THE HON. MAJOR ATKINSON AT PATEA.

Globe, Volume XXIII, Issue 2206, 22 March 1881, Page 3

THE HON. MAJOR ATKINSON AT PATEA.

(PSKSS ASSOCIATION TKLBOBABI.) PATE A, March 2t, A crowded meeting met Major Atkinson i»t the public hall this evening. By an amendment on the original proposition, Mr Sherwood, chairman of the Patea Harbor Board, was placed in the chair. . , Major Atkinson commenced by explaining the cause of his not appearing before his constituents during the last recess, attributing it to want of time and to the of his so appearing, seeing that a general election had been so recent. Before entering upon an explanation of the action of the Government since he last mot his constituents it was necessary that they should understand that when the Government took office the position of the colonial finances was utterly unknown, as there had been no statement from the late Government for fifteen or sixteen months. The state of Native affairs was most unsatisfactory, because nothing practical had been done but in the way of stirring up the Natives throughout the colony, except that the head of the Defence Department had undoubtedly put the Constabulary upon a satisfactory basis. In addition to this, there was a general depression prevailing, the commercial crisis being such as had never been previously experienced in the colony. That was the position, and when the Government, in October, came to inquire into the finances, they found a deficit of £900,000, or nearer a million as it turned out, which had to bo made up by March. This was chiefly owing to the system of relying upon the land fund as general revenue, and the Government had to make up that deficit in spite of depression and scarcity of work, in spite of the five million loan being anticipated, and advices from Home agents that the Bank of England would not advance £25,000 upon some millions of pounds worth of debentures. The first thing to do was to retrench, but it was difficult to suddenly stop the spendingmachino. Seeing that the weekly expenditure during the last two years of the Grey administration was £IIO,OOO, a sadden stoppage would have intensified the distress. But the Government saw the necessity of stopping the expenditure to some extent, and the resultof their efforts was that the weekly expenditure now was down to £60,000 or £70,000. But retrenchment was not sufficient. There were so many centres that it was impossible to govern the colony cheaply, and fresh taxation became necessary in order to do that which every man in the colony would think desirable, viz,—to maintain the colony’s credit, and pay its debts. An initial step in the rectification of the finances was to eliminate the land fund from ordinary revenue, and this involved the withdrawal of 20 per cent, from counties. That was an unpopular act, for which ho had been blamed in his district; but it was necessary, for the reason that like the colony counties had been treating the land fond as ordinary revenue to maintain made roads instead of applying it to opening up the land. Still there was a large deficiency, and it was decided to impose fresh Customs duties and a beer tax and property tax. In defence of these necessaries, he would call attention to the first principles of taxation, and it was more important that he should do so, because this question of taxation must have great attention in the immediate future. As the taxation of the country must be moderately heavy, the points to bo considered in taxing were that every subject should contribute towards the support of the Government in proportion to his means ; secondly, that every taxpayer should pay his quota in the best way and at the most convenient time to himself; thirdly, that every tax should be certain and unarbitrary, and that each man should know how much he had to pay ; and fourthly, that taxation should take as little as possible out of the pockets of the people. Practically these rules wore impossible of attainment by any tax which conld be devised. The income tax certainly would not secure these ends, and then comes the question whch tax went nearest to the result. Taxes mist be levied to catch different classes in different ways, and he claimed that the property -,ax possessed the merit that it caught the olaaes which could not be otherwise reached, wlile that class which received the benefit of exemption was amply taxed by the Customs, Speaking of the Ccstoms, he regretted to say that the only effect of the increase of duties had been that the total yield was no more non than it had been two and a-half years before That showed that much more economy wai observed in the colony, and some might argui that it indicated decreased spending ; but from an examination of the statistics, he was convinced that the spending power of the people of New Zealand was higher than that of the people in any other part of the world Then there was the beer tax. There wen various objections to that impost, but thi only question which weighed with him was the inadvisability of commencing excise duties. However, an increased basis of taxation was absolutely necessary, and the tax was unavoidable. About the property tax he should have to speak at length, because of the possibilities of the future. In regard to it, the Government had to choose between an income tax and a property tax, and they rejected the former because they believed that already as large an income tax was practically being levied through the Customs in New Zealand as was being levied in any other colony in the world. Political economists said tax income because you taxed expenditure, and he held that as the Customs duties were already so heavy that condition was met. For that and other reasons it did not seem desirable to the Government to levy an income tax. The property tax seemed much the fairer, because it was right and just that property as property should contribute directly to the burdens of the State, and that if a man possessed property requiring protection ho should—whether that property was productive or unproductive, whether he used it well or ill—contribute to tho cost of the Government in respect of the amount of property he held. Then there had been a great many objections. It was characterised I as inquisitorial, but that was a fault from | which any other direct tax was not free. If direct taxation was necessary, and no one seemed to doubt that, then before the Government could tax a man they must know what he had to be taxed upon ; therefore that argument as against the tax must be dismissed, Then it was said that it discouraged improvements, but he held the reverse opinion. If a man kept his money in the Bank ho had to pay upon the full amount, but it he laid it out in improvements, which to him might be worth the money spent, the tax fell upon a less amount than was actually spent, because there would be a considerable margin between tho value to sell, which was taxed, and the actual cost to the investor. A man with £IOO in the Bank would have to pay one hundred pennies; but if he laid out this £IOO the tax would be upon about £BO. That it discouraged thrift wao another fallacy, since a man paid the tax immediately he accumulated ; but that was but just. Whether a man receiving £IOOO a year spent it all or saved £SOO did not affect the question of revenue. The man who saved £SOO paid direct taxation on the amount he saved, but if he spent the money the indirect taxation upon the £SOO spent more than equalled tho direct taxation. He estimated that the taxation on the £SOO in a given year by Customs duties would amount to £6O, and 5 per cent, on that would more than cover the total amount that tho saving man paid by the property tax. It had been said that absentees would escape. That was not bo. There were two classes of absentees, those who held property in the colony and those who had but money. Clearly the former could not possibly escape, and as to the other class, it was a matter of great difficulty, and should be carefully considered by tho House as an interesting question involving the desirableness of taxing foreign capital. There was a great deal to be said on both sides of the question, but no one could fairly say that absentees were not caught under tho tax, while they would evade an income tax. He referred to the caso of an absentee who bad voluntarily paid a largo sum when there was a doubt whether ho could have been made to pay anything. To have got a similar sum by the income tax tho rate would have had to be not 6J but 13d in the £. It was said that it was monstrous to tax unproductive property—houses untenanted, or land unoccupied. He differed entirely, and here came in tho question of property. If a man held property he should pay. If it were un- ! productive that was his look out. I! unproductive property had a market value, and the holder did not sell at that vane, it must bo oasumed that ho continued to bold for 1 future gain, and he should not bo exempted. ' It was productive capital in the opinion of the ' holder to the extent that ho expected to gain by it in the future, and on that productiveness ho should pay. One great virtue of the

[tax wag that it discouraged speculation in the purchasing of lands- which were intended to I bo enhanced in value by the expenditure and [ labonr of adjoining settlers, and an inot me tax would not have this effect, , because the essence of the income tax ' was that it touched a man according whtv he received, and if nothing were recsrved it? respect of these investments, the ineome tax would not reach him. Another advantage was that a man was taxed upon what he himself possessed, and not upon what was owned by others. The land tax was very nnfair in that respect also, because the man who was thriftful and energetic, and made good use of hie capital had to pay move than the lazy man. That was not so with the property tar, because a man was not taxed because he was industrious and skilful, but because he had l amassed property which required protection. Ho objected to the income tax, because it was already paid through th» Customs, and because it was necessary to get at something besides income to maintain the finances in a sound state. This was really a practical question, which would come before the electors for decision at the ensuing elections. It was proposed by some to impose a land tax and an income tax, but he confessed himself unable to find out what they meant, unless it was to double the taxation upon the farmers and landholders. Income from land was just the same as income from any other source, and he could not see where the line was to be drawn - but perhaps they would come forward and explain what the proposal really meant. The colony wanted no more land tax, a tax which simply meant confiscation to the present holders. It was clear that it was so, because any one could at once see that if a person went to buy land he would capitalise the tax at the valuation for the time being, and give so much less for the land. Thus the present owner would suffer the entire loss. He thought on the whole if the tests ho had given as to the fairness of taxation were applied to the'property tax, it would bejfound to answer them all fairly well. Certainly this first year it had been costly, but if during the coming session the House should determine that the general valuation might be used by the local bodies for purposes of taxation, the property tax would in future be collected cheaply—say at a cost of not more than 3 per cent. Ho very much regretted the necessity for additional taxation, especially of direct taxation, because he believed that direct taxation was bad for a new country. However, wo were bound to provide for our liabilities, and the imposition of the tax lad done immense good in creating a more lively interest in political affairs, drawing the attention of the people to the expenditure, and in promoting economy. The general results of the year promised to bo satisfactory. He hoped the revenue would quite cover expenditure—no email achievment, seeing that twelve or eighteen months ago there was a deficit of £900,000. He believed that he could assure the colony that the Government had retrenched to the extent of £252,000. Last I session might be thought by some people to I have been barren, but it was a great mistake to judge of the value of a session by the number of Acts passed. He wished there would be even more practical discussion—he did not mean useless talk—and less legislation in future. There were several most important Acts passed, and if nothing else had been done than to put the finances in better condition, the time would not have been wasted. As to publio gworks, the only policy open for the Government, owing to the large commitments by their predecessors, was to carry out the works initiated by them where the Government saw that there was likely to be an immediate return, so that it might be in a position to complete other main lines. They had been obliged to stop many works which otherwise they would have liked to go on with, but they had endeavored to act - fairly to all. The policy for the future would be a steady continuance in this mode of action. The mode of dealing with local bodies was an important question. He explained in detail the proposals of the Government last session, as contained in the Local Government Bill. As to the withdrawal of the subsidies, there had been no breach of faith in connection with the subsidies. When these were promised, there was no idea that in 1878 there would be a new departure—a launch into an enormous and costly scheme of public works; but when that step was taken, it altogether altered the position of affairs.' It was impossible to pay the £300,000 of additional interest and sinking fund involved by the policy of 1878 without special taxation. -If there was to be taxation for subsidies it was much better to let the local bodies do the taxing themselves. He contended that the proposals contained in the Bill of last .session were fair, and he considered them- preferable to granting mileage rates to" counties for the maintenance of roads, whether for main roads through settled districts, through new districts, or through districts served by railways. No doubt there - was a great feeling abroad in respect to the future of local government, but he really thought, on full consideration that as the ratepayers - had full powers under the present Act to determine in what form future local government shonld bo, whether Boad Boards shonld be merged into counties, or counties amalgamated, they could do it very much better than Parliament could. The fact was it was the want of money, not tbe form of government, that created all the difficulty. If there had been plenty of money all would have been well, but as morcey was ■ranted it could only be secured by taxation. Is to Native affairs, the first thing that iccurred to him, and doubtless to his audience, ras regret that Mr Bryce should have left he Ministry. Certainly he felt strongly in(bed, for in almost all Native matters Mr Iryce and himself held identical opinions, hit Mr Bryce differed from the Cabinet aa to tie way in which they ought to immedately proceed in dealing with Te Vhiti. Mr Bryce was disposed for core vigorous measures than the Cabinet appoved of at that time. The statement wiich had appeared in the papers gave subetntially the reasons for Mr Bryce’s retirerant, and there was nothing behind, so far as hi knew. He left simply because he advocted that more vigorous action should be taen. A good deal might be said on bth sides of the question. The policy wiich the Government had laid out fc themselves, which they had follored, and which they intended to ftlow, was this : —They would have n hampering. They would keep a tight hnd over the reins, but they would deal wth strict justice towards the Natives. They wuld not be hurried by any man, and nothing wuld deter them from doing at the right the what they thought to be necessary. So fa ho claimed that their policy had been eucesstul. As a settler in the district, bo cofessed that he shared in the general feling of impatience that a few Natives sbuld have disturbed the district so long. But tbre wore great difficulties and dangers in the wy of rashly proceeding, and he hoped they sgeod in the course the Government pureud, and bad confidence that, as many difficuties had been overcome, so the future wuld be satisfactorily surmounted. There hd been not a moment of hesitation since the erssing of Waingongoro, and the same [firm corse would be persevered in. He aoknowleged the assistance rendered the Govornmot by the Commission, and as to the rmour being circulated about the work being doe by Sir William Fox, he could assure the sellers, after careful examination into th whole matter, that substantial justic was being done to all, and that by the time Sir William had finished hifwork there would be no ground- for grievanas among the Natives except those who woe aggrieved because the whole of the oonfisited lands were not returned. So soon as thi Commission had got over the division of lad among tbe different hapus it would be thiduty of the Government, probably by Act, to make regulations by which the Natives wold bo able to deal with the land either by Being or leasing, as might be necessary, and fhi settlement of the country thus furthered. Th waste lands administration had been sueessful. Since Mr Bolleston had lakn office last October twelve months, he hai opened up some 212,000 acres, of which 18(000 had been sold upon deferred paymets, or under the homestead system, or for cae. This was a moat important part of the wok of the Government, and he thought the staament ho had made would be regarded as satifaotory. Ho regretted that the stoppage of 11 immigration had become necessary, and looed forward to the renewal of the nominatd system at any rate. They must have poplation in order to relieve the colony in earing the present burden. The most impo»nt element in tbe future was finance. Wh ordinary prudence, all would be well. Th burdens were heavy, but he believed the colny could boar them with tolerable ease; am his reason for so thinking was this—the tes of capability to bear taxation was tho

amount psr head left after engagements had been met. It wag quite fallacious tO'eaj there wore so many people in the colony who have such a debt, and who are taxed to surf* an extent, and then to institute a comparison on the same basis with other countries. Tbt' true method was to ascertain the annual i income and see how it compared with the annual outgo. He had looked into the matter, and he found that the annual income for last year was nearly £15,000,000, say—£l4,ooo,ooo. He had been unable to get late statistics, but ho found that in 1860 the incomej of England was £400,000,000, and the amount paid for Local and General Government expenses was about eighty millions; that was excluding the interest on the debt, .which, as the debt was subscribed in England, could not be regarded as | aT > outgo. That left 320 millions, or £l4 per head' of the population. In France the amount left was £lO 8s per head, yet it wag said that France was better off than England, and less heavily taxed. But in New Zealand ;the income was fourteen millions ; the interest on our debt, which unfortunately had to be sent out of the colony, was £1,500,GOO; and deducting the cost of government and interest on private indebtedneue, the residue was £13,000,050, or, dividing it by 500,000 e«'the population, £2O per bead. He thought, therefore; that they might rest contented as to the

future if ordinary prudence were observed. He regretted to find that the people of the colony smoked and drank away no less than two millions of money a year,, but that showed that the people were not hard pressed. With regard to the coming session, he should like to see the House look carefully into ‘the finances and see that the retrenchment which the Government claimed credit for hadfijeen real, and that the finances were secured on a firm basis. That would be a great work, and if, in addition, the House passed the necessary Representation Bill, a Charitable Aid and Hospital Bill, and a Licensing Bill, he should think the session by no means barren. What the country wanted was careful administrationand very little legislation. As to public works, he hoped an effort would bo made to go on with the main arterial linos. Ho thought the past policy of the Government had been prudent and reasonable, and would be supported by the people, irrespective of local considerations. It the country would accept this view, and proceed steadily and cautiously, he had no doubt that their future prosperity would be even greater than that "which they bad already passed through. The hon. gentleman resumed his seat amid cheers and expressions of dissent. Throughout the meeting had been of a rather noisy character. The speaker was occasionally interrupted to give explanations on local subjects, and subsequently ho was catechised at length as to his conduct in regard to local matters by a number of constituents. In answer to one gentleman Major Atkinson said that whatever expense was needed to educate the children of the colony must be incurred. If it could be done cheaper than at present ,it ought to be. With regard to a change in the system, he had always been in favor of limited denominationalism, and had always thought that the Catholics had a special right to some special concession. He, however, did not want to be misunderstood, and would say distinctly that it would be unwise at the present time to alter in any way the present Act. It must remain as at present until after the elections had shown the views of the country on the subject. In answer to another person. Major Atkinson said he would pledge himself to endeavor: to secure special representation for Patea if the population justified it. He would do so, as he was strongly in favor of county representation. If the people were dissatisfied with their present position, he should have no objection to assist in tacking Patea on to another district.

A vote of thanks was moved, and a vote of confidence as an amendment, amid confusion, by Mr Taplin, who had taken the place of Mr Sherwood during the latter part of the proceedings. The amendment was declared carried.