ENCOURAGEMENT OF THRIFT

Dominion, Volume 37, Issue 230, 26 June 1944, Page 4

ENCOURAGEMENT OF THRIFT

"Savings are a powerful weapon, alike for the winning of war and for the consolidation of victory.” That statement was made by a member of the British War Cabinet recently, and it applies fully here in New Zealand as elsewhere. In the last analysis it simply emphasizes the place of thrift in the national life. The practice of thrift was always admirable, but in these days, when the resources of the nation are strained to the utmost to meet the demands of war, the strength that comes from individual thrift is the more noticeable. Not long ago the Chancellor of the Exchequer, speaking in London, said that “the economic stability of the nation must rest in large measure on the continued vigour and success of the savings movement. What has been done in this Dominion in the way of National Savings has been very creditable, but much more remains to be done. It surely is the duty of the Government to create the conditions most likely to encourage efforts in this direction. There is one big obstacle which can and should, be removed, that is the penal taxation now imposed on thrift. It is an old grievance, an old injustice, but the need for its removal today is stronger than it ever has been, not merely as a matter of justice to the individual, but as an act of public policy in the national interest. Why should the thrifty and the saving be specially singled out for penal taxation on the income they derive from their invested savings—an additional impost of 33 1-3 per cent. Especially at a time like the present, when every possible pound available may be required for War Loans, the incentive to save and invest in State securities should be encouraged by every reasonable means. Instead a penal tax is imposed on those who save and invest in this way. It is in the national interests that money borrowed (for war purposes should not carry high rates of interest, and practically every self-governing unit of the Empire has, during this struggle, been able to raise loans, in various forms, at a lower rate than ever before. But it seems to many people illogical to invest at low rates and then have the income from the investment saddled with a super-tax. Thrift, whether exercised purely for personal reasons or as a contribution to the war effort, should have its merited reward. It certainly should not incur a penalty, as is the case at present. There is one aspect that should always be prominent at least in the official mind, and that is the certainty that a policy of individual thrift will be fully as important after the war as it is today. Speaking in London, Sir John Anderson said that a virile voluntary savings organization would be indispensable after the war, “particularly in the difficult period of transition from a war to a peace economy. And this, surely, is the time to get the practice ever more widely and more firmly established, because here, as elsewhere, it is certain to be, as the British Minister said, “a powerful instrument for securing the fruits of victory.” Both the short, and the long-term policies call for this stabilizing factor in the economic life of the country, and the Government should direct its policy, adjust its methods of taxation assessment, so that every possible encouragement is given to the saving of funds for investment, whether large or small. And clearly the first step should be to remove the added impost that at present exists m the form*of a super-tax. _____