THE OTAGO DAILY TIMES TUESDAY, JULY 5, 1932. THE PUBLIC ACCOUNTS.

Otago Daily Times, Issue 21688, 5 July 1932, Page 6

THE OTAGO DAILY TIMES TUESDAY, JULY 5, 1932. THE PUBLIC ACCOUNTS.

There are one or two striking features in the public accounts .for the past financial year which were issued in the New Zealand Gazette last week. One relates to the heavy drop in the revenue from taxation, direct and indirect. In the previous year, the proceeds of taxation amounted to £18,599,980. For the year that was ended on March 31 last, they were £16,189,966. The principal decline was in the yield from Customs revenue,. which fell from £7,605,976 to £5,904,348, as a consequence of the shrinkage of importations, reflecting the diminished purchasing power of the community. A drop of £588,131 in the receipts from stamp and death duties may be attributed to a large extent to the depreciation of securities of all descriptions and to the effect ivhich this will have had on the taxable balance of estates of deceased persons. In the case of the taxation of land and incomes the yield for the past year was £159,280 below that of the preceding year. This is a distinctly significant decline in view of the fact that the increases that were made in the taxation of incomes were officially calculated to produce between £700,000 and £BOO,OOO. There was a fall of about £26,000 in the receipts from duties on motor spirits, tyre tax, and motor licenses, and the beer duty alone held its own with the yield for the preceding year. The proceeds of taxation disappointed the Minister’s expectations to an extent that, coupled with the payments that had to be made to cover the exchange costs on the transmission of funds to London, almost accounted for the amount of the deficit on the year’s operations. But the explanation of the decline, for which the Minister was plainly not prepared, seems simple enough. It is that the taxable capacity of the country has been about reached. A Government may impose fresh taxes on income, but they are levied on a diminished income, and thus yield no more than were produced by the previous taxes.. The total yield from taxation for the year was, probably for the first time in the history of the Dominion, not sufficient to meet the fixed charges. Fortunately, there were few of the- departmental appropriations that were not kept below the previous year’s figures. The largest saving was one of £378,217 in the expenditure on education, and substantial economies, in each instance exceeding £BO,OOO, were made in the expenditure of the Defence Department, the Printing and Stationery Department, and the Department of Internal Affairs. An illustration of the difficulties with which the Government was confronted in its finance during the year is provided in the fact that Treasury bills to the exceptional amount of £15,840,000 were issued. Of this total £12,815,000 was redeemed during the twelve months, and bills to the amount of £3,030,000 were outstanding when the financial year closed.