POLITICAL NOTES

Dominion, Volume 9, Issue 2806, 26 June 1916, Page 6

POLITICAL NOTES

BILLS TO COME

IMPORTANT WAR MEASURES

Two important Bills dealing with war taxation and finance are to come down by Governor's Message as soon as the House meets. The first of these is the Land and Incomo Tax Bill, a comparatively 6implc measure. Its principal provisions will be to authorise the collection of an additional five per cent, on all taxable incomes, and for tho purp'oses of this tax, as for the ordinary in-, come tax, the income taxable is that in excess of .£3OO per annum. The Bill will provide also for the repeal of tho mortgage tax. It is likely that the second reading of this Bill will bo taken forthwith after the introduction. FINANCE BILL. The other Bill, to be called the Finance Bill, proposes to give effect to a number of the taxation and financial ideas outlined in the Budget. It will give authority for the issue of war bonds, a kind of permanent Stato security to bo established. These bonds will be continuously on offer to the public, and it is the hope of the Treasurer, as expressed in the Budget, that in time sufficient moneys may bo raised by tho sale of these bonds to liquidate our war debt to the Mother Country. The bonds will bear interest at the rate of 4} per' cent. Certain banking legislation will bo in the Bill. . Probably this will deal mainly with the Bank of New Zealand, in which the New Zealand Government holds a controlling interest, and tho legislation may provide for making the control by the Finance Minister more complete than it is at present. There is no proposal for helping the bank with more capital or with a bigger guarantee, or anything of that sort. . As Sir Joseph Ward said in his Financial Statement, it is the intention of the Government to limit the bank rates for deposits. This will be provided for in the Bill, and the provision will apply to all tanks and other financial institutions accepting money on deposit. Another provision! will be one to prevent or restrict the investment of New Zealand capital abroad. The Bill will also provide for the limitation of the - rates of interest payable on all advanees.on mortgages, whether tho mortgages are given or accepted by joint stock institutions or private firms or private individuals. The task; of tho Government in this particular is no easy one. It is, of course, ob- , vious that a mere limitation of the rate at, say; 6 per cent., may do more harm than good. The rate must bear some relation to the security. For instance, the rate of interest on a first mortgage with a big margin ought not to be so high, and in practice never is so high, as the rate on a second mortgage with a dangerously small margin. The Bill may define the rate or rates, or it may leave the rates to be fixed bv administrative act of the Minister of" Finance, in'the same way as the rates'payable on advances from the State Lending Departments are now fixed. WAR PROFITS TAX. /The details of the scheme for the taxation of war profits, will not be in the Bill. This is a problem of great complexity and difficulty, as has been found in other countries. The Australian.Act and the •English Act are both bi°- measures. Sir Joseph Ward has announced that the rate of tax is to be 45 per cent., but it must be obvious that the assessment of this tax cannot be made by any simple subtraction of the. prewar income from the war period income. The Government is in this difficultv about the measure, and about certain of the proposals in the Finance Bill, that it has not .had the benefit of the long ant] detailed criticism from tho House which should have been given in the Budget debate. In more ways than one the collapse of this debate "has proved a little embarrassing.