POLITICAL GESTURE

Evening Star, Issue 23692, 27 September 1940, Page 10

POLITICAL GESTURE

LOAN WILL BE AT HEAVY DISCOUNT UNNECESSARY difficulties created “ There is no misnomer in the term ‘ compulsory ’ as applied to the loan announced to-day,” said Air Andrew Hamilton, president ot the Stock Exchange Association of New Zealand. “ A particular class of taxpayer has again been singled out, and is compelled to make application. Admittedly, he may apply voluntarily for more, but ho is under compulsion for a certain amount, if there is any_ practical meaning to the statements in the prospectus. “An unnecessary amount of difficult calculation has been passed on to taxpayers,” Air Hamilton said, “ in that they are obliged to add to their taxable income certain other forms of tax-free income and then endeavour to calculate the amount of tax that would have been payable on this total. Alany people will have a difficulty iq deciding what higher rate of tax they would fall under in this increased amount. " Compulsory subscription has been based on income tax for the year ended Alarch 31, 1939, a year when many traders and business concerns would show profits which they have not been able to make since the war began and since further import restrictions have increasingly reduced their earning capacity,” Mr Hamilton said. “It is more than likely that many will not have the available cash, and may have to sacrifice some other form of asset, or appeal to their bankers. How the banks will be able to assist is difficult to conjecture, as the loan is almost certain to be at a heavy discount and will not be easily valued because of the first three years carrying no interest. One obvious result of compulsory subscription with no return must bo a tendency towards further private unemployment through reduced income. “ The amount to be saved in annual interest on the anticipated amount to be subscribed, £8,000,000, is only £2oo,ooo,Air Hamilton said; “ a sum negligible in comparison with the hardship and other results to be produced. With an internal State expenditure of somewhere about £20,000,000 annually on public works, many of which could have waited till after the war, this saving is very small, and could have been achieved by an almost unnoticeable economy in such expenditure. “ The people of this country as a whole are well imbued with the Empire spirit,” Mr Hamilton said, “ andy unless this form of loan is a political beau geste to certain elements in the country, it is hard to understand why a voluntary appeal was not made first. In no other part of the Empire has such a loan been brought forward at this stage of the war. The country might have been given the opportunity of responding to a wellhandled financial appeal, and the pressure pumn withheld until the voluntary well was running low. “Another question being asked by many,” Air Hamilton added, “is what provision has been made for cases of hardship, and, finally, what is the position of soldiers overseas whose incomes before they left the country were such as to bring them within the terras of the prospectus ? Are they obliged to contribute to this loan as well as offer their lives?”