HOUSE OF REPRESENTATIVES.

Wanganui Chronicle, Volume L, Issue 12144, 21 September 1907, Page 5

HOUSE OF REPRESENTATIVES.

The House met, at 2.30

LEAVE OF ABSENCE.

Two {lays' leave of absence was grant- : eel. to Mr. Field through urgent public ' business. On© Aveek's leave of absence was • granted to Mr. Bollard on urgent pri- \ vate business. . METHYLATED SPIRITS BILL. : The Methylated Spirits Bill was re* ; ported, and the amendments made in - committee were agreed to. The Bill was read a third time and passed.. LAND AND INCOME ASSESSMENT , BILL. ! ; The House tihen went into Commit* tee on the Land and Income Assessment | Bill At the interpretation clause— , Mr. Massey objected to a tax being ! made* on mortgage by the borrower, whilst the lender at the same time paid s a tax on the interest derived from the i same mortgage. The Premier stated that a graduated , tax was not paid twice over. No reduction was made to the borrower on his • mortgage, but the lender did not; pay j < the graduated land tax on thei moit-* i gage. He added that this clause did not alter the existing law. Mr. James Allen urged that the mortgage tax should be done away with altogether. He added, "Make it an in* come tax if you like." By wiping out thie mortgage tax it would cheapen money. The Premier said the Bill was designed to assist in the cuttingf-up of large estates, and the tax proposed was with that object. No one wanted' to sec individual-* suffer. All they wanted to see was that the large estates were cut up. Mr. Fisher urged that >a law should be passed that when a landowner died ' his property, if over £40,000 unimproved value, should be parcelled out. If this were dojie, then in 25 years' time there would be no estates in excess of tbis value. > The clarnse was agreed to without amendment. The House adjourned at 5.30. The House resumed at 7.30. Clause 3, which provides that sections 44 and 45 of the principal Act, sect.on 5 of the Land and Income Assessment Act Amendment Act, 1903, and the schedule to the last-mentioned Act. being repealed, was agreed to without amendment. Clause 4, which provides that every person who owns 'land the unimproved value of which is £5000 or more shall pay a graduated land tax, commencing with the year ending 31st March, 1908, was agreed to without amendment. At clause "6, sub-section 3, for every additional thousand pounds of the- said value over the amount of £40,000, the percentage shall 'be increased one-fifth of a eJhilling, andi the percentage so increased shall be charged on the total unimproved vlalue of the land in respect of which the said is assessed— Mr. Wilford1 moved an amendment to omit the clause with & view to insorting the following: "For higher value there shall be a progressive increase of percentage, the rate for every value being one-fifth of a shilling more than .that for a value of one thousand pounds less." He urged thla't undter tihe clause proposed in the Bill no provision was made as to what-tax should be iinp'sed on amounts between thousands over £40.000. The amendment was negatived by 56 to 6. Mr. Laiurenson ,said he desired to more that progress be reported for certain reasons. As a private member it was impossible for him to move that the exemption be reduced, but by reporting progress it would enable the Government to bring down by Governor's message proposals to reduce the exemption from £40,000 to £20.000. He had good reasons for the course he proposed to adopt. There were 370 estates between £20,000 and £40.000. If the exemption were reduced the increased revenue thereby derived would be £5272. whilst it Would also incrase the _re~ verHie from estates over £40,000. His estimation of the extra revenue was probably from £10,000 to £12,000, but he particularly desired ib emphasise that a man owning £25,000 of land held an ample quantity, and the Government should1 do all that was possible to discourage large holdings. The Premier said he gave Mr. Laitrenson every credit for his desire to move for the reduction of the -progressive taxation from £40.000 to £25.000. but though Mr. Lanrenson had said the increased revenue would be some £5000 ' more, he (the Premier) assured members ' that the increase would not exceed -£4000. He reiterated the remarks b& 1 made on the second reading of the Bill, \ th.at it was not desirable to reduce the 1 amount h^.oiv £10.000. He pointed' out 1 that there were properties of less than 400 acres with an unimprovedvalue of 1 £25 000 and other* with 500 acres un-. improver! value £30,000. and for the ■ reasons lio had given before he was not ; prepared to accent the proposal to re--1 dnce the item. He reminded members tha+. the increased taxation from the graduated land tax would be £17,000 in " esctws'of the highest amount received ' during 1904, 1905, and) 1906. - •.Incidentally he instanced the case of a farm of 943 acres, the unimproved value or ' which was £71,000. If the proposal! was carried it would place great hardship, ' oir many 'landowners'of properties val--Iwd at £25,000. and would flood the market, He added tha 1-. it would injure ; the colony if tihe proposal wlas carried. 1... Mr. Rutherford, in opposinp: the mo--1 tion to report progress, paid that large estates were materially decreasing un- ' der existing taxation, and urged theire ' was mo necessity .to reduce the amount • of exemption Jbei<iw £40,000. I -:; Mri Fisher'agreed with Mr. Laurenl fibn and proposed to. vote for the*, amendment because he knew it would be - defeated; 'but if he believed that prryi ing the amendment would lead to£con--5 fiseation h© would not support it& He I would like to see the. Bill designed to - prevent (Large estates) being brought into j existence, but he did nob want. to> come 3 down on a private individual and say 7 that by the imposition, of this tax we're I £oing to practically.confiscate his excess 1 land. ■ . , > Mr. Wilford said the revenue derived f from Customs last year was £2.941,000. r and from land iiax -"£447 000. The total 1 value of unimproved freehold land of the colony was £100.232,247. and r he nre:ed, was sufficient- justification for t Mr. Laurenson's amendment He- was s sorry that tihe lion, member did not propose to make the exemption £20,000, -instead of £25,000. Mr. Fll contended th-ea-c were many estates iheld by one man which would I provide livings for six or seven flamuy i^s, and others of enormous values within in easy distance of towns which would 7 ba of great, value for market Gardening purposes. He wofkl support tiho amend- \ ment. He added that the time would come when they would have to. reduce thf exemption far below £25,000. The Premier said there were 128.000 Landownprs in the colony, mid 20.000 c odd paid land tax. The values of tax- '" able land was £77,000,000 last ye>nr, " | i\r>d the mortgages amounted to £49,----"000.000. If ■comparisons were to be in- * troduced between the Customs revenue

and the land tax they would have to go a little further and see how much people owning the land paid in Customs revenue. Mr. Laurenson, replying to the Premier, said that if the exemption was reduced to £25,000 the increased revenue he found would! be £160,927, not £5272, as had been stated' previously. The motion to report progress was negatived by 49 to 12. THE DIVISION LIST. The division list was as follows :— Ayes (12)— Arnold, Barber, Ell, Hogg, Fisher, Hanan, Izard, Laurenson, Poland, Poole, Stallworthy, and~ Wilford. Noes (49).—Aitken, E. G. Allen, Jas. Allen, Bennett, Calvin, Dillon, Duncan, Flatman, Fowlds, A. L. D. Fnaser, W. Fraser, Graham, Gray, Greenslade, Hall, Homes, Hornsby, Houston, Jennings, Kidd, 'Lang, Lawry, Lewis, Lethbridge, McGowlan, McNab, Macpherson, Major, Malcolm, Mander, Massey, Millar Okey, Mills, Ngatia, Parata, Held, Remington, Ross, Rutherford, Seddon, Steward, Stevens, Symes, Tanner, Thomson, Ward, Witty, Wood. THE UNEARNED INCREMENT. Mr. Ell said there Were two estates in Wellington of the value of £202,288, and eleven estates valued at £578,140. There were two sections—one of 170 feet by 137 feet, valued' at £18,725, and one 95 feet by 93 feet, valued at £16,----625. These, he said represented the unearned increment, and these were casss for a progressive land tax, but because tihey were business sites they were exempt. In Christchurch an acre of land was valued at £62,985. Another section of 1| acres was valued at £110,----435. In the latter case (in early dates) the quaretr-acre was sold for £24. Four years ago this same section was valued at £47,500. These were business si Jes which had. been created by the community, and tlitey should contribute more towards the taxation of the country. Tho Premier said the Bill Aras for the purpose of cutting up estates, and could not apply to business sections, as they could not be cut up for the purpose of the Bill, which was intended for cutting up land for settlement purposes. Mr. Herries said that suppose he held 10 acres in tihe city of Wellington, he would draw rente from the whole portions of the estate, and yet would not pay the graduated tax under the Bill. He urged that these large city esta'.es should be cut up for the purposes of workers';. homes, etc. The Bill would encourage men to invest money in city property, and forsake the country. He urged that if a man held city property he should be exempted in so far as his own premises were, concerned, and not in regard to this -tenants.-. Mr. Gray pointed out that ■ where-, landowners paid £2 10s. pea- (year in .taxes the man owning land1, in towns would probably pay £250 in faxes. Mr. Massey said the argument of the city representatives was to the effect that they should tax.the land to prevent monopoly in country, but' should they allow a monopoly in the towns to go untaxed? He urged that there should be no differentiation between land in the cities and land in the couritrv. This was an extreme tax ■wJik-li was intended to apply to the country, but not to the towns, and he was alaogtahe;- opposed to differentiation. He contended that, in proportion !to the value derived1, the local taxes in :tho country were in excess of the local taxes in the towns. ■ At clause 7, sub-section I—"Notwithstanding anything hereinbefore contained, each of the said percentages determined as aforesaid shall be increased by 25 per cent, thereof in this case of all land other than business premises, as herein defined"— Mr. Ell moved to strike out all the words after "tattd." . ■ . . ; The Pxemieir pointed out that -the effect of the amendment wcaild be increased taxation. The Chairman ruled the amendment "out of order. ■'-~■' , ~ Discussion was proceeding when the Telegraph Office closed at 12.41 a.m.