FINANCE BILL

Taranaki Daily News, 17 December 1921, Page 5

FINANCE BILL

PASSED BY THE HOUSE. NEW TAXES AGREED TO. OPPOSITION BY LABOR. By Telegraph.—Press Association Wellington, Last Night. The House to-day went into committee on the Finance Bill. Mr. Massey, replying to the discussion on the first clause, said so far as the amusement tax was concerned he desired to let children’s tickets go free, and he proposed to exempt tickets up to elevenpence. Shilling tickets would pay a penny, but after that the tax would increase at a greater rate than imposed under the present law. With regard to the racing proposals he estimated he would get £260,000 out of them, but he proposed to give fractions back to the racing clubs, because they did not belong to the Government. The rebate on income tax was necessary because he found nothing was doing the credit of the country so much harm as the extraordinary increase which had taken place in land and income tax since the war. That increase was perpetuating a slump, and he believed he had the people of the Dominion behind him in trying to bring about a better state of affairs. The discussion on the first clause was continued during the whole afternoon, the entire range of taxation covered, by the Government’s proposals being traversed during the debate. Mr. T. M. Wilford (Leader of the Opposition) indicated that he would challenge clause, ten, which provides for the rebate on income tax. Mr. H. E. Holland (Leader of the Labor Party) stated that the Labor Party would call for a division on the first clause, on which they would register their protest against the principle in the Bill to which they object. When the House resumed in the evening Mr. P. Fraser (Wellington Central) called for a division on clause I—the1 —the short title —which was adopted by 47 votes to 8. TAXING DEPARTMENTS. On clause six, making the State Advances superintendent liable to income tax, objection was made to any of the department’s funds being drawn upon to strengthen the consolidated fund. The Prime Minister said that at present the one fund which needed strengthening more than any other was the consolidated fund, and it was only fair that departments whose operations produced profits should contribute. Mr. Wilford said the State Advances Department had never been looked upon as a trading concern, and every penny of the profit it made should be kept for reinvestment at a low rate of interest, for the benefit of workers and settlers. Mr. Massey said the official view of the department was that profits earned should be subject to tax, which was estimated at £12,000 to and it was considered this amount should be made available for the benefit of the people at large, and not reserved for the benefit of certain persons.

Mr. Wilford said the department last year made a profit of £lBl,OOO, of which £70,000 was on sinking fund transactions, which was not taxable. Without this there was £lll,OOO, which would produce, if taxed as proposed, not £12,000, or £14,000, but £48,000. After several members had protested against this taxation of departmental funds, Mr. Massey said none of the money was to be wasted, but would be used for the benefit of all the people. No outside institution had brought influence to bear on him to raise the rate of interest, though other Government lending departments had made that request, which he had refused to accede to. There had been many requests that the various departments should be placed on a business footing, and yet, now that this was proposed to be done, they opposed it. At 10.25 p.m. a division was taken, and clause six was retained by 38 votes to 26.

INCOME TAX MATTERS. Referring to questions raised regarding estimates of the profits made by the State Advances Department, the Prime Minister said there was difficulty in getting immediately the details asked for, because there was a difference of opinion between the Advances Department and the Audit Department regarding the items that should be subject to taxation. Mr. Massey added that he never intended to tax funds in connection with local authorities’ operations. Clause eight was amended by the deletion of sub-clause six. rf On clause ten Mr. W. A, Veitch (Wanganui) moved an amendment that the rebate of income tax be only granted to taxpayers whose taxable income does not exceed £350. The amendment was negatived by 38 votes to 25. Mr. J. McCombs (Lyttelton) asked the Premier if he would agree to suspend the operation of the clause for two or three years, seeing that he was so much in need of money, but the Premier firmly declined to consider such a suggestion. At midnight the discussion on clause ten was still proceeding, the debate being carried on almost exclusively by Labor members. At 12.15 a.m. the discussion came to an end, and a division was taken, when the clause was retained by 32 votes to 26. On clause eleven Mr. Holland moved to delete the proviso which stipulates that no interest shall be allowed on amounts paid in advance if such amounts are less than £lO, contending that those who paid small sums should receive as generous treatment as those who paid large sums. On a division the proviso was retained bv 48 votes to 10. In clause thirteen the Premier moved the amusement taxes (published elsewhere). He explained lie ' had intended to move a free limit of lid, but had been advised by the department that this might lead to evasion, and the probability of evasion was less if the limit was 9d. He declined to accept any amendment to the clauses, and on a division his proposals were agreed to by 38 votes to 18.

Clause fourteen was struck out on the motion of the Premier, and the remaining clauses were passed unamended. Two new clauses of a technical nature were inserted on the motion of the Premier. The Bill was then passed, and the House rose at 1.40 a.m. till 2.30 p.m. on Monday.