The State Accounts

Southland Times, Issue 23511, 18 May 1938, Page 4

The State Accounts

World prosperity has enabled Mr Nash, like the Finance Ministers of Great Britain and other of the Dominions, to show a very much larger surplus at the end of the last financial year than he budgeted for. According to the figures he announced at Lower Hutt on Monday night, revenue for the year was £36,059,000 and expenditure £35,249,000, both record figures. On the revenue side taxation (excluding unemployment tax estimated to produce more than £5,000,000) yielded £31,664,000—an increase of £4,723,000 over the figure for the previous year. Practically the whole of this increase was absorbed by higher expenditure, largely on social services. For Mr Nash to say that “income tax was very largely responsible for the additional surplus” seems rather an understatement. The actual revenue from this source was no less than £1,579,000 above the estimate. If it had merely equalled the estimate the result would presumably have been not a surplus of £BlO,OOO but a deficit of £769,000. All other taxation revenues were buoyant, exceeding the previous year’s returns but keeping fairly close to the Minister’s estimates. “The only increase in taxation,” Mr Nash says, “has been the reintroduction of the graduated land tax and an alteration of the incidence of the income tax.” That is a somewhat euphemistic way of putting it: most people would call the “alteration” in the incidence of the income tax a severe increase. The Minister claims to have placed an additional £854,000 to reserves, though it is not clear just where this amount is being held. The accounts are a clear reflection of the Government’s policy of taxing and spending, but they show that Mr Nash is not yet prepared to fulfil his Prime Minister’s threat to “kick over the traces.”