STATE ADVANCES.

Auckland Star, Volume LXVI, Issue 245, 16 October 1935, Page 8

STATE ADVANCES.

PROFITS QUESTION. £14,000 FOR INCOME TAX. LABOUR MEMBERS CURIOUS. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. Provision for the oayment of income tax totalling £14,000 by the State Advances Olliec caused considerable discussion when the Estimates were under consideration by the House last night. The Minister of Finance, Mr. Coates, when asked to state what were the proiits on which those payments were based, replied: "1 cannot tell you what tlie profit is. All 1 know is the income tax payable." Mr. \V. Nash (Labour, Hutt) suggested that if the tax was at the rate of 5/ in the £ it represented profits of £50,000. The Leader of the Opposition, Mr Savage, urged that adequate informai tion should be given to Parliament, lie 'said he could not imagine the Department making such profits as would justify those payments. It was a great difference from the previous year, when only £10 had been voted for that purpose. The Minister, when actively crossquestioned, suggested that the Opposition need not feel nervous, as the accounts had been scrutinised by the Auditor-General and passed. The Income Tax Department bad told the State Advances Oflice that taxwould be levied according to the amount shown on the Estimates, but that was not to say the Department was satisfied, as it had raised objections. He read a memorandum from an officer of the Department, stating that last year it received refunds from the Income Tax Department of £29,000 overcharged in previous years. As tax had been charged on the full profits, with no allowance for cash payments on loans raised, a further claim for tlia'c £14,000 was being made. Mr. Savage: Who is going to win the argument? Mr. Coates: It looks as if the State Advances Department won it last time. Departmental balance-sheets submitted to the House disclose that the settlers' branch made gross profits of £07,421,' paying £7702 incomc tax, and that the rural advances 'branch profit of £23,432 involved an incomc tax payment of £30IS, though the profit and loss account shows «an actual loss for the vcar of £3531. Workers' branch gross profits totalling £04,713 from interest were completely absorbed in expenses, which included £52.830 losses on the realise - tion of securities and the writing down of doubtful securities. Income tax paid by this branch was £1030. but in the same yer.r £0573 was refunded bv the Income Tax Department. The* local authorities' branch, showing a net profit of £5508, paul £2440 income tax, and secured a refund of previous tax payments of £540.