Manawatu Evening Standard. FRIDAY, SEPTEMBER 27, 1940 COMPULSORY LOAN.

Manawatu Standard, Volume LX, Issue 257, 27 September 1940, Page 6

Manawatu Evening Standard. FRIDAY, SEPTEMBER 27, 1940 COMPULSORY LOAN.

The Minister of Finance lias at last issued tlie prospectus of the Government’s compulsory loan. Based on the income tax payments made last February it is estimated to produce £8,0(10,000. The need for such a loan has not escaped public attention and warning of it was given in the Budget. More recent statements made it clear that the Government had finally determined the matter, though it had been hoped by many people that the necessary legislation would have been sought through Parliament, the proper source, where the matter would have been fully debated. The country’s war expenditure is on a high scale. In the current fiscal period it is estimated at £38,000,000, half of which will be spent in New Zealand. To provide this sum special taxation has been imposed on all classes, many of whom have already made free of interest loans or gifts for war purposes. Borrowing, however, is a prime necessity of the times if the war effort is to be completely financed, and many people will recognise this fact freely. The loan period is for thirteen years and until October 1, 1943, no interest will be paid; thereafter the rate will be 2-i per cent., so that with repayment at the end of the period the effective rate would be a little less than 2 per cent. People who have already made gifts or loans to the Government for war purposes have the right to take these sums into consideration. Contributors will be required to make their payment in three amounts spread over six months to March 25, 1941, and this will be a help in many cases.

As stated the estimated total is £8,000,000 and individuals and companies will be asked to pay a sum equal to their income-tax charge for 1939-40, decreased in the case of the former by £SO and of the latter by £7O. There is therefore no liability upon those who paid less than these sums, but income free of income-tax is to be deemed to have been subject to the tax in computing the minimum subscription. Not all the money will . be required in this country, as the Minister intends that portion will be used to meet expenditure abroad and thus relieve the drain upon the British Government’s resources. It was estimated that war payments from loan moneys would amount to £3,650,000 during the _ current year, so that something like £4,000,000 should be available for overseas. The Government has made provision for the stock being used against payment of death duties, being accepted at par, and there is also provision in current regulations for people suffering hardship to appeal. VV ere this not so then not a few people would find the position somewhat embarrassing', especially those on fixed in-

comes who have found the cost of living rising steadily against them and the opportunities of making savings vanishing overnight. The Minister also makes references to local requirements, but never was the time more urgent for a strict curtailment of Government expenditure, so that the fullest possible sum may be made available for the war effort. Domestic spending calls for a rigid overhaul so that the future, with its still greater load of taxation for individuals and companies, may not become oppressively burdensome. Bearing in mind the great strain through which British people are passing in the Homeland, their kith and kin in this country will no doubt view the loan as another way in which to express their determination to do everything possible to win this war, even though compulsion is obnoxious to British people.