MORE HOPEFUL

Taranaki Daily News, 16 August 1934, Page 4

MORE HOPEFUL

PROSPECTS OF BUDGET IMPROVEMENT IN REVENUE relief to public funds t LOWER TAXES POSSIBLE CABINET GUARDS SECRET (By Wire— Parliamentary Reporter.) Wellington, Last Night. Although the Government is maintaining close secrecy about the contents of the Budget, even to the extent of issuing a special warning to members not to discuss the matter with those outside the Coalition parties, it is understood the document is expected to throw a more favourable light on the position of the country’s finances than is generally anticipated. Improved revenue returns, mainly from Customs taxation, and relief to the Consolidated Fund brought about by the transference of the exchange burden to the Reserve Bank, have enabled the Rt. Hon. J. G. Coates to take a more optimistic view of the future, although the uncertainty that still exists over the meat export position may prevent him going as far as he would like to go. The Budget position has been improved materially by the .buoyancy of Customs revenue and the satisfactory returns from the sales tax. The revenue from Customs for the financial year ended on March 31 last amounted to £6,485,013, against an estimate of £6,200,000, and against £6,131,414 for the previous financial year. Sales tax was estimated to produce £1,750,000, but in fact it was responsible for bringing £1,847,333 to the Consolidated Fund. It will thus be seen that these two items alone have improved the outlook for the Government to the extent of £382,346. There is every reason to believe also that the current year will see an even greater return from Customs and sales taxation. STABLE EXCHANGE RATE. The announcement by the Reserve Bank that the existing exchange rate is to be maintained for a considerable time is expected to lead importers to replenish stocks, which have been kept very low, largely on account of the uncertainty of the exchange position. On top of that the revised tariff schedules now in operation will bring a greater return to the Consolidated Fund. , Transference of the Governments liability to the trading banks bn account pf exchange manipulation from the Government to the Reserve Bank will also bring considerable relief to the Consolidated Fund during the current year. The Government was paying the trading banks over £1,000,000 a year as interest in respect of Treasury bills to the value of approximately £23,000,000, but now that the Reserve Bank has taken over the liability it will not be necessary to find this amount. The Government, of course, will lose its revenue from the hank note duty, but this is small—about £250,000 a year—compared with the gain that will accrue as a result of the operations of the Reserve Bank. In concluding his Budget last year the Minister of Finance said that reductions in taxation were out of the question at that time, but it was justifiably hoped that the time was not far distant when it would be possible to take some attion in that direction. Whether that time arrived now remains to be seen, but it is certain that the Government will find it difficult to resist completely pressure which is being brought to bear upon it to give some relief to the suffering taxpayer. CIVIL SERVANTS’ SALARIES. A definite feeling exists among Coalition members that every endeavour should be made this year to afford some measure of relief to those who are suffering most as the result of the economies effected by the Government. It is felt that it would be a mistake to withhold any concessions until next year, which is election year. Should the Government decide to restore any portion of the cuts niade in the wages of lowerpaid civil servants it is considered likely that it will also decide to amend the Industrial Conciliation and Arbitration Act to give the unions the right to apply to the Court for a general order for the restoration of at least a portion of the cuts. When the Act was amended in 1931 employers only were given the right to approach the Court for the adjustment of wages, and there is a feeling now that that right should be extended to the workers. However, the Government is not likely to reach a definite decision on this point until its attitude towards the civil servants is determined. Whatever the Government may decide to do, there is every reason to believe that the Budget to be presented to the House within the next week or so will be a more spectacular and hopeful document than its immediate predecessors.