AS INVESTMENT.

Auckland Star, Volume LXXIV, Issue 229, 26 September 1940, Page 9

AS INVESTMENT.

MOT HADE ATTRACTIVE.

The opinion that some companies would find it an. embarrassment to provide the amount that they would have to pay, was expressed by the secretary of the Auckland Chamber of Commerce. Dr.. E. P. Xeale, who added that the position was complicated by the fact that certain sources of income were not taxable. The war loan was not an

attractive investment, and the rate of interest-, after three years, vac very low. He considered that the £50 exemption for individuals was a fair and equitable thing. Dr. Xeale pointed out that people had a lot of commitments -which were not provided for. such as illness. The notice of the war loan was rather short, and companies had to find extra, money on account of the national securit-v tax, and also for increase in wages "tinder awards and industrial agreements. Generally, the business community had anticipated increased taxation, although it was heavy at the present time. One difficulty was that many companies had already been hit hard by restrictions in regard to import licensee. It was believed that the Minister would meet taxpayers in a reasonable way, and full comment would have to be withheld until the prospectus was available. Dr. Xeale said that there was a psychology of war finance, in that, in times of war. people would pay taxes, and pay willingly. Moreover, wajjes and profits iu many industries -were high, and the industrial profit motive was more easily replaced by national motives. Furthermore, limitation of the investment of capital made it p-jssibb-for the State to take an unusually large percentage of the surplus available for current consumption. Low taxes during a war meant Hgh taxes afterwards, when reconstruction needs were great. Taxes imposed later to meet interest bore onerously on a community daring possibly a period of depression, and perhaps accompanied by acute unemployment. However, heavy taxation in wartime was apt to impose on the country necessity for economy in consumption, just when the cultivation of that virtue was essential in the interests of national welfare.