New Zealand, previously at war with the European Axis, declared war on Japan Dec. 9, 1941, two days after the Japanese attack on Pearl Harbor, and the day following the attack on Hong Kong.
Lying 1,200 mi. east of Australia, and approximately in size the combined areas of Pennsylvania, Virginia, Maryland, Delaware, and Rhode Island, its population numbers only 1,640,000, of whom 90,000 are Maoris, natives similar to Hawaiians. Total New Zealand population is thus no larger than that of Detroit, Mich.
By mid-1942 one out of every two New Zealand men aged 16 to 60 was serving in the armed forces. One-sixth of the total population was under arms. In addition there was a part-time Home Guard of 100,000. On a population basis this would be equivalent in the United States to armed forces numbering 13,000,000 with an additional part-time army of 8,000,000.
In financing this relatively large military manpower problem the New Zealand government has enjoyed the advantage of owning the country's Reserve Bank, giving it complete control of the monetary system.
War Expenses Account for 1942-43.
War expenditure in New Zealand for 1942-43 will amount to £133,000,000; £126,000,000 of which is the estimated expenditure on the Army, Navy, and Air Force, and £7,000,000 the civil expenditure associated with the war.
New taxation includes an increase in national security tax by 6d. to 1/6d. in the £ on all incomes, including company profits. Super tax levied on income tax payable is raised from 15 per cent to 33 per cent.
New direct taxes are as follows: An additional 10 per cent sales tax on certain non-essential goods; an increase of 1/— a gallon in beer duty and a corresponding increase in wines and spirits; an extra 2d. on a packet of 10 cigarettes, together with an additional 5d. an ounce on tobacco.
The result of these proposed adjustments will be that direct taxes will reach 18/— in the £ at £2,500 in the case of unearned income, and £3,700 in the case of earned income. Companies at the maximum rate will pay 14/—d. in the £ as compared with 12/—d. at present.
The final returns for the £15,000,000 Liberty Loan for war purposes showed the loan oversubscribed by £2,501,170. This is the largest single sum ever raised as a loan in the Dominion.
War Administration Formed.
A War Administration of thirteen Ministers, seven Government Ministers and six from the Opposition was announced in July. The members of the previously existing War Cabinet continued to hold office in the War Administration. The domestic Cabinet outside the War Cabinet continued to function. The War Administration has supreme command of all war activities, and every member holds full Ministerial authority.
The War Administration, which consists of thirteen Ministers, carries out the full administration of New Zealand's War effort, but six members constitute the War Cabinet. This body consists of: the Prime Minister, Mr. Fraser; the Minister of Supply, Mr. Sullivan; the Minister of Defence, Mr. Jones; Mr. Coates; Mr. Hamilton, and the Leader of the Opposition, Mr. Holland.
The personnel of the War Administration of 13 Ministers, 7 Government Ministers, and 6 Opposition Ministers, includes:
Rt. Hon. P. Fraser, Prime Minister, Chairman of War Cabinet
Hon. S. G. Holland, Minister in Charge of War Expenditure, Deputy-Chairman of War Cabinet
Hon. F. Jones, Minister of Defence
Rt. Hon. J. G. Coates, Minister of Armed Forces and War Co-ordination
Hon. D. G. Sullivan, Deputy Prime Minister, Minister of Supply and Munitions
Hon. A. Hamilton, Associate Minister of Supply and Munitions
Hon. R. Semple, Minister of Transport
Hon. W. J. Polson, Minister of Primary Production for War Purposes
Hon. P. K. Paikea, Minister in charge of Maori War Effort
Hon. W. J. Broadfoot, Minister of National Service
Hon. A. McLagan, Minister of Industrial Manpower
Hon. W. A. Bodkin, Minister of Civil Defence
Hon. A. H. Nordmeyer, Minister of Health.
The War Administration is responsible for all matters connected with the war or with New Zealand's war effort. The War Cabinet acts as the executive body of the War Administration and is responsible for making all decisions in relation to war matters except those that are dealt with by the War Administration as a whole.
Although New Zealand is an agricultural country with very limited industrial resources, a munitions industry has undergone rapid development during the year. Trade in agricultural products to Great Britain during the years 1940-41 amounted to 547,000,000 lb. of butter, 493,000,000 lb. of cheese, 1,533,000,000 lb. of meat, and 600,000,000 lb. of wool.
Agricultural objectives and war requirements of the Dominion for the fiscal year 1942-43 included 300,000 acres of wheat as against 258,000 for the previous season.
Early in September 1942, Labor Prime Minister Peter Fraser visited Washington, D. C., to discuss war problems with President Roosevelt.
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