ECONOMY OF AUSTRALIA

Press, Volume XCVII, Issue 28657, 6 August 1958, Page 13

ECONOMY OF AUSTRALIA

“Continued Advance” (Rec. 11 p.m.) x CANBERRA, August 5. In spite of the sharp setback to rural industries through drought and the drop in export prices, the economy as a whole continued to advance, said the Treasurer (Sir Arthur Fadden) in his Budget speech today. This showed that the expansionary forces which had operated in the country during recent years had great strength and had imparted a great degree of resiliency to the economy. The last year also showed, he said, how .much could be done by “timely and well-judged action

in the fields of monetary and budgetary policy to offset adverse trends and support the initiatives that make for local expansion.” Sir Arthur Fadden said there must be an enlargement of activity sufficient to ensure greater employment and increased markets for the larger output of mills and factories, which in turn required an increase both in total expenditure and in each of the main sections of expenditure—private and public investment and on finished goods and ‘services. Sir Arthur Fadden said such a rise in expenditure must be sufficient to support the necessary increase in actiyity aqd no more. “We do not want to promote such a growth in spending as will at some later stage give rise to excessive demands for goods and resources and in particular for imported goods,” he said.

Sir Arthur Fadden said the Government aimed to counter weaknesses in Australia’s position by “giving a broad stimulus to the economy. “Some, no doubt, will say we ought to do more than we propose to do and, in particular, that we ought to reduce taxation further.

“That is something we would have been glad to do had the revenue position been stronger,’’ he said. .

The Government proposed 10s a week supplementary assistance to age pensioners, either single or married, but with' only one partner receiving a pension, who paid rent.

The Government also proposed to liberalise the means test, to raise the limit of property beyond which a . .person was debarred from the pension by £ASOO to £A2250 in the case of a single pensioner and double that in the case of a married couple. The Government proposes to encourage investment of Australian capital in companies engaged in mining or prospecting for oil in New Guinea by allowing them full deduction on calls paid to such companies, which must first elect to forgo their present exemption of profits to the extent of shareholders’ concessions in the event of oil being discovered in commercial quantities.

The deduction is not being made to overseas investors.

The Government will continue its 20 per cent, annual depreciation allowance on primary producers’ plant and structural improvements and, in calculating the taxable profit of the sale of rural land, will offset the capital expense of development against profits. The Government will allow a special 20 per cent, depreciation rate on plant and certain buildings acquired after June 30, 1958. and used exclusively in the fishing and pearling industries.

The maximum rates of living allowances payable to holders of Commonwealth scholarships will be increased by 10s a week for a scholar living at home and by 15s to scholars living away from ■home. The means test governing the pajnnent of the living allowance will be liberalised. Sir Arthur Fadden said the Government endorsed the principle of Commonwealth assistance to special insurance funds established by registered health ‘insurance organisations for persons who could not be insured at normal rates because of age, preexisting or chronic illness. The Government proposes to increase taxation allowances to residents of remote areas of Australia and to defence forces serving overseas.

Frigate For Far East. —The antisubmarine frigate H.M.A.S. Quiberon left Sydney yesterday to join the strategic reserve in the Far East. With a crew of 200 men and officers the Quiberon will be away for about seven months.— Sydney, August 5.