RETAIL CO-OPERATIVES AND TAXATION

Chronicle (Levin), 29 March 1947, Page 5

RETAIL CO-OPERATIVES AND TAXATION

— ^ DUNEDIN, March 28. ' ' Cooperative enterprise hau a loug standiug right to ileduct from trading surpluses that portion which is reJaied to members before the asaessment oi income tax. This was granted neither uy divine right nor by Labour legislation as my adversary would imply," said Mr. G. M. Churton (secretary oi the New Zealand .Federation of Cooperation) answering the Associate-i Chambers of Commerce criticism. "Dairy cooperatives, pig marketing cooperatives, and for that inatter all :coop.erative companies, are allowed tlu* same exempti'on. Why, then, are retail cooperative societies whieli are iinanced I'roin the small individual savings o. working class consumers, singled otu for this acrimonious attack? Is it nol consistent with Britisli justice that ta\ burdens should be made lighter for tho 'have nots'?

"The first paragraph of the Asso ciated Chambers tirade contends thai cooperatives do niake profits which are retained by members by being passed back to tliem in the form of reliates. Consumers' societies could quite easiL short eircuit the process by retailing their goods at cost, plus overhead. Where then would be the prolit? Whether the surplus is deducted from the price of eommoditios every year is immaterial. The important fact is that it goes back to the consumers, whereas in private business it goes into the pockets of owners or stockholders, who may not even particpate in the business. Dividends in a joint stock company are paid out as unearned inc.ome on capital investment. In a cooperative enterprise- the rebate is disbursed in direct proportion to the purchases of the individual member. The current protesrs of private traders against cooperatives are consistent with the traditional line of reaction. It is not the country 's revenue that is causing coneern,' but their own profits. Nor are they particulariy worried about being debunked. bilt thev are generally uneasy tliat th(!v may untinmtelv be defunet. "