Tax Remission To Boost Investment Suggested

Press, Volume CII, Issue 30127, 10 May 1963, Page 15

Tax Remission To Boost Investment Suggested

1 o encourage investment, the Government should exempt from taxation at least the first £lOO of all unearned income without discrimination and from whatever the source, said Mr P. N. I lolloway in a lecture to the Institute of Public Administration conference yesterday.

If investment capital were not found, New Zealand’s productivity would fall, standards would be reduced and restrictions would be multiplied, said Mr Holloway, Minister of Industries and Commerce, in the last Labour Government. He was speaking on “Government Policies and Assistance in Manufacturing Development.”

It could well be time to change direction a little in New Zealand, to encourage m jre openly, and with real effort, those people who ought a little of tomorrow, t ther for themselves or the country, he said. The only untapped internal s urce of capital was from the wage and salary earner r d other medium-income g.oups. Exhortations and patriotic fervour had brought results in war-time. But in race-time something more was required. The Government should exempt at least the first £lOO of all unearned income from payment of tax. The over-all p. iblem was total gross investment; the task of channelling a share to manufacturing was a separate

Overseas Holdings Mr Holloway said there v as a danger an too much of our equity holding being ■ntrolled from outside New Zealand. Many industries and servicing undertakings such a- shipping, banks, insurance.

the motor industry, oil. hirepurchase, radio and television were controlled from outside New Zealand. This development was natural but should be restrained where possible. It must be realised, said Mr Holloway, that a monopoly was sometimes the most economic way to supply New Zealand. Management might sometimes be efficient in its own pedantic manner. But New Zealand did lack an appreciation of the value of the commercial risk-taker or initiator or developer of ideas. “Our easy international selling in the last 25 to 30 years has left a gap in the ranks of true salesmen,” he said. “Selling and marketing is a specialised vocation. I; must not be left in the hands of enthusiastic amateurs.”

Mr Holloway said that if manufacturing were to play a proper part in developing of New Zealand’s exports of those products which were not only possible, but lucra-

tive. export houses must be developed. In the first instance, it seemed that some Government financial assistance was necessary. At least so far no private sources had really bothered to develop this field. The need to develop industry was a national emergency. he said. New Zealand still lacked that spirit of purpose, or. perhaps adventure, that had marked the commercial development of the United Kingdom after the 1939-45 war and certainly of Australia. Europe and Japan during the last 15 years. The urgency to develop industry in New Zealand, he said, was not realised but the emergency made a call on patriotism. “No Lethargy” There is no reason why New Zealanders should slip back into a lethargic coma,” said Mr Holloway.

New Zealand was faced, he said, with an economic system that demanded a maximum of prosperity; a political system that depended on persuasion more than direction; a high standard of living with security for everyone; satisfying, but with a tendency to dullness without an incentive additive; a commercial community, in the main happily drifting along on the comfortable profits of a consumer demand evenly spread by taxation and welfare payments. “Can we say that most people are interested in the future or have they been soothed with the syrup of complacency?” asked Mr Holloway.

To increase national earnings. to maintain and improve living standards, and to retain prosperity, he said. New Zealand had only one solution —to produce more goods