TAXATION AND HARDSHIP

Sun (Auckland), Volume IV, Issue 995, 11 June 1930, Page 1

TAXATION AND HARDSHIP

FARMERS’ APPEAL TO COMMISSION TOTAL OF £118,287 REMITTED i Press Association

WELLINGTON, Today. THE Prime Minister, the Hon. G-. W. Forbes, has issued the following summary of the report of the Commission to inquire into cases of hardship under the Land and Income Tax Amendment Act, 1929. It reveals that the Commission remitted a total of £118,287 in taxation.

The report reads: All the applicants were required to furnish written evidence in the following form:— (a) A detailed statement of the grounds on which it was contended that payment of special land-tax would entail serious hardship. (b) A detailed statement of income and expenditure in respect of the year ended on March 31, 1929. (c) A detailed statement of assets and liabilities, as at March 31, 1929. These statements were required to he supported by an affidavit, and the certificate of an accountant was required in cases where the accounts had been prepared by an accountant. In the majority of cases, the written evidence thus submitted was sufficient to enable a decision to be come to, but in other cases information for earlier years was requested. Oral evidence was also taken in a number of cases, as the term “serious” hardship was not defined in the statute. The Commissioners gave what they considered a fair and equitable interpretation to the term as applied to each individual case. All the decisions of Commission were unanimous. Among the large number of grounds of objection put forward, the following were the most important: (a) That the ordinary land-tax and special land-tax payable in respect of property was greatly in excess of what the income-tax payable by the objector would have been. (b) That owing to the fact that the taxpayers’ farming operations for the year ended March 31, 1929, had resulted In a loss, the special land-tax as well as the ordinary land-tax would have to be paid out of income from other sources, or out of capital. (c) That in arriving at the special land tax, no allowance had been made for the' fact that the taxpayer’s land was subject to heavy mortgages. (d) That the taxpayer had disposed of his land prior to the passing of the Land Income Tax Amendment Act, 1929, but after March 31. 1929. (e) That having regard to Its productive capacity, the unimproved value of the taxpayer’s land was too high. (f) That the taxpayer was the owner of urban lands in addition to country lands, and that the special land tax had consequently been levied at a rate applicable to the total unimproved value of the combined urban and country lands, and not at the rate applicable to the unimproved value of his “farm” lands. With regard to the question whether all or any of the lands of the objectors were capable of subdivision, a considerable asnount of evidence was tendered, but as the order of reference did not empower the commissioners to make investigations or report as to the suitability for closer settlement of the lands under review’, no definite statement on this question could be given. The main contentions put forward in respect of such lands were as follow: (a) That the land had already been ofiered to the Government for the purposes of subdivision, and had been declined as being unsuitable. (b) That the land had already been subdivided by the taxpayer, and offered for sale without success. (c) That the taxpayer had no power to subdivide the land, owing to his having granted a lease for a term of years, or to his being merely a tenant for life, or a lessee. (d) That the land was high pastoral country, and not suitable for subdivision, being more productive and more economically worked in large areas than if divided into smaller holdings. Six hundred and twenty'eight objections were submitted to the Commissioners for consideration. Of these they recommended the cancella tion of special land-tax in 329 cases, and reduction of special land-tax in 109 cases. In 23 of the cases submitted, they considered that the evidence tendered did not justify any recommendation for relief. In the remaining cases, the applicants failed to furnish the evidence required, or failed to appear, or withdrew their objections. The percentage of cases where total telief was recommended is high, and may be accounted for by the fact that these objectors comprised holders of land who were subject to heavy financial liabilities, combined w’itli other forms of hardship which called for relief. The amount of special landtax recommended to be remitted in full was £ 56.552 19s 3d, and of partial remissions £31,734 10s Sd, making a total of £118,287 9s lid.

pre-sessional addresses in the Egmont electorate. The amount returned had been £250.000, after hardship exemptions of £95,000 were remitted. Mr. Wilkinson opposed the principle of taxing a man upon the basis of his debts, and so cramping his progress. He declared that straight-out income-tax would have brought in the same amount as land-tax, if not more, while it would have hit equally the wealthy land-owners. Income-tax was a tax upon profits alone. A great political blunder had been made by the Reform Government. he considered, in remitting taxation on well-to-do land-owners, in view of the war debt of £70,000,000 and interest and war pensions amounting to £5,000,000 yearly. Land-tax and local rating taxes constituted a super mortgage on all lands, and the local governments and the general Government collected those taxes, regardless of the conditions prevailing. There was a great contrast with the English conditions. No farmer there paid a penny for rates nor for land-tax. The tax was based upon production. English farmers paid rates only on their dwellings. The total tax reduction in England of £5,000,000 yearly showed that producing farmers were considered essential in the well-being of the nation. Yet, in New Zealand, farmers competed with others paying no rates and no land-tax. New Zealand’s apparent stand-by was its climate. Today the farmers faced a tremendous fall in values. Wool was down, butter and cheese were down, meat and flax were low. Hence money was dear, unemployment rife and exchanges high. Australian conditions were largely responsible for the adverse exchange conditions, for New Zealand never before had paid 6 per cent, for drafts. Farming was the one industry that could help New Zealand’s monetary position abroad; therefore, every legitimate effort should be made to stimulate farm production in products that New Zealand could sell in the world's markets. There should be a remission of taxation, Mr. Wilkinson claimed, while stock foods should be free of tax. Upon those internal advantages, Danish competitors had built up an enormous trade. New Zealand could raise and export millions of pigs, gredt quantities of eggs and poultry, if the conditions were altered, while employment would be stimulated.