“Difficult Year For Budgeting”

Press, Volume XCVIII, Issue 28906, 28 May 1959, Page 14

“Difficult Year For Budgeting”

(A«w £«auma Press Auoaalwm

WELLINGTON, May 27. Budgeting last year was “much more difficult that usual,” the Minister of Finance (Mr Nordmeyer) said in a broadcast tonight when he reviewed the Public Accounts for the year ending March 31, last. He said three factors had a major influence on financial planning tor the year. These were:

The introduction of P.A.Y.E. from April 1, 1958. The impact of the drop in overseas prices for New Zealand's exports. The need for overseas borrowing.

Mr Nordmeyer said the new P.A.Y.E. system, with the remission of income tax for 1957-58 and the first £lOO of income tax tor 1956-57, made the estimating of revenue particularly difficult. Referring to the drop in export prices, he said the introduction of import control and the “inevitable" decline in customs and sales tax revenue made the estimating of revenue from these taxes more difficult than Usual. Mr Nordmeyer said the need to augment overseas funds with external borrowing considerably affected the country’s finances last year. Tax Yield Estimates Last year’s Budget provided for a taxation increase estimated to yield £27fi million than would otherwise have been received. “Allowing for this I estimated taxation revenue would yield £194.7 million. In fact, it yielded £205.6 million—£lo.9 million above the estimate.” Mr Nordmeyer said. "Other revenue was expected to yield £34.4 million. It yielded £35.7 million. “We budgeted to spend £229.8 million and we actually spent £226.9 million—a' saving of £2.9 million. “The net result in the Consolidated Fund was that receipts were £11.2 million up. and expenditure was £2.9 million down,” Mr Nordmeyer added. Referring to the fact that income tax receipts amounted to £109.4 million, compared with an estimated £lO5 million. Mr Nordmeyer said this reflected the higher incomes enjoyed by certain sections of the community towards the end of last year which

were not foreseen when the Budget was prepared. Social Security Fund

“In the Social Security Fund the year resulted in a surplus of £15.9 million. Expenditure totalled £89.5 million against the Budget estimate of £88.5 million, or an increase of £ 1 million. “Revenue -totalled £105.4 million against the Budget estimate of £94.9 million, thdt is an increase of £10.5 million.

“I had budgeted for a surplus m the Social Security Fund of £8.4 million, this being the amount estimated to be received during the year in respect of Social Security charge payable by selfemployed persons on 1957-58 income.

“This charge was to be spread over a period of three years and

I estimated that £6.4 million would be received last year. In fact £10.4 million was paid in. “Obviously many people pre-

ferred to' pay in one sum rather than spread the amount over two further years. In any consideration of the Budget figures, it must be remembered that this is a nonrecurring item and that the further

amounts to be received in the two following years will be much smaller.

“The remaining increase in Social Security revenue was largely due to the introduction of P.A.Y.E.,” Mr Nordmeyer said.