NEW LAND TAX BILL.

Gisborne Times, Volume XXV, Issue 2189, 19 September 1907, Page 2

NEW LAND TAX BILL.

BROUGHT UP PUR SECOND READING. LONG STATK.'.i ENT BY THE PREMIER. ProEs Association. WELLINGTON, Sept. 18. When tho House of Representatives resumed at 7.30 p. 111., the Land and Income Assessment Bill was brought up for its second reading. The Premier, in moving th u second reading, reminded members that since 1801 persistent efforts had been made to settle people on tho land, rather than allow tho land to bo held in largo tracts. from (time to time

legislation had been introduced to bring about this desirable object, but notwithstanding these efforts it had been found necessary to submit three now Bills. The Government was not submitting these proposals with a desire to increase the revenue or to be hostile to holders of largo estates. Tho graduated land tax had in tho past probably been too light for the purpose of closer settlement, especially when tho prosperity of the country was considered. In 1901 there were 212 owners of 7,840,000 acres, valued at £17,457,000, and

with an unimproved valuo of £12,200,000, and in 1892 there were 216 owners of 7,800,000 acres, of a capital value of £6,100,000 and an unimproved value of £13,000,000. In 1906 the owners had decreased to 200, with a total area of 47,000,000 acres, and the capital valuo decreased to £12,250,000, and the total unimproved value to £9,278,000. At tho present time there were 38 less owners, who owned an area of 3,700,000 acres of land, of a capital value of £3,200,000 less than in 1901. He pointed out that tho purchase of large estates by t’le Government and cutting up 1 private owners had reduced the large estates. Referring to tho graduated lind tax, he said between 5000 and 53,000 were on tho same rate as ai present. It was proposed in the new Bill continuing from that onward? from 8s per £IOO until the maximum was reachod at £200,000 worth of land with the tax at £2 ner £IOO The loss to revenue from tho subdivision of large estates ranged from £156 11s lid in 1895-96 to £19,052 17s 2d in 1905-6, the total for the whole period being £28,186 7s lid. Referring to tho fixing of the pro gressive tax at £40,000, he pointed oui that under these proposals there was an increase of taxation in round figures of £90,000. If they came down to instituting at tax at £20,000 the total additional revenue would be £4OOO. He added that there were properties in the country of a less area than 100,000 acres worth more than £40,000; there were properties with an area of less than 400 acres worth £20,000; and areas of 600 accres worth £30,000. He contended that even in the latter case they should not be under a graduated land tax. In 1892 the total absentee tax was £658, and last year the amount from this source was £4237. In 1892 the graduated laud tax was £70,889, which increased in 1903-04 to £98,682. He contended that under the tax large holders would find li undesirable to continue as -they were. Continuing, he said the existing lav. regarding partnerships was ineffective, as by giving nominal shares ci his land to members of his family a man could reduce his graduated laud tax by one-half, and the proposals under this Bill would prevent any possibility of these tactics being followed in future. Private companies at p’t sent were used for purposes of escaping the graduated land tax, but these would also bo checkmated if the legislation in this Bill were carried, as it

would prevent any person holding land from gaining benefit by forming portion of his estate into a limited company. The Bill would also prevent the evasion of tho graduated land by subsidiary companies. The Bill would also prevent the evasion of the tax by estates held in trust. The Government was carrying out a land purchase system in face of the very high values that had ruled of late years. He urged that large owners should realise that it was in the interests of the country and of themselves that they should endeavor to get rid of their excess of_ estates. Proceeding, the Premier said an inducement had been held out to get rid of his excess land by the incentive to the comparatively poor man. to procure land, and tho landowner would realise he could get 15 per cent, of the purchase money much easier than he could obtain 25 per cent, of the purchase money. Dealing with plain land, he said it was proposed to deal with that under the law as it was at present. Mr. Massey contended that the fig-

ii res submitted by the Premier showed that subdivision was steadily going on, and that there was no necessity for the Bill. He added that tho 1 Bill meant increased taxation. He agreed that it was desirable to settle tho country, but he urged that the first thing to be done should bo to settle Crown lands, and if it was desired to cut up lands of private ownors, they should provide by legislation to cut up holdings at the death of the owner if the holder held an excess of land. He agreed that the Public Accounts Committee had improved t'he Bill, and congratulated the committee on having struck out the last clause of the-Bill, which was, in effect, a clause to causo one person to spy on another. He argued that the tax on standing timber was iniquitous, and tended to tho destruction of our forests. He was pleased to see that the tax on standing tim-

ber as originally proposed had been reduced by one-half, but he contended that there should bo no tax on standing timber. His principal objection to the graduated land tax was because it did not discriminate between the man who had mortgages on his land and the one who had not. He contended that the number of people paying the graduated land tax was steadily increasing because valuators put up the value of the land. He contended that men running a farm or,, station jointly were entitled to exemption up to £3OO, but under this Bill they were not entitled to any exemution. Ho asserted that this Bill was driving people out of the colony, and men wore looking for land in Fiji and Queensland. He contended that if they were going to have a graduated tax on land then they should have a graduated tax on incomes. It might bo said that they already had a graduated tax on incomes, but it was nothing in comparison to the graduated land tax. which a man paid who did -the right thing by his country by putting liis in land and developing the resources of the country. Ho contended that there were more holdings of 10,000 acres and under at the present time than there were ten or twelve years ago. He quoted a table of, figures to show that the number of large estates was considerably reduced since 1892 and tho number of smaller holdings increased. He oontended that there was a satisfactory increase of estates up to 7,500 acres. He added that 100 acres as a rule was too small for a

farmer to get a living on. Consequently such farmers continually look out to add to their holdings. He argued that hundreds of genuine cases had conic under his notico where nothing like 15 per cent of the purchase money had been paid. In fact, there were hundreds >of cases where no thing at all was paid before a man went on tho land, and these cases were genuine. The effect of tho Government’s proposals in this clause was altogether against tho small men, and lie contended with this clause in the Bill would block settlement. I’r urged in conclusion that the lmg landowners on whom the land tax chiefly foil should bo allowed two or three years in which to get rid of their-surplus lands. Mr. Laurenson combated the Premier’s statement that if land values were taxed from £20,000 instead of £40,000 they would realise some £4OOO. He assumed the Premier was relying on his officers when ho made that statement. On a £40,000 estate the graduated land tax would be £24 3s 4d He argued that with improvements tho value of a £40,000 estate would be £65,000, and tho income on that at 7 per cent would bo £4,500. Sinco.l9o2 the unimproved value of land had increased from

£72,£00,000 to £100,000,000, an increase or 10.5 per cent, per annum, • o say that tho proposed tax .. burst up largo estates was absard. lie combated' Mr. Massey s statement that people were leaving tho colony owing to taxation, 110 assorted that within five years taxation in England would he as a giant in comparison with New Zealand s taxation. He stated that though ho was disappointed during his travels through tiie country with the way in which the -leasehold was received, -.he assured the Government there was an unlimited demand lor limitation or bursting up of large estates and for closer settlement. i±o contended that pooplo were not only going to demand political equality but economic equality. Ho added that tho graduated land tax was a step in the direction preventing the amassing oi wealth, and that was a step in the right direction, and he was wishing that the democracy would demand that wealth should be taxed. In 1883 tho number of estates ot o.OUU acres in extent and over was 427, in 1889 444, in 1892, 440, in 1902 403, and in 1906 469. In 1892 the number of estates over 20,000 acres was 303, in 1902 the number was 327, and in 1906 it had increased to 481. Mr. James Allen contended that Mr. Laurenson spoke as a city man, and that the Bill to a large extent was a city Bill. He argued that statistics showed that since 1883 the number of large estates had steadily decreased. Ho urged that a man .011 purchasing land under tho condition of paying 15 per cent deposit should he allowed to claim any improvements ho might put on as portion of the 15 per cent, otherwise this would retard settlement, as many men took up land and did not pay so much as 10 per cent. Mr. McNab said he believed that if Mr. Massey was in a position that he had to place measures on the Statute Book he would endeavor to place the nfcasures that would be in he direction of breaking up large estates. He stated that lawyers had freely stated that they were ready with practices which would annul the effect of the graduated land tax, and had invited Ministers and members of the House to come along with their taxes. He added that he was certain that such practices had been resorted to in the past, and the laws was being evaded by leases that were actually bona fide, and it was necessary to draft a. clause in the present Bill to cope with the nractioes. He contended that the cut:ing up of large estates that had taken place was due to the Advancer to Settlers Act. To combat Mr Massey's statement that numbers were going to Queensland and Fiji, he read detailed statements showing the number of applications that had been made for land in the colony during the last four months. At midnight Mr. Thomson moved the adjournment, which was negatived on the voices.