FALLING INCOME

Dominion, Volume 24, Issue 287, 31 August 1931, Page 8

FALLING INCOME

Serious Revenue Drop YIELD FROM CUSTOMS Committee’s Problems . SEARCH FOR SOLUTION (By Our Parliamentary Representative.) With the break in the work of Parliament through the setting up of the Special Economic Committee, things political have been thrown into the melting pot. The week ended with significant references to the postponement of the general election, and whatever the future may hold, it is expected that the events of the coming days will be of unusual importance.

The eyes of the country are on the Economic Committee, for in spite of the fact that the official reports of its proceedings are meagre in their details, what little can be gleaned from Its deliberations has relegated interest in the somewhat colourless debating of the House to second place. Enough has been gathered during the past week to show most clearly that from the wealth of evidence already given one fact stands out in clear perspective. That is that serious concern is being caused by the continued fall in the national income, chiefly on account of the continued. decline in Customs revenue, and It is quite clear that whatever line, of action the ten members consider necessary to bring about tha economic rehabilitation of the Dominion, any plan that is evolved will have to take into consideration tnc counteracting of what is rapidly becoming a serious problem. Two Main Issues. It would appear that two main issues have been placed before the committee during the week it has been sitting. One concerns the plight of the primary producer, upon whose welfare it is recognised that the prosperity of the whole country Is directly dependent. The other, which may be regarded as the logical consequence of the former, Is the-serious falling off in imports. The contention is that steps must be taken to combat the decline in national revenue and to offset the increasingly difficult | position of State finance by rehabilitating the farming community in particular and then business people in general. Successive Governments have come to rely upon Customs revenue for a great deal of national revenue. Any fall in these returns is regarded with the utmost concern, so that the present Government was, faced with a real problem when the Customs revenue for the first three months of the current financial year dropped by over £300,000. Although the figures for the four months have not been published, it is understood that the decline for that period has already exceeded £400,000 as compared with the corresponding period of last year. Members of the Economic Committee are believed to have been presented with this fact, and also with the point that had it not been for the heavy withdrawals from bond in anticipation of the Budget last month the falling off in revenue would have been much greater. Reassuring statements have been made by the Prime Minister during the week to the effect that there was no reason to anticipate further falling off in Customs revenue, and that there was every prospect of the position improving. This opinion is not subscribed to by one or two members of the committee, nor by prominent businessmen, and those who are in touch with importers incline to the belief that the greatest problem -of the many concerning this year’s national accounts will be wrapped up in the decline in Customs revenue. Outlook Not Bright. ” A decrease in Customs revenue of £195,976 for the current year was anticipated by Mr. Forbes in his Budget. As there has already been a drop of about £400,000 for the first four months, the prospects of a rapid improvement are not bright. There is still a belief among departmental authorities that importers will renew stocks to an extent that will relieve the position, but it has been stated definitely by several Wellington merchants that this will not be so. Ifi any event, it is pointed out, cheaper goods are being brought into the country to suit the ability of the purchaser to pay, and as it is not so much the volume of imports as their value that is of moment in assessing Customs revenue, this will have a distinct bearing upon the whole question. The Commonwealth Government, it is pointed out, hoped that the renewal of stocks would bring greater revenue to the Customs Department, but. the decline in the purchasing power of the people in Australia and the diversion of trade into cheaper lines, had the exactly opposite effect. In 1929-30 Australia collected £30,200,000 in Customs revenue, and the Commonwealth budgeted for £18,000,000 from this source in the following year. This year the Budget estimate is £16,000,000. Figures prove that the position is worse than was anticipated. General Election Question. In the June quarter, for instance, £4,700,000 was collected from Customs as against £8,800,000 for the corresponding three months of last year. This being so, the question is being asked whether the New Zealand Government has made sufficient allowance for the falling off in Customs revenue for this year. From what the Leader of the Opposition, Rt. Hon. J. G. Coates, said in the House on Friday, the question of extending the life of Parliament will be considered by the Reform Party in the light of the committee’s report. As Mr. Coates said, if a definite plan can be agreed upon, Parliament • will have to see it through, and this may be interpreted as meaning that the interruption that would result from the general election would have to be avoided. Labour is definitely opposed to any such course, but as Mr. Coates is anxious that any rehabilitation programme should not be marred by party wrangling, everything will, as he said, depend upon the report of the committee.