LESS TAXATION.

Taranaki Daily News, 27 September 1922, Page 5

LESS TAXATION.

PROPOSALS IN NEW BILL. SOME CONCESSIONS MADE. LAND SUPER TAX REDUCED. SUPER TAX ON INCOME DROPPED. By Telegraph.—Press Association. Wellington, Last Night. The Land and Income Tax Amendment Bill was introduced in the House this afternoon by Governor’s message. In reply to Mr. T. M. Wilford (Leader of the Opposition), the Premier said the leading features of the Bill were a reduG tion in the super land tax from 20 per cent, to 10 per cent. He was doing this because the financial position had somewhat improved, though in doing so he was aware he was taking some risk. He had carefully considered the matter and had come to the conclusion that it would be better to take the risk and trust to the industry of the people to increase production.

There was also some alteration in the matter of land tax on native lands. It had been brought to the attention of the Government that in some cases the land tax was far in excess of the rent paid for land held under lease, and that was not a good position. This they had endeavored to remedy in the Bill, and while they have done something they might not have yet done everything required.

So far as the income tax was concerned, he proposed to abolish the super tax altogether. These concessions in land and income taxes would mean a loss of revenue of £929,100. Members: How are you going to make it up? Mr. Massey said he had not lost sight of the fact that during the past five months of the financial year we had saved £2,100,000 in expenditure. This reduction of taxation must come. High taxation was killing industry and creating unemployment. This proposal would come into effect this financial year.

The Premier added that Clause 8 of the Bill dealt with exemptions, giving the benefit of exemption to grandparents who are bringing up orphan children. It further provided that in future coal was to be treated as a wasting asset under land, too, just as timber was at present. Company taxation was not touched as such, blit, of course, companies would benefit by the general reductions. Mr. J. McCombs (Lyttelton) contended that only those with incomes of over £lOOO a year would be assisted by these proposals. No small farmer had benefited by the policy of the Government. Mr. D. G. Sullivan (Avon) wanted to know, if the Government could give this revenue away, were they going to provide pensions for the blind as promised. Mr. Massey contended that no promise was ever made to provide pensions for the blind. He would like to do so, but he had not £40,000 a year to give away. He contended the class which would benefit as much as any were the workers, whose employment had been curtailed because employers could not afford to pay for labor. Mr. H. E. Holland (Leader of the Labor Party) maintained that large income tax payers were the people who were going to benefit. If a man had tbe income he did not require relief. Mr. Massey interjected that everyone knew the merchant passed his income tax on to his customers, thereby increasing the cost of living, and the workers would participate in the consequent reduction in the cost of living. Mr. Holland, continuing, asked what guarantee the consumers had that the remission in taxation would be passed on. The Bill was only part of the Government’s policy, which undoubtedly was to take wages from the workers and give concessions to those who least needed relief in this country. The Hon. J. A. Hanan (Invercargill) asked the Premier to give the House some tangible proof that his proposals were equitable, and how he proposed to induce an increase in production. In the light of financial stringency, the people had a right to know whether these concessions were justified.

Mr. Massey, in reply, said he promised the people that he would reduce taxation, reduce the cost of living, reduce the cost of government, and readjust the finances of the country. This he was doing and endeavoring to get back to normal as soon as possible. Coming to the proposals in the Bill, he explained that two years ago he had gathered in £2,000,000 of taxation more than was required, and that money he set aside as a reserve. He had been using some of it for various purposes, which was perfectly legitimate, and he proposed to use £500,000 of this fund to make up the loss by the reduction of taxation. The Bill was read a first time. FURTHER DETAILS OF BILL. RELIEF TO COMPANIES. WAR PENSIONS EXEMPTED. (By Wire.—Parliamentary Reporter.) Wellington, Last Night. A clause in the Land and Income Tax Bill, brought down in the House to-day, provides that new valuations are to operate as from March 21 succeeding the application for revaluation. In regard to income tax, it is providad that after this year losses incurred in business may be set off against profits earned within the three following years, provided that any relief under this section shall be given so far as possible from the first assessment within the period of three years, and so far as it cannot then be given shall be given from the next assessment, and so on. One clause provides that any companj' resident in New Zealand and carrying ou business exclusively in any of the islands of the Pacific Ocean not being British possessions, shall be assessable for income tax only in respect of such part of its income as is received in New Zealand. War pensions are exempted from income tax. Losses incurred by a taxpayer in one businesss may be set off against the profits earned in other business. There is provision for a reduction of 5 per cent, in the tax on premiums in respect of contracts for insurance with foreign companies not carrying on business in New Zealand. For the purposes of the principal Act, a husband and wife carrying on business together shall not be deemed to be carrying on business as partners, unless in fact they are carrying on business under a deed of partnership.