INVESTMENT IMPASSE

Evening Post, Volume CXXXIII, Issue 44, 21 February 1942, Page 6

INVESTMENT IMPASSE

The New Zealand sequel to Federal Government control of investment and limitation of company profits is suspension of quotations in New Zealand of Australian shares. As the list of holdings will show, shareholders in the majority of companies operating in Australia, as in New Zealand, are "small people" in a financial sense. But they submit to the tax-gatherer without whining; their dividends are euphemistically described as "unearned income" and taxed on a higher scale than earned, yet such income may well represent! the savings, possibly the fruit, of long years of drudgery. This direct action of the Federal Government is= against these very "small people," as it is against the large holders of shares held in industrial and similar enterprises providing employment for the working man. Is it any wonder, then, that the New Zealand Stock Exchanges have ceased to quote Australian shares until the present position as to the rights of investors is more clearly defined than the Federal Government has defined them? But there are serious aspects of this decision of the Australian Government which will be apparent to the New Zealand Government. All investments outside New Zealand, for the time being, are at the disposal of the New Zealand Government. What, then, is their present value in New Zealand, if they are not to be quoted? What is their value, if unquoted, when income or part income from them comes to be taxed, as it will? Moreover, these investments, in many cases, have been pledged .against loans and advances made by the banks, but what are they worth as securities today? If they are "frozen" or otherwise rendered temporarily unmarketable, how will revenue received from them be made up? These and probably other questions the New Zealand Government will, no doubt, submit to the Australian Government. The Dominion Government should make the information fully known to the people of New Zealand if and when it receives it.