Mr. Nash Estimates Surplus of £58,000 This Year’s Finances; Taxation Unchanged; Bigger Annual Votes

Northern Advocate, 21 July 1938, Page 8

Mr. Nash Estimates Surplus of £58,000

This Year’s Finances; Taxation Unchanged; Bigger Annual Votes

[Per Press Association. Copyright. J WELLINGTON. This Day. TN THE CONCLUDING STAGES OF HIS BUDGET DEBATE IN THE HOUSE OF REPRESENTATIVES LAST EVENING, THE MINISTER OF FINANCE, THE HON. WALTER NASH, IN ANNOUNCING THE ESTIMATES, FORECAST A SURPLUS OF £58.(1C0 FOR THE 1938-39 PROVINCIAL YEAR. “The expenditure chargeable against the Ordinary Revenue Account of the Consolidated Fund for the cur rent financial year is estimated at a total of £55,587,000,” he said. Provision has also been made for £200,000 to cover supplementary estimates and contingencies. After eliminating the amounts, totalling £3,181,000, which are transferable to Main Highways Account and to local authorities—which amounts are offset by an equivalent amount of revenue—and allowing for the sum of £853,897 which was transferred to the general reserve last year, it will be noted that, on a comparative basis, the estimated expenditure exceeds last year’s actual results by a total of £846.626. Debt services constitute the largest single item of expenditure, although one of the smallest items of increase. The debt charges for the current financial year are estimated at £9,544,000, an increase of £103,000 compared with last year’s expenditure. The success of the Government’s 'management of the public debt is shown by the fact that during the past three years debt charges have increas ed by an average of only £ 66,000 per annum in spite of the substantial cap! tal works which have been carried out in the Dominion. Position Summarised. The revenue which has been re ceived during the first quarter of the present financial year indicates that to date the estimates are being very closely adhered to and I am satisfied that they have not been computed on too optimistic a basis. EXPENDITURE.

d Annual Votes. , % The major portion of the comparative increase in expenditure arises in respect of annual votes. As regards social services, comparative increases are provided for under practically all headings, and I propose to deal with these separately. ‘. Under vote “Health” the comparative increase of £117,000 is accounted •for principally by additional expenditure arising in connection with the milk-in-schools scheme (£67,000), and £16,000 for extending the scope of dental services throughout the Dominion. Education. . Vote “Education” is responsible for a comparative increase of £312,000, a large proportion being due to an increase in the number of teachers consequent upon the increased number of pupils attending the State schools, together with a reduction in the size of classes. • The conveyance of primary and post-primary pupils to schools is being extended still further, involving an estimated increase of £37.000 per annum. ! The cost of maintaining the mental hospitals throughout the Dominion shows a comparative increase for the year of £22,000, Pensions. In regard to pensions, an additional ,£445,000 has been provided. The principal increase are invalidity pensions (£102,000) and old-age pensions (£355,000), while a reduction of £36,000 has been allowed for in respect of family allowances. Under the heading of “Development of Primary and Secondary Industries” an increase of £139.000 has been provided for, the vote “Agriculture” being responsible for £104,000 and the vote “Industries and Commerce, Tourist and Publicity” for £63,000. These increases are offset by savings in other votes under this heading. Defence. Defence expenditure accounts for a comparative increase of £396,000, for which the Navy is responsible for £41,000, the Army for £174,000. and the Air Service for the balance of £IBI.OOO. I have already dealt with these services, and further details will bo found in' the estimates. REVENUE. The total revenue receivable dur.ing the current financial year is estimated at £35.845.000. which is £214,000 less than last year's actual receipts of £36,059.000. Although thei’c is thus comparatively little variation as regards total revenue, it will be noted from the Budget tables that larger variations are anticipated in the individual items. Customs. Customs duties for the current financial year are estimated to bring in £759,000 lens than was received last year. It is common knowledge that

there has been over-importation in the case of many classes of goods, and this has been allowed for in the current year’s estimates. Taking the various factors into consideration, I am of the opinion that a reasonable estimate of Custom’s revenue for the present financial year is £10,000,000. Sales Tax. While the anticipated reduction in imports will have an effect on the revenue from sales tax, it is considered that counteracting influences will show a quicker improvement than in the case of Customs revenue, and accordingly a reduction of only £99,000 has been allowed for, reducing the estimate for the year to a total of £3,400,000. Highways Revenue. Highways revenue has been estimated at £3,200.000, compared with last year's receipts of £2.839,000 under this heading. At March 31 last a total of 280.327 motor vehicles were licensed, compared with 255,748 at the previous March 31. and owing to the increased spending power in the community if follows that the consumption of motor spirits should show an increase over that of last year. I have accordingly allowed for an increase’ in highways revenue of £361,000. The heading “Highways” is for all practical purposes “self-balancing” and on reference to the estimates it will be noted that the revenue under this heading is offset by a corresponding amount of expenditure. Income Tax, The only other important variation under the heading of taxation is income tax. Last financial year the revenue exceeded the estimates by the substantial total of £1,579,000. This total was accounted for in part by payment of some £640,000 arrears owing in respect of previous years. With no increase in the rates of taxation. I feel justified in estimating the taxation receivable during this financial year at £9.500.000. I would add that in arriving at this estimate due allowance has been made for the fact that more liberal provisions for the granting of relief to those to whom payment would cause hardship were placed on the Statute Book at the beginning of the present year. The remaining headings of revenue consist of -Interest" and "Other Receipts.” . estimated at £1.955,000 and £2.175.000 respectively. “Interest” in tins connection consists of recoveries from the Government Railways, representing- tne net surplus of revenue over expenditure for the year, interest on the capital liability of the Post, and Telegraph Department, interest on Public Debt Redemption Fund moneys, together with dividends on the Government's holding of Bank of New Zealand shares, and miscellaneous items of which full details are published in the accounts.

Taxation— £ Customs . 10,000.000 Beer duty 1.000,000 Sales tax 3,400,000 tax 100,000 Gold export duty 100,000 Highways 3,200,000 Stamp and death duties .... 3,300,000 Land tax 1.075,000 Income tax 9.500,000 Miscellaneous 40,000 £ Total taxation 31,715,000 Interest recoveries 1.955,000 Other receipts 2,175,000 ** Total revenue 35,845,000 REVENUE. Permanent Appropriations— £ £ £ Debt services \ 5.544,000 Exchange 1,800,000 Transfer of highways revenue .. 3.200,000 Other permanent appropriations . 521,000 Annual Votes— 15.065,000 Social services 12,774,000 Other services 7,748.000 20,522,000 Supplementary estimates and contin gencies ... 200,000 " .1 35,787,000 Estimated surplus £58,000