THE PUBLIC ACCOUNTS

Otago Daily Times, Issue 23334, 28 October 1937, Page 10

THE PUBLIC ACCOUNTS

The summary of the operations on the revenue account of the Dominion for the first half of the financial year, as presented by the Minister of Finance on Tuesday night, indicates, as he says, a very satisfactory state of affairs. It reflects clearly the buoyancy of the public revenues, and a buoyancy of the public revenues implies the briskness in business that is the natural sequel of a highly favourable export trade, and of the possession by the people of an increased purchasing power. Of particular significence is the expansion of revenue from Customs duties and sales tax, both of them indisputable guides to the condition of domestic trade. The yield from Customs duties in the six-monthly period advanced from £3,767,309 in 1935 to £4,582,758 in 1936, and this year it amounted to £5,460,000. The expansion in the receipts from the sales tax, the abolition of which was promised as an election cry on behalf of the present Government and for the retention of which the Minister of Finance now advances reasons, has been equally spectacular. In the first half of 1935 this tax returned £1,170,826 to the Treasury coffers. In the corresponding period of 1936 the yield from it was £1,446,510, and this year it was £1,769,000 —"a major item of revenue" indeed, as Mr Nash described it in the Financial Statement! With one exception, the other sources of revenue, so far as the information concerning them is available, all show more favourable returns this year than last. The exception is the interest payable to the Consolidated Fund by State undertakings, and the decrease is plainly attributable to the reduction in the net earnings of the railway service. Over all, however, the revenue for the half-year exceeded that of the corresponding period of 1936 by over.two millions. As the second half of the year brings in the income tax, which ranks next to the Customs duties as a revenueproducer, the Minister of Finance should be able to look forward with pleasurable anticipation to the results for the complete year. The expenditure for the first six months is generally greater than the revenue, but on this occasion the difference between them is smaller than usual. This will be seen from a comparison of the figures for the first half of three successive years:

1935-36 1936-37 1937-38 £ £ £ Revenue .. 10,198,828 11,456,511 13,564,000 Expenditure 11,738,428 13.645,470 14,244,000

Excess of expenditure 1,539,600 2,188,959 680,000 While the increase in the expenditure for the period is much smaller than the increase in the revenue, it is apparent, from Mr Nash's explanation of the figures, that this is due in part to the fact that certain expenditure in connection with the debt services has not been brought to account and in part to what the Minister calls "an accounting fluctuation." The expenditure has, for this reason, been considerably below " the relative proportion of the Estimates," but the Minister is clearly not sanguine that his estimate for the whole year will prove to be a conservative one. \