AUSTRALIAN TAXATION

Pahiatua Herald, Volume XLXII, Issue 15242, 7 January 1943, Page 4

AUSTRALIAN TAXATION

HUGE INCREASES FORESHADOWED. United Press Assn.- 3y Electric Telegraph—Copyright. (Special Australian Correspondent.) SYDNEY, Jan. 5. A total increase in Australian income taxation of 50 per cent, is foreshadowed in the announcement that the Federal Government must meet about £70,000,000 of unforeseen war expenditure during the current financial year. About £50,000,000 ol this will come from new taxation which may be partly in the form of a wages tax ranging from 6d in the £ on incomes of £2OO to 2s in the £ on £IOOO and ever. The new taxes are expected to be heavier on the lower income tax groups than any imposts since the Curtin Government took office in October, 1941. The higher Australian income tax groups are already being taxed as much as 18s in th© £. Fiom £2OOO upwards, direct income taxation in Australia is heavier than in Britain. On £2OOO, the Australian pays £763 in income tax while the Britisher pays £671. On £IO,OOO, the Australian taxation impost is £7829 as against £6763 in Britain. However, poltical observers suggest that incomes will probably be scaled down so that few Australians will receive more than £ISOO net a year. The rising cost of war materials, and extra reverse Lease-Bend assistance for the American forces, shipping maintenance, repairs and replacements are the major factors in lifting Australia’s war expenditure this year from the four-months-old Budget estimate of £440,000,000 to £510,000,000- Th© total expenditure for all purposes will be £620,000,000. Ait present, the income tax revenue provides about £106,000,000, of which £42,000,000 is levied on r**. comes over'£looo. About 70 pei‘ cent, of Australia’s total income falls into the under £4OO class and taxation an this main group is expected to be substantially heavier than in th© past. Compulsory war loans are being widely advocated as a method of meeting the Government’s increased financial commitments and all commentators point out that a very serious aspect of th© new taxation its likelv effect on the next £IOOO,000,000 Austerity Loan due to floated in February o r early in March. Ths loan must be filled for th© Government’s loan objective ol £200,000,000 for the year to be reached. “There is reason t*> think that once the new taxes have been imposted, the Government will consider itself at the limit of the taxable capacity of th© Australian, public in both the personal exertion, income and company fields,” writes the Sydney Morning Herald’s political coirespondent. “lit believes that the taxation scales must not be so erusuing as to destroy altogether uk • « centive to personal exertion represented. by the higher salaries. It. is also believed that such rough and ready methods of wartime taxation as a 100 per cent, profits tax warmly advocated in some Labour quarters would defeat their own ends. A 100 per cent, profits tax, some of the Ministers declare, would conserve the positon of companies which were doing well in peacetime at the expense of other companies which were struggling before the war. The Government’s taxation proposals have no specific relation to pressure by some sections of the Labour movement ' for the conscription of wealth as a sequel to the extended use of conscription of manpower for the militia and other purposes. How 1 ever, they provide an answer to the claims of some Labour propagandists that the higher income classes should be even more severely dealt with.