NOT COMPATIBLE

Evening Post, Volume CXXXVIII, Issue 57, 5 September 1944, Page 6

NOT COMPATIBLE

WAR TAXES AND PEACE

INDUSTRIAL REHABILITATION

Though appreciative of the Prime Minister's clear statement of the Government's recognition of the importance of the manufacturing industry, manufacturers were, nevertheless, deeply concerned and perplexed at the Governmental expressions on taxation and rehabilitation during the recent Land and Income Tax (Annual) Bill debate, said Mr. Lan Matheson, president of the New Zealand Manufacturers'* Federation, today. In one breath industry was championed as essential to the welfare and full employment of the country in the future, but in the next it was said that there could be no easing of heavy war taxation. ■■,'■■■ These two views were incompatible, as unless industry was allowed to make some provision for its war-to-peace conversion its chances of rehabilitating i a large number of servicemen were remote. "We agree with the Prime Minister when he says that New Zealand will not be put of the war completely until the last returned man is rehabilitated," said Mr. Matheson, "but we fail to see how industry is going to rehabilitate tens of thousands of these men, if industry is not itself first rehabilitated. We cannot create the opportunities of peace, and continue to pay out practically the whole of our earnings in heavy taxation;" ... CONVERSION COSTS MONEY. Kealising that money had to be found for war purposes, manufacturers were not asking for any relief from taxation which would give them an unfair advantage over any other section of the community. They asked for relief so that money would be available for reconversion and reconstruction specifically, Mr. Matheson pointed out. No time could be lost. It cost money to convert factories from war to peace production. "We ask for relief only that money can be diverted by private enterprise to the process of re-establishing the normal flow "of business which. we genuinely believe to be necessary for the solution of most of our rehabilitation problems," he declared. "Taking the recent remarks of the Prime" Minister and the Minister of Industries and Commerce at their face value, and reconciling them with what is apparently the Government's taxation policy, they^must be open to interpretation as a subtle means of bringing manufacturing industry under the cloak of Socialism," Mr. Matheson continued. "The Government apparently desires to be in the position of handing out financial assistance to industry in preference to providing the assistance by refraining from collecting the taxes in the first place. Is this designed to leave the Government in a better position to dictate the future of industry, in which connection Mr. Fraser said': 'Industries would be established, and the questions of advancing money if necessary, or subsidising some of them, would have to be considered'?. Is this industry's reward for thrashing its plant and machinery in producing the munitions and equipment of war, and in readily accepting exorbitantly high taxation rates as a necessity during the war emergency?" EXAMPLE OF BRITAIN. Manufacturers had nothing to hide when they pointed to liquid capital as the life-blood and-adequate capital re 7 serves as the heart of industry. These facts.were recognised tangibly in Great Britain and other countries, particularly the former, where, in presenting the last British Budget, the Chancellor of the Exchequer, Sir John Anderson, observed: "There are vital preparations for re-, construction which-we can make in the field of taxation, as in other fields. We must prepare such measures as we can devise to give industrial enterprise a fair chance to meet the challenge which the future holds for all of us.. Industry is entitled to know where it stands, and there is, in my judgment, a very definite contribution- which taxation policy can, and should, make to the problems of reconstruction." - "This attitude to taxation on industry is conspicuous. by its absence in New Zealand." said Mr. Matheson, who added that, so sincere were New Zealand manufacturers in their beliefs on the question that they now suggested to the Government that provision be I made immediately for industry to so: ■ -tax-free funds aside under n'ecess-*rv j supervision by the land :>nd Ineonv1 Tax Departments. but oar-marked specifically t'ov vrcnrv-r-:.:;---\