The Evening Star THURSDAY, AUGUST 20, 1925. AUSTRALIAN TAXATION.

Evening Star, Issue 19024, 20 August 1925, Page 6

The Evening Star THURSDAY, AUGUST 20, 1925. AUSTRALIAN TAXATION.

Ax exception to the general rule, the official financial year in Australia ends on June 30. Within six weeks of its conclusion the Commonwealth Budget has been delivered in Parliament. The Federal Treasurer had on the whole a better picture to present than might have been expected. Australia has been experiencing some wonderful seasons, production has been high, and prices, especially for wool, have been exceptional. It is true that a feeling of nervousness as to how far the reaction from extravagant wool prices would continue led to the cessation of pales and the carry over of a fair percentage of last season’s clip to the incoming selling season, and that there hag been a marking down of values; but as it has been stated that wool at £lO per bale is never wrong, and as £3O has, according to one estimate, been the recent average for Australian wool, there is a fair margin for readjustment without approach to unpayable levels. While neither wheat nor dairy produce reached such dizzy heights as wool, they have been on sufficiently high levels to handsomely remunerate Australian producers. Yet those high levels at the same time en- - courage potential competition, the postwar pressure on national finances almost everywhere dictating that every nation should develop its own natural facilities and subsist less on impbrtation.' In both Australia and New Zealand there is a proportion of producers who can only operate by virtue of their products continuing to command high '■prices, thisa caaaot long continue^

as some believe, there may be ns an accompaniment of a decline a weeding out of those, and there is some evidence of this anticipation in what one commercial critic in Sydney has described as “ the frantic efforts being made by producers of all kinds, through ..the media of pools, etc., to throw the burden of certain losses on to the public.”

It frequently happens that it is through the medium of the Government—in Australia’s case, perhaps, more the State Governments than the Commonwealth Government—that these losses are unloaded on the public. Though on the other hand public finances usually reflect a boom that is experienced in the producing and trading spheres, it might have been thought that the heavy debt burden of Australia would more than counterbalance buoyancy of the national finances from that cause, while there appears to be, whether justified or not, the belief that in Australia the State expenditure is of a somewhat extravagant kind. The dislocating effect of big industrial hold-ups also tells its tale on the Treasury. It is therefore with a feeling of some surprise, and possibly a tinge of envy, that the Now Zealand taxpayer reads of the remissions of Federal taxation which Dr Earle Page is able to promise. The past year’s operations loft a surplus of over 4£ millions, the bulk of which will he absorbed by the application of a million for naval construction, £750,000 for main roads, and £1,500,000 towards the reduction of the Commonwealth debt of nearly 431 millions —a mere drop in the bucket. When State and Commonwealth dohts are added the debt averages £IGS per head of the Australian population. Taxation to meet interest charges on this alone must necessarily bo heavy, and it is gratifying to see that the Treasurer is able to promise a 121 per cont. reduction in the income tax, equivalent to a concession of £1,400,000 on the £11,000,000 derived from this source last year. In addition, concessions of £750,000 in indirect taxation and of £360,000 in entertainment tax are promised. But besides this, the Treasurer has budgeted for a considerable shrinkage of revenue. Last year the revenue totalled £68,854,809; this year he budgets for only £57,574,300. And yet he expects to end the current year with a small surplus, for he estimates the expenditure at only £57,458,586, whereas the amount actually spent last year was £65,836,433. "Where the cable message leaves curiosity unsatisfied is how the expenditure is to be thus suddenly reduced by little less than 8£ millions. With us in New Zealand tile tendency is for the State expenditure to rise again after the pruning of a few years ago, severe as the Public Service thought it, hut not productive of such savings as the Commonwealth Treasurer announces almost with nonchalance. The only clue afforded is that in announcing the taxation concessions Dr Page said that these were being made “ after considering the expenditure to be met out of revenue.” It is to bo hoped that tho Commonwealth Government is not embarking on or teverting to the doubtful policy of charging to loan account what should p - °* perly be met out of revenue. It is not surprising that tho liberality of the taxation concessions proposed by the Commonwealth Treasurer has been commented on by some of our contemporaries as presenting a striking contrast with the concessions promised in the New Zealand Budget. One northern paper claims that Mr Nosworthy had at his disposal relatively much larger resources than Dr Page, and it calculates that it is doubtful whether tho new scale of income taxation in New Zealand will give a greater concession than 5 per cent, or £150,000 altogether; whereas if it had been made a 12J per cent, concession, as in Australia, the remission would amount to £400,000. It denies our Budget’s implication that tho trifling concessions granted represent the extreme limit of practicable relief, and urges ihat a great impetus might bo given i.o industry and trade and a material reduction secured in the cost of living by a bold rebate of taxation, to which Australia, hardly in so good a position for so doing as ourselves, is showing less timidity in giving a trial.