DOMINION FINANCE.

New Zealand Herald, Volume LIX, Issue 18175, 22 August 1922, Page 9

DOMINION FINANCE.

BURDENSOME TAXATION.

PUBLIC DEBT CHARGES.

MR. PEMBER REIVES' WARNING.

[:\bom our own corrkskwdent.]

LONDON. July 15. In the course of his speech at th» annual meeting of the National Bank of New Zealand, the Hon. W. Pember Reeves (chairman of directors), spoke at some length concerning taxation and borrowing in the Dominion.

Whereas the larger trader, hs said, had had hia taxation increased from Is 3d to 8s 9d in the £ since 1914—a sevenfold increase— tho taxation of the National Bank had increased about 25 times. A bank's income tax in New Zealand, he explained, bore no relation to its profits, but was assessed entirely upon average assets and liabilities.

" We are aware," ho said, " that taxation in New Zealand must be heavy, and we are prepared to pay our fair share of it. All we ask is that it should be levied on a just and scientific basis, and that the public should recognise that we are carrying at least our share of a burden which is beginning to press heavily on tho entire New Zealand community. It cannot be gainsaid that taxation in Now Zealand is now really burdensome. Last year it reached a fipura which meant an impost of between £18 and £19 a head of the population.

" Rough, and Discouraging."

" This is a weight which no industrial community can support with any ease, except in times of phenomenally high prices. Prices have shrunk in New Zealand, and one has only to read the newspapers there to see that the fiscal burden is being complained of as scarcely tolerable. In one respect, moreover, tho load is aggravated by the rough and discouraging system under which income tax is levied on the large companies. It is satisfactory that the New Zealand Government has appointed a commission, whose members represent various important interests, to examine into the system by whidh the income tax is levied and to report thereon. Wo have laid our case before the Government more than once, and shall continue to do so." With regard to public finance, Mr. Reeves uttered something in tho nature of a warning. " Some months ago," he said, " tho Eominion succeeded in floating a 5 per cent, loan in London on extremely favourable terms, and New Ze» land 5 per cents, had at moments stood higher in the London market than similar securities of the Imperial Government. The incident was naturally made a sublet of comment in tho English press. 'T'h'R comment, instly complimentary to Neiv Zealand as a field for investment must have been satisfactory to old colonists, who could remember the persistent newspaper attacks made in London upon New Zealand in the nineties —attacks generally based upon a misunderstanding of certain features of, our legislation. However, that may be, the. British investor nowadays has confidence in New Zealand.

Limit to Borrowing. "It is to be trusted that those who control her public finances in JLbe near future will do all in their power to conserve this confidence," Mr. Beeves con--1 tinued. "It might*, be imperilled if pubHe borrowing were continued beyond the foint where prudence calls for a halt, t was all very well to float loans every year or two in former days when the New Zealand public debt was not swollen to its present dimensions, and when taxation was low. enough to bo borne lightheartedlv. But the permanent charges for interest on the public debts and for pensions in New Zealand have now risen to between £12 and £13 per head of the population. With this formidable figure in front of them, thoughtful New Zealanders are probably recognising that the time has come for hesitation in making continued large additions to the public debfc - , i i " H is true that war has ceased, but in place of the clash of arras we see puzzled and puzzling financial conferences at -which bankrupt or embarrassed nations strive to hammer out methods for stabilising kinematic currencies, and for obtaining credit while dodging To borrow a simile from the tueatrical world, one may say that on the European stage the drama of " The Tempest has been succeeded by "The Beggar s Opera." A young country like New Zealand can no more control world-Wide financial causes of disturbance than » ship at sea can regulate a storm. But the ship's captain can take in sail; the watch on deck can keen a bright look-out; and, her steersmen can have a firm drasp oil the helm when running before the gale.-