OVER-TAXED.

Otaki Mail, 12 January 1923, Page 4

OVER-TAXED.

CAPITAL DRIVEN AWAY. i OUTSPOKEN CRITICISM. I “Tile income tax in New Zealand as it operates in relation to companies is by far the most outrageous and unreasonable in the British Empire,” was the emphatic way in which the Hon. L. J. Clifford., a visitor from Australia interested in the extension of a number of industries, expressed his opinion of a tax which lias been the subject of much severe criticism by business men in the Dominion.

Mr Clifford, who is a cousin to Sir George Clifford and a son of Lord Clifford, of England, is a director and underwriter of the Hume Pipe Company of Australia, and in company with Mr T. S. Nettlefoldj the general manager, is visiting New Zealand to investigate the possibilities for the extension of the company’s " operations to the Dominion.

Mr Clifford said that numerous concerns had looked to New Zealand as a possible field for enterprise and expansion, and while the climatic conditions were admirable and the prospects of obtaining cheap hydro-electric power very alluring, the taxation which their establishments would have to meet, had. in every case, turned the scale a'gainst the Dominion. Tn this connection lie mentioned that about two years ago two men intimately connected with several large companies in Australia, representing paid-up capital totalling £10,000,000, visited this country to report on conditions here, and although tlieir reports were extremely favourable as to the opportuiiities offering, they could not recommend tlieir companies to operate owing to the restrictive taxation,

As a result not one of these companies had commenced operations in New Zealand and the loss to the Dominion was considerable. Instead, the concerns lie had in mind had extended their energies in other directions outside the British Empire. At a conservative estimate these companies if established here would have employed no fewer I hail 5000 hands, and would have paid into the Treasury, hundreds of thousands of pounds in income tax even had the rate beon reduced to that ruling in Victoria, namely Is in the £l- - an illustration of what the rate in New Zealand meant to trading concerns. the visitor mentioned that one bank operating in the Dominion paid more in income tax than in Australia, where 90 per cent of its income was derive ft. •'‘There is an impression in some quarters,’’ said Mr Clifford, ‘‘that lhc same wonderful progress made by Tasmania under cheap electric power will he possible in New Zealand when the hydro-electric schemes contemplated by the Government are put into effect, but anyone with experience will tell the people of New Zealand that this will never be possible while the present rate of income tax is charged on companies’ profits. By the provision of cheap power Tasmania has encouraged new industries to start in the State. The Electrolytic Zinc Company, with a capital of nearly £3,000,000 has been established within 31 miles of Hobart, and will bo using about 30,000 horse-power per annum Cadbury. Fry and Pnseall have come out from England, and have started a huge factory about six miles from the same city, and many other large concerns have established themselves in Tasmania because of the cheap power, with the result that Tasmania is advancing in proportion to its population at a far greater rate than any other State in the Commonwealth, and property values tire increasing at an unprecedented pace.”