FORECAST OF TONIGHT’S BUDGET— Little Change In Direct Taxation Expected

Greymouth Evening Star, 18 August 1949, Page 4

FORECAST OF TONIGHT’S BUDGET — Little Change In Direct Taxation Expected

(SPECIAL CORRESPONDENT) WELLINGTON, This Day,— There is good reason to believe that the Minister of Finance, Mr Nash, in presenting his Budget to-night,-will keep direct taxation at substantially its present level, and will maintain the expected greatlyexpanded appropriations from buoyant revenue to give relief to various classes of pensioners and beneficiaries and to expand Public Works development and health, educational, and research services.! There will, probably be relief from income tax, possibly on similar lines to last year’s Budget, when a. flat £lO was deducted. This will not mean additional relief this year, but only a continuation. Higher Pensions The Speech from the Throne contained mention of the Government’s intention to improve war pensions and social security benefits, but other concessions are expected to include the following:— The sum set aside for land settlement, particularly in connection with the rehabilitation of servicemen, is likely to be considerably in excess of the previous year. It is understood that the Minister of Education, Mr T. H. McCombs, has for some time been considering the possibility of increasing the sums paid by way of bursaries and boarding allowances, and sympathetic treatment of these claims is

expected. A natural corollary would be a larger vote for the Education Department as a whole because its activities have been widely expanded and a large building programme appears to be inevitable to make up the present deficiency. The Department of Scientific and Industrial Research is taking a greater share in the work aimed at assisting New Zealand industry, and here again an increased vote is a natural assumption. One of the major spending agencies is always the Works Department and, in view of the large hydro-electric projects in hand and the contemplated reading commitments and other developmental plans, it is inevitable that its share of the disbursements will .be among those receiving well above last year’s actual expenditure. Heavily increased votes for the Departments of Health and Agriculture are also inticipated, while other departments are expected to share in the residue in a minor degree. Small, But Welcome Small but welcome increases, which will reflect proportionately the recent general wage orders, can be looked forward to with every confidence by age pensioners, war pensioners and widows in receipt of economic pensions. Little hope is held out for any relief in the incidence of sales taxation, although one or two minor items may be affected. Under the contracts concluded with the United Kingdom, New Zealand producers are to receive higher export prices for their produce. If internal prices are to be maintained at their present level and the consumer insulated against fluctuations reflecting the trend of the overseas market, Government subsidies must be increased. Therefore it is safe to assume that Mr Nash will make some announcement to this effect tonight. It is certain that Mr Nash will devote some time to an explanation of the implications of the recent discussions in London on the subject of dollar funds, particularly in view of the fact that no debate on the question has taken place in the House since his return from Britain. Whatever may be the financial repercussions so far as New Zealand is concerned, they are unlikely to have any substantial effect on this year’s Budget. However, the Minister will have to watch closely the Dominion’s balance

of payments figures, as the country’s overseas funds have a' greater effect on normal governmental revenue. Taking into account what has been said during the past 12 . months, it is inevitable that the expenditure for defence purposes will be ■ increased considerably, although the full costs in connection with the compulsory military training proposals will not come to charge until the next financial year. No Rise In Benefits There is no indications that the Government contemplates any increases in family benefits or in the universal superannuation payments. Amateur sports clubs have agitated for some considerable time past for. a measure of relief in the payment of amusement tax. They have reason to hope that their representations will be, to some extent at least, reflected in the Budget, ;