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War Economy



When discharged, servicemen were given 28 days' leave on pay, a free railway pass for a month, and an allowance of £25 for civilian clothes.

In November 1945 the Government announced its gratuity scheme. Mr Nash said:1

‘Let me summarise: (1) The gratuity is 2/6d a day for service overseas, and 8d a day for service in New Zealand. (2) The serviceman will require to make application for it; application forms will be made available at an early date at post-offices, Army offices, and other places throughout the Dominion. (3) After an application has been checked …, the serviceman will own money in a post-office savings-bank account.

1 NZPD, Vol. 271, p. 622.

page 504 (4) The minimum payment on behalf of a deceased serviceman will be £200. (5) The minimum for a permanently totally disabled serviceman, £200. (6) For each of three years a 5 per cent bonus will be paid on the 31st March on the sum remaining in the War Gratuity Post-Office Savings-bank Account. (7) A five per cent discount will be given to a serviceman for all money used to pay off capital sums approved by the Minister of Defence.1 (8) All gratuities are free of taxation—social security charge, national-security tax, and income tax. May I, in conclusion, urge again the imperative necessity, in the interests of the serviceman and the interests of the economy of the country, that the minimum should be withdrawn and spent, and that the maximum sum be left until the end of the period? It will pay the serviceman, and it will pay the country.’

Nearly £23 million was paid out in gratuities. The injunction and encouragement to defer spending them had some effect. In March 1949 over £11 million remained in the special savings bank accounts. At this stage they were closed down, all but £2 million of the balances being transferred to ordinary Post Office Savings Bank accounts or to national savings investment accounts.

1 The purposes were specified thus: (a) For the purpose of purchasing a home, or furniture, or any other real or personal property for the investor: (b) For the purpose of establishing the investor in any business, profession, trade, or occupation: (c) For any other purpose approved by the Minister. (Section 10, War Service Gratuities Emergency Regulations 1945. Gazetted 23 November 1945.)