PRIVATE INCOME

Nelson Evening Mail, Volume LXVI, 11 March 1933, Page 11

PRIVATE INCOME

AGGREGATE FOR DOMINION ATTEMPT AT CALCULATION Although an accurate estimate- of private iiicopie in New Zealand is not possible yet as the result of the imposition of the emergency unemployment charges it will be possible to make one in the future, according to a statement made in the Abstract of Statistics for January. “A useful basis for the estimation of the aggregate private income of New Zealand will in due course be provided by the figures -of receipts from the emergency unemployment charge imposed for the raising of funds for the relief of unemployment,” the abstract states. “The figures for 1931-32 do not permit of such close estimation as will be possible for future years in I hat (1) the charge on wages was in operation for only the last eight months of the year; (2) the charge on other income being based oil income received during the year 1930-31, the receipts do not all’ord a direct means of estimating such income for 1931-32; (3) ‘other’ income of women in receipt of less titan £250 per annum from all sources was exempted in 1931-32, an amendment being later made whereby for 1932-33 and future years a charge is made on all ‘other’ income of women in excess of £2O per annum; (4) the inevitable time lag on the one hand and the preptireliase of stamps on the other will have affected receipts for 1931-32, whereas the'position in regard to these factors will tend to balance as between the beginning and end of future years.

“Even with these weaknesses, it is possible to compute a reasonably reliable estimate for 1931-32* and an estimate lias accordingly been attempted by tile Census and Statistics Office. The aggregate of approximately £IOO,000,000 is arrived at as shown in the following paragraphs. EFFECT DURING LAST YEAR “During the last eight months of 1931-32, £490,000 was collected in respect of the charge on wages. The time lag in payment will have been partly offset by the pre-purchase of stamps, so that £500,000 may he taken as the tax payable. This would cover an aggregate wages bill of £40,000,000 for the eight months and the total wages bill for the full 12 months on this basis would be £60,000,000. “The Arbitration Court award reducing wages by 10 per cent, was in operation for only the last 10 months of 1931-32, and if this applied to or affected 50 per cent, of all wages an additional £500.000 should he added on this account for the first two months. Relief workers employed by local authorities, whose wages are wholly met out of the Unemployment Fund, are exempt from wages tax; and payments to such workers totalled slightly more than £2,000,000 for 'the year. Domestic servants in private employment are also exempt, and, if these be counted at 25,000 (they numbered 20,258 at the 1920 census) and their average weekly wage be reckoned at 15s, another £1.000,000 should be added. Altogether, the aggregate wages bill for the year would appear to be about £03,500,000. “The charge on income other than wages (3d in the pound of two-thirds of such income received during 193031) yielded £220,000 up to 31st March, 1932. In this case there would be no advance purchases of stamps to set against late payments or possible underpayments or evasions, and it seems reasonable to assess the full charge properly payable to 31st March, 1932, at not less than £250,000, representing an income (for 1930-31) of £30,000,000. FALL IN INCOME FROM BUSINESS “Incomes other than from salaries or wages undoubtedly fell substantially in tile aggregate between 1930-31 and 193132, but certain forms of income—that derived from Government or local body securities —suffered no reduction. In tlie absence of other data, it seems proper to regard income from business or investments as having fallen proportionately to the value of production — by 15 per cent. On this assumption, 1931-32 income subject to the emergency unemployment charge (as operating in 1931-32) reduces to £25,500,000. “But certain types of income were not subject to the charge, exemptions including (1) company income not distributed to shareholders, etc.; (2). income of pensioners under the Pensions Act; (3) income (other than wages) of women in receipt of less than £250 from all sources; (4) income (other than wages) of male Maoris. “It is difficult to assess income other than from wages for women in receipt of less than £250 from all sources. The estimate of private wealth, based oil the probate system, shows that women own one-fourth of the total private wealth of the Dominion. Much of this is revenue-producing (cither from business or investment), but the difficulty is to estimate tlie amount of such revenue and to apportion it between women in receipt of more and respectively, than £250 per annum from all sources. All that can be done at present is to make an arbitrary assessment for non-Maori women in receipt of under £250, and tlie amount lias been tentatively placed at £5,000,000, thus bringing the incomes of individuals other than Maoris up to £30,500,000. “In the case of Maoris, a basis of calculation lies in the fact that tlie Maori population is nearly 5 per cent, of the non-Maori, But it is probable that the revenue-producing wealth of Maoris is proportionately less than that of Europeans, and 3g per cent, seems a fair allowance, income of Maoris other than’ from wages being thus estimated at £1,000,000. COMPANY INCOME “Company income assessable for income tax was returned as £10,000,000 for the year 1930-31, and a 15 per cent, reduction on this would indicate £8,500,000 for 1951-32. Of this, approximately £2,000,000 would be paid in income tax, and would thus not he included in incomes paying the emergency charge. Probably, however, the bulk of the remaining £6,500,000 would be distributed, and it seems proper to assume that payments to reserves would be only £1,000,000, which with the £2,000,000 paid m income tax would bring undistributed company income to £3,000,000. “Pension payments under the Pensions Act during 1931-32 totalled £1,700.000.

“There are other minor classes of exemptions from tiie charge on incomes other than wages, including such incomes of males under 20 years of age. If £300,000 be allowed for these (the figure would probably be somewhat higher), the aggregate estimate would come to £100,000,000. “It need scarcely be emphasised that the estimate is not given out as more than a fairly rough approximation. It i.-. merely the best possible • at this stage,” the statement concludes.