THE COMPULSORY LOAN.

Manawatu Standard, Volume LX, Issue 260, 1 October 1940, Page 6

THE COMPULSORY LOAN.

As was generally expected, the Government’s compulsory loan has not been favoui-ably received by the financial and business communities as a whole. By its exemption of £SO for individuals and £7O for companies the Government is making all incomes on the higher mark subscribe to the loan of ,£8,000,000. In other words there is no equality of sacrifice. And the fact must be remembered that it is the section of the community which will be called upon to take up the scrip that is already bearing the burden of severe restrictive taxation. The high level of this taxation makes it impossible for subscribers to raise the sums they must contribute out .of income. They must either borrow so that they can lend to the Government, or else find the money from reserves and savings. But as there will be no interest for three years, and after that a rate less than two per cent., well under market conditions. the Minister for Finance is really seeking a capital levy. There are indeed substantia] grounds for the widely held view that “an extra turn of the taxation screw” has been made on the public who must pay. It is to be regretted that the Minister for Finance did not test, the market with a patriotic loan. In the Great War citizens freely subscribed to loans for war purposes which were offered at reasonable rates of interest and they marked the deep patriotism of the community at large. The saving of £200,000 in interest annuhlly is a very small amount, and by comparison with what could be saved by the Government itself in its internal spending practically nothing’ at all. In a desire to give the fullest possible help in winning the war subscribers will accept the terms offeredbut their harshness and the difficulties they create cannot be overstressed. -h