STAGGERING BURDENS

Evening Post, Volume CXXX, Issue 130, 28 November 1940, Page 13

STAGGERING BURDENS

«WE £HALiL BE

POORER

EXPENDITURE #F HUGE.SUM

(By Trans-Tasman.An* Mall, from "The Post's" ftepresentative;)

SYDNEY,-November 23

'"We shall be much .the poorer," said the Federal' 'Treasurer,- 'Mr;: Fadden, ■during his Budget speech-' inrther House of Representatives. His' tax-paying victims believe him.. . }- ' .

. Australia, during the year ending June'3o next, is going to. spend £276,623,000. Of. that, £186,000,000 is war expenditure—£l43,ooo,ooo in Aus? tralia and £ 43,000,00 a overseas. Civil expenditure 'from revenue will be £84,853,000, and Post Office ,works from loans will cost £ 2,0,00,600. "Relief for wheat farmers will account for £2,770, - 000, and a miscellaneous group £1,000,000. r" '■ . , • .';:■', ■•_••

Towards this ..expenditure,, revenue will, contribute £150,109,000. .Oh the basis of the taxation now .in-force, £119,000,000 will be raised. The difference of £31,100,0Q0 represents the additional taxation introduced''in the Budget. .But last May, in a supplementary Budget, there were introduced' measures which, this financial year, will be responsible for-£14,000,000 of new taxation." Thus the total of new taxation is £45,100,000—represented by £28,450,000 of direct taxation and £16,650,000 indirect. ] '■ ." -.;,..

.Increased rates of income taxation will bring in £18,500,000 of the total direct taxation increase. The total.from income taxation will be £33,000,000; Incomes over £1000 a year will provide £20,000,000 out of the estimated total income of £85,000,000;'. incomes of between .£4OO and £1000 will provide £B^ooo^ooo out.of an estimated total income of £143,000,000; and ' incomes lower than £400 will provide £5,000,----000 out of their total estimated income of £517;000,000.

Steeply increased rates -will provide the additions from the middle and higher groups .of incomes.. -M-ost of the "under £400" incomes .will be taxed for "the first time. Most of them are brought -within the. taxable field by the lowering of the statutory exemption from £250 to £ 1501 .The basic estimate is that a married man with two children will not pay income tax if he earns less than £6. The single man oh the basic wage will, pay 6d in the; £1. for a complete financial year. Rates of taxation above these two basic elements are unpredictable, almost incalculable. The Taxation Bills implementing them will give, the details. ; '. ' ■ OVERSEAS INVESTORS.' '■ New Zealand shareholders in Australian companies will have something to'ponder about in the increased rates ou companj income taxation. Firstly, the present rebate, of income'tax in j respect to dividends oh, which income taxation has already been paid; is abolished, the expected yield -from this source being £1,700.000. - A wartime company tax, graduated according to the percentage.of profits to capital em- I ployed, is expected.,to yield £4,250,000 during the remainder of this" financial year. .. An increase from Is to 2s w the £1 in the tax on undistributed' profits will be responsible for the collection Of £2,000,000. being helped by tire.withdrawal of the exemption of 25 per cent, of such- undistributed profits in the case of public"companies. Companies taxation will thus be responsible this financial year for an estimated

yield of £7,950,000. Land tax and! death duties, neither increased, will! contribute £1,500,000 and £500,000 respectively. Smokers and alcohol drinkers will be affected by increased excise duties, and practically everyone by increased sales tax. These two divisions-of indirect taxation will yield £8,500,000 and £8,150,000 respectively, being increases through new -taxation of £4,200,000 and £3,400,000. The general rate of sales tax goes up from 8 1-3 per cent, to 10 per cent.. Certain goods of a less essential character, will carry a tax of 15 per cent. Exemptions on other goods, such as basic foodstuffs and farmers! machinery and materials, will be withdrawn and a tax of 5 per cent, imposed. GOING TO BE BUSY.

!: Naturally, all increases caused by increased excise duties and sales tax will be passed on to the consumer, and the Prices Control Commissioner is Agoing to be a busy little man. On his preliminary announcement, the effect of the increases can be gauged. A bottle of beer will be twopence dearer. A pint or half-pint of that, beverage will be a penny dearer. A nip of whisky,, gin, or brandy will cost a penny more, and the increase for a bottle of those spirits will average about 2s. ■ Pipe and cigarette tobacco will be twopence an ounce more and the sixpenny packet of cigarettes will give way to a sevenpenny one. Matches will cost lj-d a dozen more. ' There is the "sock everyone Budgt_an e unenviable task for any Treasurer. There may be differing views ,how the burden should be spread, but Australians recognise there is no easy path to paying for this war. The most resentment has been expressed by members of the Labour Party and by trade union officials. The trend of their views is that the big companies earning big profits should have been singled out for heavier taxation before the' low-income men were taxed. But ■the general. opinion .seems to be that Mr. Fadden has blended courage with prudence. And so we all await our fate, .- "