W. H. NICHOLSON.]

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8.—5.

A South Canterbury Farmer's Case in Detail. Land-tax. Local Bates. Wool Returns. £ s. d. £ s. d. £ s. d. 1914 .. .. .. .. .. .. 106 14 8 108 2 11 1914 .. 1,445 0 8 1915 .. .. .. .. .. .. 125 3 (i 108 2 II 1916 .. .. .. .. .. .. 154 II 0 116 13 11 1917 .. .. .. .. 180 16 4 111 19 8 1918 .. .. .. .. .. .. 329 12 8 111 19 8 1919 .. .. .. .. .. ~ 329 12 9 111 19 8 1920 .. .. .. .. .. .. 516 18 6 142 7 3 1921-22 .. .. .. .. .. .. 585 6 1 188 I (i .Land-tax increase since 1914, £478. Hates increase, £80. Labour-cost increase, 100 per cent. £ s. d. Total rates and taxes, 1921-22, on all property taxed as above .. .. .. 773 7 7 Wool returns, 1921 22 .. .. .. .. .. .. .. 761 17 6 Deficit on account rates and taxes alone .. .. .. £11 10 I The trouble with land-tax as at present assessed and as it effects the producer is that valuations were made during boom periods, and if land-tax is to be continued, then my executive considers that a revaluation is urgently needed in most districts. A. return to the system in vogue during the war period that is, the imposition of income-tax in addition to land-tax on the farmer—can only result in lowered production and would be an unbearable tax on the producing industry. Land-tax assessed on speculative values is too heavy a burden to carry, and valuations for taxation purposes should be strictly on the basis of the producing-capacity of the land being valued. My executive are of opinion that a man using his land properly should not be called upon to pay land-tax at all, but should pay in an equal ratio with other members of the community on income earned from his land. Unearned increment could not then be brought into the question of valuations, the productive capacity of the land being the real basis of value. The only variation in this value would be brought about by fluctuations of market prices for primary products, and this difficulty could be met by taking over a number of years for valuation purposes. There is no doubt that subdivision of estates has been carried to excess in many cases by the Government to the detriment of the country generally, and to the particular piece of country subdivided especially. This applies more especially with regard to grazing properties which present no opportunity of improvement by cultivation. I may mention my own experience on a large property with which I was personally connected. It was cut up by the Government, and when it was handed over by the Government it was carrying 26,000 sheep, one of the best flocks in the Dominion, which clipped 450 bales of wool, and it also ran over three thousand head of surplus stock each, year, and sent away from four hundred to six hundred of fat cattle. That estate was cut up for closer settlement, and to-day it is running only 14,500 sheep and 650 cattle, and the sheep are of a nondescript character, and the wool is only one-third of the value of the clip from the 26,000 sheep previously carried ; but there are millions of rabbits on the place to-day. There was a Commission sent down by the Department to investigate the proposal for taking it over about four years before it was cut up. They rode over the place for four days, and they saw only four rabbits. Mr. Shirlcliffe.\ What was the locality of that place? —North Canterbury, the Glenwye Estate. It was run by the late Mr. Duncan Rutherford. Mr. Hunt.\ Tt was a pastoral leasehold ? There is only 9,000 acres of freehold, and the rest is hilly back country. Will you now allow me to make some comments on the statements placed before the Commission by previous witnesses ? Mr. Seifert, of the Wellington Flax-milling Company, said that the Department charges income-tax when income is made by companies, and when no income is made the Department is not interested. I wish to point out that with the producer the Department's interest continues even when losses are made, and there is no let up. Then, Mr. Fels, on behalf of his company, objects to the land held by one company in various districts being grouped for taxation purposes, but this is done in all cases where a farmer owns land under similar conditions, and so does not apply to companies alone. The Chairman.'] But his complaint was with regard to leaseholds being aggregated —That is a different matter. It was not reported properly then. The flat rate of land-tax suggested by Mr.. Fels will not meet the case, as the basic objection is still there —that is, taxation of one form of capital investment only. My executive does not agree with Mr. Gow that land is a fair subject for taxation as against other property on account of it carrying privileges. The only privilege apparent is that of having your time fully occupied sixteen hours a day and a problematical result of your exertions at the end of the year. If. as he says, the only justification for land-taxation is on account of the. privilege of ownership, then there is no justification whatever for it. Mr. Gow agrees with my executive that the true system is a man's ability to pay according to his income. Mr. Shirtclijfe.] I suppose, in spite of all these disadvantages which you say have been experienced during the past ten years, the farmer has done pretty well ? —I could not go back through the war period, of course. I was actively engaged during most of the war period, and I was not in my present position, but taking the time from the slump onwards the bulk of the sheepowners have not recovered to the position they were in prior to the slump. But prior to the slump they were in a very good position I —l am not aware of that. But prior to the slump they were getting extremely good prices for their wool ? But, as you know, the bulk of the farmers are not good book-keepers, and though they got 6d..a pound more for their wool than they had ever been getting before I doubt whether on their bank balances after they had squared up at the end of the year they were very much ahead on account of the increased cost of production. If you look at those figures in the table on page 10 you will find that it gives you