TAX REDUCTION

Nelson Evening Mail, Volume 79, 21 July 1944, Page 4

TAX REDUCTION

| “PRESENT NOT TOO EARLY” | VIEWS <>l MANUFACTURERS Wellington, This Day. "From present indications, and with a lull comprehension of the* financial side of post-war industrial reconstruction, manufacturers feel that the present is not too early for the Government to relax taxation sufficiently to allow the accumulation of reserves specifically for post-war reconstruction." said Mr I. Matheson. president of the New Zealand Manufacturers’ Federation yesterday. Mr Matheson said it was obvious that manufacturers thought that war should not be a period of extra or normal profit making for themselves or any other section of the community. At the same time it should be realised that it was an unsound practice for industry and commerce to pay out in taxation practically all their legitimate earnings during a period when some of such earnings, should be earmarked for post-war reconstruction. Manufacturers were the first to admit that the Government's recently announced deferred maintenance taxation exemption scheme was in the spirit of the principle which he was enunciating, but they felt that that element should and must be extended to cover aspects of reconstruction wider than those of deferred maintenance alone. All shades of commercial and productive endeavour in the Dominion were faced with an enormous and costly task, on both the physical and financial sides of conversion to peacetime work. "Apart from the physical acts of reconverting plant, re-engaging staffs, catching up on deferred maintenance, bringing techniques and processes up to date with advancements made overseas during the war—each of which obviously calls for big reserves of industrial working capital and managerial talent —is the necessity for business and commercial vigour.” said Mr Matheson. “Business cannot be conducted on the lines of a pared-to-the-bone theoretical experiment in capital economy. The life-blood of commercial endeavour is represented in adequate capital. The so-called rhythmic fluctuation of the trade cycle demands that business should possess sufficient financial padding to cushion its jolts. If industry and commerce are to re-enter their respective spheres in useful and healthy form, now i.s the time for them to commence assembling their financial equipment.” The request that was being made was not a veiled one for unlicensed profit accumulation, but for something essential to achieve full and speedy national economic rehabilitation through the Government lifting some of the warnecessitated taxtion load, thus allowing industry and commerce to prepare for their post-war obligations and commitments.