HOUSE SITS THROUGH NIGHT

Sun (Auckland), Volume III, Issue 801, 23 October 1929, Page 6

HOUSE SITS THROUGH NIGHT

Hardship Clause Severely Criticised BURDENS PLACED ON FARMERS * 'Equity Taken From Land Values” THE SUN'S Parliamentary Reporter PARLIAMENT BLDGS., Today. AFTER having spent three days in debating the second reading of the Land and Income Tax Amendment Bill, Reform members still kept the floodgates of talk wide open in the House, when the Bill entered its committee stages. They kept up the flow of speech continuously and, armed with a sheaf of amendments to keep the debate going, liad for their aim the longest stonewall of the session. Several brought along rugs and blankets to make the time sjient in the House more comfortable. The Reform Party, through the Rt. Hon. J. G. Coates, expressed its willingness to agree to the passage of the Bill if what were termed “injustices” were removed, but the Government was adamant in its attitude on the hardship clause and the super-tax.

Member after member rose to speak and just stepped along daintily outside the confines of what is called, in Parliamentary language, “tedious repetition,” and at midnight the House was still debating the short title of the Bill. Earlier yesterday it had spent over four hours in discussing amendments introduced by Governor-General’s message, so that this preliminary skirmish gave an indication of how things were going to develop. The Government on the other hand was not willing to abandon its stand on the subject, and early in the day, in moving urgency, the Leader of the House, the lion. G. W. Forbes, said that the Government was not going to stand any nonsense. As the night dragged on, members disposed themselves for slumber, and subsided in the benches to slumber unashamedly, or else went outside to seek more comforts. A significant feature of the whole day was the silence of Government and Labour members. The only Government member to speak was the Minister in charge of the Bill, Mr. Forbes. Time after time Government members were taunted with their silence, but they still held to their imposed peace. One amendment in the GovernorGeneral’s message suggested that the commission to be appointed to investigate alleged cases of hardship in considering claims should take into account, in addition to the financial position of the applicant, the practicability of using profitably for agricultural and pastoral purposes such lands which,' though capable of that treatment, were not in fact so employed.

MORTGAGE EXEMPTION NEW METHOD PROPOSED Concerning the mortgage exemption, a new method of ascertaining the capital value of a mortgage is proposed. In the case of a rent charge or annuity the capital value is to be, the full amount of the present value on March 33. preceding the year of assessment, capitalised at 5 per cent. In the case of a mortgage existing at the commencement of the year preceding the year of assessment the capital value, if the amount secured on the previous March 31 is greater than that secured at any other time during the year, is to be the average of the amounts secured on the last day of each month of the year preceding assessment.

Where a mortgage is executed during the year preceding the year of assessment the capital value is to be the full amount of the principal owing at noon on the previous March 33, reduced, except in certain cases, by one-twelfth for every month or part of the year preceding the year of assessment that had elapsed before the registration of the mortgage. In such cases it is provided that no deductions be made in cases where owners acquired interest in the mortgaged land at any time during the year preceding the year of assessment.

Under the section of the Bill dealing with the payment of income-tax it has been provided that the incometax payable should not exceed the difference between £14,000 and. the total unimproved value of the lands. The amendment proposes to eliminate this proviso.

CLAUSE BY CLAUSE MR. COATES LEADS ATTACK Although, except for the hardship clause, alteration in the amendments were minor, members of the Opposition seized on clauses and worried them fiercely all the afternoon in committee and repeated their arguments with gusto when the report on committee stages came before the House at 4.35. Refreshed by tea Reform members attacked the amendments again and carried on altogether for four hours and 25 minutes before getting down to |what might be termed “tintacks.” The Leader of the Opposition, Mr. Coates, said that when the message was before the committee of the House, the Minister had been asked to give an explanation, which he had done. He had indicated that the amendment to clause 3 of the Bill gave the commission an opportunity to consider whether exemption as a matter of hardship should be g,ranted to occupiers of rough and unimproved land. The proposals, however, offered no solution to the difficulty, despite intimations of relief undoubtedly given by the Prime Minister in the second reading debate and in answer to deputations, and in interviews. A further amendment had been submitted that the commission be given power to decide on all classes of hardship. Consider the man on land not suitable for subdivision, said Mr. Coates. Such a man should be encouraged to stay on the land, but under the present legislation no relief whatever was given to the classes mentioned. The amendments brought up by the Government did not provide relief in any class of hardship, but vent in the other direction entirely, and tightened up the hardship qualifications, making the application . for relief mare difficult. Mr. Forbes had not indicated, in any way. that he was prepared to hand out justice and equality. Mr. Coates realised his difficulty, and meant in no way jto be personal, but he wanted to imI press him with the series of injustices being created. The silence on the other side showed that it wanted to get by a difficult situation by an awkward silence. Did Mr. Forbes

realise that the man with £IO,OOO unimproved value would have his land tax doubled? Mr. Forbes: Ten thousand? The tax does not operate until you get up to £14,000. Mr. Coates: I am speaking of mortgaged lands. I am not touching on the supertax. At present there are hardships inflicted before the supertax comes on. The mere fact of reducing the mortgage exemption from £10;000 to £7,500 immediately doubles the tax. The only conclusion to be arrived at is that the Government is out, not only to create an injustice, but to make a levy on one of the most desirable classes of the community. The Hon. T. M. Wilford: Steady! Mr. Coates: Why steady? Mr. Wilford: That is over the odds. Mr. Coates said that Mr. Wilford evidently did not understand the effect of the amendment. He had not said a word on the subject.

Voices: He won’t! He can’t! Mr. Coates continued that Mr. Wilford was a lawyer. Mr. A. M. Samuel (Thames): And an actor. (Laughter.) Mr. Coates maintained that the tax was not only meant to burst up large estates, but also to place an impost on estates of a value of £B,OOO and upward. He challenged the Minister of Justice to prove that a man with a property of £B,OOO unimproved value would not have his taxation increased. Mr. Wilford: You are full of challenges. Mr. Coates: I am quoting mortgage lands now. The Minister of Justice says this is nothing. A Reform Member: Nothing to him. W * J - Polsor » (Stratford), said that he had led deputations on taxation, and there was no doubt that Sir Joseph Ward was quite sympathetic to their representations. ' He had agreed that a hardship clause was necessary, and had even gone so far as to hold OLit hope of further concessions. Mr. Poison appealed to Mr. Forbes to give the question a little more consideration. At present a man had to be practically bankrupt to take advantage of the clause. I-Ie suggested that on land unfit for closer settlement there should be an improved graduation tax.

Mr. Poison claimed that the Bill was framed by a departmental officer, who had a jaundiced vein against the farmer. He believed he could lay his finger on that man, and regretted he liad been given an opportunity of influencing the legislation.

“INIQUITOUS” MR. D. JONES’S CRITICISM Speaking- early in the evening Mr. D. Jones (Mid. Canterbury) said that deputations had gone away from Sir Joseph Ward with the firm impression that the Prime Minister would give redress, but now his illness had led to ?.n unfortunate mix-up. He did not know for whose benefit the amendments had been brought down, but they certainly had nothing to do with the representations made to the Prime Minister. It was plain that the United Party had not considered the Bill and its effect. Why was there difficulty about the hardship clause? The answer was because the Bill was so iniquitous from beginning to end that the only real amendment would be to withdraw it and bring in a new one. There was a great difference of opinion in the minds of United Party members themselves on the Bill. It was said that legislation would affect the rich man only, but Mr. Jones claimed that the man who would get most out of it would be the land speculator. The rich. man would get out after one payment. The man who would suffer was he who was bearing debts. The man without debts on his property would make one payment, and then would go to the Valuation Department and ask that his valuation be reduced to the capitalised value of the tax. Either the Valuation Department would have to reduce the value or take over the property, and the Minister could confirm that from the department. The man with a mortgage had no escape. The effect of the tax there was that the whole of the equity was taken off, and when it came to renewing a mortgage he was at the mercy of the land speculator or the Government. That clearly had not been realised. The Government would get its amount of money for one year only, and then would lose in estate duties through the lapsing of estates, and the value of the land would be reduced materially. The Bill would be most damaging on the London market. continued Mr. Jones, and was no better than the Queensland Land Act. In that respect Mr. Forbes should recognise the important issues involved in the measure, and Mr. Jones suggested that he should consider withdrawing the Bill and bringing down legislation to put taxation where it should be. The Bill was placing a burden on the farming community and leaving the city and commercial interests untouched. REFORM'S PLEA REMOVAL OF INJUSTICES After Ur. Jones, more Reform members had their say and at eight o’clock "tedious repetition’’ had driven the Press from reporting the speeches. Finally, when eternity seemed a good nomination for the duration of the discussion. the amendments were reported to the House at 9.10 p.m., and

a start was made on the real business of the evening—committal of the Bill. Members settled themselves for a real old-fashioned corroboree. Labour was still sternly silent save for an occasional interjection, and the Government benches maintained a policy of masterly inactivity. Mr. Coates said that it liad been proved, in the second reading v that the ethics of taxation were violated by the measure, which totally ignored capacity to pay. As far as subdivision was concerned, the Reform Party was prepared to have an open mind, but this was not taken into account and all property was hit, irrespective of its suitability for -subdivision. The Bill, if passed, would seriously affect farmers and tho finance they urgently required. Thev were being dealt a baclc-lianded blow. The Reform Party had no desire to obstruct if injustices were removed. The party did not object to levying income-tax on farmers owning £14,000 unimproved value and upward. Ml*. Coates quoted the case of the big landowner, with £IOB,OOO unimproved value, and said that the tax would absorb five per cent, of the annual value of land and confiscated the equity. The legislation was sudden as it was, but a man should have notice of the clear intention of the Government as to the necessity of subdivision. Amid interjections Mr. Forbes said that the discussion on the Bill was unprecedented. He then went on to deal with the arguments.- He said that every deputation had urged the hardship clause, and one had been inserted, so it could not be said that the farmers would be mined. There was no suggestion that the commission would act unfairly. The Government only asked that those who could pay should pay. (Hear, hear.) What was the position? The Government entered office with deficit and a need for revenue. Everywhere expenditure was being asked for and the farmers had concessions. Reformers: Where? • Mr. Forbes went on to say that it was only fair that those owning large portions of land in New Zealand should pay. (Hear, hear.) An increase in taxation was necessary and expenditure was going up by leaps and bounds. The Government was faced with an additional £1,500,000 this year. The Reform Party had altered the graduated land-tax in 1912, and there had been a tax without a hardship clause last year. It was ridiculous to talk of “confiscation” and the “British flag,” and so on. The amendment to the hardship clause was brought in to widen its scope. It gave the commission some freedom in determining returns from land and on other points. In New Zealand today every penny revenue was required and taxation was necessary.

“HOLLOW MOCKERY” LABOUR SINCERITY QUERIED The Hon. W. Downie Stewart (Dunedin West) expressed himself as disappointed at th.e reply of the Minister. wAh the hardship clauses amendment the Government seemed to have decided that there was hardship only where lands were not brought into cultivation. Mr. had asked how revenue could be raised without the Bill. Mr. Stewart was of the opinion that the Bill should have been sent to a committee as suggested and it could then have been thrashed out. As it was the Bill was of a swinging nature. Mr. Wilford: What did you say? Mr. Stewart: I said swinging not swinger. He continued that the in-come-tax, in addition to land-tax, was a hollow mockery. The Labour Party was insincere in supporting a Bill that would absorb the whole annual value of land. That was Mr. Stewart’s basic objection to the Bill. The Government seemed to have put on the land-tax in addition to the income-tax to make certain of the whole lot of revenue from the farmer. Member after member fell before the onslaught of sleep as the hours sped by on wordy feet.

GUARDS CHANGED SPELL FOR CHAIRMAN The chairman of committees, Mr. S. G. Smith, had been spelled by Mr. W. A. IJodkin (Central Otago) and Mr. Forbes by Sir Apirana Ngata. In all 23 members were listening to the words of Mr. H. G. Dickie (Patea). Of these, to uso an Irishism, at least five were asleep. A few hardy ones remained in the galleries looking rather bored and more in need of sleep than oratory, when Mr. A. W. Hall (Hauraki) got up and Mr. D. G. Sullivan (Avon) got down —to sleep. At 12.30 bells rang to call members to the chamber in a hurry, as Mr. W. Ji Jordan (Manukau) had drawn attention to the fact that there was not a quorum in the House. At 1.20, however, the position was as bad. as there were 22 members only in the House. Most of these were recumbent. By now the attendance had been enriched by one man in evening dress, obviously having dropped in on his way home from a dance. He enjoyed to the full the privilege of leaning on the rail and gazing earnestly at Mr. J. A. Young (Hamilton), who happened to be saying a few words. Mr. J. A. Nash (Palmerston) drew attention to the state of the House, but in vain, for the bells did not ring. Now Reform was represented by six members and Labour by four. About two hours later the second “dog watch,” or next relay of Reform speakers, came on and spoke to somnolent benches. No amendment had been moved yet and tempers were becoming rather frayed. Three-twenty is not the best time of the morning for urbanity and the stonewall showed signs of lasting another couple of days.

Evidently having had a good sleep Mr; Lysnar was in a militant mood and challenged all and sundry to prove his statements. By now Mr. W. J. Broadfoot (Waitomo) had relieved the chairman and Mr. Ransom was taking the place of the Minister.

At 3.45 Mr. Lysnar Was on his feet again and declaiming against everyone being asleep. Mr. H. E. Holland was the last Labour survivor on the stricken field. "Look at the Labour Leader.” exclaimed Mr. Lysnar, “he’s asleep.” “Oh, no, he isn’t,” came the reply. "He’s wiggling his toe.” Those awake chuckled loudly-, and then the somnolent ones were stirred to life with the dropping of Mr. Lysnar’s book of Bills. He was in great fettle and had members laughing, both with him and at him, and so things wore on with the dawn peeping through the windows. On most of the benches members were asleep, although at 5.30 several were reading the morning paper. By this time the Reformers’ third relief had taken over, and there was still another to come. By 7.30 the original chairman of committees was officiating (Mr. S. G. Smith) and the Hon. J. G. Cobbe was spelling the Minister. At 7.30 Mr. Smith was allowed to leave,the chair till 9.30, when the House will resume.