Stratford Evening Post With which is Incorporated “THE EGMONT SETTLER" Established 1890. THURSDAY, MARCH 12, 1931. THE FLIGHT OF CAPITAL

Stratford Evening Post, Volume I, Issue 79, 12 March 1931, Page 4

Stratford Evening Post With which is Incorporated “THE EGMONT SETTLER" Established 1890. THURSDAY, MARCH 12, 1931. THE FLIGHT OF CAPITAL

AN interesting cable message from Canberra states that the Federal Commissioner of Taxation is beginning an investigation into the flight of capital from Australia. The flight of capital from Australia is apparently considerable, or the Commissioner of Taxation would not regard an inquiry as necessary. It is true that capital, as represented by buildings, cannot be removed from one country to another, but companies may transfer their business operations overseas, as a wellknown harvesting machinery company did a few years ago, when it decided to cease manufacturing in Australia and remove its capital to Canada. The strain placed upon capital by the legislation of Australian Labour Governments has increased greatly in the last few years, and has much to do with the serious unemployment problem. Unfortunately so much concentration has taken place upon giving Labour the higliest return for its services and in reducing the length of the working day that the needs of capital have been almost completely ignored. In consequence Australia is suffering severely. Labour is entitled to its fair share of the product of its activity as an agent in production, but unless the instrument in production is kept in good order and is permitted to be renewed or replenished from time to time, it must lose it’s value and effectiveness. Capital cannot withstand unreasonable demands indefinitely, and sane Labour leaders such as Messrs. MacDonald and Snowden have not hesitated to state that there are limits to taxation beyond which it is not safe to go. The extremists in Australia and other countries boast that they are bent upon the overthrow of capital; in other words, they seek to destroy the instrument in production. Such a policyHs sheer madness, and it is amazing to find socalled educated people ready to support it. What is urgently needed in practically every civilised country. to-day is a definite relieving of the strain upon capital and measures that will enable the instrument to receive a fair return for its part in production. Wherever extremists persist in adding to the burden of capital there is bound to be serious trouble. The flight of capital may be prevented by stringent laws, but those laws will not give new life and activity to the instrument. There is only one sensible course —reduction in the costs of production to meet the changed economic conditions —and the longer that is delayed the worse the position will be. The policy decided upon by the New Zealand Government is sound, and if it is confirmed by Parliament during the special session, we believe that the Dominion will soon feel the benefit, while Australia in the hands of Socialist leaders warring against capital is rapidly drifting deeper into the morass.

PRICES HARDEN NOTWITHSTANDING all the pessimistic talk of bad times, and worse to come, the fact remains that the prices of New Zealand’s primary products are showing a hardening tendency, and this gives ground for assuming that the depression has reached its lowest ebb. A cablegram received from London last week contained the cheerful news that the demand for Australian and New Zealand butter has greatly increased in the Homeland. Australian suppliers have, in fact, been unable to cope with all the demands made upon them, with the result that prices of New Zealand produce have benefited. As compared with January of last year, the consumption of Commonwealth and Dominion butter has increased by 72,850 cwt. The popularity of the product of Australia and New Zealand is shown by the noticeable increase in its consumption. Another cause for gratification is the advance in the price of wool. These are encouraging factors, showing (he way in which the wind is blowing, and there seems no reason to doubt, given the necessary energy and optimism on the part of producers, that, the cloud of depression now hanging over the Dominion will gradually Lear. Unwarranted pessimism should be strenuously avoided.