THE NATIONAL ACCOUNTS

New Zealand Herald, Volume LXX, Issue 21516, 13 June 1933, Page 8

THE NATIONAL ACCOUNTS

It has been known since tho end of April that the Budget for 1932-33 had been balanced, always remembering that reserves to the extent of £2,500,000 were drawn upon for the purpose. The small surplus of £40,142 comes as no surprise, but some features of the accounts, now made available, are worthy of remark. The original plan was for a deficit of £1,000,000 in round figures. This has been avoided largely because the revenue collected exceeded the estimates by £938,500. The expenditure was held below the appropriations by some £112,000, the two items together revealing how the prospective debit balance was overtaken. The savings would have been much greater had the cost of purchasing exchange in accordance with the guarantee to the banks not made an additional demand of £470,000, the figure given by the Minister of Finance. It was, however, the unexpected buoyancy of revenue, especially a taxation yield £BOO,OOO in excess of the estimate, that produced the principal variation between results and expectations. Customs revenue at £431,000 above the estimate was the outstanding item on this side of the accounts, though income tax also was £156,800 above what the Treasury anticipated. The contribution of the railways toward interest on capital also proved the estimate to have been unduly pessimistic. Incidentally the new taxation imposed toward the end of the year produced £54,000 by the end of March, the sales tax being responsible for some £38,000 and the gold export duty for the remainder. It is satisfactory to find the accounts balanced when the country had been led to expect they would not be. The satisfaction has to be qualified by two reflections, first that the result has come because the pockets of the people yielded more in taxation than it was thought they possibly could do, and second because the fall in this source of revenue has merely proved slower than was expected. It is not likely that the drop expected in the year just ended will fail to materialise in the current period. Neither income tax nor customs revenue can be depended upon to excel expectations this year as they did last; further, there is &11 the uncertainty of new factors introduced.when the exchange was increased in January. The favourable result at March 31 can be accepted as thankfully as its nature merits, but extravagant expectations for the future cannot safely be entertained on the strength of it.