THE OTAGO DAILY TIMES. WEDNESDAY, JUNE 14, 1933. THE PUBLIC ACCOUNTS

Otago Daily Times, Issue 21979, 14 June 1933, Page 6

THE OTAGO DAILY TIMES. WEDNESDAY, JUNE 14, 1933. THE PUBLIC ACCOUNTS

It is a matter for satisfaction that, through the adoption of the policy of transferring reserve funds to the extent of £2,500,000 to the revenue account, and through the postponement of the payment to the Home authorities of interest on war debt, the Government was able to close the past financial year with a nominal surplus of about £40,000. Even greater satisfaction may, however, be expressed over the fact that a financial buoyancy was exhibited during the final quarter of the year of which there had been no trace for several preceding quarters. It may not be wholly unreasonable to hope that the recent expansion of the revenues, which admitted of the fiscal year being closed with a result that exceeded the most sanguine anticipations of the Government, presages a return to more favourable times for the whole of the community. This hope may be the more earnestly expressed for the reason that the Government not only cannot continue to enjoy the advantage of the expedients which enabled it to balance its Budget on this occasion but also can have no expectation, unless there is some restoration 'of prosperity, of securing the revenue from taxation that was brought to account in the past year. The Minister of Finance has compared the revenues for that period with the estimates in order to show that there was’an excess of receipts to the extent of £938,521. It is more illuminating to compare the receipts of the Consolidated Fund for the year with those of the preceding year. This comparison shows the result that follows:-

1931-2. 1932-3. £ f Taxation .. .. 16,189,967 15,605,206 Interest ... .. 2,868.138 2,641,710 Other receipts .. 3,661,628 4,321,605

Total .... 22,719,733 22,568,521 The significant feature of the accounts, when thus examined, is the diminution that is shown in the receipts from taxation and from interest. This decrease is not entirely set off by the increase in “other receipts,” included in these being the amount of £2,500,000 withdrawn from reserves, from which a sum of £1,494,825 had been transferred to revenue in the previous year.' A detailed comparison of the receipts from taxation in the two years also possesses a clear significance. Subject to some trifling modifications which the gazetted figures may show to be necessary, the proceeds of taxation accruing to the Consolidated Fund during the two years were: —

1931-2. 1932-3, £ f Customs duties 5,904,348 6,131,414 Beer duty .. 641,080 654,227 < Film hire tax .. 41,207 30,101 Motor taxation 1,814,186 1,680,604 Stamp and death duties .... 2,799,204 2,999,278 Land tax ~ .. 542,128 498,916 Income tax .. 4,447,814 3,556,774 Sales tax .... Gold export duty

Total .. .. 16,189,967 15,605,206 There was, therefore, an increase of over £200,000 in the receipts from Customs duties, ascribable in some small measure, it may be assumed, to the higher yield of ad valorem duties consequent upon the basis of valuation being raised by the inflation of the exchange. There was also an increase of about £200,000 in the receipts from stamp and death duties, consequent, no doubt, upon some large estates becoming liable to probate and succession duty. Two new forms of taxation —the sales tax and the gold export duty—were in operation for a portion of the year, and between them were productive of over £50,000. Despite this, the revenue from taxation was £584,761 below that collected for the previous year. There was a substantial fall of about £130,000 in the receipts from motor taxation, probably due in part to a large number of vehicles being put out of commission. In the yield from income taxation there was a much more severe drop —one of no less than £891,040. This is certainly not a matter upon which the country can congratulate itself. It affords fresh and cumulative evidence of the tendency towards the drying-up of a source of revenue upon which the Government has placed a great deal of reliance in the past. And it suggests strongly that, unless the obligations of the Government in respect of expenditure are sensibly lightened, the Minister of Finance has, however greatly the economic situation may be improved, difficulties still to overcome in the maintenance of a balanced Budget.