THE TRADING BANKS.

Evening Star, Issue 24010, 8 October 1941, Page 6

THE TRADING BANKS.

In the past the trading banks of New Zealand have been described in Labour circles as monopolistic concerns, making undue profits and otherwise harassing the industries of the country. Those who go the whole way have advocated that they should be taken over by the Government. The fact that the banks have rendered inestimable service in the development of this country has been either ignored or denied. Mr Nash has never gone to the length of making the acquisition of these concerns an immediate issue. On more than one occasion ho has said that if the banks did their job there would be no interference with them. That such a condition was being fulfilled was made clear by the Minister in the House of Representatives yesterday when a clause in tho Laud and Income Tax Amendment Bill relating to the assessment of banking companies was under discussion. Remarking that the banks had been helpful since the war started, he added that they were rendering a service as efficiently and at as low a cost as tho State could do it. The purpose of the clause referred to is to remove anomalies in the existing arbitrary system of assessment for taxation that, in the words of the Minister, are grossly unfair to the banks. Under the present method the average assets and liabilities over each of the four quarters are taken. Divided by four after certain deductions, the average for the year is obtained. Then 30s per cent, of that average is taken. This is assumed to be the profit the banks are making in that year. From the applicable rate on that assumed profit tho tax is assessed. Under the Bill passed yesterday the assessment will ho changed from an assumed profit to tho actual profit, and the banks will be taxed on the. same basis as ordinary trading companies. Thus an act of

simple justice is done to the banks. The method that has been employed is understood to have been originally introduced many years ago on the ground that the banks at that time were not utilising their assets to their full extent for the benefit of the community.