FEDERAL BUDGET PROPOSALS.

Timaru Herald, Volume CXXV, Issue 18627, 24 July 1930, Page 9

FEDERAL BUDGET PROPOSALS.

Presented To Parliament. MANY MILLIONS INVOLVED. United Press Association—By Electric Telegraph—Copyright SYDNEY, July 23. Copies of the Federal Estimates of Receipts and Expenditure for 1930-31 have been circulated in the House of Representatives. The revenue is estimated at £65,585,770, of which £14,000,000 Is expected to be derived from new taxation. The Administration proposed an increase of Government costs by £1,000,000. Overseas trips will cost £14,000, political expenses £71,000, the League of Nations £30,000, and iron and steel bounties £300,000. The estimates of expenditure, which total £65,610,000, or an increase of £1,094,000 over last year, include £14,707,000 on business undertakings, namely railways and post offices, an increase of over £500,000. Of this expenditure, £869,000 is to be contributed from the general revenue. The post office revenue is expected to be £15,577,000, an increase of over £1,500,000. The sum of £322,000 will be voted for Federal Capital Territory, from which the revenue is expected to reach £228,000.

The principal feature of the Federal Budget debate was the address by the Leader of the Opposition (Mr J. G. Latham). He gave details of his proposal to reduce the estimates by £4,000,000. These included the withdrawing of £1,000,000 for unemployment relief and limiting the maternity bonus to persons receiving not more than £6 a week. SHARP REMINDER FROM LONDON. MORE STABLE FINANCES DEMANDED. United Press Association—By Electric Telegraph—Copyright (Received July 23, 9.20 p.m.) LONDON, July 23. “The Daily Telegraph” city editor says: “There appears a reasonable prospect of a steady recovery of values in Australian Government loans, over the period following the views of the mobilising of the exchange; together with the beautiful rains and the slightly better conditions in the commodity markets, following the taxation to balance the Budget. The “Financial News” expresses the opinion that any suggestion that new Australian loans, at present, would be unfavourably received, but Australian developments will necesistate fresh borrowing, when the present crisis is over. Meanwhile, investors are expecting more than a series of forced expedients from Mr Scullin’s Government, and would welcome an assurance that a thorough-going inquiry is being made with or without Sir Otto Niemeyer’s assistance, into the whole of Australia’s financial structure.

THE SCULLIN BUDGET. TAXATION INCREASED IN AUSTRALIA. United Press Association—By Electric Telegraph—Copyright CANBERRA, July 14. Drastic increases in taxation are provided for in the Budget speech just delivered in the House of Representatives by the Prime Minister and Treasurer. During the current financial year, it will be necessary to raise an additional £14,000,000 by direct and indirect taxation. About £1,000,000 is expected from a tax of 2h per cent, on the wholesale price of commodities sold in Australia. A similar tax is in operation in Canada, and an officer of the Canadian Taxation Department has come to Australia to advise the Commonwealth Government on questions relating to this form of taxation, which is quite new in Australia. The Government proposes to raise more than £5,000,000 by new customs taxation including an additional import duty of 3d a gallon on petrol, 6d a pound on tobacco, one penny a foot on non-British cinema film, ten per cent, extra on radio values and £1 a ton on newsprint. The new duties will hit American imports. Most of the petrol and tobacco imported into Australia and 90 per cent of the cinema film come from the United States. Canadian newsprint must pay the additional £1 a ton duty, but the margin of preference over non-British newsprint which gives it a commanding advantage is preserved. The balance of the new revenue is to be obtained by an additional ten per cent, on incomes from personal exertion and an extra 15 per cent, on incomes from property. Income tax on corporations and* companies is also increased, and a special tax is to be levied on the money remitted from Australia to America on account of film hire. Hitherto remittances to American picture interests have escaped income taxation, but in future 30 per cent, of the amount involved will be regarded as taxable income, and must pay 1/4 in the pound sterling. Increased postage rates making the postage on letters 2d are estimated to yield £1,000,000. Telegraph and telephone rates are unaltered. Introducing the Budget, the Treasurer stated that the Government was faced with a financial depression without parallel in the 30 years’ history of the Commonwealth. This had caused a prospective revenue shortage of more than £14,000,000 dollars, including a decline in Customs revenue,

due to a large falling off in imports of about £7,000,000, and a decrease in direct taxation due to reduction in taxable incomes of £220,000. The actual revenue shortage for the year just closed was £1,400,000, making a total accumulated deficit of more than £6,000,000. This is to be extinguished by a special loan. During the present year, Mr Scullin said, the Commonwealth must raise a loan of not less than £30,000,000, to clear up the London exchange position, which has arisen owing to the decline of Australian exports, caused by an unfavourable wheat season last year, and sharp reductions in the price of wool. The Australian trading banks havo arranged to pool their external exchange and to give the Commonwealth Government first call upon their London funds.

Sir Otton Niemeyer, a special representative of the Bank of England, has come to Australia to investigate the financial and economic position, and it is expected that as a result of his visit, difficulties caused by the London exchange position will disappear.