DETERRENT TO INVESTORS

Press, Volume XCVII, Issue 28629, 4 July 1958, Page 13

DETERRENT TO INVESTORS

Brewery Head’s Comment (New Zealand Press Association) AUCKLAND, July 3. The Budget provisions w’ould deter hotel investment in New Zealand, not only from New Zealanders but also from American interests, said the managing director of Dominion Breweries. Ltd. (Mr H. J. Kelliher) in Auckland today.

American interests, he said, had built hotels in all the important countries of the free world except New Zealand, and New' Zealand had. perhaps, the most impressive tourist potential of them all.

Mr Kelliher said there was no doubt that the thoroughly unwarranted penalty on retention of tax-paid profits and the new tax shareholders would have to pay on dividends would prove a serious obstacle to investment in the hotel industry. Hotels were operated to make nrofits for investors and that was the prime motivating force in any free enterprise economy. It was «>ne with which overseas interests w’ere particularly concerned when considering financial participation in tourist hotel projects. Mr Kelliher said the Minister of Finance had followed discredited precedent in announcing that there must be a substanHal reduction in bank overdrafts and a further tightening up on capital issues approvals. He had not taken the opportunity to substitute positive and constructive alternatives. On past experience in New Zealand and other countries the intensification of controls of that nature would act as a direct brake on production and might well result in unemployment. Thousands of New Zealanders, he said, w’ould be bitterly disappointed that the Labour Government had not honoured its traditional policy of more than 20 years to stabilise the purchasing power of the workers wages.