GOVERNMENT INTERFERENCE IN BUSINESS ATTACKED

Gisborne Herald, Volume LXXV, Issue 22820, 15 December 1948, Page 10

GOVERNMENT INTERFERENCE IN BUSINESS ATTACKED

(P.A.) WELLINGTON, Dec, 14. “We have reached a stage where a large percentage of the community is striving to do as little as possible while stripping as much as it can from those who do put forward some productive effort,” said Mr. A. Hamilton, retiring chairman, in his address at the annual meeting of the Wellington Stock Exchange today,

* He said that the investment market had been seriously affected in recent months by various restrictions imposed by the Government in its endeavour to draw money from normal investments in an attempt to control inflation.

Premiums on New Issues

Many companies instead of raising temporary loans through their bankers had been compelled to get their shareholders to raise new capital. The next step had been to stipulate a premium on new issue, forcing shareholders taking up shares to pay a greater price for them.

At the same time bankers had been instructed not to make advances to their customers to take up these shares, the result being that many investors who would normally finance the acceptance of new shares by loan against other security found themselves unable to take the shares offered to them, the rights to-buy many new issues consequently being sacrificed at low prices. “It is questionable if such interference has any real value in the long run.” said Mr. Hamilton. “If we are to have sound, efficient industries In this country we should encourage investors to find the necessary capital. Everything cannot be run by the Government of a country, and we have few illustrations of success in this direction.” Condition of. Frustration “Today with constant interference in the affairs of the individual a condidition of frustration has arisen. Those who are endeavouring to function in a normal way are beset by an army ot inspectors and officials who put no effort into production themselves, but seem to glory in raising as many ob stacles as possible in the path of the actual producer.” Britain rose to her strong position and New Zealand was developed by enterprise and bard work, not by numerous Government departments.

Mr. Hamilton said one of the worst features of the present fallacies was the harmful effect on our young people who were being led to believe that a stream of luxuries and high wages would be kept permanently flowing by a beneficient Government. There was even a suggestion they should- be given earlier control in the nation’s affairs. No doubt those advocating the right to vote being advaced to the age of 18 would have their own good reasons for doing so, but it would be a strange state of affairs if a minor who could not be bound by a contract until he reached the age of 21 should rank equal in such a serious matter as the control of the management of a nation. Wonder What Has Struck Them

“When the myths of these modern theories burst through failure to stand the test the pity is that it will be these same young people who will wonder in amazement exactly what has struck them.”

Mr. Hamilton said while it might seem hopeless in this country to expect any reasonable relief from taxation, a deeper consideration of the problem was long overdue. Mr. Nash recently spoke of the soundness of investment in Government loans, including the present tap loan, yet no encouragement had been given to the ordinary investor to deposit his savings in such a loan. The low rate of interest could be overlooked but the heavy penal rate of income-tax heaped on a person who responded to the Government’s pleas could not. With one hand the Government paid interest but the recipient was met around the corner with a demand for excessive taxation because of his thrift.

Some realisation by those in authority of the iniquity of this penal tax on income from investments was evidenced in the recent graded exemption on taxable incomes up to £4ot). But the mere fact that such an exemption w'as kept to low incomes left the feeling that the penalty was retained to hit one particular class. “For too long we have had class legislation and for a community to function happily such an approach to the Government and legislation should be terminated,” said Mr. Hamilton.”