Tax Receipts For Year Lower Than Expected

Press, Volume CIII, Issue 30454, 30 May 1964, Page 17

Tax Receipts For Year Lower Than Expected

(.Veto Zealand Press Association)

WELLINGTON, May 29.

Income tax receipts were £10,700,000 below the Budget estimate of £155 million, said the Minister of Finance (Mr Lake) today when releasing a summary of the transactions in the public account for 1963-64. In 1962-63 income tax collected amounted to £134.1 million.

Mr Lake said the decrease was offset to some extent by higher receipts from customs duty and sales tax.

However, the net short-fall in taxation receipts had resulted in a small deficit of £1.4 million in the Consolidated Fund and of £2.7 million in the Social Security fund.

The expenditure from the Consolidated Fund was close to the estimates and the small deficit was absorbed by the opening balance in the fund. Expenditure from the Social Security Fund was also near to the estimate.

The transfer from the public account to Social Security Fund was held at £35.9 million (as against £37 million budgeted) which together with the cash balance was sufficient to balance the fund as at March 31.

Mr Lake said expenditure on social services (which included expenditure in the Social Security Fund) totalled £237.5 million. State Houses

Other expenditure included £8.3 million in State house construction, £29.7 million on

roads, and £18.5 million was made available to the State Advances Corporation for financing home owners, farm development and some local body housing schemes. Of the expenditure on defence, £5 million was met by a transfer from the reserve fund.

Net loan receipts totalled £95.4 million (£81.5 million in 1962-63) including £12.2 million raised in London, £0.9 million from the World Bank on behalf of a harbour board and £82,300,000 in New Zealand. Of the amount raised in London, £7,3 million was used to redeem maturing debt The amount raised in New Zealand included £27 million from the Post Office Savings Bank, as against £lB.B million in 1962-63.

Loans Repaid

During the year, £24.7 million of maturing debt was repaid in New Zealand. In addition. the third local cash loan of £lO million in February, 1964, was all paid to the Reserve Bank in reduction of Government indebtedness. “This action had the effect of reducing excessive liquidity and was therefore a most important factor in maintaining balance in the economy,” Mr Lake said.

He said although tax receipts had been lower than expected, the over-all cash receipts including a high inflow of small savings, had enabled the Government to increase slightly the balance in the public account, even after contributing to stability by repaying the £lO million of debt to the Reserve Bank.