"NO INTERFERENCE"

Evening Post, Volume CX, Issue 69, 18 September 1930, Page 10

"NO INTERFERENCE"

GOVERNMENT'S ATTITUDE

TO FOREIGN COMPANIES

■'In concludis-g a statement issued to-day in reply to assertions published concerning the operation of the new film hire lax, the Acting-Prime Minister (the Hon. E. A. Ransom) declares lhat the industry must clearly understand that the Government will not tolerate interference in the domestic affairs of the Dominion on the part of any foreign corporations. He maintains that the films distributors have to explain why the tax.'' confiscatory.

"My tention has been drawn," said ii .ansom, "to misleading statements in the Press concerning the film hjre tax and its effect on the industry, and also references to a boycott of New Zealand by American film organisations. Objections a,ppear to bo raised principally on the ground that the new tax will bring in more than Was estimated by the Government.

"On this point I have to say that tlie revenue to- be derived from the tax during the balance of tho financial year is,- after all, only an estimate in. which there is, no doubt, room for differences of opinion, but if the tax does bring in more than is anticipated by the Government, it can only mean that the act rentals, after deducting administrative expenses and the amount on which income tax is payable, are greater than was estimated. In fact, if the ' rentals are greater it simply xneahs that the surplus remaining for the film companies is greater than if the yield from the tax was less. Thus the renters should be the last to complain of the tax producing more than ss, estimated. The rate of tax is definitely fixed at 25 per cent, in the ease of; American sound films, and it is only payable on actual net rentals received, whether the amount be large or small.

"Prom a Budgeting point of view, it is inevitable that some items will produce more and some less than the Estimates, and if the Government were to consider making; reductions in items that showed indications of producing wore, there "would be little hope of balancing the Budget as a whole. EQUAL TO CUSTOMS DUTY. . ■"As has previously been explained, the film hire tax is as near" as possible the equivalent of an ad valorem Customs duty on sound film, having regard to the fact that the real value of a film is the. amount of rentals it will produce en being exhibited. Some films earn large amounts and some very little. Under these circumstances, to have Increased the flat rato footage tax by 2d. or ; 3d per foot to obtain the additional revenue would obviously be quite inequitable, and in view of the large clearances from bond prior to the tariff changes would have been largely _ ineffective from a revenue point of view this year. .On an ad valorem basis at 25 per cent.-the tax has been referred to in the Press by representatives of the trade-as eonfiscatory and "such as to lender trading in New Zealand quite impossible. As to this, I need only gay that a perusal of'the tariff will show that many articles pay higher ad valorem rates. On apparel and boots, for instance, the rate is 47 per cent. A GOVERNMENT LOCK-OUT. "It has been stated by the trade that the threatened refusal by the American film distributors to supply films to New Zealand is a 'lock-out' by the Government and not a 'boycott' by the distributors. In this connection the following points have already been wade by the Minister of Internal Affairs in reply to a recent deputation on the matter: — (1) That the tax as in New Zealand boro approximately the same proportion to rentals received by the distributors es did the Australian taxation. (2) That the New Zealand exhibitors ■were paying a larger proportion of the total rentals than in previous years. (3) That the increased amount paid by the New Zealand exhibitors would be more than sufficient to pay the film hire tax. (4) That the net iceeipts for the present year from film hires after paying the tax, would be double the net receipts collected in the silent film days. The film distributors have therefore to explain why the tax in New > Zealand is confiscatory and causes a "lock-out," while the taxation, in! •Australia, involving the same percentage of gross rentals, can be ac- j cepted with more or less equanimity. THE BRITISH ATTITUDE. "May I also point out that the British film producers, who share the principle involved in the tax, have raised no such questions as 'lock-outs? and 'boycotts,' but on tho contrary1 have assured the Government of their determination to carry on, with a hope that when times are better the Government will agree to review the matter. "Finally, my attention has been drawn to a published statement as follows: — I

". 'The distributors' action is not a bluff. Having withdrawn under Hays's instructions they must stay out until Hays gives them permission to recommence business.' "

In this connection let me say the industry must clearly understand that the Government will not tolerate interference in the domestic affairs of the Dominion on the part of any foreign corporations.