PARLIAMENT

Dominion, Volume 11, Issue 174, 12 April 1918, Page 8

PARLIAMENT

FINANCE BILL ANOTHER HEAVY WAR CALL FINANCIAL SHIRKERS DEALT WITH SUBSCRIPTION ACCORDING TO MEANS NO INCREASE IN TAXATION AMUSEMENT TAX EXEMPTIONS The House of Representatives met at 2.30 p.m. The Prime Minister and the Minister of Defence made statements on the future dispatcli of reinforcements, and the house adjourned at 4.40 p.m. until 7.30 p.m. The Finance JSill was introduced by Vice-Regal Message at 7.30 p.m., and Sir Joseph Ward claimed urgency for it. Slli jOSIiPH WARD, moving the second reading, explained the contents of the Hill. He said that the general purpose of the Bill was to provide for the financial needs of the Government until another session of Parliament could be held. There would be no Estimates, and everything would bo carried out as on last year's Estimates. Provision would have to be made for an increased amount of unauthorised expenditure. The Bill did not propose any increase or variation in taxation, and he was quite satisfied that no increase would be necessary during next session of Parliament. The Bill, however, did propose to exempt irom the amusements tax admission tickets to agricultural, pastoral, and horticultural shows, but payments for admission to side-shows at these shows would be liable to the tax, providcdJJie charge exceeded sixpence. Similarly the tax would be remitted on admission chargea to entertaiunientp promoted by societies for literary or musical or artistic purposes. The tax had been difficult to collect from these sources, and the amount involved did not exceed £20UO. The Loan and Compulsion. The Bill proposed that tho Govern* ment should have authority to borrow '£20,000,01)0. The clauses to compel wealthy persons to subscribe to loans wero altered, but the alterations were not to havo retrospective effect. All the old provisions were repealed. Under Ibis Act people were to be required to eubscribe to the loan according to their means, and the Taxing Department, which knew of the means of persons and companies, would advise the Minister as to those persons against whom the compulsory provisions should be enforced. If the person should object to.the amount required he could apply to tho Board of Appeal set up, and tho decision of the board was linal. For failure to comply with ian order to contribute a person ~was to he fined twice the amount of his land and income tax as a penalty, nnd the amount he was ordered to give for the loan he must give in addition, receiving not the ordinary rate of per cent., but 3 per cent. * free of income tax. Ho had heard that there had been transactions in War Loan stocks at less than par. In case of such sales occurring the purchaser and the seller would not be I held to have contributed to the War j Loan in respect of the stocks previously held. Tho amount of what was called death duty stock was being increasI ed to the total amount of £2,500j000.

With the total of £20,000,000' loan proposed in tiie Bill, the country would havo borrowed £83,000,000 since tho war bega.n, £76,000,000 raised iind to be raised for war purposes. The total abiount of money borrowed within Kw Zealand since the beginning of the war had been £32,500,000. The Bill contained a clause empowering the Government to give the Imperial Government a: of agreement in exohange for certain Treasury bills. This was to meet an audit objection. The- memorandum of agreement was a convenient security for the Imperial authorities to liold against money expended on New Zealand's behalf. The Government did noi. intend to return any sum oversubscribed in connection with the present £9,!5O0,0OO loan. The money that might reach the Government in excess of the £9,500,000 was not im-

mediately required, but it would be held against die new £20,000,000 loan. Local bodies were being ensured the protection of the moratorium, and were beins empowered to borrow money by way of bank overdraft for investment in the War Loan. The General Election. Referring to the proposal to postpone the date of the general election, the Minister said that on the preceding day nearly all ibe members of the House had met Ministers and heard a statement regarding the position. The members had shown a consensus of opinion that the election should not be taken in December i oxt._ Eight members had taken an opposing view. The Government having heard the views of members, had inserted a clause empowering the Governor-in-Council to fix the date of the general election. It was ju.st as well for the country to understand the position. The Prune Minister i':id i'imself, the lcadsrs of tiie two great political parties, lwl been nskwl by the Imperial Government to attend a meeting of the War Cabinet., Thoy had boeu asked to «u to London at the time of unparalleled crisis. On the successful outcome tf this crisis depended the fate of the British Empire. All the Dominions were to 1)9 represented at the War Cabinet of this year, and the Nov.- Zealand Parliament li.id been askS ed to authorise two Ministers to at- ! fond. ' But if the two party leaders ' went awiiy at this juncture ) in resi"v,isc to an invitation I that could not be disregarded a general j election between vhs meeting of Par- • lianu'iit and December If), the due date, • would be an impossibility. The Gov- | ermnei't and Parliament were not rei sponsible for the conditions that made : tho postponement of' the election necesj j-nry. Me did not believe that any ' pcrsnn. apart from myre party >bia!i, could fail to accept the position. The Bill gave the Gove-rnor-iii-Cuuncil power to lix the date of the general election. This date could not be selected until Parliament met in October. He considered it would bo worse than a crime to attempt to '.okl it ckcliini in New Zealand this year. The parties had to stand together during th;) war, ::i'd the continued existence of a National Government was an essential I condition to thp smooth :i!id. successful ! prosecution of New Zealand's -hare of I tho war. To ,. suggest that a session I of Parliament could be held under pre- ; sent conditions in the absence of the l two party leaders was absurd. I Dr. Thacker: -What would happen if you were torpedoed? . Sir Joseph Word said in that case ■ now leaders would have to lie selected. But ill- pri'sont he and Mr. Massey were the luiuiers. They were carrying iirnvo responsibilities and facing p i irravo situation. The enemy was show- ".!!■- ;lk' litmus , , dn-peration. The Germans were tkowing an nyalandw cf men ana gtme against the British and

French, in tho hope of overwhelming] the Allied armies, and if the effort siicceded tno fate of the Empire would bo deplorable iudeed. The Minister of Finance proceeded to defend tho "free-o'f-mcome-tax" provision of the War Loan prospeotus. He insisted that uy no other method could Now Zealand have avoided the increase in the rates of interest. The provision was not going to relieve the income tax payers of after-war taxation. The siune people would have to provide the necessary revenue when the war was over whatevei method of raising the money were adopted. Nobody who understood the position would say that wealth \ps escaping burdens at the present time. Not less than

one-third of the income of the people who paid income tax was being taken by means of taxation. The Dominion had done wonderfully well on the financial side as well as the military side, it could not afford to pander to political ideas lor party political purposes. The paths of financial security must be followed if the unparalleled sums of money required for war purposes wero to continue to be available. "National Covernment or Chaos." Mr. G. FOIUJES (Hurunui) said he did not like the position created by the issue of war bonds free of income tax. An enormous sum of money was being invested beyond the reach of taxation. But the war had created exceptional conditions, and members had to realise that the Minister of Finance had special information as well as special responsibilities. He hoped the Government,would be just as hnn in the enforcement of the compulsory provisions of the Finance Act as it was ill the, administration of the Military /Service Act. The audit of Defence accounts ought to be undertaken very thoroughly, with the object of checking extravagance.

" Sir James Allen: A large staff from the Audit Department is working continuously in the Defence Department

Mr. Forbes said lie would like to feel quito sure that • the huge sums it money handled by the Defence Department were expended without waste. He approved of the postponement of the general election. The issue at an election held during: the war period would be "National Government or chaos," and the people did not want to,voto on such an issue. Mr. Pearca is Doubtful.

Mr. G. V. PMEGE (Patea) said that in his opinion it was unfair to ask the House to reimposo the very unfair and very heavy taxation of last

year without giving to the House any statement of the finances cf tho country. Sir Joseph Ward interposed that the accounts were not complete mid the information was not available.

Mr. Peai'co sa'd lie did not approve of the compulsory loan proposals. It would happen that mon would pay unduly high taxes, and also an unduly large contribution to the loan. He did not think tho people would have confidence in the method to lie adopted for assessing tho amount of contribution to the War I/oan. A man could be ruined by a very heavy assessment. He believed that all men should bo made to bear their fair share of tho loan, and ho would support any fair proposal to ensure this, but the present proposal was not fair. He hoped the Minister would amend this claueo. 'me present taxation would, if continued ruin feme of the best settlers in this country. He would have welcomed a substantial increase in tho amusement tax. He strongly approved of the extension of the life pt I arliament. "A Vioious Clause." Dr. A. K. NEWMAN (Wellington East) said it was satisfactory to know that the heavy taxation of last year was not going to be increased, it could not be, since there was an enormous surplus. Sir Joseph Ward: It is a large eurplus, but not too large. Dr. Newman: "It could not be. 1 wish the surplus was £10,000,000." Dr. Newman proceeded to protest against tho indennitoness of- the new compulsory clause. It would be impossible for taxpayers to know under the clause how much they were going to be required to snbscribe. Last year s form of compulsion had been much better, since "any man could discover in advance what he was expected to do. The new system would discourage investments in the loan since people, would wait to see. how much they were expected to subscribe. Tho Appeal Board would be swamped with work and would never get finished. The clause-gave certain Civil Servants a power to extract money from the people to any extent.

He appealed to the Minister to revert to last year's clause or else amend the new clause so as to enable people to calculate what amountoorf r money I they had to subscribe. ,The clause as drafted was vicious and unwise in every way, and would cause a great deal of anxiety and perplexity in the tommunity. Other Tpeakers, Mr. J. P. LUKE (Wellington North) said ho was not at all concerned as Dr. Newman was 'ibout the compulsory loan proposals. Ho believed the Minister of Finance was going the right •ivay about trying to get tho money for the war, and he would support the compulsory proposals. Mr. G. WITTY (Riccarton) declared that all the millions borrowed were beinc wasted by tho Minister of Defence. Mr. J. V. BROWN (Napier) also spoke about Defence extravagance, which ho said was the cause of much of tho popular dissatisfaction with the Government!.

Mr. H, P. HUDSON (Motueka) said the Government should do something more to encourage the development of our mineral resources, mentioning particularly coal, salt, and molybdenite. Debate Adjourned. Tho debate was adjourned on the motion of Mr. Anderson (Mataura). The House adjourned at 11.24 p.m. until 11.30 a.m. to-day.