THE BUILDING SUBSIDY

Wanganui Chronicle, Volume 77, Issue 156, 4 July 1934, Page 6

THE BUILDING SUBSIDY

bir, —Tug resolution carried by the wanganui Chamber of Commerce requesting the Government to reinstate me JXo. lu building suusidy will u< reg i cited by those tunsemus of tin scheme’s serious deiects, As far as renovations and limited additions are concerned, the scheme has its good points, out in respect to house construction, althougii it is certainly a misleading negative tonic, it has eventual disastrous negative results. Its defects as applied to house construction »<e as J allows: — (.1) it taxes the worker and unemployed, who has little to give to him, with more. (2) It depreciates to the extent of meh gift subsidy (approximately £lOO per home), the approximately three hundred thousand existing houses. (3) It thus taxes a people to depre* ciato its own assets. (4) WorkeiS, owners and mortgagees who had got into serious trouble due to the main world slump causing a value drop on properties of at least a third, became further prejudiced in position by security further value .fall uue to the competitive effect of the subsidy gift reflex. (5) This has caused building so pieties and mortgagees to withdraw from normal financial assistance of housing. (6) Has caused capital that should be in commercial circulation so aiding employment, to be fear driven hito

the restiicted zones of Government securities and bank deposits. (7) Has caused an intermittency in the building business and employment as parties hold off waiting Government reinstatement of the gift subsidy scheme. (8) It so strangles in part the normal functioning of hiiUdmgs. As proof of the above, it, is clearly seen in the fact that loaning societies and building societies in a number of cases have not only ceased loans foi buiidmg purposes, but are returning capital to their shareholders rather than attempt to accept business in a sone so menaced. Recently, within this Dominion, instances actually totalling hundreds of thousands of pounds have, been returned to shareholders owing to the- negative reflexes of wcil-intentioncd legislation affecting the building and trading industry. This divorce of capital from the zones of industry and employment (unseen and unnoticed by many), is iadcca regrettable and intensely serious, ar it not only damages the tuink ana branches of employment, but unintentionally adds to the confusion of these difficult days. Tf the Dominion Government would follow che very successful British system of assisting the building industry and employment, much good could result, as such scheme is not linked to unjust and unwise gifts, but is based On a principle of sound assistance, safety and the use of the normal trunk and branches of financial and industrial a^srstancc. —I am, etc., LEN E BASSETT*