BUDGET FORECAST

Evening Star, Issue 18047, 15 August 1922, Page 4

BUDGET FORECAST

A SOBER DOCUMENT. RETRENCHMENT DETAILS. POSTAL CHARGES UNDIMINISHED. MILLION FOR HYDRO-ELECTRIC DEVELOPMENTS. PROVISION FOR UNEMPLOYED. REDUCTION OP INCOME TAX FORECASTED. [From Ocr Parliawextary Reporter.] WELLINGTON, .August 15. The Financial Statement which Mr Massey will read to the. House to-night is an unusually long document, not because the Government wishes to announce any notable policy on developments or extensions of its activities, but purely for the reason that it is desirable to set out very fully the exact financial position, with the object of justifying a cautious financial policy. There is, I understand, nothing flam* boy an t about the Statement—none of the usual confident predictions of a surplus at the end of the- year. Tho Treasurer cannot overlook a certain drop of two millions- in income tax, nor the falling off in the land tax.

Customs revenue is expected to show a good improvement in tho last quarter of the financial year, owing to the resumption of English importations and the renewal of trade with Australia, which was almost suspended owing to the uncertain tariff position.

There are so many uncertainties about tho future of the public revenue that the Statement will be, it is understood, devote considerable attention to what has been achieved in reduction of expenditure, and will suggest that as a result the dominion should at any rate bo able to balance its income and expenditure this veai - .

Among retrenchment- details the Budget will show that current salary reductions involve a saving at the rate of one million per annum. Many Government departments are costing tho taxpayers less owing to drastic revisions in their scale of fees for services to the public. It was hoped that the Budget might announce a reduction in postal charges, but until the revenue of the Consolidated Fund balances the expenditure the Minister of Finance will make no concessions.

There will be- a, Loan Bill this session, the probable amount- of which is five millions, to enable public works to be maintained at the present rate of progress. It is intended to appropriate 131,000.000 for continuation of hydro-electric developments.

The Statement mentions the. imporianca of providing liberally for public, works, owing to the necessity for meeting the un em ployed situa ti on.

Last year’s loan renewals amounted to £6,664,740, of which over £5.000,000 were hold in Now Zealand, Of the latter £4,500,000 wore loans free of income tax. They have not been renewed with this concession. Thus the Finance Minister is able to point to important savings, coupled with reductions in tho Public. Debt duo to tho purchase of two and a half millions of New Zealand stock bought by the Treasury at a discount. Tho Statement handies with caution, in view of the falling revenue, tile prospects of reduction in taxation, no definite promises being forthcoming; but it is hoped that early in October the position,of tho year’s revenue will lie sufficiently evident to warrant some reduction of income tax. This will be effected by special Bill. The necessity of waiting for financial developments ■means a- longer session than originally expected by the Government. Members anticipate remaining in .Wellington until the latter half of October.