N.Z. REFRIGERATING COMPANY

Otago Daily Times, Issue 23118, 18 February 1937, Page 10

N.Z. REFRIGERATING COMPANY

PAST YEAR’S OPERATIONS HEAVY BURDEN OF TAXATION EFFECT OF RECENT LEGISLATION (Per Untied Press Association) CHRISTCHURCH, Feb. 17. “ The present rate of company tax compares with the British rate of 4s 9d, and is, perhaps, the highest in the world. Such a heavy imposition must in the long run have a crippling effeci on our industrial life, for there is little inducement to risk capital in new enterprises or to spend money on improvements to existing factory equipment when nearly 40 per cent, of the earnings goes away in tax,” said Mr W. H. E. Flint (chairman of directors), in an address to shareholders at the forty-ninth annual general meeting of the New Zealand Refrigerating Company, Ltd. Reviewing the company's accounts, Mr Flint said the balance available for appropriation was £26,941 15s 3d less than last year. The company’s earnings were actually larger than in the previous year, but the increase in the rate of income tax for companies to 7s 6d in the pound had necessitated setting aside a much larger amount than was required in the previous year to meet the liability for the tax. The land tax had also absorbed an additional £lll4. “ The preparation and shipment of chilled beef has continued at Imlay in common with a number of other North Island works,” Mr Flint continued. ‘‘This business is still in its early stages in New Zealand, and is not yet on a profitable basis from the company’s point of view. Judging, however, from the reports from London, this class of beef is rapidly improving, and reflects credit on the efforts of the producer.” The preparatory work done by the company was also favourably commented upon. “ Since we last met there have been important additions,to our costs arising out of the Government legislation,” said Mr Flint. “In November last a new award was made by the Arbitration Court, and this award, with other increases arising principally out of the new legislation (leaving out of account the increases in income tax and land tax), probably amounts for the Dominion to from £300,000 to £400.000. Arising out of the trouble about Christmas in Auckland, the Minister of Labour directed the freezing companies to increase the pay of the hourly men, and we estimate the cost of this will amount to another £BO,OOO or £IOO,OOO, directly or indirectly. This extra cost, which will probably be little short of £500,000 for the Dominion, will be a further tax on the meat producers of this country. “In connection with the extension of a direct steamer service to the Far East, your directors caused a thorough investigation to be made into the prospects for the company’s products in that part ,of the world. lam glad to be able to report that a small but steady business is now being built up, and I think we shall be in a good position to benefit from any general increase in the trade between this country and the East.” Referring to the dividend, Mr Flint said: “In the present circumstances I am sure you will agree that it is wise to continue a conservative policy in regard to the dividend and to make as full provision as possible for future expenditure on renewals and extensions.” The directors recommended the payment of the same dividend as last year, which was adopted. The retiring directors, Messrs W. H. E, Flint and E. Hay, were re-elected.