HIGHER TAXES

Timaru Herald, Volume CXLVIII, Issue 21818, 22 November 1940, Page 5

HIGHER TAXES

Federal Budget Presented By Telegraph—Press Association —Copyright (Received November 22, 12.29 a.m.) CANBERRA, November 21. Delivering the Budget Speech in the House of Representatives to-day, the Treasurer (Mr A. W. Fadden), announced that the additional taxation for the remaining seven months to be imposed amount to £31,100,000, of which £17,170,000 could come from income tax, £5,800,000 from companies, £3,400,000 from sales tax, £4,200,000 from Customs and excise and the remainder from the abolition of the rebate of company tax. With the extra taxation imposed last May amounting to £14,000,000, the total additional war taxation for 1940-41 was £45,100,000. Increased taxation on companies would be levied by a wartime company tax and a tax on undistributed profits which in a full year was estimated to return £5,300,000. Mr Fadden said the total taxation of public companies in Australia would become very high, approximately £32,000,000 on an estimated income of £93,000,000 or 6/9 in the £, while dividends would be taxed without rebate in the incomes of shareholders. The general rate of sales tax, he said, would be increased from 8 1-3 to 10 per cent. He estimated that the sales tax for the full year would yield £23,800,000, compared with £17,000,000 on the present basis. The statutory exemption from individual taxation had been reduced from £250 to £l5O, which meant that effective taxation began with the single basic wage earner from whom a contribution at the rate of £1 in the £ was asked. The taxation of the higher incomes would be pushed to the limit. He had taken 14/- in the £ as a reasonable limit to the effective rate of Commonwealth and State taxes combined. He estimated the Commonwealth revenue on the basis of the taxation now in force together with the additional revenue to be derived from the additional taxation at £150,100,000. The total expenditure was estimated at £150,073,000. of which the proportion of the cost of war services chargeable to the Budget will amount to £65,220,000. Further taxation will be required before the end of the year to cover the ever-increasing war expenditure. Yield From Income Tax Mr Fadden estimated that the taxation in a full year on the higher incomes of more than £lOOO a year would yield £20,000,000, on the middle incomes, between £4OO and £lOOO, about £8,000,000 and on the lower incomes, under £4OO about £5,000,000, totalling £33,000,000. He anticipates that the total public borrowing wold aggregate £80,000,000. He estimated the war expenditure of Australia in 1940-41 at £143,000,000. Expenditure overseas, it was estimated, would absorb a further £43,000,000 bringing the total to £186,000.000. Included among the new duties will be an extra 9d a gallon beer, 10/- on proof spirit and 2/- per lb on manufactured tobacco. Mr Fadden announced that the Government was granting an increased allowance of 1/6 a day to the dependents of men on active service.