8.-5.

67

R. FINCH.]

that is made —because under the last Act you are entitled to a rebate if you are paying at a higher rate than you would be if your debenture interest were brought in for assessment. You are entitled to a rebate from the Department. The flow of capital to debentures from the bigger companies to some extent has been deliberately made with the idea of avoiding tax, and I do not think these people's efforts to avoid.tax deserves much consideration. Where companies have agreed to pay the debenture-tax —you know there have been large issues on that basis ? -Yes. I am rather referring to cases where investors have put their money into elebentures—either local body debentures or company debentures -and they have to pay the tax. You would not consider it a breach of faith if the tax was raised on them ?—No; because it would only affect the: very large holders of debentures, and these very large holders are always alive to the fact that the incidence of taxation must be varied to some extent. It would not affect the small holder. Towards the end of your statement you make this suggestion : " Abolition of land-tax as a means of raising annual revenue, and putting on a special tax for the purpose only of preventing undue aggregation of land and to burst up any large holdings that can profitably be subdivided." And you go on to say : " As I understand it, this was the original intention in the introduction of land-tax, and its incidence is such that it acts inequitably when considered as an annual charge. Necessarily a land-tax must be imposed to take effect on a certain day and hour —at present it is 12 o'clock noon on the 31st March in each year. The charge cannot be subject to apportionment in any way, and it works out in practice thus : If a man buys land on the 30th March he pays land-tax on it, but if his purchase is not made until the Ist April he escapes tax. That is clearly inequitable and its nature is such that it is practically impossible to avoid it, more particularly as a reasonable method of apportionment of a graduated land-tax has yet to be suggested." Does not a man, when he is buying a farm, take into account the land-tax he will have to pay and fix his buying-price accordingly ?—To some extent. The Chairman.] He would know that he would make himself liable to tax. He would realize that, would he not, and take it into consideration in fixing the price he agreed to pay ? —There you are taking into consideration the investment of a capital sum as being portion of an annual amount that is payable to the State. Mr. Shirtcliffe.] But take your point that if a man buys on the 30th March, he pays land-tax ?— Yes. But if he buys on the Ist April he does not pay the land-tax for that year ? —Yes. My suggestion is that if he buys on the 30th March he takes into account in his buying-price: the tax that he will have to pay ? —-I do not think so. In practice the question that confronts the buyer is whether it is a desirable property, and this question of land-tax does not materially affect the price that he pays for the property. It may affect his decision as to the purchase of the property if his graduated tax is to be very largely increased. But actually, as regards that particular investment, I do not think that in practice this question of the payment of that particular land-tax enters into it. He shuts his eyes to it ? —Yes. I have seen numbers of instances of that. They ignore it for practical purposes. Here is a farm of a certain acreage ; what is it worth per acre ? That is what is asked, and the, question whether the purchaser is going to complete the sale on the 30th March or the Ist April is generally ignored in practice. I have seen numbers of instances of that. I have known cases where the purchaser has agreed with the vendor for the apportionment of all rates and taxes. He has completed the sale, and then he has found that one of the parties to the contract has got to pay the land-tax, and that cannot be apportioned. You can only attribute that to short-sightedness on the part of the buyer ?—Yes ; but I do not think that it enters into it much in practice. I understand that you are in favour of the abolition of the land-tax entirely, except an aggregation tax?— Yes. Have you any suggestion to make as to how a special tax could be put on for the purpose of preventing aggregation ?—Yes. The land-tax should only commence at a certain figure on all properties. Or, if you wish to exclude town properties, put it on the rural properties for the purpose: of bursting up farm properties where they are suitable for closer settlement. Would you make that a graeluated tax ?—Yes, if it is to be for the purpose of bursting up estates, most certainly, because it would have that effect. Apart from, the question of bursting up estates, would you consider it reasonable and fair to tho whole community that a man who holds, say, £100,000 worth of land should pay a higher rate than a man who holds £5,000 worth ?—lf the tax is imposed solely for the purpose of bursting up estates, yes. I would advocate that the land-tax be used for that purpose and not directly for the purpose of returning to the Government an annual sum for revenue purposes. I think I see your point, but apart from the question of bursting up estates, you would have a flat rate of land-tax above a certain minimum, whatever might be fixed ? You would have: a fiat rate ?—No ; a graduated rate, because the graduation would make more practicable the bursting-up of the large estates. Mr. Begg.] What you would like is that the exemption should be raised materially ? —Yes. And otherwise it should be; left as it is ? —That is what it amounts to. Mr. Shirtcliffe.] Have you any suggestion as to the extent to which the exemption should be raised ? At present it is £500 ? —lt is very small. Have you any suggestion as to the extent to which the exemption should be raised ? —No. It would take a great deal of investigation before a fair basis could be arranged. I have not had the figures available to go into that question. To revert to this question of bursting-up estates, I suppose there are comparatively few large estates now that call for bursting-up, are there not ?—I do not think so.