TAXING DAIRY COMPANIES.

Taranaki Daily News, 24 June 1921, Page 6

TAXING DAIRY COMPANIES.

A PROTEST FROM DAIRYMEN. (From Our Special Reporter.) Palmerston N„ June 23. The conference of the National Dairy Association on Monday discussed at some length the action of the Government in taking from dairy companies one of the privileges they had previously enjoyed by the removal of the exemption from taxation. The matter again came up yesterday, when Mr. J. S. Connett (Bell Block) moved: “That this meeting, whilst admitting t|ie necessity of the Government to increase its revenue by every fair means, regrets exceedingly its recent action in deciding to tax dairy companies, as it will tend to weaken the position of all directors who are desirous of building up the financial position of their companies on sound lines. The importance of this matter to the dairy industry is such that we desire the Government to take the earliest opportunity otf repealing the section the Act referred to.” Mr. Connett said that he thought it was advisable that a vote should be taken on the matter, which he felt was a very important one. His company, like many others, had built itself up on sound lines by setting aside reserves, and i-f these had been taxable years ago they would not have been set up. The advantage of reserves was that they could be set aside during good seasons. It was unthinkable that this legislation could be brought about without the leaders of the dairy industry having some opportunity of recording their objections. There were very powerful advocates of the industry in the House, and he thought that any future legislation of this kind should be referred to the leaders of the industry, as this was the only way to legislate on sound lines. Possibly the intention of the Government was to compel companies to pay out the last penny to suppliers, who could be taxed individually, but this was not beneficial to the industry. Mr. J. Marx* (Mangatoki) said apparently co-operative companies were considered as trading concerns which were setting aside reserves, but these companies only set aside reserves for the, purpose of maintaining their plant and buildings, etc. Mr. J. R. Corrigan said he had been told by a Government official that had they confined themselves to the business of manufacturers of produce, nothing would have been done, but a number had started as trading concerns, and had mixed up their two businesses in such a way that the Government had to levy the’ tax. He. however, supported the motion. A member stated that the accounts were generally kept separate, and no difficulty would be encountered over this. He thought the Government were not so much to blame as the officials. The resolution was Carried.