INTEREST REDUCTION.

New Zealand Herald, Volume LXIX, Issue 21132, 15 March 1932, Page 12

INTEREST REDUCTION.

Sir,—ln reference to the controversy regarding above, neither Mr. Seaman nor anyone else would appear to have given any consideration whatsoever to those who have spent a lifetime of self-denial and sacrifice in saving for their old age and have invested such savings in Government and local body debentures on account of I heir assumed strength of guarantee. Why should these people have their small incomes reduced while Government and local body servants still remain in enjoyment of comfortablo superannuation allowances, which have been largely subscribed by the tax paying community, including those who it has been recommended shall have their income reduced by a compulsory reduction iri interest? There is no justice of any kind in such a proposal. Further, why should ratepayers have their rates reduced at the expense of those who have, not been responsible for the extravagance of tho local bodies? Surely it is for the, ratepayers who elect them to shoulder tho responsibility. Tho same argument applies to Government. It is the taxpayers who should pay for the follies of the Governments they have elected; i.e., over-staffing of departments and carrying out, of useless and extravagant works, etc. A Possible Sufferer.

Sir, —I am sure it was with considerable relief that many read in Monday's Herald the sound and moderate leader on the question of interest reduction by Parliament on Government and local body loans. There is a widespread delusion that the holding of Government and local body securities is confined almost exclusively to very well-to-do people. As a matter of fact, many of us, who have invested all our small capital in these bonds on the strength of their supposed perfect safety, have incomes which would bo scorned by a plumber or a tram conductor. This proposed tax has every defect which a tax can well have. It is a class tax, affecting only a small proportion of the population ; it takes no account of the ability of the taxee to pay it; it is, in essence, pure repudiation and an act of bankruptcy and, inevitably, will so damago the credit of the country that any present gain will be more than offset by future loss. It is also a direct discouragement of thrift or economy; for what use is it to save when by Act, of Parliament thoso savings may be wholly or partly taken from you ? It is comforting to knowthat, so far, this suggestion of the commission is only a majority report, and that one member with a good Scottish name and sound Scottish sense is resolutely opposed to this proposal It has riot yet been adopted, so far as we know, as the policy of the Government, arid it would be something of a tragedy to find that the head of our present Government, who stood behind Sir Joseph Ward in his advocacy of profligate borrowing, is also posing as the lirst Prime Minister to sponsor a policy of repudiation, excellently as these two policies run in double harness. The commission docs not, for ob vious reasons, suggest extending this tax to foreign holders of our bonds, but 1 would point out that tho moral turpitude of picking your brother's pocket, though probably less unpleasant in its consequences, is just as great as picking a stranger's. Chas. Barwell.