HEW LAND TAX BILL.

Gisborne Times, Volume XXV, Issue 2192, 23 September 1907, Page 2

HEW LAND TAX BILL.

FURTHER DISCUSSION IN THE HOUSE. ATTEMPT TO REDUCE EXEMPTION DEFEATED. TOWN V. COUNTRY ISSUE.

Press Association.’ WELLINGTON, Sept. 20. Tlio House of Representatives mot at 2.30 o’clock this afternoon and went into committee on tlio Land and Income Tax Bill. At the interpretation clause Mr, Massey objected to a tax being paid oil a mortgage by the borrower while the lender at the same time paid a tax on the interest derived from the same mortgage. The Premier stated that the graduated tax was not paid twice over. No reduction was mado to the borrower on his mortgage, hut the lender did not pay graduated land tax on tlio mortgage. He added that this clause did not alter the existing law. Mr James Allan urged that the mortgage tax should bo done away with altogether. He added ■ 11 Make it income tax if you like.” By wiping out the mortgage tax they would cheapen money. The Premier said tlio Bill was designed to assist the cutting up of large estates, and the tax proposed was with that object. No one wanted to see the individual suffer. All wanted to see. that large estates were cut up. Mr. Fisher urged that a law should be passed that when a landowner died his property, if over £40,000 unimproved value, should be parcelled out. If this were done then in 25 years’ time there would be no. estates in excess of the value. The clause was agreed to without amendment. Clause 3, which provides for sections 44 and 45 of the principal Act, section 5 of the Land Income Assessment Act Amendment Act, 1903, and the schedule to the'last-mentioned Act being repealed, was agreed to without amendment. Clause 4, which provides that every person who owns land the unimproved value of which is £SOOO or more, shall pay graduated land tax commencing with the year ending 31st March, 1908, was agreed to without amendment.

At clause 6, sub-section. 3 (for every additional thousand pounds of said value over the amount of £40,000 the percentage shall be increased one-fifth of a shilling and the percentage so increased shall be charged on the total unimproved value of the land in respect of which the said is assessed) Mr. IVilford moved an amendment to omit the clause with a view to inserting the following: “For a higher, value there shall be a progressive increase of percentage, the rate for every value being one-fifth of a shilling more than that for a value of one thousand pounds less.” He urged that under the clause proposed in the Bill no provision was made as to what tax should be imposed on amounts between thousands over £40,000.

rue ameuumeiit was negatived uy 56 to 6. Mr. Laurenson said lie desired to move that progress be reported for certain reasons. As a private member it was impossible for him to move that the exemption be reduced, but by reporting progress it would enable the Government to bring down by Governor’s message proposals to reduce the exemption from £40,000 to £20,000. He had good reasons for the course he proposed to adopt. There were 370 estates between £20,000 and £40,000, and if exemption were reduced the increased revenue thereby derived would be £5272, whilst nt would also increase the revenue from estates over £40,000. His estimation of what the extra revenue would be was from £7OOO to £12,000. J>ut he particularly desired to emphasise that a man owning £25,000 of land held an ample quantity, and the Government should do all possible to . discourage large holdings. Tlip Premier said he gave Mr. Laurenson every credit for a desire to move for a reduction of progressive taxation from £40.000 to £25,000. but though Mr. Laurenson had said the increased revenue would be some £SQOO more, he (the Premier) assured members that the increase would not exceed £4OOO. He reiterated his remarks made on the second reading of the Bill—that it was not desirable to reduce the amount below £40,000. He pointed out that there were properties of less than 400 acres with an unimproved value of £25,000, and others with 500 acres and an unimproved value of £30,000, and for reasons he had given before he was not prepared to accept the proposal to redue© tli© item. Ho reminded members that the increased taxation from graduated land tax would be £17,000 in excess of the highest amount received during 1904, 1905, and 1906 Incidentally he instanced the case of a farm of 943 acres, the unimproved value of which was £71,000. If the proposal were carried it would place a great hardship on many land-owners of properties valued at £25,000, and would flood the market. He added that it would injure the colony if the proposal were casried. Mr. Rutherford, in opposing the motion to report progress said that large estates were materially decreasing under existing taxation, and urged that it was not necessary to reduce 000 amOUU * exem Pti°n below £40.Mr. Fisher agreed with Mr. Laurenson and proposed to vote for the amendment, because he knew it would be defeated, but if he believed that carrying the amendment would lead to confiscation lie would not support it. He would like to see a Bill designed to prevent large estates being brought into existence, but he did not want to come down to a private individual and say that by the imposition of this tax they were going to practically confiscate his excess land. Mr. Wilford said the revenue deriv ed from Customs in last year was ’ m , anfrom the land ta: £447,000. The total value of the unimproved freehold land of the coloni svas £100,232,247, and that, ho urged was sufficient justification for Mr Laurenson’s amendment. He was sorry that the hon. member did nof make the exemption £20,000 insteac of £25,000. Mr. Ell contended that there wen many estates held by one man which would provide a living for six or seven families and others of enormous value? within easy distance of towns, which would bo of great value for market-gardening purposes. He would support the amendment. He udded that the time would come when they would have to reduce the exemption far lower that £25,000. The Premier said there svero 128 - 000 landosraers in the colony, and 20’000 odd paid kind tax. The value of taxable land svas £77,000,000 last year, and the mortgages amounted to £49,000,000. If comparisons svere to be introduced between Customs revenue and land tax, he would have to go a little further and see how much ™e people owning land paid in Cus-

Mr. Laurenson, replying to the Premier, said that if tho exemption was reduced to £25,000 the increased revenue,_ he found, would be £16,927, not £o2/2 as he had stated previously-

Tlie motion to report progress was negatived by 49 to 12. Tho divisiooilist is as follows: —Aye 6 (12): Arnold, Barber, Ell, Fisher, Hamm. Hogg, Izard, Laurenson, Poland. Poole, Stallworthy, Wilford. Noe: (49): Aitken, E. G. Allen, Jas. A 1 len, Bennet, Colvin, Dillon, Duncan. fTatman, Fowlds, A. L. D. Eraser. W. Fraser, Graham, Gray, Grecnsiido, Hall, Horries, Hornsby, HousJennings. Kidd, Lang, Lawry. Lewis, Lethbridge McGowan, McNab. Macplierson, Major, Malcolm, Slander, Slassey, Millar. Stills, Ngata. Okey, Parata, Reid, Remington. Ross, Rutherford, Seddon, Stevens, Steward, Symes, Tanner, Thompson, Ward, Witty. Wood.

Sir. Ell said there were two estates in Wellington of a value of £202,288 eleven estates valued at £578,140. and there were two sections, one 170 ft by 137 ft, valued at £18,725. and one 95ft by 93ft valued at £16 r 625. These, ho said, represented unearned increment. These were cases for a progfes&ivo land tax, but be-

cause they wore business sites they were exempt. In Christchurch an acre of land was valued at £62,985. Another section of 12 acres was valued at £110,435. In the early days a quarter-acre wa6 sold at £24. Four years ago this was valued at £47,500. These were business sites which had been created by the community,- and should contribute more towards taxation of the country. The Premier said the Bill was for the purpose of cutting up estates, and could not apply to business sections, as they could not be cut up for the purpose of the Bill, which .was intended for cutting up land for settlement purposes. Mr. Herries asked what would be the case if be held 10 acres in the city of Wellington. He would draw rents from the whole portion of the estate, and yet would not pay graduated tax. H fi urged that these large city estates should be cut up for the purposes of workers’ homes, etc. .The Bill would encourage men to invest money in city property, and for the sake of the country he argued that if a man held city property he should be exempted in so far as his own premises were concerned, and not in regard to hi 6 tenants’. Mr. Gray pointed out that where a landowner paid £2 10s a year in taxes, a man owning land in towns would probably pay £250 in taxes. Mr. Massey said'the argument of the oity representatives was to the effect that they should tax land to prevent a monopoly in the country, but they should allow the monopoly in towns to go untaxed. He urged that there should be no differentiation between land in cities and land in the country. This was an extreme tax, which was intended to apply to the country but not to towns, and he was altogether opposed to amy differentiation. He contended that in proportion to value derived the local taxes in the country were in excess of local taxes in towns. At clause 7, sub-section 1 ( Notwithstanding anything hereinbefore contained each of the said percentages determined as aforesaid shall be increased by 25 per cent, thereof in case of all lands other than business premises as herein defined”), Mri Eli moved to strike out all* words after “laind.” The Premier pointed out that the effect of the amendment would be to

increase taxation. The Chairman ruled the amendment out of order. A new sub-olause (‘‘This section, shall commence to take effect with respect to the graduated land tax payable for the year ending March 31st, 1910”) was agreed to. Clause 8 was agreed to without am--1 endment. The House adjourned a.t 1.35 a.m.