THE AUSTRALIAN BUDGET

Press, Volume LXXXV, Issue 25903, 8 September 1949, Page 5

THE AUSTRALIAN BUDGET

Presentation By Mr Chifley

SLIGHT CUTS IN TAXATION

(N.Z. Press Association —Copyright) (Rec. 11.45 p.m.) CANBERRA. Sept. 7.

Presenting the Budget to the Federal House of Representatives to-day, the Prime Minister (Mr Chifley) said that revenue, allowing fdr income tax deductions which operated from the beginning of July, Was estimated fit £532,600.000. The total expenditure, including a grant of £10,000,000 to the United Kingdom, £9.000,000 in additional payments to the States, and £6,700,000 transferred to the war gratuity reserve, would be £567,000,000, leaving a balance of £34,400,000 to be financed by loans. Tax reductions in the full year would be £9,600.000. They would include an extension for two ye&rs Of the period of special depreciation allowances for the re-equipment of industry, the extension of the incometax concessional rebate for life insurance premiums and superannuation contributions for individuals from £lOO to £l5O, a reduction in the general sales tax rate from 10 per cent, to 8 1-3 per cent, (costing £5.000.000 this financial year and £6.700,000 in the full year), a 20 per ceht. reduction in entertainment tax (costing £BOO.OOO this year and £1,100.000 in the full year), an easing of customs, excise, and primage duties, amounting to £1,500.000 in the current year, and £1,800,000 in the full year. All the amounts are in Australian currency. Mr Chifley said that for the second time since the end of the war it was possible in 1948-49 to balance the Commonwealth Budget. All expenditure, excluding advances to the States for housing, was met from revenue, ahd substantial sums were set aside in the National Welfare Fund £nd the waf gratuity reserve. Zichievements in Four Years In 1944-45. revenue fell short of expenditure by £266.000,000, which had to be borrowed. In the four years since then tax reductions had been made which on present income levels would be valued at £280.000.000 a year; large war accounts, including the lend-lease settlement, had been met; £108,000.000 had been provided for the repatriation and re-establishment of former servicemen and women; £184.000.000 had been found for interest and sinking fund on the war debt; gifts totalling £35.000.000 had been made to the United Kingdom: contributions worth £30.000,000 had been made tor the relief of war distressed peoples; social service expenditure had been increased to £81.000.000 a year; the National Welfare Fund had been built up to nearly £100.000.000; and £132.000,000 had been paid in subsidies to down the cost of living and assist primary producers. The total revenue for the year was £535.000.000. which was £42,000,000 above the estimates. The m:in increases were: (1) income tax and social services contributions. £26.000.000. a result of an exceptional rise in wages and other incomes, and the overtaking of arrears in tax assessments- (2) customs and excise, £11,000,000. a result of an increase in imports and of sales of beer and spirits being greater than was expected; (3) pay roll tax. £l.BOO 000. The total expenditure in 1948-49 was £535.000.000. or £25.000,000 greater than was estimated. Greater Production Planned “Security, higher living standards, and the attainment of an ampler national life all depend on whether we can bring our indisputable wealth of resources into greater productive use.” said Mr Chifley. The Government was attempting to achieve this by systematic developments such as power, water, land, transport, and aviation schemes, and by tackling the population problem on a scale never attempted before. Under the migration programme it was expected that 220,000 migrants would have landed in Australia by June 30. 1950. and that 120.000 would be available for employment.

Already the benefits of immigration had appeared in a higher output of formerly under-staffed industries and faster progress in building and other constructional projects. Reviewing the financial prospects for the coming year, Mr Chifley said that revenue had continued to rise in spite of heavy taxation reductions. Such a rise would probably continue this year, but would be offset by a reduction in taxation arrears. Prices and costs must continue to rise. The net expenditure on defence and war services was estimated at £154.000.000. compared with £195.600.000 in the previous year. Provision had been made for a gross expenditure on the defence services of £64,600.000 and for war and repatriation services of £101.000,000. Progress of Defence Plan The five-year defence programme, now in its third year, was progressing satisfactorily. The cost of the programme was now expected to be £295.000.000. The Army estimates for 1949-50 were based on an average strength of 15.000 full-time-duty personnel and a citizen military force of 23.000. The strength of the citizen military force on July 1, 1949, was 15.776. The air programme included the local manufacture of aircraft and engines and the production of prototypes of new aircraft. An amount of £6.000,000 had been included in the estimates for expenditure on defence research and development, including the long-range-weapons project. Mr Chiflev said that though shortages of materials and certain types of labour and surveyors had caused some slowing of planned works, trials as planned were proceeding on the interim range concurrently with the construction- of the main range. The total expenditure for 1949-50. other than that on defence and war

services, was estimated at £387,000.000. compared with £339.000.000 in the previous year. The major increases would be £11.000.000 in payments to the National Welfare Fund. £13.600.000 in payments to the States, and £15.700.000 in capital works and services,

Expenditure from the Welfare Fund was estimated at £100.400.000, against £80.800.000 last year. The main increases would be age and invalid pensions (£3 800.000). uncmnlovment and sickness benefits (£2.900 000) child endowment (£6.700.000). pharmaceutical benefits (£2.200.000), and medical benefits (£2.000.000). Allowing fof a substantial increase in incomes and profits subject to taxation, the revenue from income tax and social services contributions was estimated at £276 000,000, compared with £272,000.000 last year. At the existing rates, the sales tax revenue was estimated at £40.000.000. or £1,000,000 higher than it was last year. The revenue from the pay-roll tax levied on companies was expected to yield £22,000.000. or £2,000,000 above that for last year. At £60.500,000. customs revenue was expected to be £3.000.000 less than last year’s, but excise revenue, at, £64.000.000. would be greater by £1.300.000 than that of 1948-49. Captain Killed in Mutiny.—Captain Capuro, skipper of the 7575-ton Italian ship Empire Rani, was killed at sea in a mutiny, report the owner’s agents at Suez. The agents said that they received a radio message from the chief officer of the Empire Rani, renuesting the Suez port police and Italian Consular authorities to meet the ship when she docks.—London. September 6. World Swimming Body.—Reuter’s Rome correspondent says that the International Swimming Federation has decided to readmit Germany. It is understood that Germanv will not vet be allowed to have a representative on the executive committee of the federation. and will not be allowed- to compete in the next Olympic Games. —London, September 6.