ECONOMIES MADE.

Auckland Star, Volume LXI, Issue 173, 24 July 1930, Page 10

ECONOMIES MADE.

MONEY STILL NEEDED.

BURDEN WILL BE SPREAD.

FEW TAXES TO ESCAPE.

LAND SUPERTAX ABANDONED,

(By Telegraph.—Parliamentary Reporter.)

WELLINGTON, this day. In his survey of the Dbminion's finances on taking office as Prime Minister, the Hon. G. W. Forbes prepared the public for something drastic in to-night's Financial Statement. His formidable task was, he demonstrated, to avoid a deficiency which, if ordinary "taxation and expenditure was maintained, would amount to £3,000,000. Thus members of Parliament are expecting a Budget almost sensational in its main features. The Customs revisions announced on Tuesday night are only a preliminary to the taxation programme. Even with the increases indicated the falling revenue means a lessened return from that source of £370,000. Drastic economies in expenditure were forecasted, and the Budget, it is confidently believedj will show that the Government is doing its share to meet the serious position due to falling tax revenue. The Departmental estimates have been rigorously curtailed, with the result that this section of expenditure will, it is believed, show a reduction on the estimates approaching £400,000. Railways' Reorganisation. Apart from railway savings due to the abandonment of some branch lines, the curtailment of services, reduced staff, revised fares and freights, which - are expected to improve the financial position of this Department by at least £500,000, compared with last year's gross expenditure, the . Finance Minister is asking the House to approve a. total involving reductions which run well into the second million. Unfortunately for the taxpayer, the position cannot be redeemed only by savings. There still remains the heavy burden of unemployment relief, which last year involved the expenditure of £1,415,000, and it has been officially stated that the present number of relief workers is at the record point of 4000. Barely to balance the finances at the end of the present year will require not only savings, but additional taxation to maintain the revenue on lessened tax resources. Consequently the rates of taxation have to be generally increased. Spreading the Net. The principle which the Finance Minister will follow is to spread the burden impartially over all sections. Consequently there will be scarcely any important tax whicli will escape upward revision. The income tax is expected to be increased 10 per cent all round. The totalisator tax and banknote tax will be raised. The estate duty and the gift duty in the higher scales arc also expected to be increased. -

In his endeavour tff spread the net wide, the Finance Minister is credited with the intention of reverting to the former amusement tax, starting with one penny duty on the shilling ticket. Attention has been directed to an improvement in the method of securing adequate income tax from films, and a new system of assessment will enable an ad valorem tax to be levied, probably 10 per cent con British and 25 per cent on foreign films. The land tax rates, it is anticipated; will remain unchanged, though the exemption range may be substantially reduced in the hope of maintaining an adequate return on the reduced unimproved values. The investigation of cases of hardship in the imposition 'of the special land tax last year resulted in exemption totalling £120,000. With the heavy drop in wool prices the financial position of these large holdings has further depreciated, consequently a supertax, if levied this year, would be a failure from the revenue viewpoint. It can be predicted that this tax will be abandoned.