Manawatu Evening Standard. THURSDAY, SEPT. 26, 1935. THE FEDERAL BUDGET.

Manawatu Standard, Volume LV, Issue 256, 26 September 1935, Page 6

Manawatu Evening Standard. THURSDAY, SEPT. 26, 1935. THE FEDERAL BUDGET.

An excellent record, stands to the credit of the Commonwealth Government in concluding- the financial year, which ended on June 30 last, with a surplus of £711,000. It is a sturdy example to the States which are still finding- difficulty iu balancing- their Budgets. The Federal surplus has been achieved in the face of extra payments to the States. Special grants were made to South Australia, Western Australia, and Tasmania, and then an extra grant to all the States amounting to £2,000,000, while the sum of £3,300,000 beyond the receipts from the flour tax was paid for the benefit of wheatgrowers. The buoyant state of the finances has enabled the Federal Treasurer to distribute his favours widely. The supertax on property and income is being reduced, the list of exemptions from the sales tax widened, encouragement given to the Australian tobacco industry, and a partial restoration made in regard to the salaries of the Civil Service and the army and navy. Aid for necessitous farmers and orchardists is being continued this year, and attention paid to the development of markets. Mr Casey is in the happy position of continuing- the measure of relief Mr Lyons as Treasurer instituted in last year’s Budget. The Government assumed office when Australia’s outlook was darkest. Finances were in a chaotic condition, commercial activity and production were at their lowest, and unemployment was at the highest point known. But by the pursuit of simple, well established principles of sound finance, and the avoidance of specious and complicated processes of monetary manipulation and financial legerdemain, as a London critic has stated, the Government was able to regain its financial strength. -For the .current year, after allowing for the remissions mentioned in the Budget and the large increase in defence expenditure under the scheme inaugurated last year — the outstanding feature of the Budget—the present year is expected to show a surplus of £17,000. But as the past twelve months yielded a surplus of £711,000 against an estimate of £13,800, the position may be substantially better nine months hence. The State Budgets, it is worth noting, also, show progress though they have not all been able to reach equilibrium. A year ago the States budgeted for deficits aggregating £5,500,000, which on June 30 had been reduced to £3,765,000. Actually, South Australia realised a surplus of £36,000. These deficits were calculated after payments amounting to over four and a half million pounds had been made into sinking* funds, so that the position is better than it would appear. On the other hand, as mentioned, several States received special grants from the Federal Treasury, and all of them an extra grant aggregating £2,000,000. The largest State deficit was Hew South Wales’s £2,800,000, but even that figure is vastly better than the deficit of £14,000,000 for the year ended June 30, 1932. It is the difference between the two that measures the pace of recovery in New South Wales, and competent critics hold that it is greater there than in other States. Victoria had a deficit of £150,000 against an estimate of £243,000; Queensland £564,000 against £1,000,000, and Western Australia £167,000 against £644,000. Failing a larger grant from the Commonwealth these States must further reduce their expenditure to reach equilibrium, the first aim of the Loan Council being that all Budgets should be balanced by 1934, or else, trust for more buoyant revenue in the current year. Taxation reductions in New South Wales, for example, have resulted in a stronger financial position as confidence has been restored, and a continuance of this movement should have the haooiest results. A reduction in the deficits , this year by the same extent as in 1934-35 would practically mean the attainment of Budgetary equili-. brium.