NO INCREASE?

Auckland Star, Volume LXXII, Issue 166, 16 July 1941, Page 8

NO INCREASE?

TAXATION IN N.Z.

MOUNTING WAR COSTS

SOME BENEFITS LIKELY (By Telegraph—Parliamentary Reporter.) WELLINGTON, this day. Though adhering to his policy of paying as much of the war costs as possible out of current revenue, the Minister of Finance, the Hon. Walter Nash, in his Budget, to be presented to the House of Representatives tonight, is unlikely to announce any additional taxation.

The main reason for this satisfactory position is that Mr. Nash has already had two opportunities of making provision for the heavy additional costs due to the war. He began in September, 1939, with a 15 per cent increase in income tax, and subsequently imposed additional war taxes, notably the national security charge of 1/ in the £ on wages and salaries.

The results of this taxation programme have apoarently been such ns to justify the Minister in coming to the conclusion that the measures already taken will cover requirements for the current financial year, despite the fact that New Zealand's war expenditure for this year is likely to be about £60,000,000, against the £37,500,000 for which the Minister made provision in his last Budget.

Although the social security, -national security and sales tax are not likely to be altered, it is expected that there will be an announcement of some variation in income tax procedure. Mention is also likely to be made of measures to be adopted for the reduction of costs, which will probably be effected by a reduction in the rates of interest on bank overdrafts, which has already been forecast.

Extra Social Security Benefit?

It is confidently anticipated that another addition to the social security benefits will be disclosed. It is realised that extra war taxation has imposed a greater burden on the family man. and for that reason members anticipate that mention will be made in the Budget of legislation to come forward this session providing additional relief in respect of children. The cost is obviously to be met from the Consolidated Fund. In addition, this source will also have to be drawn upon to meet the medical benefits under the Social Security Act. Therefore, the appropriation last year of £3,200,000 from the Consolidated Fund is likely to be considerably increased. Taxation is not expected to cover all war costs. Some provision must be made to meet portion of these by loan, and this, as the Minister has already made clear, will be on a voluntary basis.

Record Year of Trade

The Minister will be able to announce a record year of trade and of savings.

Considerable interest has been taken in the result of the national development loan, on which no information has so far been disclosed put it is understood that a fairly large sum has been subscribed in New Zealand.

The estimates of the Public Works Department, which will accompany the Budget, will reveal a further pruning; in fact, a large part of the operations of the Department this year w 1 1 relate directly to the war effort within the Dominion.

Summed up, the results of the war finance policy previously put into operation will enable the Minister to present this year a favourable Budget. It Will probably be found that the position is that although the taxpayers will not be asked to contribute more heavily than last year some sections will receive more bv way of benefits, and the policy of pay as you go" in respect of the war'effort will not be relaxed.