PARLIAMENT

Evening Star, Issue 22453, 25 September 1936, Page 7

PARLIAMENT

THE TAXING BILL MONEY REQUIRED FOR ADDITIONAL PENSIONS ANOTHER STEP ON “ ROAD TO SOCIALISM " [Per United Press Association.] WELLINGTON, September 24. The House met at 2.30 p.m. Mr Chapman gave notice of his intention to introduce the New Zealand Institute of Clerks of Works Registration Bill. Mr Tau Henare was granted seven days’ leave of absence on account of illness. Mr Nash moved the second reading of the Land and Income Tax (Annual) Bill and the Land and Income Tax Amendment Bill, which were considered together.^ Regarding the payment of income tax by instalments, Mr Nash said it was permissive on the part of the Governcnt by Order-in-Councii to fix several dates on which instalments should be paid. There was nothing permissive as far as the taxpayer was concerned. He knew there would be anomalies regarding the graduated land taXj but there was provision in the. existing Act to .meet such cases. Mr Poison said New Zealand citizens would not permit the sacrifice of all liberty at the bidding of any band of misguided theorists, and most people were beginning to realise it. As far as he could see there was no sympathy on the part of the electors for the policy which the House was now discussing. Before the election the Prime Minister said further taxation was out of the question. An adjustment of taxation, the Prime Minister said, must not be interpreted to mean ah increase in taxatioh, which already had been overdone. Where, Mr Poison asked, was the mandate to place this staggering burden of taxation on the shoulders of the people P He claimed it was a breach of solemn pledges made on the platforms of the Dominion, and he thought the- responsibility, lay largely with the Minister of Finance. The House now knew where the money was to come from. It had to come from confiscatory taxation on the thrifty. That was the road and that was the method. If the- Government had ' disclosed before the election that all its promises meant only a heavy turn in the taxation screw he wondered if the Labour Party would have had the success it did have on election day. Mr Moncur: It was a good one. Mr Poison: “It was a lucky one, but it will not occur again.” He went on to say that from the .already meagre national income, the Government were going to take double toll in the way of more payment for workers and record taxation for the Government. If they were giving more payment to the workers, well and good, but if the Government were going to extract further taxes the effect would be more serious than the Government realised. The Government’s policy was really an attempt to take two crops from one field. In some cases taxation would absorb more than half the income. Industry could not function without reward, and he was satisfied the Government knew that and that the present measures were means of advancing its common ownership plan. The Labour Party was plunging blindly towards its extraordinary objective without any consideration for the injustice it would create in doing it. He held there was no justification for a graduated land tax either in principle or in theory. Its effect would be to put thousands of acres of marginal land out of production. He said it was a Trades Hall conceived plan created by a class for a class and put into operation without realising what the repercussions would be. TThe graduated land tax .would, be especially severe on the sheep farmer. It would be a blow for the farmer and for industry generally when the Bill went on the Statute Book.

Mr Thorn claimed that nothing in the present legislation conflicted in any way with the principles expounded during the .election campaign. He said if Ithe history of land taxation for the last 14 or 15 years was looked into it would be seen that the abolition of the graduated land tax was the act of a Government solely determined to help its wealthy land-owning friends, and it would also be seen that the estimated revenue from what was now proposed by the present Bill was considerably less than that collected in the way of graduated land taxation _ in any year between 1922 and 1925 inclusive. In 1931 the graduated land tax was abolished. Revenue from the land tax then, fell, and in 1935 the land owners paid £650,000 less than, they paid in 1931. No one would deny that, as far as land taxation was concerned, past Governments had treated the big land owners with the most _ generous consideration, but generosity to wealthy land-owning friends did not stop at abolishing the land tax. In 1924 all incomes derived from land were exempt from payment of income tax. The Government responsible tried to make it appear that this was done to assist the small working farmer, but actually the only people to benefit were the well-to-do and i the very rich farmers. It applied only to those receiving incomes in excess of £3OO, and only 6,536 land owners were in that fortunate position, so it could be said that practically no small Working farmer benefited at all. Taxation, he said, had been transferred from the rich to the poorer sections of the community. Mr Holland expressed the opinion that, as the legislation was probably the most important of the session, and as £1,300,000 was to be taken from the people, the debate should have been broadcast. People had been told over the air where ■ the money was to be spent, and they should have been told where it was to come from. He claimed that the graduated land tax would bear very unequally and very unfairly, and in some cases would amount to a capital levy. He believed the reintroduction of the graduated land tax was to break up big units, but at times big units were necessary for economical production. The tax would place finality on capital invested in large concerns. Taxation should be based on the ability of the taxpayer to pay, but that did not apply in this Bill, and it would drive another nail into the coffin of private enterprise. He said that provision for hardship cases should be made in the Bill. It was placing too much responsibility on an officer to tell him to use his own discretion in such cases. Mr Barclay denied that the legislation was an attack on private enterprise, nOr was it a tax on the unimproved value. The Government wanted money to pay the pensioners, and he would defend the tax on any platform. He thought any cases of hardship could be sifted out by the Commissioner of Taxes. , He agreed that the debate might have been broadcast, so that the people in the country, would know how;

the money was to be used. Mt Nash bad said the extra taxation was needed to pay the increase in pensions. CAT OUT OF BAG. Sir A. Ransom said Mr. Barclay had let the cat_ out of the bag when he said the object of the Government in reintroducing the graduated land tax was not to, break up big estates, but to secure money to pay pensions. He said that despite the election promises of the Prime Minister that there would be no increase in taxation, the Government taxation had now established a record, and amounted to £l9 4s per head of population, an increase on the last Government’s taxation proposals of £3 per head of population. He argued that an increase of more than three million sterling in revenue should have been quite sufficient .to meet improvements _ in social services without having to raise another one and a-half million by income and land taxes. He thought the graduated land tax particularly unfair in the cases of large blocks of land in isolated country. The tax was so unfair in its incidence that it might lead to confiscation, Mr Armstrong said it was entirely wrong'to . say that taxation was higher; now than it had been, especially as far as land and income taxation was concerned. . . Sir A. Ransom: I was speaking pf the total taxation. . . ; ’ ■ ABILITY TO PAY. Mr Armstrong said the total taxation rose or fell, with the national income. It was not the amount of the taxation a man paid that mattered, but whai Ke had left after paying it, and the present Government would see that he did have something left. Farmers should not be exempt from all forms of taxation, and surely no one would deny that the man with a property of an unimproved value of £5,000 could pay more in the £ than dairy farmer's with. 50 acres.- He said the taxation in the aggregate might be higher than ever, hut' when the incomes of the people were concerned it was proportionately less.. ■■ ' Mr Endean said the Bill was another step on the road to Socialism. He said New Zealand was still part of the world, and it was impossible for a country of her size to lead the world. Excessive taxation was one means of destroying the economic structure of a,country. The imposition of the land tax dispe* garded ability to bay. It was wrong in principle and should not he enforced. . The debate was adjourned, and the House rose, at 10.25 p.m.

LEGISLATIVE COUNCIL ' [Per United Press Association.] : WELLINGTON, September 24. The Legislative Council met at 2.30 p.m. The Nelson, Water Works Extension Amendment Bill was reported without amendment, and the Auckland City Abattoir Bill was reported with a .minor amendment. ' ' The Mortgagors’ and Lessees’ Re. habilitaiion Bill was received from the House and read a first time. The Leader of the Council (the Hon. M.' Fagan) moved the second- reading pro forma and also that-the Bill .be referred to the-Statutes Revision Committee forthwith. —The Hon. W. Perry, Sir James. Allen, and Mr Cotte protested against the committee sitting on the Bill immediately, and suggested that time be given to members to study the measure.—Mr Fagan said there; was no desire to pass the Bill in one day. —The motion was agreed to, and the Council adjourned at 3 p.m. ■