INDUSTRIAL INCENTIVE.

New Zealand Herald, Volume LXIX, Issue 21233, 13 July 1932, Page 12

INDUSTRIAL INCENTIVE.

Sir, —Mr. Hickey ascribes the enormous debt and high taxation to the public en-, terprises established during the last 40 years; but the facts show that the statement is absurd. Tho extension of fbs functions of the State took place during tho Liberal-Labour regime, which ended in 1912; the public debt was then £84,000,000; it has since increased by some £200,000,000. It will thus he seen that the cost of these State enterprises must comprise only a comparatively small part of our debt. An official statement in the 1931 Year Book sayslu every department theso new activities, as well as the old, directly successfu, while the indirect benefits are incapab e of measurement. A considerable portion of the annual interest on tho debt, although paid out of tho Consolidated Fun in the first instance, does not fall on the taxpayer as such, tho revenue derived from several of the more important undertakings being sufficient to meet the interest on the money borrowed in respec of them." A typical example of how theso State institutions are ruining tue Dominion is tbe State Fire Insurance, established in 1905, with a capital 0 £2OOO. Its operations were early responsible for a reduction of 4 on dwellings, offices and similar risks. Until 1929 it has shown an annual income of £258,995, and assets of £960,000, and for the 11 years ending 1927 had paid in income tax £I66,SWMr. Hickey is in error in stating that tr»- - hugo pre-war profits of the German rai wavs were made at tho expense of people. In a prewar controversy in England it was shown that the iron and sMi industry in Britain was at a disa age in competition with Germany, because Of tho special low rates for iron ore on tho German railways. State railways < only be run profitably at rates which pe mit of the successful deyelopment national industries. What is_ the. less we have not yet fully learnt in this JJ minion? Sir Leo. Money is responsible for the statement (1912) that, kingdom of Prussia, m m;aking i gets, starts with one-half of its required ready to its hand Itl J cs l ,ost. of profits on railways, forests 'I office and other revenue-produangund^ takings.'! J. S. Montgomery