Fighting Oppressive Taxation
pp. 109-110 · Read in the full issue
How Fiji Cold Companies Are
A WAR of words between the Govern ment of Fiji and the companies which own the rich goldmining in dustry there, directs attention to the ex traordinary change that has taken place in the relationship between governments ind goldmining concerns since the govern ments became more or less dominated by Socialist theories.
In the old days, by giving them sub stantial concessions in taxation, and in Dther ways, governments encouraged min ing enterprises to invest their funds in :he search for gold. Enormous sums were iost in such enterprises—but the gold mining investors were always encouraged x) try again because they were free from taxation and enjoyed other privileges. It vas sound thinking on the part of the governments, because gold has a fixed in ,ernational value; and the government of my country with a rich gold industry was ;eldom troubled with financial problems.
The Melbourne financial group headed )y Theodore, Wren, Cody and others was ;hus encouraged by the British Colonial Dffice to develop and exploit the Tavua Goldfields, in the northern part of Viti Leva, Fiji. As a result the Emperor and joloma companies were successfully jstablished, and the Colony of Fiji has jenefited enormously from the millions of )ounds worth of gold they recovered. [T seemed a happy arrangement for everyone. But Socialism was taking command in Australia (where Em- Deror and Loloma are owned) and in Britain (whicn is responsible for the government of Fiji).
The first trouble came when the two :ompanies were met with an inflexible de nand for double taxation. The Govem nent of Fiji imposed a heavy tax upon )oth the gold produced and the profit of he companies; and the Government of Australia, with total disregard of the ithics of the situation, insisted upon im losing income taxation upon the dividends if the shareholders when they arrived in Australia for distribution.
Because of this manifest injustice— here was no indication of such taxation lemands when the companies launched heir enterprise—the late Mr. Theodore ought both Governments until the day f his death.
For example, the Fiji gold companies tad set aside a certain sum to be used a investigating and developing the gold ield that is known to exist in the Beran'de -rea of Guadalcanal, in the British Solo non Islands. A subsidiary had been ormed, an organisation created and men /ere already in the Solomons, when the British Socialist Government let it be ;nown that it would demand a very large hare of any gold discoveries made in the lolomons.
Mr. Theodore immediately cancelled all ilans relating to the Solomons and with drew his prospecting party. As a result, here is no gold coming out of the Solo ions—and there is not likely to be. The Oldfield there is not a “small man’s how’’ —it can be worked profitably only y a big company, with big resources.
Mr. Theodore’s answer to the Australian jovernment’s attempt at double taxation ms to withhold dividends from the Aus ralian shareholders. Instead, he put into peration the rather unusual plan of :eeping what officially are the profits in (where they are used as working apital) while he returned the subscribed apital to the shareholders in a series of •ayments extending over years, and which ook the place of dividends. Officially, the hareholders’ capital has been returned
to them—and this is free of taxation, of course; but they still own in Fiji, in re spect of each share, a large sum of money which officially represents the accumu lated profits of the companies—but which they can-only get, free of Australian taxa tion, if they go and live in Fiji, MR. THEODORE is dead but in this respect his soul goes marching on.
The Emperor and Loloma companies held their annual meeting in Melbourne on December 1, and the chairmen of the respective meetings (Mr. P. p. Cody, for Loloma, and Mr. Wallace H. Smith, for Emperor) each directed attention to the punishing taxation that was being now imposed upon the companies in Fiji. They said that the Fiji royalty charge was now equal to 71 per cent, of the value of the gold won as against 5 per cent, previously.
Mr. Cody said this action by the Fiji
Government was extremely harsh, and offered no inducement to the mining com panies to explore and develop other areas.
The annual accounts showed that Em peror, in the year ended June 30, made a profit of £161,752 Australian, compared with £76,202 in 1949 and £56,637 in 1948.
Loloma made £142,850 Australian, com pared with £128,083 and £88,939 in the pre vious years.
These increased profits are due in part to the action of the British Government in depreciating Sterling. Australian and Fijian currencies were similarly devalued; but the product of the mine (gold) he*ld its value, of course, in the world’s market.
Both companies also are receiving a large and increasing revenue from their heavy investments in other companies.
The Fiji Government got over £lOO,OOO in direct taxation in one year from the two companies.
In preparation for the introduction of jet aircraft on commercial routes, 15 special meteorological radar stations will be built in Australia and New Guinea.
The proprietors of a copra estate in Taveuni, Fiji, remember with gratitude the generosity of the Fijian owners of a lease which forms part of the estate. In the years 1941 and 1942 when copra prices were low, the Fijians agreed to a sub stantial reduction in the rent. Now that the price of copra is high, the proprietors of the estate have sent to the Native Land Trust Board a cheque for the amount surrendered in those two years, with a request that it be paid to the Fijian owners of the land and that they be thanked for their helpful attitude in diffi cult times.