PARLIAMENT

Dominion, Volume 10, Issue 3163, 15 August 1917, Page 6

PARLIAMENT

FINANCIAL DEBATE

LAND TAXATION

EFFECT ON SMALL HOLDERS

T* l6 House of Representatives met .it 2.30 p.m.

The_New Zealand Inscribed Stock Rill and the River Boards Amendment Bill were introduced by Vice-Regal Message and read a- first time. The Hon. W. FT? A SEE (Minister of Public Works) explained tlio purport of the Bill dealing with river boards. Thero were, he. said, some river boards in the country which were not doing their duty, and the Bill proposed to give power io the Minister of Internal Affairs, when a river board wns reported not to be managing its affairs properly, to set up a commission to inquire as to whether the report was correct. Tho commission could recommend,/ to the Government what ought to be done, nnd could carry the work out. For this purposo the commission would have tho same power as the board or hoards concerned to rtite in order to raise money required. The Bill was urgently necessary, because the ; troublo had arisen in a number 3f different parts of New Zealand.

THE MARINE DEPARTMENT. The report of the Marino Department was laid upon the table by the Hon. G. W. Russell (Minister of Marine), and was discussed by several members. The Minister, in reply, said that he was sorry that tho House, under the present forms, did not. get a full opportunity of discussing 'the reports of State' Departments. Tho reports .were laid on tho table and any debate took place at -once before members had read tho docu. ment. Mr. L. S[. Tsitt (Christchurch North): Wh-£ cannot tho procedure be altered? Mr., Russell: It may bo altered some day. A suggestion that bad been made by the member for Nelson for a new light, in Tory Channel would receive careful consideration. Ho recognised the desirability of developing the inland waterways of New Zealand. Magnificent success had attended the effort to acclimatise the quinnat salmon, and New Zealand seemed to stand alone in this respect. The salmon had run freely in the Wnitnki River during the present season. They were big fish, weighing up to forty pounds, and they had absolutely filled the river at some of the higher, reaches. Tho fish entered the river from February to May, and the Department had now in the Waiteki and Rangitata enough salmon to justify preparations for netting operations. He nredicted that within five years New Zealand would 1)0 exporting tens of thousands, of pounds of salmon after supplying ' the local market. He re. arretted that the ■ report of Pvofessar Prince had not yet been received. Tho interim report already placed befovo Parliament indicated that the fishing industry was enormous development and woulrl become the. basis of a very big export trade. ' The Minister referred to the efforts made by the Marine Department to acclimatise oysters. ! The experiment gave every prospect of success. ■ ,

THE FIANCIAL DEBATE TAXATION PROPOSALS , SOME CANDID CRITICISM, Mr. C. A. WILKINSON (Egm out.) resumed the debate on the Financial Statement. He said that one of the biggest and most alarming features of the get,was the rapid increase ill tho.public debt of . the Dominion. Other features were tho big surplus ami the heavy taxation on small and moderate-sized farms. The big debt would'entail upon the country an annual interest charge by the end of next.year of not less tlian six and a half millions of money. He thought the Government should .onsider what proportion, if any, of tho cost of the war should be paid for out cf revenue. We had already provided a certain amount, which was invested in Loudon. lixcossive borrowing tended to the inflation of values, and Jiis opinion was that both borrowing and taxation Aould bo used by the Government to provide the money for the ivar. He did not approve of tho proposals for compelling men'to invest in the loan. No such proposal should be eutortained until the Government failed to get the money, in some other s way. But lie had iisen chiefly to speak about the taxation on laud, especially,_,as affecting small holders. The graduated tax had been abolished in effect, and he thought the new system a better one. The worst feature of the land taxing proposals was that no exemption was allowed for mortgages, and • this would operate very hardly agaiust the small farmer. It was true that a farmer could deduct his mortgage interest for tho purpose of determining his income for taxation purposes, but this would not give any relief to the farmer who would not be called upon to pay income tax. He agreed that wealth should pay the greater part of the cost of tho war, but in this respect the tax.ition was going to press heavily on a class of people not able to bear tho burden. Tho land' tax had been doubled, bu.t it was not fair in its incideuce, being i.eavier proportionately for the small holdings. He hoped tile Finance Minister .voultt I see his way to alter the scheme of land taxation to give relief to the small fanner and to take more from the man 'vith a I bi"'area. This would be a sound proi ceeding in view of the fact that tho country needed small farms. Land had also to -bear heavy burdens for local taxes, amounting in all to from 21 to millions a year. He would urge also that a fanner sliould be allowed to deduct the amount d land tax as an expense in returning his income for taxation. He feared that the general effect of the heavy taxation would be to drive people off the land, accelerating the already constant drift towards the cities, where the life was easier than in the country. This was not going to be for the good of the country It was proposed not to re-enact tho excels profits' tax, and no doubt this decision would give satisfaction to the country. But two separate income taxes were to be levied. An ordinary tax of from 6d to 3». in the round, with ipcvfectiy fair exemptions. The war tax would be from 9d. to 4s. 6d. in the pound without exemptions. He would like to see a straight out levy made of one tax to bring in the same amount of money. The Government had been blamed for not conscripting or confiscating capital; no considered that all those schemes were foolish. Any very severe system of taxation would in the end destroy itself by destroying fhoincontivG to production and industry. The object of the State should be not to cripple industry, and to tax tho spending of money rather than the earning of it. Everything should ho done to* 'encourage ■ people to go on producing. He did not apnrove of the rule bv which a farmer who. by his own labour and that of his wife and family, was not allowed in assessing his income to deduct some equivalent of wages l< r his family, lie would like to c ce some such allowance as this made. He would also like to see a heavier Tate of tax Imposed upon bachelors, with moro exemptions to men with families.

Customs Duties. He had been very glad to notice that, the Government was adopting Imperial preference, if only in a small way. I"o thought the levy of 3d. on tea was a fair levy. . He was of opinion that tho duty on bor should be very much increased. Tho present Customs duty on iiiolor-cars not nearly sufficient. He was in favour of a tax on motor tyres, bur lie would nut lie in favour of handing over tlie money from this tax to Ineal bodies unlcss'those local bodies maintained, good roads. With regard to the cigarette duty, he said that before the late impost the retailer made a profit of 25 per cent. If be still sold at the same price he would get 17J per cent., but if he was allowed to charge 7d. a paclcet the retailer would get a profit of 35 per cent. This was not fair. He thought the country was losing a lot of revenue by neglecting to charge enough for liotel licences. These should be increased on a graduated scale, and collected, not by tho

local bodies, but by tlio State. Tko brewers' licence was also ridiculously low. Ho thought some economy should be instituted. The Treasurer's estimate wns for a"surplus of .£1,200,(109. But unless we got from this extra taxation a bigger surplus than this wo would not bo able to tako off tlio war taxes after tho war. Moro must bo done in the way of reducing expenditure. He would like to ask the Government what had been done in regard to tho classification of industries made by tho National Efficiency Board and approved by tlio Government. Were the military service boards instructed regarding most essential industries ?

Mr. Myers: Yes, they have been. Mr. Wilkinson said that unless caro was taken in regard to tho conscription of labour from these industries, damage would be (lone to the country, and our rural industries would be crippled. He was not one of those who had cold feet about the war. Ho believed that wo should go on sending reinforcements to the utmost of our ability. But we must do it with reason. If we had done too much in tho past this was no reason, why we should do it in the future. He was not In favour of the conscriptiou of youth of nineteen years.