AUSTRALIAN BUDGET

King Country Chronicle, Volume XXXIII, Issue 4809, 12 July 1939, Page 2

AUSTRALIAN BUDGET

PROBABLE DEMANDS. TAXES MUST GO UP. PROVISION FOR DEFENCE. Australian Commonwealth expenditure from revenue in the financial year beginning June 2G will reach nearly £100,00,000. The Federal Cabinet has been engaged in a preliminary examination of Budget proposals to meet the situation. Treasury officials are working at top pressure t in the preparation of estimates, and the Cabinet soon will have to decide what new taxation will be necessary , to meet the expanding expenditure. The Budget for 1938-39 provided for revenue and expenditure of about £93,00,000. This will be increased by considerably more than £5,000,000, and. the sources from which that extra money will have to come are now under consideration. Defence is responsible for the ever-growing Budget expenditure, and the Cabinet is making a thorough review of the whole defence programme. The exact amount of defence expenditure from revenue in the coming year has yet to be decided, but it will be higher than ever before—probably between £10,000,000 and .£15,000,000. The balance of the £31,000,000 which will be spent next year on defence will come from various trust funds which have been built up for particular defence contingencies and from loans in Australia and London.

New taxation to be imposed in the Budget will be more drastic and widespread than has hitherto been expected. A general increase in taxation will be inevitable. Although no decisions have yet been made, an increase of not less than 20 per cent, may be expected in income tax. An increase—probably of another 1 per cent. —in sales tax also appears likely, while an upward review of many of the revenue items in the Customs and excise schedules will be undertaken. A section of the Cabinet favours a heavy increase in the income tax on large companies, and on other organisations and persons with large incomes. Efforts will probably be made to ameliorate the incidence of new direct taxation on small incomes, as prospective new indirect taxes will fall heavily on the smaller incomo

groups. No date has been fixed for the reassembling of Parliament, but a tentative date is August 23. By that time Mr. Menzies who is Treasurer as well as Prime Minister expects to have his Budget ready and he is determined to present it to Parliament as early as possible. ffe sees considerable disadvantages in the late presentation of the Budget, which, as a result, is not dealt with by Parliament much before Christmas.