LABOUR'S POLICY

New Zealand Herald, Volume LXXIV, Issue 22708, 21 April 1937, Page 18

LABOUR'S POLICY

FINANCIAL OUTLOOK BANK CHAIRMAN'S VIEW EXPERIMENTAL LEGISLATION , f - [from our own correspondent] LONDON. April 3 The attention of London' financial circles has once again been directed to the "experimental policies" of the New Zealand Labour Government, this time by the remarks of the chairman of the Bank of Australasia, Mr. F. V. C. Livingstone-Learmonth. The Times says that at the annual general meeting his references "must have left some doubt as to whether the Labour Government is not taking risks with its credit. It is difficult to see how the price paid to a producer can be artificially maintained above world market prices without creating unbearable internal burdens in taxation and raising internal prices to levels that will counteract any advantage accruing to the producer." The Financial Times said: —"It is rather difficult to discern where the experimental policies of the present Government will lead the country ultimately. There have been already some adverse reactions upon the banks, but the chairman is not without hope that these will be offset in part by some relief from long-existent taxation methods regarded as inequitable."

The Standard of Living Mr. Livingstone-Learmonth, whose comments upon the Australian economic position were regarded as distinctly encouraging, said of New Zealand: "You were told by your chairman last year that a Labour Government had been recently put into power by an overwhelming majority of votes, and they have been in office for some 16 months. Their very laudable desire to better the living conditions of their countrymen, which should indeed be shared by all Governments irrespective of colour, has led them into experimental channels which it is hoped they will fully explore before developing.

Taxation of Banks "The Government's first step has been the socialisation of th© dairying industry, and having paid the producer a fixed price they have proceeded to sell the output in overseas markets, with tiie result that the banks have ceased to handle the homeward exchange. Only that portion: of the proceeds" cjf the sales not required to finance Government undertakings and debts will be available for the financing of imports into New Zealand. Ihis must result in a diminution of the already slender profits made at some of olir New Zealand branches, but we have some hope that we shall receive more equitable treatment from the present Labour Government than we have had from their predecessors in the matter of taxation, which, hitherto, applied to banks, has been levied on a hypothetical profit which largely exceeds the actual one.

Mortgage Readjustment "The inequity of the present method, which applies solely to banks, has been admitted by more than one National Government in New Zealand, but has not been remedied. We have a promise that it will be looked into by those nbw in power. "An important Act passed in Ivew Zealand during the year, and one which must affect banking interests, and, indeed, the whole business community as it affects the violability of contract, is the Mortgagors and Lessees Renabilitation Act.