THE HOUSE.

Dominion, Volume 6, Issue 1824, 9 August 1913, Page 6

THE HOUSE.

GRADUATED INCOME TAX. V GOVERNMENT PROPOSALS. . The House of, Representatives met at E.3Q p.m. . Tlio Land Tax and Income Tax Bill : lpas introduced by Governor's Message. Tho Hon. JAMBS ALLEN, replying to a question by Mr. Witty, said ■ that the Bill, ; besides being the onrnual taxing ■JJill, contained tho ' new provisions for the graduated income tax. The proposals wero : based .upon . the same principle as ..tlio graduated 'land tax of test year. The tax -would increase gradually as incomes rose,- and not by abrupt steps, as was the case under the '• old system. ■ Tho maximum rate would be increased on 'higher incomes. STATE LENDING,. ' LOCAL BODIES' LOANS BILL. The House wont into Committee, at 2.55 p.m., cm the Local Bodies' Loans Bill and the :Stato Advances Bill. In discussion upon the first-named - measure, Mr. G. Witty suggested tluat local bodies should be given twelve months instead of six months, in which to take over a loan granted by tho Advances Department. • ..Tho Minister said that all hu desired was to have some definite arrangement. If tho Committee thought six months too short a time ho was prepared to coneider sorno longer period. Unnecessary Polls. Mr. G. V. Pearcq asked whether there any provision in tho Bill for raising a loan without a poll. 'Under • the old Local Bodies' Loans Act provision. was made for raising a loan when a ' .petition had been signed by a majority of tho ratepayers interested. Where only four, or fivo ratepayers were interested it was « waste of money to take a poll, and 'these conditions prevailed in respect of nine-tenths of tho backblock county ' I °Mr." J. G. Coates asked whether it ~ would not be possible to extend the benefits of the sinking fund provisions to loans provisionally approved prior to the passing of tho Act of 1912, in cases where the money had been expended upon wrnafide development work. The Minister eaid that the Act was not 'retrospective, but that ho would* consider the point. . 17 , ' Clause 8, permitting ft local body to deposit sums to tho credit of a loan account in bank was amended to proI vide that interest on -any money so doI posited should be appbed towards tho Interest omd sinking fund of tho loan. Local Bodies' Overdrafts. could not liquidate it out of revenue, 6hould bo allowed to do so by means of ' a loan. Ho said that local bodies which wore in debt would bo very grateful for such a provision. . . . Mi. J. Dickson opposed the proposal.

urging that it would encourage a local body to increase its overdrafts, raise a loan to wipo it off, and then get another overdraft. Mr. G. V. Pearco took the same view, and remanked further that to got the consent of two-thirds of the ratepayers of a country to a loan would be a very expensive way of wiping off an overdraft. The Hen. Jcs, Allen said ' that no alteration was proposed in the existing law. Local bodies had powers .to use their winks for special works, but any local body doing so had to comply with the law and reduce the overdraft at. the end of tho year. He declined to accept the amendment proposed by Mr. Witty, Old Clauses antj New. Mr. T. M. Wilford said that It was difficult to understand which clauses were altering the law and. which were the present law. Better progress would bo mado if the Minister stated as each clause, was reached whether it was new or old. Tho Minister agreed, to do go. He pointed out that all re-enacted clauses had side-note references. . Mr. . Wilford . said that the • aide-notes conveyed no information. At tho suggestion of tho member foT Hutt, Glauses 25 to 10, inclusive, being all taken from existing law, were passed without disiyssion, on .a angle motion. . Mr. Wilford Protests. The smooth progress whiclj had hitherto been made was interrupted at 4.5 p.m., when Clause 52 had be.an rcached. Mr. Wilford, at this stage, protested that many members did not understand the Bill, and moved, "That tho Chairman leave the choir," as an indication, that tho Bill should be referred to the Statutes Revision Committee, Tho Minister said he hoped hon. mem-' bera understood that if this motion were carried it would kill tho Bill. Mr. Wilford: Oh, no, wo could reinstate it. Mr. Allen repeated that to oarry the motion would be to kill the Bill.'

Mr. G. V. Pearce fa id that this Bill provided for a State guoraiteo of local bodies' loans to the amount of half a million, and hero was the row Leader of the Opposition trying to kill it. This was a, nice state of things. He hoped that not a Hinjlo member on either 6ide of the House would support, the motion. Mr. J. Hanan contended that the Bill was omo that should be referred to the Statutes Revision .Cqmmitteo, und denied that any member wanted to kill the Bill. Attempt to. Kill the Bill. Thfl Prime Minister denounced the motion on the graund that it would kill the Bill if carried. N Mr. Wilfordi Tou know the intention of the motion. " Asked by the member for Hutt, "Can't you reinstate it?" the Prime Minister replied: "Yes, if we were allowed,£<>>{3s, eo, but I am not going to . take any risks. (Opposition interruptions.) If this moti9n is agreed to the Bill will not ho reinstated."

A memberi Tho motion will not be agreed to. Tho Primo Minister: If the motion is agreed to—l don't think it should have been moved—tho Bill will be oft' tho Order Paper l'or tho rest' of the session. Mr. Wilford: It was done in order to save you spending money. . Mr. Witty said that no one oould say that the Minister had not been, assisted with this Bill. On tho contrary, ten clauses had been taken in globo, on the motion of the member for Hutt. The Primo Minister knew, as well as ho did that there woultl bo no division on this motion'. As to restoring tlio Bill to tho Order Paper, if he were allowed to refer to a past debate he would say that what had been done on the previous -night could bo done again. Finally, Mr. Witty expressed a hope (hat tjie Prime Minister was not going to bring in the whole of his majority to voto against tho motion. "A Political Larrikin." Sir Walter Buchanan said that Mr. Witty had done'^valuable-work all the afternoon and had treatod the Bill in ,a non-party spirit. V The hon. member for Hutt had appeared in his usual order of a political larrikin'. Mr. WilfordThat is.a chestnut. Sir Walter Buchanan* said that it was absurd'to suggest, when the Bill was well through' Committee, ' that it should bo referred to tho Statutes Revision Committee. •

Mr. G. Anderson suggested that _ the other two Leaders of tho Opposition might be allowed to speak. The House could then proceed to a division and get on with tho business of the country. He appealed to tho member for Bay of Plenty to give his views on the Bill. Mr. R.. M'Callum said .that the Statutes Itovision Committee was. being slighted' on every' possiblo 'occasion. Tho 50 clauses passed could bo recommitted if necessary to embody amendments proposed by the Statutes Revision Committee. What the member for Hutt desired to do was to pass a vote of confidence in the Statutes Revision Committee. The Minister had no confidence in tho Committee. ' Only, unimportant Bills / wero being sent to it. 'Mr. Wilford said that he had listened to. the skim-milk argument of tho hon. member for.Patea and had listened to tie lion, member for Wairarapa glissading down a snow-slope and ending on the edge of a precipice in the person of the Chairman. Ho continued that ho had taken tho only possiblo method of recording his protest against the'passage of a Bill which members did not understand. A member: Speak for yourself. Mr. Wilford said that ho could understand the Si'cmbcr' for, Waitemata (Mr. Harris) not understanding what ho was doing because ho (Mr. Harris), had proved on tho previous night that he was the veriest child in the political game. Mr. Harris: I was too. many for you, anyhow! Mr. Wilford said that tho membei for Wairarapa had adopted the tactic 9 of tho Leader of the Opposition and had answered argument by abuso. Finally, ho said that he would concern himself no more about tlio Bill, but would take whatever the Minister said for propel. His protest would bo recorded in tho journals. The motion was lost on tho voices. Illegal Borrowing. Mr. G. Witty suggested that tho maximum fine which may be imposed upon any local body member who consents to illegal borrowing should be reduced from ,£IOO to £50. The suggestion was not adopted. Hospital Buildings. Mr. J. B. Hino suggested that local bodies should bfe empowered to raise loan 3 to cover the cost of erecting hospital buildings. At present, he stated, when hospital boards found it necessary to erect buildings the contributory local ■ bodies frequently experienced "gfeat difficulty in raising tho funds required. The Minister said that hospital boards oould not be empowered to borrow as they oould not provide tho necessary security. He would see what could bo dono in the ease of the contributory bodies. Mr. .Hino said that lie had asked that authority be given to grant loans for the purpose of .building hospitals. He had not asked that hospital boards should be empowered to borrow. The Minister promised to mak* inquiries. ' „ ~ On tho motion oi tho Minis tar- tlio

period within which local bodies may take up loans granted by_ the Department was extended from six months to twelve. INVESTING SINKING FUNDS. Tho Hon. J. Allen moved an amendment to Clauso 8G to provide that tho Public Trustee should pay all sinking fund moneys into tbo Common Fund, instead of investing them in outside securities. Mr. T. M. Wilford asked the Minister to say why it was proposed to direct tho Public Trustee to invest all sinking funds in tlie Common Fund of the Public Trust office instead of in suitable gilt-edged 'securities. Tho Hon. J. Allen said it was proposed to invest the funds in the Common Fund of tho Public Trustee because at once tho moneys so invested earned interest. There would be no delay until suitable investment could bo found for them. A. second reason for tho Umngewas that the' security behind the Common Fund was tho best possible. After the money wont into tho Common Fund it was then invested in local bodies' debentures and other securities. Ho added in reply to anothor question that all sinking funds would not bo re-invested separately from tho Common Fund. Mr. R. M'Callum said ho did not like the proposal to lump all tho sinking funds as was proposed. Ho preforred 'ho clause, as it was originally drafted to tho proposal. Mr. E. P. Leo supported tho Minister's amendments lately introduced by tnMinister. Mr. M'Callum suggested that the local bodies bo given the option of investing in other securities if they found payable investments offering. The Minister said tho investment of sinking funds in the Common Fund waß an extremely payable proposal for tho local bodies. The moneys were paid to tho Public Trustee often in very small sums, and as soon as the money was paid in it earned interest, and at the end of tlio half-yearly period earned compound interest. All theso operations happened automatically without a halfpenny of ex pense, whereas if the moneys had to wait for suitablo investment they might lio without earning interest for many months. ' Tho Minister s amendment .was agreed to on tho voices. Mr. T. M. Wilford Baid that if tho Common Fund was to bo so much more profitable, as socmed probable, either tho Government should reduce the rates to borrowers, or increase the rates pay able to depositors. The Hon, I. Allen said that if tho office became more profitable, the interest rates on deposits might bo increased. The .Hon. A. L. Herdman said that tho Publio Trust Office was run at a loss, which' would bo apparent but for tho fact that tho Public Trustee had charge of the Common Fund. Tho Common Fund earned a profit greater than tin loss on tho rest of tho office, and the balance was held as a reserve fund. It was proposed in tho Bill to be introduced to mako provision for the establishment of a reserve fund, without which such on institution as the Public Trust Offico could not bo on a sound basis. It was necessary, therefore, that no gratuitous work should bo imposed upon tho Publio Trustee, as would be the case if effect were given to tho proposal that tho Public Trustee should, without .charge, invest sinHng fund moneys in outsido securities.

Mr. M'Callum persisted that tho Public Trustee had no to mako the Common Fund profitable at tho exponso of tho local bodies. The clause as amended was passed. Clauses 87 to 111, th© last clause of tho Bill, were agreed to with only trivial amendments. , The Bill was reported with amendments.