FLIGHT OF CAPITAL FROM N.Z.

Hawke's Bay Herald-Tribune, Volume 81, Issue 17, 13 October 1937, Page 4

FLIGHT OF CAPITAL FROM N.Z.

i Our Ovra Correspondent.)

Better Investments In Australia DOES MR NASH DENY IT?

(Fron

WELLINGTON, This Day. The statement of the Minister of Finance, the Hon. W. Nash, in the House of Representatives in comnient on allegations of Mr W. A. Bodkin that money is leaving the country have been taken to represent a denial that this scate of affairs exists. However, it is unlikely that Mr Nash meant to issuc sueh a denial, because he knows that this is true. What Mr Bodkin declared was that during the past year £6,264,000 had gone out of the country, and he quoted figures to show that overseas accounts had failed to balance by that amount and said the money couid only be accounted for as exported capital. Mr Nash's •comments on this were that the statement was quite untrue, and that he wanted to reassure the House and the country that "not a smgle pound of New Zeaiand capital had gone out of the country which could not be explained." This, of course, is a very different thing from saying that no money has gone out of the country. it is known here that one insurance company alone has sent £1,000,000 to Australia for investment in Australian Government bonds. * The reason for this is the fact that investments are available in Australia at a higher return and with less taxation than they are available in New Zeaiand. In this particular instance the insurance company will receive 4;( per cent, with 3/- per cent income-tax to be paid out of that. On the other hand, the Government Life-Insurance Department has recently agreed to advance the sum of £550,000 to the Wellington Hospital Board for construction of its new £600,000 hospital buildings. The rate of interest which the Government Life Insurance Department will receive will be 3$ per cent. For reason this loan has been kept a secret. But its effects will be felt in the bonuses to the policy-holders of the Government Life-lnsuranco Department.