CONSOLIDATED FUND

Press, Volume LXXXIII, Issue 25269, 22 August 1947, Page 8

CONSOLIDATED FUND

Revenue Estimated At £108,860,000 PROVISION FOR HIGHER WAGES

(From Our Parliamentary Reporter.)

WELLINGTON, August 21. “Total revenue of the Consolidated Fund during the current financial year is estimated at £108.860.000, and expenditure at £105,516,000,” said the Minister of Finance (Mr W. Nash) m his Budget speech in the House of Representatives this evening. “The balance of £3.344,000 will be available for the Supplementary Estimates, much gleater provision than usual being necessary to provide for wage and salary increases and other adjustments in expenditure arising out of the Arbitration Court’s recent decision on basic rates of wages.” Mr Nash , said that during 1946-47 trade and economic activities generally had been somewhat better than had been anticipated when the 1946 Budget was prepared. Consequently, the receipts of the Consolidated Fund totalled £108.294,000, or £7.912.000 more than the Budget estimate. The buoyancy had been reflected in all headings of taxation, particular items contributing to the excess being as follows:—income tax, £1,335.000; national security tax, £1,404,000; customs, £1,219,000; sales tax, £1,300,000; and stamp duties (which included racing revenue), £1,550,000. Expenditure had exceeded the aggregate estimate of £100,382.000 by £3,301,000. The main reason for this rise in expenditure was a transfer of £3.000,000 to the War Expenses Account to assist in providing funds for the gift of £12,500,000 to the United Kingdom. Otherwise, the expenditure generally had been fairly closely in accord with the estimate. However, it had been found necessary to pay an additional subsidy of £170,000 to the Teachers’ Superannuation Fund, and another new item had been £500.000 transferred to the Land for Settlements Account as part of the finance for servicemen’s rehabilitation. Surplus of £4,611.000 The year’s transactions had resulted in a surplus of £4,611,000. Exercising an authority under the War Expenses Act, 1939, the Government had transferred this amount to the War Expenses Account to assist in meeting the costs of J Force and other re-

maining war commitments. With this assistance it was expected that further borrowing for war purposes during 1947-48 would be obviated.

Mr Nash said that revenue from taxation as a whole in' 1947-48 was estimated at £89,710,000, compared with the corresponding figure of £90,715,000 last year. Customs revenue had been estimated at £20,300.000, compared with £15,719,000 last year. “Import licences issued for the 1947 period were in excess of the previous year’s figures, and more imports can be expected,” he said. “Although production in Great Britain suffered from a severe winter, combined with a shortage of coal, and imports from the United States and Canada are complicated by the, dollar shortage, evidence as to the availability of goods formerly unobtainable supports the view that this year’s imports should be appreciably greater than for last year.

“Sales tax receipts. £15,300,000, are based on an anticipated expansion in volume of imports and locally produced goods. Income tax revenue continues to increase as a result of improved trading and industrial conditions, and for the current year the estimate is £35.500,000, compared with the £32,085,000 collected last yeari

“The national security tax chased as from April last, and £760.000 has been credited in the accounts from this source for the current year, compared with £9,404.000 last year. The difference of £8,644,000 exceeds the additional tax returns expected to accrue under other heads.

“The remaining credits to the Consolidated Fund include interest on the investment of public moneys, profits ’’from State trading undertakings, departmental receipts (representing payment for goods and services supplied by departments), and stabilisation recoveries, which are reimbursement of subsidies mainly from the primary industries accounts. These combined are expected to realise £19,150.000.

Higher Estimated Receipts “The total receipts into the Consolidated are estimated at £108.860,000 for this year, an increase of £566,000 over actual receipts credited last year.” It was estimated that, under the heading of expenditure from the Con-

solidated Fund, £22,782,000 would b* required for debt services (covering interest on the public debt, provision for debt redemption, and administration costs) this year, compared with £22.515.000 last year, said Mr Nash. Payments under Civil List and other permanent appropriations were estimated at £740.000, compared with expenditure under the corresponding headings during 1946-47 of £6.415.0(Xk Mr Nash said there were two reasons tor this large variation: (1) the £3,000,000 transferred to the War Expenses Account last year as part of the monetary gift to Britain was nonrecurring; and (2) it was no longer necessary to provide under this item for the transfer of funds to the Main Highways Account, because the cost if maintaining highways would in lurnre be paid directly from a new vote, highways maintenance, in the Coniolidated Fund. Mr Nash said the amount provided m the annual appropriations of departmental votes this year was £81,994,000. A total of £16.000,000 was being transferred to the Social Security Fund, or £2,000.000 less than the previous year’s contribution from the Consolidated Fund. Other social services would account for £18.986,000 this year, the additional cost of nearly £2,000.000 mostly representing increased subsidies to hospital boards and the provision of further educational facilities. Nearly all costs for the armed services w’ould be paid in future from the Consolidated Fund. Hence, estimated expenditure from the Consolidated Fund, at £10.134,000. was about £3.000.000 more than in 1946-47, but actually the combined expenditure on the armed services from the Consolidated Fund and the War Expenses Account was much less this year. Effect of Wage Increases Other votes from the Consolidated Fund showed an increase from

£18,060,000 to £23,415,000, Mr Nash continued. Expenditure, shown in detail in the main estimates, was £ 105,516,000, but special provision would have to be made to cover the situation resulting from the Arbitration Court’s recent ruling on wage increases. Items such as additional hospital subsidies, increased wages, and cost of stores and equipment would absorb £2,350,000? and £994.000 had Deen allowed for the normal supplementary expenditure which could not be foreseen when the main estimates were being compiled. The increased cost of social. security benefits would be met in part from increased revenue irom the social security charge, and the balance from the £16,000,000 from* the Consolidated Fund. The following table gives estimated •eceipts and expenditure under main headings for 1947-48:

Loans Maturing This Year. “During the present financial year, substantial parcels of existing debt will have to be dealt with. These comprise:—Domiciled in New Zea,and ’ £8,01Q,030 (maturing September dom iciled in Australia, £82,300 (maturing September 15. 1947); domiciled in London, £150.000 (maturing September 15. 1947); domiciled in London, £14,027,000 (maturing November 1, 1947); domiciled in London, (maturing March 1, 1948- * T A. e loans maturing in September, wixether domiciled in New Zealand or overseas, will all be paid off. but New Zealand holders will be able to reinvest in the present 3 per cent, tap issue maturing July 15, 1962-64. two London loans totalling £38.000,000 in New Zealand currency, the first one for £14.000,000 has a fixed maturity date of November 1. the other loan of matures on March 1, 1958. but we have the option to repay on or after March 1, 1948. on giving three months’ notice. As these loans carry interest at 4J per cent., it is <?bto our advantage to deal with Doth loans this year, and arrangementi are now m train for this purpose.’’

Receipts Taxation— Customs 20.300,000 Beer duty 4.370.000 Sales tax .. .. 15,300,000 Film hire .. 130.000 Highways 3.300,000 Stamp duty 9.000.000 Land tax 950.000 Income tax .. 35.500,000 National security tax 7GO.OOO Miscellaneous .. 100,000 Total 89.710,000 Interest 5,500,000 Profits of trading undertakings 2.160.000 Departmental receipts 11,490,000 Total 19.150.fo0 Total receipts 108.aww Expenditure Permanent Appropriations— £ Debt services— Interest and management 18,215.000 Repayment 4,567,000 Total Other special acts 22,782,000 740,000 Total 23.522.000 Annual Votes— Social security 16,000,000 Other social services 18,986.000 Armed services 10,134,000 Stabilisation 13,459,000 Other votes .. 23.415.000 Total .. 81.994.000 Total expenditure Main Estlmates Additional costs arising out of Arbitration Court’s decision 105,516,000 Increased subsidy to hospital boards 210.000 Increased war pensions 140,000 Increases in departmental votes for wage and salary increases and for stores .. 2,000,000 Total Supplementary Estimates arid 2,350,000 contingencies 994.000 Total expenditure .. £108,860.000 “Repayments totalling £16.395 000 were effected from the following s ources:— Public Debt Repayment £ Account 7,170.000 Loans Redemption Account 5,725,000 War Expenses Account .v 3.500.000