BUDGET SURPLUS

King Country Chronicle, Volume XXX, Issue 4873, 21 July 1936, Page 2

BUDGET SURPLUS

AUSTRALIAN FINANCE. TAXES WILL REMAIN. BURDEN OF DEFENCE. Sydney, July 9. Under-estimating revenue by £5,000,000, the Commonwealth Government actually only managed to keep its surplus down to £3,500,000, exceeding its estimated expenditure by £1,500,000. Practically the whole of this excess expenditure was in relief to primary producers, which absorbed £2,450,000, as against an estimate when the Budget was presented to Parliament of £1,175,000. New records were set by the surplus_the highest in Commonwealth

history and the fifth in succession and by revenue collections, which amounted .to £82,203,000. The expenditure,' £78,641,000, was only £290,000 below the highest point ever reached —£78,938,000 in 193031, when there was a deficit of £10,758,000.

The figures show that the Commonwealth is now taking far more from the pockets of the people and also spending more than in the years before the depression. Revenue was over £9,000,000 higher than in 192829, and expenditure was up by £3,200,000, despite a reduction of nearly £8,000,000 in the meantime in interest, sinking fund, and exchange payments. Reduction of sales tax by probably 1 per cent, will be the main feature of the tax remissions promised for the 1936-37 Budget. There will have to be some remission of primage on

British goods to honour obligations under the Ottawa Agreement, which lays it down that this impost on British goods must be removed as soon as the financial position of the Commonwealth permits. Public servants will benefit by the removal of most of the remaining salary cuts, with a promise that these will entirely disappear in 1937-38.

Apart from some miscellaneous revenue and taxation concessions, the 1936-37 Budget is likely to be disappointing from the taxpayers’ point of view. There will be no reduction of direct taxation, according to present plans. The reason which will be given for a meagre and restricted programme of tax remissions will be the need for additional defence expenditure and the £17,000,000 of deficits, accumulated before the Lyons Government took office and which have still to be paid off.

Possibilities- of some remission of petrol taxation are not bright, but Cabinet, when it settles down to discussion .of the Budget proposals next week, will have before it requests for relief from the heavy taxation imposed on motor transport and aviation. At present the Customs and primage duties on petrol work out at 7£d a gallon, which is more than the landed cost. Each penny a gallon duty on petrol means a revenue of £BOO,OOO. There will be no general reduction of postal charges, notwithstanding the huge profits made by this Department during recent years. The Government has come to rely on the Post Office as a taxing machine. One per cent, of the sales tax, which in the financial year just closed yielded £9,432,463— nearly £1,000,000 more than the receipts for 193435 and £600,000 above the estimate

would represent a theoretical revenue loss of £1,900,000 in a full year, but experience has shown that the yield from this tax has steadily grown despite remissions of over ans venuee movar taxation eml £3,700,000 during the past four years.

Budget estimates of Customs and excise revenue were greatly underestimated, receipts being £3,588,000 above the estimate. Study of the last three years’ figures shows how enormously imports have increased. In 1933-34 Customs and excise yielded £34,254,000, compared with £37,869,000 in 1934-35, and with £41,437,000 in the year just ended, an increase of over £7,000,000 a year over the three years. These figures have an important relation to the general trade balance position, and show that unless there is some check in imports in the new fiscal

year London credits are likely to be severely strained. Taxation in the last three financial years has increased by £7,209,000, which is almost exactly the amount of increase in Customs and excise revenue.