TAXES BATTLE LOOMING

Taranaki Daily News, 20 January 1933, Page 8

TAXES BATTLE LOOMING

POSITION IN AUSTRALIA. STATES v. COMMONWEALTH. Verbal fireworks are likely at the next Premiers’ Conference if the representatives of the various States sue-, ceed in raising the question whether the Commonwealth should at once evacuate entirely specified fields of taxation and leave them to the States, says the Evening Post’s Sydney correspondent. Taxpayers have a vital concern in outcome of the argument, because upon it largely depends their prospect ot early Ax reduction. The States claim that it is not fair to them that the Commonwealth should be making round tax revision while they have to borrow money to bridge their deficits. In particular the States are likely to concentrate on Federal abandonment of probate, which last year brought ’in £1,250,000 to the Commonwealth coffers, and entertainment tax, which netted £133,000. _ For some time State treasurers, struggling to keep their deficit wdhm managable proportions, have casting envious glances at the growmg Federal surplus. At the present rate, and unless further tax cuts are, made, the surplus may reach nearly £4,000,000 by June . 30. The Commonwealth ac count for the haif-year ended De comber 31 show a surplus pf £3,208,000. The progressive improvement in federal finances is shown by comparison of the latest figures with those for the las two vears. For the first six months of 1930-31 there was a deficit of £9,500,000, and for the first six months of last year there was a deficit of £1,231,000. The position now is that, exceeding the Government’s most optimistic anticipation, the surplus for the first_ six months is practically large en ° * cover the special grant to whaa * ers, the grant to farmers for fertilisers, and the tax remissions which have already been made. The marked improvement is largely due to buoyant Customs revenue. In the six months ended December 31 Customs and excise produced £17,291,000, compared with £14,402,000 during the first six months of last year. Similarly sales tax revenue, despite the increased exemptions, is nearly £1,000,000 more than it was at December 31, 1931. In spite of this, it is considered that there is little possibility that the Commonwealth Government will comader for one minute the evacuation of fields of taxation once regarded as exclusively within the taxation sphere of the States. Abandonment by the Commonwealth of the income. tax and land tax fields is hardly within the sphere of practical politics, but the surrender of probate duties and entertainment tax would relieve the financial position of the States to the extent of nearly £1,500,000 on last year’s figures. Encroachment of the Commonwealth into the State taxation fields has been a marked feature of Federal policy since the war, and the effect has been to diminish seriously the ability. of the States to balance their budgets. The view of the Commonwealth Government is that the present buoyant revenue cannot be regarded as permanent, and the Commonwealth has already surrendered by tax remissions as much revenue as the financial position warrants.