Wairarapa Times-Age THURSDAY, AUGUST 13, 1942. TAXATION AND EARTHQUAKE LOSSES.

Wairarapa Times-Age, 13 August 1942, Page 2

Wairarapa Times-Age THURSDAY, AUGUST 13, 1942. TAXATION AND EARTHQUAKE LOSSES.

AT its meeting this week the Wairarapa Provincial Executive of the Farmers’ Union passed a resolution declaimg that, in the conditions brought about by serious earthquake damage in this district, it. “views with amazement a law which charges heavv taxation on the repair of our misfortunes, and that an addition of 20 to 30 per cent in taxation, to our repair bills is such a serious disability that we feel that the Minister 01. Finance should make the necessary dispensation.”

There is no doubt that taxation of one'kind and another will add more or less seriously to the burden imposed on a. great many people in town and country who unfortunately are under the necessity of spending large or small sums on earthquake repairs. Exactly how the “dispensation proposed by the Farmers’ Union executive is to be made operative is not, however, immediately apparent. .It is not easy to see how any general, and comprehensive alteration in taxation policy could be made to meet the case, and the alternative, if it were decided to remit taxation on the cost of earthquake repairs, presumably would be to deal with claims individually, in accordance with an accepted standard.

Apart, however, from the fact that the determination of that standard might be anything but easy, an enormous amount of administrative work evidently would be entailed under a policy of this kind. More than one branch of taxation would be involved —a member of the Farmers’ Union executive mentioned, for instance, that he understood he was paying £G as sales tax on the cost of a new chimney—and obviously small claims would have as good a right to consideration as those of larger amount.

It may be a question, too, how far the principle of exemption from taxation on account of loss due to unmerited misfortune is to be carried and where it is to begin and end. The Farmers’ Union executive possibly may be asked to state its proposal in more explicit terms.

There have been thus far some rather vague proposals that, in cases of hardship on account of earthquake damage and loss, some relief may be given by way of loan, or possibly of grant, but what shape exactly these proposals are to take,finally has yet to be made known. At a long view, and taking account of tiie total problem, the best method of minimising economic hardship on account of earthquake damage evidently is to be found in a well-devised and comprehensive scheme of insurance.

The promotion of a scheme of this kind would be made more difficult if it had to be limited to particular areas, but over a period so large a part of tlie Dominion has at one time and another experienced earthquakes that there is something to be said for the establishment of an insurance scheme of national scope, under which, for example, a percentage addition to premiums would convert fire insurance policies into a cover against both fire and earthquake risks. The procedure would be similar to that followed at present in the matter of war risk insurance. In any scheme of the kind it would no doubt be essential that fire and earthquake risk should be covered by a joint policy. Otherwise contention and litigation might arise at times over the determination of liability.