"No Such Things As Capital Expenditure"

Chronicle (Levin), 31 July 1948, Page 4

"No Such Things As Capital Expenditure"

' ' frhero is 110 such thing as capital tuiproveiiieift oix sdcdn'd class land,^ ,aid Mr/J. L. LUmbert to, the Royal . JommissiQu inquiring iuto the sheep indtisti'y, at Hunterville yesterday. ' ' It •should t'ome under the title of mainteliance. ' ' • , ■ ■ • Mr. Lariibert quoted' the example of a back country fanner who buiit a aouse for his employee and Was taxed .'or it as capital expenditure. This was . lot capital expenditui'e. It was maintenanee. To mahitain % back country iarin, which had to be of a fairiy substantial acreage ;-to be an economie init, the fanner had to einpioy labour. . Again if a man took up an area of scruo land his expenses foi' elearing it were taxed as capital. If a Whare wero erected it was taxed as a capital improvement. The erection of tnew fences was charged as capital. * Such taxation was one of the causes of the laek of progress in the back country. There was 110 tmployee who was more loyal than the rural employee, Mr. Lambert went oiij but no oue could blame him foi* leaving the, back blocks if his employer could not buiid a house for hiiu. Lack of medical service, i'Or which the farraer paid with everybody else, would drive anybody into the town. Roads Were poorlv maintail>ed. "The back country farmers are sbouldering the major part of the burden of the petrol tax because they are usiug more petrol, Some of the money froin thd petrol tax should be put into a fund to help the back country farmc.r, ' ' he maintained. x\ih,er liearitig ^ Mr. Lambert 's evidence the commission inspected a fann 011 which the owner was usiug euperphosphate to keep riown manuka. He had built a road through his fann to cart in the fertiliser but his expenditure had been taxed as capital. His costs Imd been greatly inceased. He had therefore to make fewer improvements.