TAXATION REDUCED

Wanganui Chronicle, Volume 89, Issue 213, 8 September 1945, Page 5

TAXATION REDUCED

AUSTRALIAN BUDGET LOWER RATES APPLY NEXT JANUARY PEOPLE BENEFIT IN SIX MONTHS OF FINANCIAL YEAR Recd. 11 p.m. Canberra, Sept. 7. Australian first post-war Budget was presented to Parliament to-day by the Prime Minister and Federal Treasurer, Mr. Chiflcy. It provides for a reduction in income tax and 12£ per cent, over the full year, to operate from January 1 next, and sales tax concessions amounting to £2.800,000 for the full year, and £1,900,000 for the current financial year.

The Budget totals £492,000,000. of which revenue will provide £340,000,000, and £152,000,000. will come from loans.

Taxation will be divided into two sections, one for normal income tax and the other for social services. Exemptions from social services contributions will apply to taxpayers without dependants earning less than £lO4 a year, with a wife £156, with a wife and one child £175, with a wife and two children £2ll. nth a wife and three children £257, and with a wife and four children £277. Contributions will be graduated, rising to Is 6d in the £. With normal income tax the exemption for taxpayers without dependents will be raised from £lO4 to £2OO and no married taxpayer with an mcomo of less than £266 will be called upon to pay income tax. The new income tax rates start at cd in the £, rising to a maximum of 15s 2d in the £ upon income in excess of £5OOO. Including social services, the maximum rate will be 16s 8d in £. Tt is not proposed to reduce taxation on public companies, but the effect of reducing the individual’s taxes will be to reduce the tax on private companies,” said Mr. Chifley. The social sendees contribution is estimated to yield £51,000,000 in the full year and income tax £89,000,000, makmg a total of £140,000,000. The present taxation yield is £160,000,000. which means £20,000,000 reduction in revenue, but as the decreases are to operate for only half the present financial year the decrease this year is expected to be only £10,000,000.

Of the £492.000,000 total expenditure, £360,000.000 is to go still into war expenditure, and £132,000,000 into non-war expenditure. Mr. Chifley said Australia faced an acute shortage of dollars, adding that unless the forthcoming discussions in Washington provided a mutually satisfactory solution.. dollar imports would have to be severely restricted. Australia had outstanding war commitments overseas of about £50,000,000. It might be necessary to maintain the machinery of exchange control and import licensing as a flexible means of keeping the situation in hand, as Australia’s import requirements were likely to be in excess of her current overseas earnings.

Of £360,000,000 required this year for war expenditure £62,000,000 was needed for overseas expenditure. While the rate of the war expenditure would be greatly reduced by the end of the year commitments in the Pacific and the very magnitude o f Australia's war effort meant that the reduction would be only gradual. There would be no reduction in expenditure for nay and allowances during the year, despite the rapid reduction in the strength of the forces. On discharge, servicemen would receive deferred pay. all the undrawn active pay. war service leave of 15 days for each year overseas, and re-establish-ment ’eave of 30 days. The deferred pay alone would probablv cost £54000,000 this year, leading a liability £3<l.oonx)oo°' 1946 ‘ Of a W roximatel >'

Parliament also approved of the payment of war gratuities, estimated at approximately £75,000,000. The Government decided to increase pensions for widows maintaining a child from 32s 6d to 37s 6d a week.

Health and social services imposed a new and heavy cost on the Budget. In 1935-39 the total outlay for social services was £17.000.000. It is expected to reach £65,000,000 this year and. -77.000.000 next year. Mr. Chifley warned against “a runaway rise in prices,” because at present incomes were running in excess of the supplies. There was an additional added danger from the release of accumulated wartime savings. Mr. Chifley anticipated that incomes will remain al. a high level during tho trasition period. He said Drice control must b” yp aine-1 for the present.