Sharemarket fall fastest since war

Press, Volume CXIII, Issue 33413, 20 December 1973, Page 19

Sharemarket fall fastest since war

(New Zealand Press Associanon* DUNEDIN. December IS. The sharemarket in 1973 had suffered the fastest decline since World War 11, and this could be attributed to disenchantment with the policies of the present Administration — an erosion of confidence in the Labour Government.

Mr H. R. Wilson, chairman j of the Dunedin Stock Ex-; change, said while delivering his annual report to the ex-j change, that measured by the New Zealand United index,; share prices fell 21 per cent; in five months between July! and December. In the post-war era theperiods of price decline had. averaged less than 17 per - cent in value, and lasted; about 19 months.

At a time when the New Zealand economy was enjoying full employment, a level of overseas reserves which had touched slloom for the first time, and company earnings which show satisfactory levels, Mr Wilson asked how the present malaise could be explained; he concluded it was disenchantment with Labour policies. “The first six months of 1973 saw a stock market enjoying too much the present fruits of buoyant business, and not concerned enough to see that inflation in general, and Government spending in particular, demanded payment of a price which could only be met through increased taxation.” Because of a major taxation change companies had to bear the burden, he said, with a result that company tax rates were lifted from 45 per cent to more than 51 per cent. “It is not surprising that the Government fulfilled its pre-election promise to cancel payroll tax. Much more had been taken away than given, and still the basic inequity remains that, company dividends are assessed for tax in the hands of the recipients, even though the I profits from which those dividends are paid have been ; fully taxed already,” Mi I Wilson said.