COMPULSORY LOAN

Otago Daily Times, Issue 24421, 5 October 1940, Page 12

COMPULSORY LOAN

AIMED AT SMALL CLASS MR DOIDGE'S CRITICISM WAR NEEDS UNDERSTOOD (From Oup Parliamentary Reporter' WELLINGTON, Oct. 4. " The objective of this loan is a tiny handful of prudent, thrifty people who have saved just enough to come within its scope," said Mr F. W. Doidge (Opposition, Taurangai during the debate in the House of Representatives to-day on war finance. Mr Doidge discussed in particular the £8.000.000 compulsory loan. "Why is this loan not a national effort?* he asked, after recalling that the national savings schemes about to be introduced would not be compulsory "Why compulsion for one section and not for another, if it is to be an all-in effort? " People's Spirit Misinterpreted Nowhere else in the British Empirt had there been found necessary a compulsory loan of the type announced in New Zealand, Mr Doidge said. He claimed that not even in Germany or Italy had there been recourse to a loan as harsh ~ "The Minister of Finance walks in financial jack-boots and is out of toucn with the sentiment of the people, lie said. Proof of the willingness of the people to give freely was to be found in the magnificent response to the funds to buy fighter aeroplanes and to relieve distress in the bombed areas of London. The Minister had set limits on the amounts to be forwarded for these purposes, yet he made trie war loan compulsory "The terms of this loan are shattering the prestige of New Zealand, Mr Doidge added. " They constitute to no small extent an insult to the people of this country." Imports From Britain The danger of weakening the trading power of many companies was emphasised by Mr Doidge. He said it was necessary to be careful not to prejudice future production. He also advocated strongly the. Keynes plan of saving, which, he said, was bringing in £20,000,000 a week in Britain, while a similar scheme had . already produced some £15.000.000 in Auswe have to help Britain by accepting her imports," he concluded "It is wrong of us to blockade Britain, for that is cutting Britains throat In Britain's factories are Posters saying, ' Export or Expire/ and with the loss of Britains Euiopean markets we have to help. MINIMUM SUBSCRIPTIONS BASIS OF COMPUTATION EXPLANATION BY MINISTER (Per United P*ress Association) . WELLINGTON. Oct. 4. A further explanation of the basis of the minimum subscription to the current war loan was made by the Minister of Finance. Mr W. Nash, in a statement to-day. "The minimum subscription for individuals," the Minister said, is in general to oe taken as the excess over £SO (calculated to the nearest multiple of £10) of income tax which was payable in February last in respect of income derived during the year ended March 31, 1939. In the case of companies, the minimum subscription is the excess of income tax (also computed to the nearest multiple of £10) over £7O Exempt Income " Where persons are in receipt of exempt income, that is income not subject to income tax. the income tax is to be computed as if that income were assessable income, and not as being income which is either wholly excluded from assessment or which is merely taken into account for the purpose of increasing the rate of lax payable. Exempt income to be taken into account in this way will include dividends from overseas companies (but not local companies) and other exempt income from abroad, interest from tax-free Government stock and from tax-free company debentures, also farming income where the land used had an unimproved value of less than £3OOO. " In short, exempt income includes all income that was subject to the social security charge, but which was not assessable for income tax, and also all income derived from abroad and exempt from social security charge because it has already borne a similar charge overseas, but does not include dividends from New Zealand companies. Deductions Explained " Where no income exempt from income tax was received, the minimum subscription can readily be ascertained by deducting £SO or £7O, as the case may be, from the amount of income tax actually payable and converting the balance to the nearest multiple of £lO. For example if the income tax ordinarily due an payable in February last was £93, the minimum subscription would be £4O in the case of an individual and £2O in the case of a company. If the tax were £96. the amounts would be £SO and £3O respectively. In cases where the income derived during the year March 31, 1939. consisted wholly o partly of exempt income (namely, dividends and other exempt income from abroad, income from farming land under £3OOO unimproved value or tax-free interest) , it will be necessary where the tax is likely to excetd £SO or £7O to compute the amount of tax which would have been payable on the basis outlined above." Examples Given To assist persons not conversant with income tax matteis, more particularly farmers who were exempt from income tax in respect of the 1939 farming income season and others whose orincipal source of income was exempt Mr Nash produced a table showing the approximate amounts of minimum subscriptions from people resident in New Zealand on their total income derived from all sources during the year ended March 31. 1939. This table shows that if his income is earned a single man with £6lO will be required to find £lO. and a married man on that income scale will not need to contribute anything. In the case of earned incomes of £7OO. single people will contribute £2O. and a married man. with wife only £lO. In regard to incomes of £IOOO, contributions will be made as follows:— Single person, £7O; married man with wife only. £6O; married man with wife and one child. £SO; married man with wife and two children. £3O. Single persons earning £2OOO will contribute £3lO, and a married man with wife £3OO. ranging down to £240 for a man with wife and four children Unearned Incomes Another section of the table deals with unearned incomes. Under this section a single nerson receiving £520 will Day £lO. and a married man nil. Married people with no children will commence to contribute at the £SOO income mark, their contribution in thai case being £lO- Those receiving unearned income of £IOOO a year will pay as follows:—A single person £110: married man with wife only. £100: married man with wife and one child £9O; married man with wife and two children,, £80; married man with wife and three children. £7O; and married man with wife and four children, £SO. Those with incomes of £2OOO will pay £430 for single persons, ranging down to £340 for a man with wife and four children.

Taxpayers not conversant with the basis of the commitalion are advised to consult an accountant or others versed in taxation matters for guidance, or may apply bv letter to the Commissioner of Taxes. COERCION FOR THE UNWILLING iFiiom Ouu Parliamentary liuyoirme WELLINGTON. Oct. 4 "The volunteer system of recruiting was abandoned in this country, not because men were not coming forward, but because they were not enlisting in the right proportions," said the Minister of Finance. Mr W Nash. ,in replying to the war finance debate in the House of Representatives to-day He said it had been decided that the fair way was to bring m everybody who had a like responsibility and like sacrifices to make "The same principle exactly is in the £8.000,000 loan plan," he said "There is no compulsion in this loar in the first sense. I believe that thousands and hundreds of thousand"; of people will subscribe more 'than they have to. Yet there are some who would never subscribe, and the compulsion provisions are for them "