NO TAX RISE

Manawatu Standard, Volume LXI, Issue 192, 16 July 1941, Page 6

NO TAX RISE

BUDGET FORECAST. MORE SECURITY BENEFITS. (Special.) WELLINGTON, July 16. Though adhering to his policy of paying as much of the war costs as possible out of current revenue, the Minister of Finance (Mr Nash) in his Budget to be presented to the House of Representatives tonight, is unlikely to announce any additional taxation burden. The reason for this satisfactory ppsition is that Mr Nash has already had two opportunities of making provision for the heavy additional costs due to war. He commenced in September, |ISJ39. with a 15 per cent, increase in income-tax and subsequently imposed [additional war taxes, notably the national security charge of Is in the £ on wages and salaries. The results of this taxation programme have apparently been such as jto justify the Minister of Finance in jcoming to the conclusion that the measures already taken will cover the requirements for the current financial ;year despite the fact that New Zealand's war expenditure for this year is likely to bo in the vicuiitv of £60,jOOO.OOO. against the £37/300.000 f? r ]which the Minister made provision in the last Budget. The British Government undertook to finance our overseas war. requirements, but Mr Nash has adopted the policy of keeping these loans down to the minimum. He disclosed at the recent session that the obligation to Britain in respect to last vear was £4.500,000. of which he said' £1.500,000 had then been paid off. It is understood that the buoyant condition of New Zealand's finances has enabled] the whole of this particular obligation i to bo discharged. CHANGED PROCEDURE.

While the social security, national 1 security, and sales taxes are not likely to bo altered, it is expected I that there will be an announcement I of some variation in the income-tax : procedure. Mention is also likely to be made of measures to be adopted for a reduction of costs, which will probably be effected bv a reduction in the rates of interest on bank over- ; drafts, which has already been forej cast. INCREASED BENEFITS. It is confidently anticipated that another advance in social security benefits will ho disclosed. It is realised that the extra war taxation has imposed a greater burden on the family man. and for that reason members anticipate that mention will be made ill the Budget of the legislation to come forward this session providing additional relief in respect to children. The cost is obviously to be met from the Consolidated Fund.

In addition, this source will also have to be drawn upon to meet the medical benefits under the Social Security Act. Therefore, the appropriation' last year of £3.200.000 from the Consolidated Fund is likely to be considerably increased.

Taxation is not expected to cover all the war costs. Some provision must be made to meet portion of these by loan and this, as the Minister has already made clear, will be on a voluntary basis. The Minister will be able to announce a record year 01 Trade and or j savings.

Considerable interest has been taken in the result of the national development loan, on which no information has so far been disclosed, but it is understood that a fairly large sum has been subscribed in New Zealand. PUBLIC WORKS CUT.

In public works expenditure the Government last year exercised a substantial pruning down and the Estimates of the Public Works Department, which will accompany the Budget, will indicate a further movement in this direction. In fact, a large part of the operations of tho department this vear will relate directly to the war effort within the Dominion.

Summed up, the results of the war

finance policy previously put into operation enable tin Minister to present this \ear a favourable Budget. It will probably be found that the position is that, although the taxpayer will not be asked to contribute more heavily than last year, some sections will receive more by way of benefits, while the policy of pay as you go in respect, to the war effort will not be relaxed.