“THE FEAR COMPLEX”

Poverty Bay Herald, Volume LXV, Issue 19803, 3 December 1938, Page 18

“THE FEAR COMPLEX”

TO SAVE OR SPEND? CALL IN THE ACCOUNTANT Disclaiming any desire of introducing the question of party politics, the official mouthpiece of Ihe New Zealand Society of Accountants refers to the development in New Zealand since the election of a “fear complex” with “a tendency to send capital out of the country. This is to be deprecated.”

It is held that there is is ample scope for the profitable use of capital in the Dominion. “The reassuring statement of the Prime Minister as to the policy of his Government and the promise to place land and income taxation on a more equitable footing should do much to curb the panic which has developed in recent weeks.” 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.” A It is pointed-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-operation 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.” Business is “the very life blood of tills 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 Domionion and in this matter it behoves us all to exercise a little common sense.”

The tendency to save unnecessarily, it is averred, was one of Hie 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 vitally concerned in the safeguarding of capital and the preservation of sound principles of finance, accountants, it is declared, would be the last to advocate indiscriminate use or abuse of cash resources, but it is suggested that it is a sound policy to continue buying and to spend where it can be afforded to spend. “Why make the position more difficult and create unemployment by with-holding the means of livelihood from our fellows?” it is asked.