SOLE RIGHTS TO CO-OPERATIVE STORES CAUSING CONCERN

Wanganui Chronicle, 31 January 1947, Page 6

SOLE RIGHTS TO CO-OPERATIVE STORES CAUSING CONCERN

CHAMBERS OF COMMERCE APPROACH MR. NASH (P.A.) Wellington, Jan. 30. "The statement by the Minister of Rehabilitation that in State housing areas where community centres are established the Government agrees to the whole of the commercial services and trading businesses being placed under the exclusive control of co-op-erative societies is rightfully causing considerable public concern," says a statement by the Associated Chambers of Commerce of New Zealand t'o-day. “As long ago as September last, the Associated Chambers wrote to the Prime Minister asking whether it was the intention of the Government to grant monopolies to consumer cooperatives in State housing suburbs, and whether such co-operatives are to be placed on a similar basis as regards taxation to ordinary trading concerns.” DESIRE OF RESIDENTS. The Minister of Finance replied on December 4: ‘The Government will facilitate the provision of buildings for consumer co-operative stores if it is in accord with the desire of residents, but will not give preferential treatment at the expenses of existing private enterprise businesses which have already been establishd in State housing localities. The reply to the taxation question was to explain that the profits which were distributed to members of the consumer co-operative societies were not taxed.

“We again wrote to the Ministerstating that it was not clear whether private enterprise businesses seeking to enter- the field after the establishment of consumer co-operative societies in State housing areas would be permitted to do so. Also the Minister was asked whether it was not arguable that ordinary trading concerns should be allowed to make a dividend distribution before the income became applicable on December 23." Mr. Nash wrote: "If the community is adequately served by existing facilities, whether private enterprise or consumer co-operative, consideration of any application for the establishment of additional shops would oi necessity be conditioned by this factor of adequacy, and by the further problem associated with the matter of building material and labour shortages." QUESTION OF TAXATION. Mr. Nash said although there were various schools of thought regarding taxation, he thought there was a strong justification for regarding a company as a separate tntiy for taxation purposes and for levying taxation upon the company's .income before the distribution of dividends to shareholders at a fixed rate based on the invested capital. “It can be seen from the official declaration by Mr. Nash that there was still an opportunity even under restrictive circumstances for an individual or private enterprise unit to open a store in State housing locality," continues the statement. ‘Mr. Skinner now declares flatly there is to be no such opportunity, and my association has consequently written to the Minister of Finance, who, unfortunately, is out of New Zealand, stating that we find it impossible to reconcile his statement in his correspondence to us with the statement made by Mr. Skinner. We have asked what ts the policy of the Government on the subject and in view of the decided conflic' between the two announcements, lor an early clarification of the issue."