GOLD EXPORT TAX

Evening Star, Issue 21630, 27 January 1934, Page 10

GOLD EXPORT TAX

INDUSTRY REQUESTS CANCELLATION NOT APPROVED BY PRIME MINISTER Cancellation or reduction of the export tax of 12s Gd.an ounce on .gold' was sought by a deputation from the Otago Chamber of Mines to the Prime Minister yesterday afternoon. Mr Forbes expressed the opinion that the present high price of gold should be sufficient to stimulate the industry. Mr W. A. Mitson, who was the principal spokesman, said that the export tax operated against mining companies struggling to make headway. _ In respect to such companies as Rimu and Waihi the raising of the exchange to 25 per cent, had helped them considerably, and they were in a position to afford ,tho tax'; but. in the majority of eases the tax was making all the difference between success and failure. He suggested that the removal of the tax could be substituted by an income tax, which would affect only, those companies which were successful. He contended that the operation of the export tax had prevented a certain amount of overseas capital from coming to New Zealand, because in Australia there was no export tax on gold. The speaker went on, to deal with the high prices received by primary producers in 1914 and by woolgrowers from recent sales, and pointed out that no export tax was applied in those cases. Mr Forbes said that woolgrowers had had a much harder spin than gold miners, .and he instanced a case where the Government had received only, about 2d a lb on a very large consignment of wool. Mr J. G: Neill submitted that with the Government’s geophysical survey charge 15 per cent, of the price of gold had to be deducted before wages and other working expenses could be paid. It was necessary to do everything possible to encourage the investment: of capital if the industry was to win very much gold. ■ . 1 /, In reply the Prime. Minister said that it was very necessary "for the Government to get revenue,! and there was always an objection from those being taxed. The price of, gold to-day was a very high one, and if it was not sufficient to stimulate the industry he did not know what would. He asked what was the net return of gold to-day. i Mr Mitson: £6 10s clear of the tax. Continuing, Mr' Forbes said that the finances of the country were not in;a sufficiently buoyant state to make : a reduction of the tax. In\ regard to overseas capital being frightened, off, Parliament had heard of no particular instance. Mr Mitson: The Otago Chamber of Mines informed the Hon. Minister of Finance that if the export tax was removed the chamber would undertake to spend £IOO,OOO in Central Otago, The Prime Minister assured the deputation that nothing could be done in the meantime, but if a reduction was effected in'the existing exchange—a reduction not contemplated at the mo-, ment —the Government -would review the question of effecting a proportionate reduction in the export tax on gold. He also promised to discuss with the' Minister of Mines (Mr C. E. Macmillan) the possibility of leaking the tax chargeable on the basis of fine gold instead of, as at present, on the weight of gold after it had been melted.