wore continued there would be a shortage this year of two millions in the revenue required. Tinder these circumstances, the tax was impossible, and he preferred to rely on the progressive land and income tax as being mere reliable in j estimate and more equitable in incidence. He contested the feasibility of ; I the proposed price tax, because it was j

inadvisable at this juncture to star; .. on a new method of collecting i . xion. whic-h was full of pitfalls for ' : the Government and -the taxpayers i stances wore quoted to show what t pitfalls were. No one carefully sidering the>e instances could dream of imposing a profits tax on 1 basis of a price tax. having regarr the fact that three millions of revr\ were required. Referring to the 1. ami income ttix. he declared that proposals tinder the Budget ivo claim 40 per cent, of many incoir Some business firms would bo, cal upon to pay 13s in the 2-'. He asked the Rouse desired to go further tL that. He did not believe- in esiracti more taxation from the people than n necessary, as he believed that the cotr try with the lowest taxation would the most flourishing after the \v: Many members had urged increas taxation on land, but- their propos;. would lead to some land paying tax; lion higher than the unimproved valu

of the land and that would be simol ruinous. When the taxing Bill can - down, relief would be given to stun men with mortgages. Mortgages as .. whole could not be exempt, unless tin whole hind revenue was going vo sli; away, and no member on either side o the House had suggested any substitute that -would not bo full of danger i to the country. The moment the door : was left o])cn in connexion with taxation. it was surprising how many people ; would try to get through it, and with | the advice of clever lawyers, they fre- i quently succeeded. It had been urged that the death duties should be increased, but ho preferred to wait and see. Tho Budget proposals were takinr six millions from the people by meat, - of taxation. There ha.d never been anything like it. but it was necessary ;o build up a great reserve. Wo would soon have ten millions in this fund, which, if it. -was not used for war purposes. could later on. be used for tho reduction of war loans. So far as he knew. New Zealand was tho only country that was piling up such a reserve, and he rejoiced to see the magnificent response to the call thus made upon the taxpayers. -Many, ho knew, were even borrowing to pay their taxes this year, without squealing, but this iact pointed to the care necessary not to ruin anyone by taxation. There would lie proposals to relieve small shareholders in companies in the Taxing Bill. Continuing jus speocn artor the dinner adjournment, sir Joseph Ward defended the tea tax, and said he thought ifc was unreasonable to object to pay a small impost when such heavy burueus were being placed on others, particularly when the money so raised was being devoted to assist the aged and noeciy. Looking to tho future of tho liquor traffic, lie thought public feeling was tending in tho direction ol' State Control, and some Government would have to face that fact. He had always favoured sobriety, and this was to some extent behind the change in the method of collccting tho beer duty, the tendency being for brewers to brew a lighter beer. He deprecated tho cry against luxuries, including niotor-cnrs. Too heavy taxation might have tho effect of keeping them out of the coun- ( try and destroying revenue, and j revenue the country must have, lieverting to tho war loan, Sir Joseph declared that unless tho loan was raised at 4-i per cent, freo of incometax, it would have to be floated at Ci, and the effect unquestionably would be that tho rates of interest -would have to be raised by all lending institutions, including "the advances to settlers' office, and that would not be desirable. He spoke appreciatively of General Godley, and regretted that the General had been attacked in the House before he had had a chance to say anything in his own defence. The House then went into Committee j of Supply to consider the Estimates.

- ••! ••, - .fc item of tlto ; .. ' , v ncil, £2000— r. : v.-.'.cn iho vote