The Waikato Times FRIDAY, SEPTEMBER 27, 1940 TERMS OF WAR LOAN

Waikato Times, Volume 127, Issue 21229, 27 September 1940, Page 6

The Waikato Times FRIDAY, SEPTEMBER 27, 1940 TERMS OF WAR LOAN

Mr Nash’s explanation of the terms of the proposed New Zealand war loan apparently must be read in conjunction with Regulation 14 of the Finance Emergency Regulations, 1940 (No. 2), issued in June. The Minister’s statement left a doubt in the public mind whether subscription to the loan is to be compulsory, but the regulation puts the position clearly. It means that if subscription is not made voluntarily the Minister has power to demand subscription. Mr Nash is obviously hopeful, however, that the public will subscribe freely at least up to the minimum total of £8,000,000. It is still not clear, nevertheless, whether compulsion will be applied if the minimum is reached and some people have not taken their appropriate share of the loan. That, apparently, lies within the discretion of the Minister. The regulation states : “ If the Minister has reason to believe that any person has not subscribed in due proportion to his means to any loan for the time being authorised to be raised by the Minister for the purposes of the War Expenses Account . . . the Minister may, by notice in writing . , . require that person to subscribe to that loan, within such time as may be specified in the notice, such amount as may be therein specified.” The amount which the Minister will expect to be subscribed will be at least the amount of income tax payable in respect to income received in the year ending March 31, 1939, and payable in February next—“ decreased in the case of individuals by £SO and in the case of companies by £70.” In a nutshell, every individual who has to pay more than £SO in income tax, and every company which has to pay more than £7O, will be required to subscribe to the loan a sum equal to the income tax paid—with certain considerations where voluntary contributions have been made to the War Expenses Account. The exemption of the lower incomes from the necessity to subscribe is designed to avoid hardship, but the demand will fall heavily upon those whose incomes place them just above the dividing line. Further to ease the burden it has been provided that 30 per cent, should be subscribed on application, 40 per cent, on December 16, 1940, and 30 per cent, on March 25, 1941. The fact remains, however, that the notice to find a sum equal and additional to the amount paid in income tax is short, and some people may have difficulty in obtaining the necessary accommodation.

The adoption of the income for the one year 1939 as a basis for contributions is open to some objection. A more equitable method might have been to base the demand on the average income of say three vears. In this way hardship to those who had an unusual accretion of income in 1939 might have been avoided. There may also be hardship to some people who are dependent upon income from investments because no interest is to be paid until 1944. Possibly such matters will be considered if and when the Minister finds it necessary to invoke the powers contained in the Finance Emergency Regulations.