Manufacturers Oppose Allowance Suspension

Press, Volume CVI, Issue 31115, 19 July 1966, Page 18

Manufacturers Oppose Allowance Suspension

The suspension of the investment allowance would be discussed again by the New Zealand Manufacturers’ Federation at its meeting on August 2 and 3, said the federation’s president (Mr J. R. Maddren) at the monthly meeting of the Canterbury Manufacturers' Association last evening. Mr Maddren was comment-! ing on a letter that he had] received from the Minister of: Finance (Mr Lake) in reply! to one he had sent to Mr Lake after the budget, appeal-j ing to him to reconsider the' decision to suspend the investment allowance. Mr Lake said in his letter that the Government’s aim in suspending the investment allowance was to bring demand for new plant and machinery into better balance with reduced supplies available from overseas. Tliis would reduce the number of applications for licences which had to be declined and ensure a better allocation of the resources available. “I think it must also be borne in mind that the investment allowance was introduced with the specific purpose of encouraging expan-

jsion of industry,” said Mr Lake. “At the time of its introduction, some incentive of this nature was appropriate. “At present, however, the level of economic activity in the economy is somewhat higher than is desirable and in such circumstances general incentives for further expansion have less justification.” Mr Lake said he would like to emphasise that it was the Government’s intention to give high priority to the reintroduction of the investment allowance as soon as circumstances permitted.

“As stated in the Budget, we hope that this will be possible next year,” said Mr Lake.