STATE FINANCES

Dominion, Volume 37, Issue 122, 18 February 1944, Page 4

STATE FINANCES

Details Of Revenue And Expenditure ACCOUNTS FOR NINE MONTHS Heavy War Commitments Revenue and expenditure of the Consolidated Fund, 'Social -Security Fuud and War Expenses Account for the nine mouths ended December 31 of the current financial year ivere announced yesterday by the Acting Minister of Finance, Mt. Sullivan. Consolidated Fund revenue amounted to £26,803,000 and expenditure to £26,314,000. Receipts of the .Social Security Fund totalled £10,540,000 and expenditure £10,732,000. Payments. from the War Expenses Account for the nine months amounted to £109,021,000 and receipts to £117,083,000. The Minister said that apart from the lease lend aid and the overseas borrowing under the Memorandum of Security, the whole of our requirements for war and other purposes had been financed from current resources in the form of taxation, genuine savings from income and public subscriptions to the Third Liberty Loan. Generally, all the indications were that the Budget position was quite satisfactory. “Notwithstanding our heavy commitments for war purposes,” said Mr. Sullivan, “the accounts to date reveal a sound position under all headings. This is reflected in the three principal accounts, the Consolidated Fund, the Social Security Fund and the War Expenses Account.” Details of the Accounts are as follows :—

“It will be noted,” said the Minister, “that revenue for the nine months shows au increase of £2,500,000 as compared with the corresponding period last year, but while most revenue headings show a slight increase, the major portion of the increase is under Customs duty, stamp duty, income tax and interest., Income tax is up by £879,000, but this is accounted for to a large extent by the greater use being made of the facilities for payment of the “tax progressively through the year instead of- in one sum in February or March. The extra interest for the , period comes from. the earlier receipt of interest from the trading undertakings. Increase in Expenditure.

“Expenditure, on the other hand, is also up by £2,400,000, the only substantial increases being debt services £1,300,000, corresponding to our increasing war debt, and social services £1,600,000. Under the latter heading war pensions account for approximately £600,000 and transfers to Social Security Fund £1,000,000. the last-mentioned item being due to a larger amount being transferred earlier this year.

“Expenditure out of the Social Secur.ty Fund has increased by £943,000 over Lie corresponding period last year, ’ said the Minister. “A total increase for the year of £1,453,000, however, was provided for in the Budget, so that the increase .for the nine months is within the proportionate part of the total for the year. Receipts on the other hand, apart from the amount transferred from Consolidated ■Fund, are up by £311,000. The net increase in expenditure for the year is to be met from cash balances in the fund at the beginning of the year. The result to date regarding this account shows a satisfactory position and well within what was visualized when the Estimates and Budget were submitted to Parliament.” WAR EXPENSES ACCOUNT. Receipts. Nine

“On the receipts side of War Expenses Account,” said Mr. Sullivan, "there is an apparent lag on the taxation item, but the reason is the late receipt of im come tax, the major portion of which is received in the last three months of the financial year, and as one-quarter of tne total income tax is credited to War Expenses Account, the position of this item will no doubt be adjusted when income tax comes to hand. Under the heading publie war loans and national savings, the receipts to date are close to the estimate for the whole year, due to the fact that the major part of our public loans was raised in one issue, the £35,000,000 Third Libertv Loan, earlier in the yeat. When that loan was oversubscribed, however, the excess was used. to reduce the amount owing to the British Government under the memorandum of security, and is reflected on the expenditure side of the statement. The balance still required is to be made up from three sources, firstly, the outstanding instalments under the Third Liberty Loan where investors elected to pay over a period : secondly, the continuing receipts from national savings, and thirdly, the ‘over the counter’ issue «t present on sale. “Under the heading 'Civil’ there is an i ,o ver-expenditu.r_e for., the time Aciflg, but

this arises mainly from war expenditure being carried out by various Government departments, the amounts for which will be transferred to other subdivisions, Navy, Army, Air, and reverse lend-lease, before the close of the financial year as detailed accounts become available. The total expenditure out ot War Expenses Account, however, for the nine months, is within the appropriate proportion of the Budget estimate. For war purposes, estimates of expenditure for a year ahead must always be much more uncertain than for civilian purposes, but for this year our war budget appears to be working satisfactorily. One aspect of the matter that £ would mention is that the huge volume of expenditure involved has been financed without any assistance from'the Reserve Bank. lii fact, apart from lease-ienrl aid and the overseas borrowing under th» memorandum of security, the whole oi our requirements for war. and other purposes have been financed from current resources in the form of taxation, (genuine savings from income, and public subscriptions to the Third Liberty Loan. “To maintain this record, which is vitally important from a stabilization point of view, we need a continuation of public supiwrt through national savings and subscriptions to the ‘over the counter’ sales of Liberty Loan stock now on offer. As announced recently by the Prime Minister, national savings havereached the magnificent total of £20,000,000. of which nearly £10,000,000 has been received this year, but still moris required. The Liberty Loan stock on offer is on exactly the same terms as the main loan, and we still require about £3,000,000 to complete the programme for the year. Investments can be made at any post office or trading bank, so that persons or firms w-ith money to invest can receive a good investment and at the same time know they are playing nn important part in supporting the war

CONSOLIDATED FUND. Ileceipts. 0? Nine mtbs. ended 1943-44 December 31, Estimates. . 1943. 1942. Taxation: £ . L 1 Customs 6.600,000 5,614,000 5,187,000 Beer duty * 1,800,000 1,523.000 1,435,000 Sales tax .. 3,’500.000 2,659,000 2,890,000 Highways . 1,600,OTO 1,335,000 1,266.000 Stamp Duties 1JOO.OOO 1.672,000 1,293,000 Land tax .. 1,000,000 TO5.000 008,000 Inco;uo tax 19,100,000 6,380,000 7,501,000 Miscellaneous 200,000 169,000 . 148,000 Total taxation 35.500,000 22,327.000 20,508,000 Interest ... 4,100,000 2,969,000 2,533,000 Other receipts 2,000,000 1,507,000 1,281,000 .Total receipts 41.000,000 20,803,000 24,322,000 Expenditure. Permanent Appropriations: Debt services 16,100,000 9,692,000 8,387,000 Others 3,476,000 3,006,000 3,691,000 19,800,000 12,698,000 12,078.000 Annual Appro prlations: Social scr14,829,000 S.S36.000 7,201,000 Other votes 0,809,000 4,780,000 4,'591,000 41,394,000 26,314,000 23,870,000

SOCIAL SECURITY FUND. Receipts. 1043-44. Nine months ended Estimate. December 31. 1943. 1942. £ £ £ Social Security 8,254,000 Charge .... Registration 11,600,000 S, 000,000 436,000 ■570,000 453,000 Transfer from Consolidated Fund 4,100,000 1,500,000 500,000 Miscellaneous — 37,000 39,000 16,275,000 10,540,000 0,229,000 Expenditure. Annual approprint ions, ineluding administration expenses and medical and hospital bene fits 4,850,000 3,501,000 3,063,000 Monetary bonefits under the Social Security Act .... 12,517,000 7,171,000 6,726,000 17,403,000 10,732,000 0,789,000

Budget months Estimate ended for vear December 1943-44. 31, 1943. £ £ War taxation ...'.. '40,000,090 27,394,000 Transfer from Con5,700,000 solldated Fund .. 5,700,000 Public War Loans including National 38,767,000 Savings 40,000,000 Loans from Depart8,000,000 mental funds 10,000,000 Memorandum of Se9,739,000 curity 12,000,000 Reciprocal Aid 21,134,000 Lend Lease 40,000,000 Suspense — 6,250.000 Miscellaneous 300,000 99,000 148,000,000 117,083,000 Expenditure. 4,680,000 Naw 10,000,000 Arniv 68.000,000 51,613,000 Air ' 34.000.000 18.167.000 Civil 16.000,000 16,346,000 Reciprocal Aid —Re- z 12,788,000 verse Lend . 20,000,000 Rehabilitation ■ — 240,000 Loans Redemption . — 5.187,000 148,000,000 109,021.000