BUDGET "GIFTS."

Auckland Star, Volume LXVI, Issue 223, 20 September 1935, Page 12

BUDGET "GIFTS."

CUT RESTORATIONS.

HOW BENEFITS WORK OUT.

TAXATION AND PENSIONS

Budget time is tlio season of the year when tlie man in the street has forced 011 him the realisation that whatever lie may think of politicians, he cannot afford to ignore politics. But this year all is well, or at least much better than it was. Buoyant revenues have enabled the Government to give back something a week to every person who pays unemployment tax. to return a few more badly-needed shillings to pensioners who were called on to share the sacrifices which emergency demanded, and to restore per cent of the salary reductions Imposeel on public servants. The further increase in salaries to be given Government servants still leaves" the rates from 31 to 111 per cent below the rates that existed before the cuts were first imposed, but it is none the less welcome.

A few examples will show exactly what the Budget means to, say, the mail on f5 a week and another on" a weekly salary of £10. As general taxation is unaltered, only (lie emergency wages tax Jfor unemployment is affected. In these two cases it works out as follows:—

Yearly Wages Tax. Weekly Income. Present rate. Xew rale. £ s. U.s. £s. d. Mi:n on £5 10 10 S S ?.3 4 Quarterly levy 10 0 10 0 Total 11 ir, S 0 13 4 Man oil £10 21 13 4 17 G S Quarterly levy .... 100 100 Total 22 13 4 IS 6 S The man on £5 a week is not likely to have any investments, but the man on £10 may i have £1000, which yields him 4 per cent on liis investment. In this ease he j will save another 6/8, since he will now i pay emergency tax on this £40 at the rate of Bd, instead of lOcl, in the £.

It is only when the yearly totals are calculated that the extent of the sacrifice which everybody has borne is apparent. Had any Governmejit, in the days of prosperity ever dreamed of relieving a £5 a week man of £13 a year in taxation, the country would have protested vehemently. Resentment has been avoided r for the reason that everyone realised that the unemployed cannot be left to starve, and that the levy is deducted every week, so that the £5 a week man in effect at present gets £4 15/10. There may be no arithmetical difference, but there is a world of difference to the taxpayer, between 4/2 a week and £10 10/8 a year.

The /pensions position is not so generally well understood. The old age pension,, which was first cut from £4-"> 10/ per annum to £40 19/ and now stands at £43, will be restored to £45 10/ —that is, 17/0 a week.

A widow, with one child, who used to get £52 a year and now receives £40 10/, will have her pension increased by 7J per cent, bringing it up to £50 0/. A married miner, who used to get £95 per annum, and was cut to £81 18/, will now get £88 1/.

Soldiers' disability pensions were not cut, but their economic (supplementary) pensions were. For instance, a soldier who was originally awarded an economic pension of 30/ a week, was cut, first to 27/, and later to 21/. He will now get 22/0.