BY DIFFERENT ROADS

Evening Post, Volume CXXXII, Issue 106, 31 October 1941, Page 4

BY DIFFERENT ROADS

Comparison of the Federal Labour Government's Budget with that submitted by the short-lived Fadden Government is remarkable for the similarities it discloses, as well as for the points of difference. Mr. Chifley has budgeted for a record sum, £325,000,000, but it is only £3,000,000 more than Mr. Fadden proposed to raise. But whereas Mr. Fadden proposed to cast his net widely, the Labour Treasurer intends to get his extra revenue from a smaller class and to demand more from that class. The main feature of Mr. Fadden's.. Budget was an ingenious" scheme for a; combination of : taxes an<i-;tpans-,7.bearing a striking likeness to the plan fbr compulsory savings or deferred wages proposed in England by Mr. J. M. Keynes. All incomes in the Commonwealth above £100 a year would be required to contribute on an Australian-wide scale. The contribution for an income of the same size would be equal in every State, but in the States having, high State taxation the amount payable to the Federal Treasury would be less than in those having low State taxation. ' Also, with low incomes a greater part of the contribution would be treated as fa loan; with high incomes the greater part would be taxation. The Labour j Government dispenses with this com- j pulsory saving programme and substitutes higher taxation (higher even than Mr. Fadden proposed) on companies and bigger incomes. Both j Governments have the same twofold aim: to obtain money for war and to reduce civil spending power. But Labour, because of its affiliations, feels compelled to ignore the vast spending power of small and medium incomes.' The "Sydney Morning Herald's" criticism appears to be much to the point. The Labour scheme will operate to reduce capital (by taxation on the company and personal incomes that would be saved), but will not check civilian spending on consumable goods. The other principal differences are in the scale of expenditure on social purposes and in the method of approach to Government control. Both Budgets propose to increase soldiers' pay and allowances to wives. Also, civil pensions are to be increased, but Labour intends to go further than Mr. Fadden in civil pensioning. Both Governments recognise the necessity for being wary of inflation and make a point of precautions against what is termeda secondary expansion of credit through ihe 'trading banks. But whereas Mr. Fadden proposed to guard against this danger by requiring the trading banks to hold certain deposits with the" Commonwealth Bank and by obtaining an assurance of co-operation between the Commonwealth and trading banks, Mr. Chifley calls for greater deposits and more compulsion than co-operation. The difference of" approach is a difference with which we'are familiar. The non-Socialist Government is satisfied with results and pleased if. they are secured by voluntary cooperation; the Socialist Government must feel that it has the whip in its hand.