AUSTRALIAN MONEY COMING TO N.Z.

Star (Christchurch), Volume XLIV, Issue 144, 19 June 1931, Page 13

AUSTRALIAN MONEY COMING TO N.Z.

BANKER DISCUSSES EFFECTS OF TAXATION. (Special to the “ Star.”) WELLINGTON, June 19. The effects , of high taxation on the prosperity of a country were referred to by Mr William Watson, chairman of the Bank of New Zealand, in his address at the annual meeting of shareholders to-dav. Taxation paid by the bank to the Government of New Zealand in the year under review, said Mr Watson, was £54.109 more than in the year previous. The total increase in rates and taxes on the whole of the bank’s business was £86,837. “ There is no doubt,” he continued, “ that general high taxation drives money and credit out of a country, but by this I do not imply that New Zealand has, until now, suffered in such a manner; on the contrary, it is well known that large sums have been transferred from Australia and invested here. The causes of these remittances were undoubtedly the more stable conditions which obtain here, fears of higher taxation, and probably exchange. It has been held by eminent authority in London that money and credit cannot ordinarily be removed from a country, but individuals can and have been able to transfer their assets from Australia to other countries by various methods, and to enrich the places of receipt by making investments there. It is also clear that subtraction by any State of the people’s wealth, either by inordinate taxation, or by high death and gift duties, to | pay for expenditure overseas, which cannot be met by excess of exports over imports, must impoverish that State to the detriment of all within it. “ Income tax was increased last year by 10 per cent, involving the bank in an additional impost of £17,865. “As some of you know, banks in New Zealand are taxed not on what they actually earn in the Dominion, but on what, under an arbitrary and now unfair system, they are assumed to have earned, the result being that, as compared with what we would have to pay if taxed as a joint stock company, we were mulcted last year to the extent of no less than an additional £58,841.” During the year, £594,263 was paid by the bank to the Government of New Zealand by way of dividends and taxation, viz.:— Dividends £245,312 Income Tax 196,524 Land Tax 18,563 Note Tax 133,564 £594,263