SOUND POSITION

Evening Post, Issue 20, 24 January 1935, Page 12

SOUND POSITION

UNEMPLOYMENT FUND

SURPLUS OF £684,000

NEED FOR RESERVE

An outline of the position of-the Unemployment Fund as at December 31, 1934, was realised today by tho Acting Minister of Employment (tho Hon. S. G. Smith), who stated that the finances of the board were in a satisfactory position. '~ The cash balance in the fund at that date was £1,478,000. Against this balance there had to be set oft' revenue received in advance estimated at approximately £.150,000, and expenditure' incurred to December 31, but not yet brought to charge, estimated at £.753,000. This balance had to be increased by approximately £109,000, being revenue actually received to December 31 but not paid over to the Treasury by the collecting departments. The estimated actual surplus in tho fund at December 31 was therefore £684,000. In addition to outstanding accounts of £753,000 at December 31, there were imprests outstanding, representing vouchers paid but not yet charged to the various - accounts, of £488,000. The Minister explained that* the estimated surplus of £684,000 represented an increase of approximately £249,000 over the balance at the commencement of the financial year. This increase might be attributed to the buoyancy of the revenue, and to the fact that the numbers .who had become a charge on the fund had shown an appreciable reduction over the corresponding period of last year.

ESTIMATE OF REVENUE. '"It is very pleasing to report," stated Mr. Smith, "that the revenue f rpni unemployment taxation is well up to expectations. At the commencement of! the financial year it was estimated that the revenue would reach £4,768,000, being £341,000 in excess of the actual receipts for the previous year. In view of the fact that the numbers seeking relief from the fund showed an appreciable reduction, it was decided to reduce the taxation tolOd in tho £ aa from October 1, 1934, and to grant exeinptioji to persons under twenty years of age. In addition, certain other exemptions were provided, the effect of which will not bo felt until next financial year. The revised estimate, on the basis of reduced taxation for half the year, placed the revenue at £4,346,000. The actual receipts for the nine months ending December 31, 1934, amounted to £3,635,408. As previously explained, it is estimated that approximately £150,000 of this amount represents revenue received in advance, but even after allowing for this it appears that the estimate of £4,346j000 will b" slightly exceeded. Whilp the improvement'in the revenue can to a certain extent be attributed to the operation of improved methods Of collection of wages tax, there is no doubt that the chief factor is the steady improvement in industry generally." ■ ... •

INCREASED EXPENDITURE. *T-lie.Minister stated that in considering the amount of the balance, it had to be remembered that taxation for the balance of the year would be received at the reduced rate of lOd in the £ and that in addition the recent review' of "(the.. scheme ; 5 allocations..' would Aut volve tho board in additional ■ expenditure estimated on present registrations at £175,000 per annum. It would be appreciated that it was as much in tho interests' of tho unemployed as of the

taxpayers that a. sufficient balance should bo maintained in the fund.

"The effect of the special exemptionsand the reduction in taxation will considerably reduce the money . available for unemployment relief during the next financial year," concluded the Minister. "For this reason it is essential that,there should be adequate balance in the fund at the close of the present financial year to meet the normal increase in expenditure' during the next winter. Tho balance in the fund at December 31 would constitute, on the present rate of weekly, expenditure, a reserve sufficient for about nine weeks' allocations." .