VERBAL. DUEL

Hawke's Bay Herald-Tribune, Volume 81, Issue 18, 14 October 1937, Page 7

VERBAL. DUEL

-Presa Association.)

j Is N*Z. the Highest-Taxed Country? MR. C0ATES?S CIAIM

tBy Telegraph

WELLINGTOIT, Last Night. The adjourned debate on the second reading of the Land and Income Tax (Annual) Bill was resumed in the Honse at 7.30. Mr. Forbes, who was the flrst Opposition speaker to-night, eriticised the graduated land tax and said apparently the Government had no intention of revising this form of taxation and dealing with the unfairness of its incidence. Dealing with other formg of taxation, he said as long as therq was heavy taxation, there would be unemployment and struggling industries. It had been proved over and over again where taxation was lightened there was an immediate response in increased employment and expansiou of industry, and he considered industries shpuld be encouraged in the direetion of lightening their burden of taxes. He con* tended tbe hardship clause in the land ;ax had been ineffective in the past, ' Che question of taxation was closely dnked with unemployment and the Government should enquire into the (pieation of h.iv heavily income taxation was beariug down on industry and ivas hampering its devclopment. Mr. J. A. Lee said that the manifesto of the Reform, TJnited and Nationalist Parties promised to alter the tucidenCfe of taxation bnt nothing was iona, The Minister of Finance of the aresent Government had already promised to introdnee a BiR to alter the Incidence of taxation. It was true that last Governmeats reduced taxation In days of bounty but they went on the London market to make good the deficit because they -had refused to pay their wny. They had bnilt np a ataggering debt and uow the country had to pay 10 to 12 million in interest. Nobody doubted that there should be an alteratioh in the incidence in taxation but it was not easy to make sweeping changes. During the depression incomes were not taxed as they should - have been. Repple with sur-. pluses.instead of putting money into channels to create an increase in production and create employment inyested their money on fixed deposit. Labour aimed at paying its way always. It • aimed to meet expenditure out of revenue and reduce the debt instead of piling it up for posterity. Sir Alfred Ransom said the prosperity of the country was not due to the Administration. Iu the last two year3 taxation had increased by $14,000,000 taken directly fronrthe pockets of the people. Thpre was a grave danger of the ship of State sinking and the Opposition wanted to help stop tho leaks and avert that danger. It had been rumourqd that the Government jntead- j ed to increase the land and income tax , to make good any loss through tho j removal of the saies tax, Eeferring to the graduated land tax he said he regarded it as one of the most unfair eollected from the people beeause it did not carry a provision for ability to pay. The Labour Governmont believed that primary producers shou]d be tenants of the State rather than owners of land. Distribution of Income. Mr. W. J, Lyon said he was not prepared to admit that the improvement in the conditiohs- in Kew Zealand was due only to the imptovemont of prioes overseas. Unless there were an equitqble distribution of tbe national income then prosperity could not exisfc .and the Government had set itself out •to secure that distribution. They were not so much concerned with prosperity in the aggregate but with the prosperity of the individual. Labour was being told it was giving no protection j to industry but he would ask at what . point taxation on industry must stop. 1 Would the Opposition tell them that? The Opposition had taken a great deal of credit for the fact that it had no.t reduced social services during the period of prosperity prior to tbe last slump. That was a time, be said, when it should have increased th&se services. They had been told Labour was going to bring all the people down a copmon level. This was not the objeptive. Labour intended to bring the people up to a common leve], There was quite a difierence. He would like the Opposition to justify their contontion why the owners of land should not pay taxes nnon it and contended that the Oppo-

sftion was putting up arguments which wero more specious than practicable. Finance Minister Replies to Gritics The Minister of Fiqance (Hqn. Walter Nash) said if he were to read old Hansards all night he could not cover all the things the members of the Opposition had said in favour of the land tax in the past. If there were One person his Government was anxious to legislate for it was the man with an average income of £4 per week. This man did not pay income tax and his taxation would probably amount to only £10 10s per year, not £89 10s as had been alleged by the OppositionThe present Government hau been charged with having taken the incomq tax limit down to £210, but that was not correct, It was done by the previous Government in 1933. He continued that the Government had always been careful to presqrve the exemption of £50 from income taxation for each child, Members of the Opposition claimed New Zealand was the highest taxed country in the Empire. He would point out that in tho £400 field, also in the £600 field, the income tax in Great Britain was slightly higher. The inember for Kaipara would admit that liritain . was within the Empire. (Laughter). Mr Coates: Yes, but the tax in Britain is not higher than ours. Mr Nash: It is. Mr Coates: It is not. You havq not added the wagcs tax to our taxation. The Speaker: Orderl The honourable Minister is replying. Mr Nash; I have in my hand a book .-omparing, taxation in Britain, Australia and New Zealand. I will show it to npnourabie gentleman wnenever h« likes. ■ Mr. Coates: You have not addcd oui wages tax all the same. Mr. Nash: Has the honourable gentleman added the workers* insurance paio in Britain to the taxation there? Mr. Coates: Yes. Mr. Nash: I have also added the eightpence in the pound paid in wagei tax here and I would draw the honourable gentleman 's attention to the fact that Government taxation in New Zealand embraces all public services whereas that in England does not. The votes for police and education are not Included in the British Government 's taxation. Government members: He's got you there! Mr. Nash continued that the Opposition had been misleading the country by say ing that New Zealand was the most heaVily taxed country in the world, but it happened to be greater in South Australia than ln New^ Zealand. The country in Europe most heavily taxed was Britain where thcce was tha best standard of living. In New Zealand the standard of living was as good as any in the world. The rise in the cost of living had been 7 per cent. but the increase in wages was 30 per cent 'A member of the Opposition had advo cated family allowances and had urged reduction in- taxation, but the Government could noj; do both. There was not a member of the Opposition, he said, I who had voted for the increases in pensions which the Government had made and they would not vote foi those pensions to bo reduced. If tha same courso were to be followed during the next slump — if thpre were to he a slump as the Opposition prophesised— • God help this oountryl The Opposition had said the Government had not plaeed any new pensions on tbe Statute " Book, but this was incorreot. The Government had given new pensions to aged and deserted wives among others. If a slump came the Government would extend the production of goods that could be produced in New Zealand. Speaking of land taxation, Mr. Nash stated that under the Bill the farmei svould suffer no hardehip. The Qpposition had asked what the Government tvould do if oversoa prices fell. What had the Opposition done when prices had fallen, he asked. Opposition members: You are dodgIng the point. Mr, Nash: Oh no, I'm not. I have slready explained that if oversea prices ffll and aifected the income of this country we would insulate the eountry against tbose outside influences. Members of the Opposition knew fhat if they told the country what they would 3o during a fall of oversea priees they would never got back to tha House to do anything. In conclusion, Mr. Nash said old age pensionets were better ofl than they had been before. Wage earners were better off. The country 'a flocks of sheep were greater, Exports were greater and income was' the greatest for eight years. And if another two years pqssed and the same stqndard of progress was maintained as during thp past 12 jnonths all recoird» would 11 broken. On the motion for the second reading boiug put to the House it was forced' to a division and oayried by 42 to 16. On the motion o? the Prime Minister ihe Committee stages of the Bill weri deferred until to-morrow evoning and fehe House rose at IQ.3C.