The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. TUESDAY, AUGUST 24, 1937. TAXATION ON GOLD.

Auckland Star, Volume LXVIII, Issue 200, 24 August 1937, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

TUESDAY, AUGUST 24, 1937. TAXATION ON GOLD.

For the «ittse ifcctf f»dfci ocnttowm, For f fee srr-ofic f fcat need* renmtmmat, for fie fvtvre in tfce dirtance, And fhe good that toe om 4*.

Most of the -world's gold has been sterilised i by the fact that the gold standard has no Longer any real existence, but the demand for J the metal has not lessened, and the price | remains at a level which, would have been considered fantastic a few years While | the price holds, every ounce that can be j produced in a ■debtor eonntry sneb. as New | Zealand shoaJd be won, and any factor which tends to reduce production should be eliminated. The efforts made by the prodneing companies to secure tie elimination of the gold export tax have so far failed, and in the light of the reeent speech of the Hon. P. C. Webb, Minister of Mines, on. tie subject, in reply to the chairman of the Okarito Gold Dredging Company, the outlook is not hapefuL Mr, Webb refers to what the Government has done and is doing to assist -mining- by prospecting subsidies and grants. As Mr. Wheeler has pointed out, this aid is undisputed, but the extra taxation is a direct damper upon companies in formation, because these do not participate in the benefits of Government expenditure, while any gold which tiey may prodnee is subject to a duty of 12/6 per ounce when exported. This special impost is, levied on no other industry; it i≤ a direct handicap to the raising of eapital for new j mines, and a≤ such it- retards the development! and progress of the fields. Mr. Webb explains that he desires gold mining to be an investment, not a gamble, but as a practical miner he knows enough of gold mining to be thoroughly aware of the fact that risk can never be eliminated from either reef or dredge mining. Beefs do not always obligingiy give the same assays; dredging areas may return a pennyweight to the yard in one area and an ounce in another. As Mr. Wheeler has pointed out, Mr. Webb's name figured as a director in one properly in whieh the preliminary borings gave the most alluring , results, bnt which is now in liquidation. No one is infallible in dealing with underground reef systems, and the speculative element can never be eliminated. The State should be far-sighted enough to remove obstacles to exploratory work when it h»« so much to gain by success. The export tax was imposed four years ago, -without warning, as a special levy in. a time of aente distress, after a statement had been made by the Rt Hon. J. G. Coates that it was intended to be temporary and would not have .been imposed but for the depressed conditions. Those conditions have been alleviated, bnt the tax remains as a restrictive impost upon an important industry. The State has done much to encourage gold mining, bnt it has undone that good by continuing an impost whieh helps to keep eapital off the fields. New Zealand must depend in future upon her low grade ores, as is proved by the fact that production has gone down from 735,376 ounces in 1866 to under 200,000 ounces last year. The argument that the priee is now so high that the mines can be worked at a profit inclusive of this special tax is not borne out by the facts, and in any event the gold mining industry distributes so great a proportion of its eapital and receipts in plant, machinery, wages and freights that any suggestion which is likely to give it a fillip should be very earefully considered, and any plan likely to attract capital and expand the industry should be adopted. Readjustment of taxation to the ordinary scale would assist. No similar tax is imposed on any other industry,- and if this were abolished the Government would in all likelihood eolleet mueh more than its total from increased ineome tax, beside opening up a wide field for more employment.