THE HOUSE

Dominion, Volume 10, Issue 3183, 6 September 1917, Page 6

THE HOUSE

Tho House of Representatives met at 2.30 p.m. . THE FINANCE BILL DISCUSSION IN COMMITTEE THE AMUSEMENT TAX. The Finance Bill was further considered in Committee. Tho iii'st clause was that dealing with the amendment of tho tariff. Mr. M'Combs asked the finance Minister what rovenuc would bi> produced by tho increased Customs und Exclso duties. Sir Joseph Ward said that tt\e increased duties on spirits would produce .fifS/lSt; on tea, X 99.767" on wines, .£2,120; on cigars, J212.71G; on cigarettes, .£123,011; on drapery, millinery, soft goods, silks, satins, velvets, plushes, etc., of. Foreign origin, X!)7,31i0; excise duty on beer, -C 87.873; a total of £ 162,000.

The Tea Tax. Mr. M'Combs asked the Minister to amend the tea duty from 3d. per lb. to an ad yelorem duty. Ho argued that tho Hat rate of 3d. per pound was unfair to tho poor people using cheap tea. .Sir Joseph Ward sai-1 that 1 e vould iiot be averse to substituting an ad viuurem lax of, say, 25 per cent., which would bring in the same revenue.

Tax on Amusements. Mr. W. A. Vcitch protested against the amusement tax as being an addition to tho cost of living of tho poor people. This protest was received with cries of derision, members pointing out that sixpenny tickets were exempt. Mr. J. T. M. Hornsby said that the Minister was letting the. men who were really making money out of picture shows escape scot free. Tho men making tho profits were the film distributing syndicates. '

Sir Joseph Ward: They are taxed en their incomes.

Mr. Hornsby: But you are putting no speciel tax on them. You are putting a, special tax on the people ibo go to picture shows. Sir Joseph Ward: I nm advised that tho people will not pay, ami that in every case the tax will be paid by tho proprietors. Mr. P. C. Webb opposed t'.io amusementtax, and said the supporters of the tax ■were "kill joys." Mr. L. M. Isitt said that if the sympathisers with the picture shows were really in earnest they should vote to close the hotels at li o'clock. (Laughter.) Then the picture shows would all bo filled. Ho did not think the tax was at all a burdensome one, and he believed the prmciplo of taxing amusements was a sound Mr. .T. V. Brown (Napier) said that Kβ believed the wholo of tho people of the Dominion were opposed to tliis tax upon the amusement of tho women and children whose menfolk were fighting at tho front. Mr. B. Buicfc (Palraereton) asked the Minister 1:0 stick to hie guns. The peoplewho could not afford to pay tho amount of the tax could stay away from the pictures occasionally and feel that they were making a sacrifice in the national cause. The hugo sums of money spent in amusement ought to pay a share of war taxation. Mr. Brown suggested that the tax should be taken off picture shows and put on to liquor and racing. Mr A H. Hindinarsh (Wellington Soutli) said that in lOtfi Sir Joseph Ward liad opposed an amusement tax. Ho had said it would not bo wise to spread gloom among the people, and hail added that the fax conld not bo collected. Ought the House to follow the Treasurer ot last vear or the Treasurer of this year.' Sir Joseph Ward: This year. Mr. V. Heed (Bay of Islands) said tho picture theatre tax was purely a tax on country people. There wcro no sixpenny shows in his district, so that the exemption of the sixpenny tickets would give no relief. _, , .... Mr C J. Parr (Eden) said there was more' opposition to the amusement tax in the House than in the country. The people liad no objection to paying tho small tax proposed. ,_,,.. _ ~ Dr 4. K. Newman (Wellington East) said the'amusement tax had worked well and smoothly in Britain, ami no protest had beou made by the people who had to put a few ponce into the Treasury when they went to theatres. Sir Joseph Ward, in answer to a question, raid Iliat every sort of entertainment including ngricultnwl shows, would p'iv the tax. Musical societies, not conducted for profit, would not be taxed. The clauses relating to the amusement tax wore adopted.

' Bank Reserves. Answering a question put by l)r. A. K Newman, the Minister of lunanco su'id that Clans" CI of the Bill provided that whero banks had made investments in the war loan, the stock might form a part of the reserve held against notes issued The clause also extended until five years after the close of the war tho period within which bank-notes wero legal Can the bank create new notes' against this stock? Sir Joseph Ward: No, certainly not. Old-Age Pensions. In connection with tho increase of oldnKo pensions by way of war bonus, the Hon R. H. Rhodes said there was hardship owing to the fact that a ponsioner whose personal earnings in any one year exceeded Mi had hie pension: reduced.

XI e suggested that the amount should bo increased to Xtfl a year.

Sir Joseph Ward said he would not accept the suggestion. The increase proposed in the old-age pensions represented an increased charge of i2il),00O per year, and the Government could not accept any furthor increase.

Mr. H. Poland said that miners who were incapacitated by miners' disease were given 15s. a week if single, and .£1 a week if married, and were not allowed to earn any money at all. Mr. Isitt mentioned the hardship suffered by old people who could not get tho full pension because they had homes, which could not ]>e sold ut the present time.

Dr. Newman 6aid he knew of a case of a woman, aged SG years, who could not get a pension large enough to provide bare necessities because she had a home worth .£4OO. Her position was desperate. Sir Joseph Ward said he would look into the pension matters mentioned by members before the Bill passed finally, and see what could be done. Tho Government could not accept further increases in expenditure without very careful consideration. Old people who had small sums of money did not have to spend tho whole of the cash before they could get a full old-age pension. They could buy. an annuity and then have tho full pension. A pensioner who owned a home could deposit the deeds with the Public Trustee and then get tho full pension. Mr. Isitt said it was very hard ;to ask the old people to part with their bits of property, and so lose their power to have something to their children. Sentiment attached to the homes.

Tho Hon. D. Buddo suggested that possession of a home up to the value of .£SOO should not deprive an old person of a pension. The increase in the value of land and houses ought to be taken into consideration, and the present exemption of J-340 was far too low.

Mr. Lee asked why the old pfople should be forced to get rid of their savings by buying an annuity and handing their homes to the Public Trustee Before they were allowed to draw the pension. The demand was unreasonable and cruel. People who had saved two or three hundred pounds should ■ not be forced to pay their own pensions, in effect, and dissipate the money that they might require in time of illness or misfortune. Tho majority of the members of the House were strongly of epinion that tho old people should have more generous treatment. If the House were divided on the subject there would be no doubt about the result.

Sir Joseph Ward said he could only repeat that he would get the fullest information and submit it to the Government. His sympathies were with tlio old people, and he wonl<l be as glnd us any other member of the House if the concessions asked could be made.

More Amendments. Amendments to tho Bill were introduced by Vioe-Regal Message. Sir Joseph AVard said that in me of the amendment clauses mi ".ttempt was made to try to meet tho position as affecting company shareholders. The exemption from company income tax was being extended to give exemption to psrfsdns in receipt of incomes of JMOO, the former limit having been .£3OO. This was a.s much as he could agree to give under the circumstances.

Another amendment was intended to validate tho action of the Public Trust Office in making advances to' employees to enable them to invest in the War Loan of last year. The validation would apply also to similar advances for this year's loan. With regard to the investments of local bodies it was provided that uo moneys raised and held for a specific purpose deiiiiod by law should be put into the loan, that no local body should have power to rate in order to get money for the loan, and that no money whatsoever should be invested by local bodies without the consent of the Governor-General-in-Council. ,-,.,• Another amending clause validated investments made by companies r>nd tnistees ■in tho loan, and protected the persons or companies making those investments.

The Tea Tax. When the schedule of Customs duties wa3 under consideration, Mr. J. M'Combs moved to delete the duty of 3d. per lb. on tea. He proposed to the Finance Minister-that .he could make up the lost revenue by reimposing "the oxcess profits tax. Mr. Hornsby said that by replacing the flat tax by an ad valorem duty the opponents of Hie taxing of the poor man's tea would not reach their objective/ He would therefore vote to delete the tax, as it was a tax tending to increase the cost of living. Sir Joseph Ward said that tho tea tax would amount to Is. 9d. per head of the population per year,'and a great deal of that duty would be paid by persons not charged with any other war taxation at all. Tho income tax exemption had been kept at the high limit of .£3OO. [f it had been reduced in this es in other countries these people would have had to pay much more. He thought members who were opposing the tax were pandering to the wrong idea held by some people that certain classes only of the population should be taxed to pay for the war. This tea tax would provide funds to increase the pensions to aged people and snfferers from miners phthisis by ss. per • week. Tho tax would amount to only 3d. a week lor a family of five. Mr.' Buiik: Oh, it's terrible! ■Sir Joseph Ward said that tho tax would also have the desirable (ft'ect of allowing teetotallers to pay some contribution to the revenue. He appealed to the House to come to a voto and show where the stamina of Parliament was on a question like this—to impose a.very light tax for a very humane purMr. G. J. Anderson said that the tax was, in his opinion, unnecessary. It tho country were in extreme financial straits it might bo necessary to tax tea and other necessaries, but it was not in 6uoh straits. The revenue_ might bo made up by increase of tho incomo tax. Sir Joseph Ward: Everything is all right so long as you put it on tho other fellow. The discussion went on for some time. Dr. Pomare amused himsolf with a dissertation on the evils of drinking tea, making it out to be a noxious beverage. Then followed a serio-comic discussion as to whether or not tea was a necessity, in which discussion the Minister was exhorted to spare tea, and tax a variety of other commodities. It appeared, Lowever, the exhortations left the Minister quite cold, and he had all the tinie the certain support of a majority of membora. Sir Joseph Ward, replying at a period of tho discussion, said that he wished to put a fact before thn House. He had been asked to put 2s. a gallnu on .whisky in order to get more revenue. 110 wished to inform the House that at present, whisky imported into this country cost 255. a'gallou. Tho duty was ISs.. eo that the landed cost was «<*. a gallon, equal to 7s. a bottlo. Owing to the price, the. importation of spirits had dropped, and the result was a drop in the revenue. Tho imnosition of an additional tax of 2s. a gallon would not produce moro revenue, but would actually cause loss of revenue.

Mr. H. J. H. Okey said lie had been informed l>yatea merchant: that the duty need not add threepence to the retail price of tea, since a saving equivalent to the amount of tho duty could be. made by abolishing fancy packages and useless Mendings. Mr. E. Newman said ho had heard no complaints at nil outside the Honee regarding t'he tea tax. Every section of the community was being required to hear its share of war taxation, and tcadriiikcre <lid not resent the smnl! t:ix proposed. Some sneakers had charged the Governmcni: with doine nolhins In k-eop down the cost of living That was absurd. The Government had done a groat deal. The necessities ot war finance must, b:> regarded as paramount. "I will support, the Finance Minister in everything but this tax upon tea, said Mr. Glover. "He will pardon me any little delinquency on this occasion. Tea is a necessity." Mr. Sykes said he was a firm supporter of the National Government, but he did not approve of the tea tax. The revenue to bo secured by the Government from (lip tax would bo comparatively small, and tho amount could be secured from other sources. The Prime Minister. The Prime Minister said that ho had been accused, in tho course of tho debate, of having boasted that he had cot the last penny out of the Imperial Government for Now Zealand produce. That was not corroct. When addressing the

House after his return from London he had said: "I think the best has been done, so far as the present season is concerned. We wont upon the principle that wo wero not entitled ,lo screw tho last farthing out of the imperial authorities. We only asked for what was fair and reasonable, taking the increased cost of production into consideration." If it hud not been for _ increased prices obtained by Iv'ow Zealand for produce, in ],roportion to the increased prico of production, the dominion would not have been able to finiinco its share of thp war, and we would have had depression instead of prosperity at the present tiino. The tax on tea was not a now thing. Tea bad been made duty free in 1907, on the principle of the "free breakfast table," and he and the Minister of Finance would be very glad to take the tax oif again when the war waa over. The Government had been particularly tender in dealing with small people. The lax on tea in Britain was Is. per pound. The tax on sugar in Britain was 4!0 per ton. The wholesale price of sugar in New Zealand was 2JJ-U. The British people would be glad to get sugar at Gd. The New Zealand Government left the income tax exemption of J;300 untouched after three years' war. The exemption iu England was .£l3O. The Government had done ite best to protect and assist the people of small means. It was raising pensions; it had set a good example to private employers by paying the State Employees a war bonus. It had provided means for reducing tho pnee of meat. The chairman asked tho Prime Minister to confine his remarks to the tea tax, Mr. Massey said that he did not believe the people of New Zealand objected to the tea tax as a form of war taxation. The Division. The Committee went to a division, on the question at 11.20 p.m. The tax was retained by 37 votes to 21. Following was the division list:— For the Tax (37). Allen Leo Bollard M'Callum Buddo "iassey Bui?k Myers Dickio Newman, E. Dickson, J. M. Okey Dickson, J. S. Parr Field, T. A. H. Pearce Field, W. H. Pomare Forbes Reed lPraser 1{ bodes, E. H. Guthiie Eaisaell Hanan Scott Harris Thomson Henare Ward Herdman Wilkinson Horries Witty Hudson Young Jennings Against (21). Anderson Poland Anstcy Poole Brown Smith, G. H. Ell Statham ■Fletcher Sykes Tornsby Taloot Hunter Veifch Isiti AValker M'Combs Webb Marnier Wright "vewman, Dr. Pairs. For tho Tax:—MacDonald, Cairoll, Findlay, Nosworthy, Golvin, Ngata, K. W. Sttith. Against:—Thacker, Wilford, sidey, Parata, Glover, Craigie, Himdmarah.

Matter of Preference, In connection with tho duties on textile goods and apparel, Mr. Harris eaid that tho New Zealand hat industry was being threatened with extinction. Mr. Heed said that too much favour was being shown to Australia under the preferential clauses. ■ Sir Joseph Ward said that local manufacturers were fully protected. New Zealand had lonj? been ready to make a preferential trade agreement witli Australia. .The Government was willing to negotiate an agreement, but the .Australian authorities were not prepared to make a deal. The last of the new clauses was agreed to by the Committee at 11.50 p.m., and the Bill was reported. The House rose at 11.52 p.m.