AUSTRALIAN ECONOMY

Taranaki Daily News, 25 July 1931, Page 8

AUSTRALIAN ECONOMY

NEW FEDERAL BUDGET. FACING THE. INEVITABLE. Sydney, July 18. The latest Federal Budget, the fifth in three years, which was introduced by Mr. Theodore last Friday, has become known as “the economy Budget,” and this term certainly distinguishes it more than any other could from its predecessors. At the mention of the new taxes which are to be imposed most Australians merely shrug their shoulders'and accept the inevitable. The general attitude is that as the Federal Government is clearly doing its utmost to meet the extraordinary economic conditions criticism would be out of place, and that the Government is entitled to a fair run with its extensive economy plans. The Dean of the Faculty of Commerce at the Melbourne University, Professor Copland, who so ably assisted the Premiers’ Conference in Melbourne, has expressed general satisfaction with the “Budget,” and as he has been an impartial adviser of the Government; and an outspoken critic as well, his views are regarded as of great importance. He said that the Budget showed that Australia was determined to make an effort to restore prosperity, and the sacrifices that entailed weie so evenly spread that there was “no excuse for grumbling.”

Professor Copland, who was chairman of the experts’ committee appointed to draft a plan for the economic rehabilitation of Australia, says that the Budget follows closely on the lines of the decisions that were reached by the Premiers. It was part of the agreement that the Federal deficit should be reduced to £4,300,000. Actually, after making allowance for the operation of the Hoover plan the deficit would be little more than £1,000,000. The greatest reduction in expenditure provided by the Budget is that on interest. The amount mentioned by Mr. Theodore was £2,470,000. Wages and salaries to members of the Public Service suffer a cut of £1,800,000. It is generally regretted that reductions in pensions should have been necessary, but it is recognised that the Government could not have gone on borrowing for these social services. The savings in the old age and invalid pensions bill is estimated at £1,825,000, but the reduction on total payments last year will be only £860,000. The difference between the saving and the reduction is explained by the increased number of people who have been forced by the economic conditions to apply for pensions. On war pensions £1,300,000 is to be saved, and the reduction and limitation of the maternity bonus will result in a saving of £230,000. Other economies account for £1,000,000. Under this miscellaneous head comes further "severe cuts in the money spent on defence. Very soon there will be nothing left of Australia’s defence scheme. In budgeting for a deficit of only £-5.000,000 great progress has been made on the way to Budget equilibrium, for the deficit budgeted fpr 12 months ago was twice the amount. It is rather surprising that the Government should continue to pay bounties for certain goods manufactured in Australia. One would have thought that these industries were already well enough protected by the tremendous protective duties. It is estimated that during the coming year bounties will cost £330.000. This is considerably less than last year, owing to the fact that lower rates will apply all round. Tlie Federal ! Government does not think it necessary to place upon the people vastly increased burdens in the shape of direct taxation, such as Mr. Lang deemed necessary in New South Wales. The exemption mark for the payment of the Federal income tax has been lowered £5O. The general increase in the rate of the tax by 5 per cent, will not press hardly on anybody. But these features of the Budget proposals will mean

■ additional revenue of nearly £700,000. I The amount which New South Wales now owes to the Commonwealth on-ac-count of interest paid and repudiated by the State is £3,834,148. The Federal deficit was, of course, increased by that amount, and even so was £3,000,000 less than estimated in the Budget 12 months ago. It would seem that if only New South Wales were permitted by Mr. Lang to fall in behind the’, other Gov-' ernnients Australia would soon be on the right road.