WAR FINANCE

Dominion, Volume 11, Issue 151, 15 March 1918, Page 4

WAR FINANCE

SIR JOSEPH WARD AND OUR WAR LOANS. Wo published yesterday the report of an interview given by Sir Joseph Ward to the Cliristchurch "Press" on the subject of our war loans, and mure especially in defence of the policy of is-\ suing the loans at 4| per cent, free of income tax. In ilio course of his remarks, Sir Joseph Ward quoted figures, to show that if the Government borrowed without, the free-of-income-tax proviso the country would have to pay more in interest charges than it was now giving away by the free-of-income-tax concession. Unfortunately, an error crept into the report by which the taxation was referred to as 4 and 5 per cent, instead of 4s. and ss. in the pound. To make the position clear we reprint the paragraph in question ae corrected:—

"Now, £100,000,000 at i\ per cent.free of income tax," remarked Sir Joseph Ward, "will cost this country £4,500,000 per annum. If we borrowed at the plus income tax, we should pay approximately 6£ per cent, on £100,000,000. That would amount' to £6,500,000 ner annum; that is, the country would pay £2,000,000' por year more for interest tlian under the system of free of income tax, which has been followed within the Dominion 1 , up to now. Thn income taxpayers ort the £6,500,000 would pay, on the present graduated scale, at an average of 4s. in the pound, £1,300,000 per annum, that is, £700,000 per annum less' than we would bo paying them for interest. If the income taxpayers averaged ss. in the pound they would pay £1,625,000 per annum for income tax. That would'be £375,000 less por annum than we now gain under the free-of-in-come-tax system." i