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Under existing New Zealand law not all of these allowances are made. We recommend the adoption of tlie Australian clause, which would be fair to all and most reasonable. To the Australian list (a) to (i) should be added : (j) The bull-dozing of tracks to give access for manuring, fencing, and general maintenance. We realize that abuses must be avoided, and recommend that these deductions should be allowed only to the genuine farmer actively farming his land. (ii) Contributions for Roading Contributions are sometimes made by a farmer to his local authority in excess of rates levied, for the purpose of obtaining road access, and this is often the only way of obtaining a road. These payments to a local authority for such purpose should be deductible allowances in the same manner as rates. (iii) Planting of Trees The planting of trees for shelter purposes and for erosion-prevention is most necessary. It should be treated as a maintenance expenditure, including the fencing off of the young trees. (iv) Flood Damage The repairing of exceptional flood damage should be a maintenance expenditure. The present position is that moneys spent on repairing exceptional flood damage are regarded as capital expenditures —that is, as taxable income. We regard this as unjust. (v) New Fencing The erection of new fences is classed as a capital expenditure, and should qualify for special depreciation in view of its enormously inflated costs to-day. (vi) Rabbit-fencing The conversion of a fence into a rabbit-proof fence should be classed as a maintenance expenditure. (vii) Losses Losses can be carried forward for three years under the existing legislation, but the evidence before us suggests that it may take four to five years to recoup losses in many cases. The period should be extended to five years. (viii) Averaging of Incomes for Taxation Purposes Considerable evidence has been placed before us on the need for averaging of incomes. This is a matter, however, that is much wider than the sheep industry, and we can only commend these submissions to the Government with the recommendation that all the implications of widely fluctuating incomes should be closely investigated.