TAXATION INCIDENCE

Otago Daily Times, Issue 23669, 29 November 1938, Page 11

TAXATION INCIDENCE

MEANS OF CURBING PANIC INVESTMENT OF CAPITAL IN DOMINION "The reassuring gtatement of the Prime Minister as to the policy of his Government and the promise to place land and income taxation on a more equitable looting should do much to curb the panic which has developed in recent weeks," states the Accountants' Journal, the official organ of the New Zealand Society of Accountants, commenting editorially on the development in New Zealand since the election of a " fear complex " and " a tendency to send capital out of the country." Holding that there is ample scope for the profitable use of capital in the Dominion, the article adds: "If the Prime Minister and the Minister of Finance are as wise as we think they are, they will be guided on these points to some extent at least by the deliberations of the recent Chambers of Commerce Conference in Auckland." Policy of Co-operation The article emphasises that there is no desire to introduce the question of party politics. It points out that the,Treasury and other departmental heads can place valuable data at the disposal of the Government, and it is suggested that before far-reaching measures are put forward for an overhaul of the taxation system it would be prudent to ask for the co-opera-tion of a committee of business men fully representative of the farming, industrial, manufacturing, distributing and trading sections of the community. On such a committee the services of an experienced accountant would be beneficial. The New Zealand Society of Accountants, it is stated, would be only too pleased to lend its aid. While obviously the Government would not be bound to accept the ideas and suggestions of the tribunal set up, it would at least have placed at its disposal the knowledge and judgment of practical men." Cutting of Expenditure

"It is well recognised that business is the very life-blood of this and every other civilised community. Stop the flow or check it even and we are doing a disservice to the country. The limitation of purchasing of more than bare necessities will quickly wreak havoc in the economic life of the Dominion and in this matter it behoves us. all to exercise a little common sense. The tendency to save unnecessarily was one of the causes of the last depression. Cash, even gold itself, is valueless once trade stops. Hoarded money, and a tendency to invest in gilt-edged securities—if there is any such animal —can only bring a small return and if a catastrophe develops capital can easily depreciate to less than half its real value.

'As professional men who are vitally concerned in the safeguarding of capital and the preservation of sound principles of finance, accountants would be the last people to advocate the indiscriminate use or abuse of cash resources, but we do suggest that it is a sound policy to continue buying and to spend what we can afford to spend. . . . Why make the position more difficult and create unemployment by withholding the means of livelihood from our fellows? "