TAXATION

Nelson Evening Mail, Volume LXI, 18 June 1926, Page 2

TAXATION

••BURDEN STILL VEIIY SEVERE"| l (Special to Mail.) WELLINGTON, This Day j The following, remarks on taxation wofo made by the chairman/ of directors (Sir George Elliot) at the. annual meeting of Elm Rank of NOw Zeafari.il j this afternoon. j Tlie burden of taxation is still very I severe, and there does not, appear to be j any rally prospect of a substantial re-J duct ion. Taxpayers will always grum-j ble, but provided prudence and economy :-n);e exercised by the Government in its administration, we should all accept tlie : position with as good a. grace as possible, never forgetting that. We are stil! !paying the price, and must for many years continue to pay the price, of freedom for foreign domination. j We do, however, feel the eompeti-' lion that Ranks have to face from Gov-, eminent Departments, which pay only trifling taxation, or no taxation at alt, I in connection with their activities. For; instance, v tho average amount of loans current in the Government Advance Dc-' partment for the vear ended 31st March .1925, was appro'ximateljy I I The income tax paid by the Department! i was £4,757, whereas, on a similar I amount of advances, any Rank trading in the Dominion would require to pay income lax amounting fo £70,875. j Another instance — i The- Post Office Savings Rank has de-l posits of over £47,000,000, on which l ,no income tax wheatever is paid. If any' Joint Stock 'Rank hail such an amount; on deposit and lent it out, less a requisite, cash reserve, it would have to pay' annually about £300,000 in income tax alone. It is no argument, to say that it would merely bo taking money out of one Government pocket and putting it into another for the Post Office Savings Rank to pay taxes oi the same proportion as the Joint Stock Ranks. That is not the case; the real effect would be that the- Savings Bank would have to pay its depositors almost j| per cent less interest than it does at present j or, looking at the matter from another point of view, by reason of the nonpayment' of income tax, the Savings Rank can afford to pay jj per cent more for its deposits than a Joint Stock BanK tan afford.

Probably nowhere else in the English speaking world does a Government compete with the Ranks on such lines as in this country; The function of a Government Savings Rank is to encourage thrift amongst the poorer classes of the community by providing undoubted security for, the investment of their "savings. In Great Britain no depositor can pay in to the Post Office Savings Bank mora than £SOO in any one year, on which sum he is allowed interest at the rate of per cent per annum ; in the United States the limit of a deposit account is 2,500 dollars, and the rate of interest 2 per cent per annum. In New Zealand the limit is £5,000, and interest at the. rate of 4 per cent is paid on the first £SOO and 64 per cent is paid on the. balance. If the Post Savings Rank deposits were in the hands of the Banks, they would be employed in the developmbent of the pastoral, agricultural and industrial interests; as it is, they are used by the Government, and are diverted from tiie channels in which they could most usefully be employed. £■ - In 1915 the Post Office Savings Bank had on deposit 22,166,365 In 1924 46,948,628 In 1915 the Joint Stock Ranks had on deposit 31,433,653 And in 1924 49,502,499 These figures speak for themselves and completely disprove the allegation of certain critics who declare that the Government favours the Banks.