UNPLEASANT BUDGET?

King Country Chronicle, Volume XXXIII, Issue 4817, 31 July 1939, Page 5

UNPLEASANT BUDGET?

PRESENTATION TUESDAY NIGHT TAX ON HIGHER INCOMES. INCREASES EXPECTED. Increased taxation on higher incomes is expected to be announced in the Budget, which will be presented in the House of Representatives tomorrow night. Since the all-round increases made by the Labour Governmen during its first year of office, the rates of taxation have remained unchanged, but indications are that certain classes of taxpayers will be faced with heavier demands from the State during the coming year.

There has been no official intimation of what may be expected in the way of taxing proposals, but in a recent public debate in Wellington a Government member, Dr. D. G. McMillan (Dunedin West) made the significant statement that the Government intended to raise the tax on. higher incomes and greatly to increase death duties.

Future Customs Revenue.

Even if this year's expenditure is to remain the same as last year, it seems that increased taxation will be necessary to compensate for the drop in customs revenue which may be expected to follow the restrictions on imports. On the other hand factors which are in the Government's favour are the surplus of £BIO,OOO carried over from last year and the £4,500,000 recently raised by the internal loan, while consideration must also be given to the export credits totalling £9,000,000 granted by the British Government. Against these, however, is the anticipated deficit of approximately £2,000,000 on this year's operation of the guaranteed price scheme, in relation to which the recent report of the directors of the Reserve Bank has some significant passages.

Although the Government may find i< passible to reduce some of the departmental votes it seems certain that a larger appropriation will be necessary for defence. It is likely that the greater part of the export credit of £5,000,000 granted by Britain for Government purchases will be spent on defence equipment, but apart altogether from that the expansion of the territorial forces and other branches of the fighting services will involve heavier charges on the Consolidated Fund.