DOMINION’S WEALTH

Evening Star, Issue 22560, 30 January 1937, Page 10

DOMINION’S WEALTH

ASSESSED AT £880,000,000 NATIONAL INDEBTEDNESS Methods of assessing the private and public wealth of the Dominion are contained in the 1937 edition of the New Zealand Official Year Book, aggregate private wealth, excluding Maoris being estimated at £673,000,000 at the end of 1935, and the public wealth at approximately £342,000,000. An addition of 4 per cent, for Maoris brings the private wealth to £700,000,000 and the national wealth is given as £BBO,000.000 in 1935. . Estimates of the private wealth of New Zealand are arrived at on the assumption that the wealth per head of the living is approximately equal to that left by the average person dying. The fact that the younger and more numerous members of the population do not possess as much accumulated wealth as the older members, taken in conjunction with the fact that the* death-rate varies with age, renders it necessary for this purpose to divide the population into age groups. The average wealth of persons dying within any 9 no age-group being known, the average wealth of living persons belonging to that age-group is assumed to be identical, and an estimate of the total private wealth of the Dominion is arrived at by weighting the average wealth of persons in each quinquennial age-group by the number of persons in that group. The average wealth of deceased persons is obtained by a consideration of the estates certified for stamp duty. The number of estates dealt with in any period,, however, is usually equal to about one-third only of the total dea.ths registered during that period, and as most persons leave some estate, however small, it is necessary to make some allowance for those which have not passed through the Stamp Duties Office. It should be noted in this connection that estates under £I,OOO escape stamp duty, and if under £SOO, succession duty, though many estates of a lower value than the figures indicated are passed for probate or letters 'of administration. An arbitrary allowance is made for unrecorded estates of persons aged 15 years or over. No allowance at all is made for estates of persons under 15. FIVE YEARS’ EXPERIENCE. To obviate fictitious results due to the infrequency of very large estates in the returns, combined with the lapse of time between death and the certification of the estate,' it is necessary to base the estimate on the experience of a series of years. On the other hand, movements in values render it undesir-. able to take a very long period, and the New Zealand estimate is usually, based on the average of the last five years available. In a time of rapidlymoving values, even a five-year uncorrected average will give incorrect results. The present figures have accordingly been based upon a triennial average. As the effects of the depression have been felt over the whole period, conclusion.should not be_ seriously jeopardised by movements in values. Based, tpen, on the estate and death figures for the tnennium 1933-35, the aggregate private wealth estimate for the Dominion at the end of 1935 is £673,000,000, of which £468,000,000 represents the wealth of. men, and £205 ; - 000,000 that Of women. The total is equal to £451 per head of all population, excluding Maoris, and £706 per head of adult population (aged 21 and over). It is obvious that estimates of private wealth based on the probate system are approximate only, owing to the various factors involved. For example, part of the wealth of deceased estates consists of insurance policies. In the probate returns the maturity value of the policy is taken, whereas among the living the average _ surrender values of policies in force is much below the maturity value. Against this, however, is the fact that pensions and annuities enjoyed by the living do not enter into deceased estates, while there is also a pronounced tendency towards conservation in the valuation of .personal property for death duty purposes. Further, a not inconsiderable amount of property is disposed of before death by way of gift, and does not appear in the probate returns. It should be explained that the computation of private wealth relates to the population exclusive of Maoris. The inclusion of Maoris would not affect the per caput rate to any extent, but involves the addition of less than 5 per cent, of the total. An addition for Maoris of 4 per cent, to the aggregate figures previously given for 1935 would bring the estimated private wealth of the Dominion to £700,000,000. NATIONAL WEALTH. The public wealth of the Dominion has been estimated at approximately £342,000,000, the State advances outstanding being included. No deduction, of course, has been made for indebtedness of the Government and of local governing bodies. Of the gross Public Debt at March 31, 1935, £117,000,000 was domiciled in New Zealand, and of the gross debt of local governing bodies (other than hospital boards) £46,000,000 was domiciled in the Dominion, exclusive of the £6,000,000 borrowed from the Government, allowance for which has already been made in the estimaation of the approximate public wealth. The hospital boards’ debt of £1,225,000 (less £201,000 accrued sinking funds) may be assumed to be mainly domiciled in New Zealand. The debt of the Government and all local bodies domiciled in New Zealand thus aggregates £164,000,000 which requires to be deduced from the aggregate of public and private wealth in order to arrive at an estimate of the national wealth. The estiated national wealth is therefore £880,000,000.