AUSTRALIAN FINANCES

Otago Daily Times, Issue 22628, 20 July 1935, Page 5

AUSTRALIAN FINANCES

I NO RELIEF FROM TAXATION TENDENCY TO SPEND MORE (From Our Own Correspondent.) SYDNEY, July 11. Federal Ministers and Ministers in all the States are now busily engaged in framing the new financial year’s Estimates, and anxious taxpayers a-re wondering whether they are getting back to the predepression policy of extravagance. During the last year or so there has been a tendency for the iron control over expenditure, which did so much to bring Australia through the depression, to weaken dangerously. Certainly the country's finances have improved, but not to an extent, the people consider, to warrant extravagance. The Federal Government, for instance, had a surplus of more than £700,000; South Australia one of £30,000. All the other States’ deficits were well within the limits laid down by the austere Premiers’ plan, and their total, as Mr Stevens, the New South Wales Premier, pointed out the other day, was considerably less than the amount paid by the States in cash to the national sinking fund. What ta-xpayers are complaining about is that, except for minor concessions, they are still groaning under the same load of taxation as they did during the depths of the depression. _ A demand is growing that, before grandiloquent schemes of expenditure are entered upon in the fashion of the good old “ boom and bust ” days, some of the taxation load should be shifted. The Federal Minister* are the greatest offenders in this spending race. They have had a handsome surplus during the last four financial years. The £700,000 surplus for 1034-35, which ended on June 30. was attained after paying a £4,000,000 subsidy to wheatgrowers. unprovided for in the Estimates. An analysis shows that (he Commonwealth accounts improved by more than £4.000,000, mostly due to increased Customs revenue. But there was, in addition, a large carry-over of income tax payments into the now financial year. The Treasury did not want the money; it wanted something up its sleeve. Tax-

payers mjght well expect some concessions in view of these flourishing conditions, but they have been told not to expect any. Once the taxation screw is imposed, Governments are loath to ease it by a single turn. Thus, Federal Ministers, with a steady stream flowing into the Treasury coffers, hope to use it instead of diminishing the flow. The Postmastergeneral plans to eliminate his handsome surplus, not by reducing twopenny postage to a penny halfpenny, but by embarking on an (at present) needless and expensive scheme of air mail services between the capital cities. The Defence Department expects to spend £1,100,000 more this year than last year, and another £380,000 more next year. Other Ministers are all competing in this spending race. The States are making a more honest endeavour to stick to the onerous demands imposed by the economic conditions of the last few years. The improvement in State finances during the financial year 1934-35 exceeds expectations. The six State Budgets show a combined deficiency of only £3,765,000. This is less by about £2,000,000 than the deficits for the year fixed by the Loan Council. The improvement in accounts iu June was so great that the net deficits are less by nearly £750,000 than the estimate accepted by the Loan Council when it met in Canberra six weeks ago. The progress towards equilibrium in the accounts of the States is disclosed by the fact that the deficits for 1933-34 aggregated £6,870,000, and for 1932-33 £8,220,000. The net deficit of £3,765,000 is reached after the surplus of £36,000 in South Australia —the first surplus to be shown by any State since the depression—is set off against the deficits of the other States. Thus the aggregate deficit for the other five States is £3,801.000. Of this amount the deficit of Eire Now South Wales Government is £2,800,000, or about threequarters of the total. There were aggregate payments to the sinking fund of £4,600,000, so there was a net reduction of State indebtedness of about £BOO,OOO during the year.