AUSTRALIAN BUDGET Record Expenditure For Defence

Press, Volume CVII, Issue 31449, 16 August 1967, Page 17

AUSTRALIAN BUDGET Record Expenditure For Defence

(N.Z. Press Association—Copyright)

CANBERRA, August 15.

Australians this year will pay a record 1118 million dollars for defence, a rise of 18 per cent, under the annual Budget presented in the House of Representatives tonight.

But at the same time they heard Federal Treasurer, Mr William McMahon, warn them that the country could not continue for long the increased rate of defence spen ding “without deep impairment of the economy.”

In a “stay-put” Budget, with an eye cocked to an important Senate election later this year, Mr McMahon made small taxation and social security concessions and said that on present prospects another good year could be expected. There was no change in taxation on cigarettes, beer or spirits or consumer goods generally. Over all, the Budget provides for expenditure in 1967-68 of 6483 million dollars, a 9.5 per cent increase compared with 11 per cent the previous year. Receipts are estimated at 5887 million, an increase of 9.3 per cent compared with six per cent the previous year. The gap of 596 million dollars will be covered by local and overseas borrowing. Defence expenditure was a dominant feature of the Budget although the 18 per cent jump this year does not compare with the heavy 34 per cent increase made last year. In the coming year defence spending will rise 168 million dollars on the 950 million dollars actual expenditure last year. National Practice “Defence must, and does, rank high in our national priorities,” said Mr McMahon. "We must be prepared to play an effective role in our own defence and, in co-opera-tion with our allies, in the security and stability of this part of the world.

“But we would not be helping either ourselves or our allies were we to attempt to over-reach our capacity.” Mr McMahon said it was not the present level of defence that gave concern so much as the rate of escalation. Five years ago Australia's defence bill was 428 million dollars, nearly 700 million dollars less than the current estimate. Over four years the rate of increase had averaged 22 per cent annually. “Plainly we cannot continue for long to meet anything like

the rate of increase of recent years without deep impairment of the economy,” he said. “As it is, estimated costs this year will be equivalent to 5 per cent of the estimated gross national product “Among Western world countries, only the United States, Britain and France are at present devoting a larger proportion of their resources to defence than we are.” Another serious aspect of defence spending was the mounting external costs which this year could rise above 350 million dollars, about 11 per cent of the country’s export earnings. Five years ago the figure was well under 100 million dollars a year.

Generally, Mr McMahon’s Budget was straightforward, with no surprises. Apart from defence, the main points were: TAXATION BENEFITS: Taxation allowances for dependants to rise 26 dollars a year, bringing the wife’s allowance to 312 dollars and for one child to 208 dollars. Taxation exemption for life insurance and superannuation premiums to rise from 800 dollars to 1200 dollars. Child endowment increases for larger families of 25 cents

to one dollar 75 cents a week for the fourth child, 50 cents, rising to two dollars for the fifth and a further 25 cents for each successive addition. EDUCATION: The total Commonwealth expenditure will be about 194 million dollars—a 35 per cent increase. POSTAL CHARGES: Increased Post Office charges, adding 36 million dollars, rejected earlier this year by the Senate, have been reintroduced with effect from October 1. Saying that there had been no general increase in mail charges or cost of local and trunk telephone calls since 1959, Mr McMahon said the Post Office was headed for a loss of more than 40 million dollars in the financial year if charges were not increased. AIR NAVIGATION CHARGES:

Charges payable by all aircraft operators will rise by 10 per cent “in accordance with the policy of progressively recovering from the air transport industry a great proportion of the increasing cost of providing, maintaining and operating airports and airways facilities.” The increase will bring in an estimated 257,000 dollars in 1967-68.