NEW ZEALAND'S FINANCES.

Taranaki Daily News, 2 October 1919, Page 6

NEW ZEALAND'S FINANCES.

OBLIGATIONS OF DOMINION. It has become the fashion in Now Zealand not only to think but to talk in,millions. The country has recovered from its amazement expressed when the first war loan of £8,000,000 produced £13,000,000. .Since then something between £38,000,000 and £39,000,000 has been raised hero. A further £10,000,000 is now called for. The enthusiasm which characterised subscription to the first £8,000,000 was due to the war —the desire to "see it through." The war has been seen through; but has left a lot of little things behind it. To satisfactorily dispose of these the £10,000,000 is now demanded.

Demanded is the right word, for the Government has power to compel every person whose income is subject to taxation or who pays land tax to take up a specified portion of the loan. That power will be exercised-, as it has been exercised, without doubt. It has already been applied to the case of people whose means enabled them to subscribe to war loans but who did not.

So far as can be ascertained, the pressure that has been exerted does not amount to a very large amount, when millions are spoken of in such light and airy, a way as has now become the fashion. Probably the amount which holders have been compelled to take up, and on which they receive 3 per cent, per annum instead of the issue rate of 4J per cent., docs not exceed £3OOO. When the last investigation was made under the compulsory clauses of the Act, it was found that there was not a great number of people of sufficient means who had not subscribed. Those who were unable to satisfy the Commis. sioner of Taxes as to their inability to subscribe to war loans were compelled to do so, and accept what may be called the penal rate of interest—3 per cent.

In the case of the first loans, the donations to patriotic funds were taken into account in the assessment of what proportion of war loan the authorities decided should he taken up by subscribera. Compulsion, too, was not to be applied to persons whose incomes were £7OO per annum and under. Now all land tax and income tax payers are obliged to take up these securities. They will include all individuals, companies, corporations, and all organisations in receipt of income (with certain exceptions), subject to income tax or paying land tax. There is abundant food for thought here. The Secretary of the Treasury and the Commissioner of Taxes administer the compulsory clauses. Their decision can be appealed against and the matter taken before a Judge of the Supreme Court in chambers. Up to the present it is understood no appeals of this sort have been made.

So far, it is believed that £1,000,000 has been received for the war loan of £10,000,000 now before the country. Subscription to this, as to some previous war loans, is compulsory, of course. Those who are able to do so, are directed to apply to their bankers for advances to enable them to subscribe. The rate of interest to be paid for such accommodation is 5| per cent., but, inasmuch as the subscriber to whom the advances are made is receiving 41 per cent, interest on his stock, the cost is but £1 per cent. It will be remembered that the last war loan for £0,500,000 floated in the Dominion was subscribed to the amount of £8,000,000. Since then £3,500,000 has been received, and of this £2,000,000 will be available for the present £10,000,000 loan. Subscriptions to this £3,500,000 will be taken into consideration when dealing with the application of the compulsory clauses. There has not been anything, so far, connected with this present £10,000,000 loan resembling the publicity campaign in Australia connected with the £20,000,000 now before the people of the Commonwealth. New Zealand having compulsory subscription on its Statute Books is, it would seem, relying upon that fact as a means of obtaining a full subscription to the ,£10,000,000. However, Australia has somewhat similar power, and it is likely to be applied in the case of the loan now before the public. Aeroplanes dropping leaflets, buttons worn in lapels, collecting tanks in the streets, and many other devices appear to no longer coax subscriptions to the loan. Pressure is now likely to be applied.

One fact that New Zealand has to fac3 is the maturity, in 11)20, of £40,000,000 of loans, apart altogether from war loans. No doubt a great proportion of those loans will be renewed, but at an increased rate of interest, or the money have to be found in due date.

Another fact that cannot be ignored is the enormous amount of money required to put returned soldiers—or very many of them—upon their feet again; to start some in new careers, to help others recover ground lost in their callings, trades, or professions while on active service. There are other qui„e large incidentals, too, all connected with the war, which have yet to be met. Ther.' are, likewise, demands for public works, railways, hydro-electricity, and other undertakings unconnected with the war which are clamant enough, and will require to be met. In short, the £10,000,000 now before the public is but one more link to the already long chain of public debt, but the sooner it is forged the better for the country.— Wellington Post.