THE AUSTRALIAN BUDGET

Press, Volume LXXVII, Issue 23445, 27 September 1941, Page 9

THE AUSTRALIAN BUDGET

Fadden Plans to Raise £322,000,000 LABOUR PARTY’S ACTION NOT YET DECIDED (U.P.A.) SYDNEY, September 26. The Australian Prime Minister and Treasurer (Mr A. W. Fadden) last night introduced a record Budget of £322.000,000. which is one-third of the Commonwealth's national income last year. Of this sum £217,000.000 will be devoted to war purposes as against £l7O 000.000 in the previous 12 months. This shows the rapid expansion of Australia's war industries. The Prime Minister said that nothing would deter the Government from' its plain duty. Australia must continue to provide the sinews of war without regard to privilege, creed or party. The Budget provides for a new method of combined taxation. Compulsory loans will yield £25.000,000, of which'£2o,ooo,ooo will come from individuals and £5,000,000 from companies. A post-war credit plan will apply to income beginning at £IOO a year in the « case of single men, and the scale of contribution rises to 18s in the £ on the higher incomes and will bear interest i at the rate of 2 per cent., payable after the war. The Government intends also to | obtain an additional £ 5,000,000 from the holders of existing tax free loans, I who will be required to put 20 per i cent, of the interest they draw on those loans into the post-war credit pool. Company Taxes There is a new company tax of 6d in the £, which is estimated to yield £2,500,000. Companies will also nave to pay 20 per cent, of their undistributed profits into the post-war credit i pool, also 20 per cent, of the amount ; which the Taxation Commissioner normally allows them for depreciation. The Budget increases postal rates by Jd and telephone calls by id. This is estimated to yield £1,500,000. Public loans in the coming year are estimated to bring in £54,000,000, compared with £62,000,000 last year. Income tax will be stepped up by £3,000.000. Mr Fadden announced increases in the pay of all the fighting services, and in allowances to their dependants, totalling £6,000,000. Generally speaking the increase will be Is a day. War expenditure, he said, would reach the colossal figure of £217,000,000, of which £160.000,000 will be spent in Australia and £57,000,000 overseas. Mr Fadden said that in addition to raising public loans of £"54,000,000 the Government would borrow by means of war savings certificates and loans from the banking system, making a total of £122,000,000. Banks’ Undertakings He revealed that the trading banks had given an undertaking not to make excessive nrofits during war time. Thev had also agreed to act in accordance with the policy laid down by the Commonwealth Bank in respect to , granting increases in existing advances, and also to deposit with the Commonwealth Bank all surplus investment funds. The Government intends to establish a mortgage bank to provide facilities for long-term borrowing. Mr Fadden tabled a statement showing the effect of the new national contribution plan, which represents a total contribution by means of taxation. State and Federal and post-war credits to the cost of the war and Government Under this, for example, a person with a dependent wife will pay on an income of £2OO about £ll, on an income of £3OO £33, on £4OO £55, on £SOO £BO, on £6OO £llO, on £BOO £IBO, on £IOOO £261. The national contribution scheme means that total payments to the nation will be the same in every state for Australians earning similar incomes. The national contribution will be assessed and from this will be deducted both the Federal and state taxes, the remainder being the amount payable as a post-war credit loan. The Federal income tax will not be increased except on the higher incomes, where there will be substantial increases. . . Federal tax and loan contributions will be deducted each week from pay envelopes after a date to be fixed. Labour Criticism Mr Fadden was almost continuously under fire from Labour members during his Budget speech, and he had to appeal to the chairman of committees for a fair hearing. . Mr Menzies sat in his own room during most of the speech. Although Mr Curtin declined to comment last night, observers say that the Labour attack on the Budget is likely to be based on; (1) The proposed increase of Is a week in deferred pay for soldiers. (2) The proposed interest rate of 2 per cent, on compulsory savings. (3) The taxation of personal exertion on the same scale as income earned *”(4) Proposed compulsory loans by all persons without dependants earning more than £ 100 a year. It is claimed that the deferred pay for soldiers will amount practically to a compulsory loan to the Government without interest , , Interest rates on compulsory loan* are likely to be a major issue. Labour men say that low-wage earners, who will be compelled to lend money they cannot afford, will receive only 2 per cent. They claim that the wage-earners should receive at least as much as, if not more, interest on their money than the private banks receive. . Labour has always held that income earned fm personal exertion should not be taxed as heavily as income from and Mr Coles, either of whom could cause the defeat of the Government in a Labour Budget attack, declined to comment on the Budget. The Labour Party will decide it* course of action in regard to the Bud- ! get on Tuesday. Comment on Budget A Canberra correspondent states that the third war Budget opens new vistas of sacrifice for the Australian people ; but he declares that the general feeling i is that Mr Fadden has brought down a j courageous Budget which places a ! serious burden on the shoulders of the J Opposition. . , . 1 The Budget was well received in 1 Svdnev, though workers’ incomes will j be reduced by their having to subscribe 1 to compulsory loans, i Commenting editorially, the Daily 1 Telegraph” slates; “The Budget was I conceived, shaped, and delivered in an i atmosphere of grim party political 1 strife, which had induced the taxpayer to prepare for unimaginable horrors, I but the document itself -is not so ter- | rible as most of us expected. If the I Labour Party believes the Budget to Ibe bad. it must convince Parliament and the people by offering alternative detailed proposals.” The “Svdnev Morning Herald states; “Mr Fadden’s Budget shows unusual imagination and constructive thought in devising new ways of raising further sumc from the public. He has undertaken a huge task in finding the means of mooting the Commonwealth expenditure of £320.000.000. He outlined new burdens to be placed on the public and foreshadowed much more strin--1 gent control of our industrial resources. ; a]] of which is welcome evidence of the growth of our war work. ’ U.S. Oil Stocks.— Measures to meet j a prospective shortage of aviation petI rol were announced by the United i States Secretary of the Interior (Mr ; Harold L. Tckes) to-day. He said tha£ j Government funds would be used to 1 build up reserve stocks and to construct I Government refineries.— Washington, September 25.