LAND TAXATION

Manawatu Herald, Volume L, Issue 3990, 29 August 1929, Page 2

LAND TAXATION

PLEA FOR CLASSIFICATION

MR. LINKLATER CRITICISED BUDGET PROPOSALS. Another plea that farm lands should be classified before the imposition of the super-tax was made in the House of Representatives on Tuesday by Mr. .1. Linklater, Reform member for Manawatu, who stressed the point that the tax was too hard on the man with a mortgage. The appearance of the Budget, said Air. Linklater was awaited with more than ordinary interest by the people of the Dominion, but when it arrived it caused a great deal of uneasiness, especially among the farmers. It was generally thought that the Financial Statement would forecast a reduction in taxation, but the reverse had happened, and general disappointment had been the result. It the Budget proposals took concrete form —and it now seemed that they would —the farmers would be taxed by three methods—the primage duty, income tax, and land lax. Some members had gone to a great deal of trouble to prove that the primage duty would not be passed on to the consumer. Everybody knew that any initial cost to the merchant must be passed on to the retailer if the former were to make a success of bis business. The additional primage duty amounted to £410,000, and natulrally would not be an exception to that rule. FORCED SUBDIVISION.

Air. Linklater said that the object, of the land itax and income tax was to force large landowners to subdivide their estates. The tax was to he levied on estates of' £12,500 unimproved value, whether they were suitable for subdivision or not. In New Zealand a great deal of land was quite unsuitable for subdivision. Indeed, some farmers’ offers to the land purchase officer had been refused. A Labour member: At what price? Mr. Linklater: All sorts of prices.

The Minister of Defence (Hon. T. M. Wilford): Hear! hear! All sorts of prices.

\ Air. Linklater said that in the Manawatu -district there was land with high unimproved value. In Palmerston North there was land up to £55 unimproved value per acre. That meant that the man with only 250 acres of land would be subject to the supertax. Farms of tics description were used for lamb fattening, and the tax would hit the farmer badly. CLASSIFICATION URGED. If the proposals were carried to their conclusion, the lamb industry would be struck a very severe blow’. The industry was worth £30,000,000 to New Zealand last year. Alost farms could be profitably used for dairying in small areas only. If all the good land were cut up, the smali farmers would be wholly dependent on the dairying industry for hteir prosperity, and if there were a slump in the dairying industry there was no doubt that the depression would be accentuated very much more than if the country was dependent upon other modes of farming as well. It appeared to him only reasonable that the lambs of New 7 Zealand should be classified before the super-tax was imposed. The Minister of Public Works, he saicl, gave an example of how the land tax would affect tw 7 o classes of farmer, one of whom he described as being able to go overseas every year and buy a couple of motor-cars with money made off the land. Mr. Linklater said he would like to know how many farmers in New 7 Zealand were in that enviable position. In the ‘Manawatu —one of the most prosperous districts in New Zealand —he knew 7 of very few who could indulge in luxuries of that description. Surely, an income tax on such a farmer would be a very much better and much more reasonable method of taxation.

THE ALAN WITH A MORTGAGE

Many landowners, said AH. Linklater, had lairge responsibilities by way of mortgages. It did not seem fair to him to place the same burden on those who had no mortgages as on those who did. A man with a mortgage did not seem to get very much sympathy from the presold Government. No man hiked a mortgage, hut the great majority of (lie farmers to-day, and many successful ones at that, started their careers on borrowed money, and were grateful to the men who bad lent them their money. Som# of them, he was sorry to say, bad not been so successful, and were finding it difficult to make a living. They were hanging on, however, in the hope of better times. Many of them bad put their life’s work into their farms, and the additional land tax would impose a furtiiei’ very severe burden upon them.

Air. Link-later said that in bis opinion the Government’s proposals would not relieve the unemployment problem, but would rather accentuate it. Many farmers were forced to reduce their improvements if they had a bad year, and if the proposals were put into effect not nearly so much labour would be employed as was the case at present. Strenuous efforts had been made to restore confidence in rural securities, but, in his opinion, the dual taxation would have quite the reverse effect, especially if the ideas of the Minister of Lands were put into operation. Mr. Forbes had told the country -that they were only a gentle reminder. Air. Linkla ter said that he would like to know if they were a reminder what the actuality would be. 1

VIEWED WITH .APPREHENSION. The dual iax was looked upon U ith a great deal of apprehension by the farming community. Very lew farmers were good book-keep- . tis, and in years gone by had employed accountants to make out (their income-tax returns. The late Government did not buy land to the same extent because it considered ihe land had not reached its economic level. Not only the Reform Party but private individuals had been very careful during recent ears, with the result that land speculation had become almost a thing of the past. “Wjhat?” asked Mir. R. Semple (Wellington East). Air. Linklater said that any land agent in New Zealand would tell Air. Semple that very few 7 sales had taken place during recent years because the would-be purchaser considered the price too high. A great many men bought land when prices were high, and were still hold-

ing on to it. The Government now wanted to buy land, and the question now w 7 as what was wanted to he done with land of that description. If the land was going to he cut up it seemed to him that the Government was not doing justice to those men. The reason why there was so much money stored in the hanks was that people were waiting to see what the present Government was going to do. It could not be reasonably 7 expected that many of the unemployed would go on the land as settlers. To-day in order to ballot for a section a man must have £BOO in either cash or kind. When the ballot was drawn lie had to build his house and make arrangements fc|r stock. It was obvious, therefore, that a man had io have a fair amount of money before he could think of buying a sec - tion at all.

UNDEVELOPED LANDS. Ah’. Linklater said it appeared to him that it would be much better for the future of New Zealand if a great number of the undeveloped lands wdre taken in hand. Production in that case must be increased enormously. Under the system of buying lands already improved and which were already producing, nothing would be added to the production of the country. Air. Semple: Why did not your party do that? Air. Linklater : Do what? Air. Semple: Develop the undeveloped lands. Air. Linklater: It was doing it, and doing it very fast, too.