GOLD EXPORT TAX

New Zealand Herald, Volume LXXV, Issue 23165, 11 October 1938, Page 7

GOLD EXPORT TAX

"INDUSTRY CRIPPLED"

CASE FOR REMOVAL MEAGRE RETURN ON CAPITAL *, ■•' •- Trenchant criticism of the gold export tax of 12s 6d an ounce is contained in a statement issued by the New Zealand Gold Producers' Association to shareholders in mining companies. The statement points out that the tax has crippled the industry in New Zealand at a timte when it should be prosperous and assisting the economic condition of the country. "Most New Zealand primary industries are either subsidised, assisted, or maintained by fixation of prices, but gold mining is the only primary industry which is j>enalised by an export tax," continues the statement. "This tax is a tax on production, whether the producer makes a profit or a loss, and in many cases amounts to a capital levy. Employment for 6000 Men "There are 25,000 investors in gold mining in New Zealand and 6000 men employed in the industry. Of the three types of mining, alluvial and quartz, which employ the greater proportion of the men in the industry, are declining rapidly, The returns are being maintained by the larger dredging concerns, which employ comparatively few men.

"Should the 6000 men employed in the industry be deprived of their employment through lack of Government encouragement, it would involve the country in an annual expenditure of at least £1,200,000 to maintain them on public works at £4> a week. The gold tax collected is only a little otfer £IOO,OOO annually. New Zealand has produced gold to the value of £100,000,000 to date, but annual production is almost stationary, in spite of the largo modern dredges now in use."

Pointing out that export taxes are unsound, the association adds that this* was proved by the export timber tax, which crippled trade with Australia. In Now Zealand, capital tax of 12s 6d is paid on every ounce of gold produced, and there is very little Government assistance. On the other hand, in Australia, where no tax is payable, there is a guaranteed minimum price, capital invested in the industry is largely free from taxation and production has increased. Heavy Taxes and Low Earnings "Ihe New Zealand Mines Department has admitted that net earnings of tho producing companies wcro only 5 per cent in 1936, and only 4 per cent in 1937, in this highly speculative industry," adds the statement. "This represents a pay-out. of £230,107 on a capital of over £4,500,000, and, in addition, the companies paid £108,793 to the Government in the special gold export tax, equal to nearly 50 per cent of tho dividends declared. The industry also paid other heavy taxation. These figures take no consideration of loss of capital or the wasting nature of the asset. "Much low-grade quality ore ground could be worked but for the imposition of the tax, and there is no doubt that certain companies would bo in existence to-day if this tax had not been imposed in 1933. "'■' Every ounce of gold produced in New Zealand adds to its economic wealth, and is not dependent on any Other industry, as there is a free market for gold on a fixed world parity. The abolit.ioii of all taxes on gold mining wpuld prove a sound business proposition ft>r the country. The removal of tlnJ gold export tax will stimulate production of latent wealth and provide very necessary employment."

PUKEKOHE PRODUCE

% RAIN URGENTLY NEEDED CAULIFLOWERS NOW DEARER [from our OWN corrkspondext] PUKEKOHE, Monday ll&in is now urgently needed to maintain production in the Pukekohe district at a good level. Warm sunshine and drying winds, offset by only a few light- showers, have resulted in the top soil losing moisture rapidly during the past week, i»nd crops are beginning to ripen off prematurely. A good soaking rain within the next 1 24 hours or so should retrieve the position largely, but should the dry conditions continue, new potato crops will bo light and cauliflowers, particularly, will be in very short supply. Crops of new potatoes dug last month yielded only about 5 cwt. to the acre.' Those being dug to-day-are giving from .'3O cwt. to 3 tons. The price for good lines remains at last week's level, 25s Gd per cwt.j f.0.r., Pukekohe. Poorer lines are going direct to auction markets. * Cauliflower'values have taken another jump during the week, to-day's quotations being 13s 3d a Chapman bag, and 10s 3d a sack, as against' 12s and 15s 3d last Monday. Orders are being filled only with difficulty. Spring cabbaged remain at 10s 9d a bag and lis 9d a sack. The season for the Savoy variety has ended.

What is probably the last parcel of pumpkins to leave the district this year went away to-day .-The price was 9s per cwt. Carrot prices have hardened from 4s 6d to 5s a-sugar hag during the week. Lettuce, which is in short Supply, remains firm at 0s a case. Cabbage' plants continue to bring 12s 0d g thousand, .cauliflower plants 18s 6d, and onion plants 3s 6d.