THE OTAGO DAILY TIMES Friday, August 16, 1948. THE BUDGET

Otago Daily Times, Issue 26232, 16 August 1946, Page 6

THE OTAGO DAILY TIMES Friday, August 16, 1948. THE BUDGET

The jocularity of Mr Nash’s recent statement in England that he had to hurry back to New Zealand to prepare a Budget “ which will win us the election ” found no reflection in his speech in Parliament last night. The hope may still have lingered on, but if so it must have been accompanied by a realisation that he was offering singularly little to justify it. In brief, the Budget which Mr Nash described as having for its guiding principles the encouragement of production and the relief of taxation actually gave small relief and less encouragement. These truths, however, are obscured in a highly disingenuous statement, the normal complexities of which are in this instance further confused by the “mopping up” of the War Expenses Account and the transference of the residue to the Consolidated Fund. The manner by which salient facts are disclosed piecemeal and without elaboration is typified by the announcement of the Government’s future policy in connection with the coal industry. In the course of discussing “ some of the long range plans for the economic and social development of New Zealand,” Mr Nash makes the first definite statement of the intention to nationalise all coal mines in the Dominion. Such a method of breaking the news may be well enough for “ long term plans ” but it is most unsatisfactory io find immediate intentions similarly dismissed in what, in theory, should be a full, frankand comprehensible statement of policy. War expenses which last year, even after the conclusion of the wax*, were swollen to £134,000,000 are now reduced to £32,000,000 by limiting the use of the account to adjusting unsettled commitments of the past, meeting the cost of the J Force, and paying certain items of rehabilitation. Half of this estimated expenditure is to be provided from national savings and from the disposal of surplus assets. The large reduction in the War Expenses Account has, however, a relation to the size of the Consolidated Fund which, standing last year at £58,500,000 is now inflated to no less than £100,382,000. As Mr Nash discreetly remarks: “ Therein is reflected, either directly or indirectly, the result of most of our financial transactions.” In this amount, a new vote of £13,789,000 for stabilisation has been included. These subsidies, which in the past have been met mainly, from the War Expenses Account, are now shown as being derived from general taxation in which unremitted war-time imposts are still included. Provision for Social Security is also to be found figuring prominently in the Consolidated Fund, the exact constitution and operation of which must now be regarded as a mystery to all but the initiated. Social Security payments were estimated last year at £22,000,000, but because of the increased benefits, the cost is now placed at £34,700,000, last year’s levy of £ 7,000,000 from the Consolidated Fund being increased by a further £11,000,000. Taxation reduction, which is hailed by Mr Nash as a very material relief, totals £21,200,000. but this .quite impressive figure has to be discounted by the fact that the relief for the present year is only £18,000,000, and of this reductions are already in operation which will account for £8,900,000. Sales tax exemptions are the most notable item in this relief, and, from the reduction in income - tax, the aver age family man will receive a benefit of up to about £1 per week. There is no reduction on the taxes levied for. tobacco and beer. The primary producer will look in vain for any benefaction and must draw cold comfort from the , Ministerial charge that “ we have a moral obligation to increase our production to the maximum,” with the promise of a reward in that the Government is visualising the bringing about of “ considerable improvements in rural living -and working conditions.”