NEW INDUSTRIES

Wairarapa Times-Age, 12 October 1940, Page 3

NEW INDUSTRIES

TEMPORARY INCOME TAX RELIEF PROVISION EXPLAINED BY MINISTER. CONTROL OF SHARE DEALINGS. (By Telegraph—Press Association..! ! WELLINGTON. This Day. 1 “There will be consultation between myself and the Minister of Industries and Commerce and his organisation for the purpose of determining whether the industry is in the interests of New Zealand.” said the Minister of Finance. Mr Nash, when moving the second reading of the Finance Bill No 3, one 1 clause of which empowers the granting of temporary relief from income tax to proprietary companies establishing new industries. The new industry, the Minister added, must be shown to be in the interests of the country. Mr Nash quoted the case of a company that was to manufacture a commodity which the Minister of Industries and Commerce desired should be manufactured here. Its capital was owned to the extent of 60 per cent by an organisation in Australia, and 40 per cent by an organisation in New Zealand. A new company was starting, and under the provisions of the existing law the rate of income tax' payable by the new company would be. determined by the rate the existing! company was paying. Under the provision in the Bill the rate of income tax payable would be according to the rate of profit of the new industry. Explaining the clause placing restriction on the transfer of shares in bondholders' companies, Mr Nash said it was designed to prevent robbery of the cruellest type. “Here is a company where, if we measured the value of its shares on the basis of its assets, they might be worth £6,” the Minister said. “Because of public opinion they could be sold for £lO. But there are persons going round this country buying the shares for £lO and selling the same shares within a month for £4B or £5O. That is robbery of the cruellest type. There are one or two companies, in the main operating in Australia, I think in collusion with people here, who are cruelly robbing people.” Mr Nash said the clause empowered directors to refuse to register the transfer of shares where it was known the price paid for them was unconscionable. The-market value would be the test all the time.

The Bill was put through all its stages and passed after brief discussion.