TWO BUDGETS.

Manawatu Standard, Volume LVI, Issue 248, 17 September 1936, Page 8

TWO BUDGETS.

The people of the Commonwealth of Australia are entitled to felicitations in respect of the Federal Budget. The year to the end of <1 une closed with the substantial surplus of over £3,500,000. Australia has obviously made considerable progress towards economic recovery. The people are to receive the full benefit of the improved conditions, for income tax, sales tax, and primage arc to be reduced. These taxes generally fall very heavily on the mass of the people, and the reductions announced will leave more money in the pockets of the people, who will thus be able to spend more; and the increased spending will mean increased revenue for the State. But remission of taxation is not the only cheering feature of the Federal Budget, for the Civil Service salary cuts are to be fully restored; pensions are to be increased; members of the Senate and the House are to receive a partial restoration of cuts, and about twcrt-hircls of the year’s surplus is to be spent on defence. Taken all round it is an excellent showing. Comparisons are odious, but a comparison of New Zealand’s Budget with that of Australia is not favourable to the Dominion. The New Zealand Budget showed a surplus of £281,000, and there was some hope of tax reduction. The Labour Party promised a reduction of the sales tax and a lowering of the exchange rate, neither of which promises has received any attention. Instead of tax reduction there is a substantial increase, the higher income tax and the reimposed land tax being estimated to yield £1,800,000, which is equal to considerably more than £1 per head of the entire population. It is the belief of a good many people that the taxes named will fall upon special classes, which is true enough- At the same time it must not be forgotten that the £26,000,000 of taxation to be collected during the current year must be obtained from within the country—from the people within the country. The taxation falls upon the entire community relatively- What are we getting for this increase in taxation ? Cuts have been restored, and so they are being restored in Australia ; pensions have been raised, and tlie same is_ being done in Australia. But in New Zealand 23,000 people have been added to the pension list and there are over 26,000 “idle poor” to maintain, these being those receiving sustenance without work. While Australia is stimulating her secondary industries, many of which are now active in the export trade, New Zealand is retarding the progress of local industries with high taxation, high costs of production, and regimentation of production under union supervision. _ There is a price to pay for political mistakes, as for other mistakes, and this country will have to pay later. Sometimes economic laws grind slowly, but they never forget to grind.