NEW ZEALAND FINANCE

Wairarapa Daily Times, 29 September 1937, Page 3

NEW ZEALAND FINANCE

LABOUR’S BUDGET. NO TAXATION RELIEF. £50,000 SURPLUS ESTIMATED. An intimation that no alteration in the rates of taxation is contemplated this financial year commands attention in the Budget presented to the House of Representatives last evening by the Minister of Finance (the Hon. W. Nash). The Minister estimates revenue for the current year at £34,778,000 and expenditure at £34,728,000, leaving an estimated surplus of £50,000. Much space in the Budget is given to a review and defence of the policy put into operation and now being developed by the Government.

In the opening passages of his Statement, the Minister said the Dominion was enjoying a measure of prosperity greater than had been enjoyed for many years. This prosperity was to a major extent due to the policy of the Government. The Government claimeci no credit for higher prices for meat and wool, but it did claim that the policy of readjusting and. extending the incomes of the mass of the people had brought a major improvement in our internal economy. A combination ox higher prices and increased quantities had resulted in a record sum , of £64,600,000 being obtained for the Dominion’s exports for the year ended on June 30 last. This represented an increase of nearly £11,000,000, or 20 per cent., compared with the previous dealt in some detail with employment promotion, wage and salary restorations, housing, mortgage finance, the marketing of primary products, oversea trade negotiations, internal marketing, and industrial efficiency the Minister went on to deal with public works, stating that _ last year £587,000 was spent on railway construction, as against an allocation this year of £1,060,000. “The urgent need of more rolling stock and the putting in hand of deviation and duplication works in the more heavily trafficked lengths,’’, he added, “is covered by the programme for the current year amounting to £3,235,000.“ The ex penditure on public buildings last year of £655', 000 was almost exactly twice, the previous year’s outlay. The allocation for the current year is £1,689,000. This includes £050,000 for school buildings, £459,000 for post and telegraph buildings and a substantial provision for air-defence bases and for general buildings, including courthouses and mental hospitals. A comprehensive plan has been prepared for grouping Government offices round Parliament Buildings on modern townplanning principles. In total, the works and development plan, including maintenance of hug ways .and certain other items. °f a revenue nature, requires provision for an estimated sum this financial year of £17,367,000. The items are: Eailway construction and improvements £4,295,000: highways and roads, £5,708,000; public buildings,, £1,689,000; hydroelectric development, £1,445,000; small farms settlement, £450,000; telegraph extensions, £750.000; Native lands settlement, £677,000; State forest development, £475,000; lands, development and improvement, £825,000; other works (aerodromes, plant and material etc.), £1,053.000. The Minister stated that expenditure from the Consolidated Fund this year was estimated at £34,728,000. This included £3,058,000 transferable to the Main'Highways Account and to local authorities which was offset by an equivalent amount of revenue. On a comparative basis, the expenditure was £3,504,000 in excess of that for the preceding year. an increase of only £15,000 for debt charges. (The public debt shows a net increase for the year of £5,109,102, but savings have been effected by conversion). Social services are estimated to cos this year £12,168,000 compared with £9,913.000 last year. The Education vote of £3,745,000 shows an increase of £349.000 on last year’s expenditure. Summing up the position in general, the Minister states:— The Government have restored wages and salaries, increased pensions, provided better facilities for the promotion of health and extension of education. The extra cost is £8,500,000 and this comes out of an aggregate of private incomes which last year’s statistics show to have increased by at least £20,000,000. So that whilst £8,500,006 have been used to extend production and promote some increase in our living standards, the people who have paid the extra money are left with £11,500,000 more than before the readjustments were made. _ The revenue for the current year is estimated at £34,778 000, which exceeds estimated expenditure by £50,000. The estimated revenue this year from taxation (other than unemployment taxation, which is estimated to yield £5,180,000) is £30,338,000. “Honourable members will have realised ere this,’’ the Minister observes in concluding his Statement, “that no alteration in the rates of taxation is contemplated this financial year, The Government have gone some distance along the road of improving the general welfare of the community, and, while much has undoubtedly been done, there is still much to do. The general buoyancy in revenue has enabled substantial improvement to be effected in the lot of the less fortunate section of the community—the pensioners, the unemployed, and those m receipt of small incomes—and until the Government’s objective in . connection wih a more equitable distribution . of the national income has been attained the whole of the additional revenue will be required for this purpose. “This statement covers one of the most interesting periods in the history of the Dominion. The purpose of the Government is to bring security to all our people. To achieve this purpose the Government accept the responsibility for those who through physical or other disability are unable to care for themselves. For those able and willing to work the Government are laying foundations so that their skill and energy ean be beneficially used not exclusively for themselves, but for the Dominion as a -whole. These foundations are difficult to lay because acquisitive instincts affect the actions of all of us to such an extent, in present circumstances. The Government believe, however, that when there is security for all who are willing to work the fear of poverty and depressions will disappear, and w T ith it the domin-

ant acquisitive instinct will gradually be eliminated. “The removal of the fear of poverty is a first essential to progress. Our living standards can be raised to higher levels only by the production of more and better food, healthier ano warmer clothing, with comfortable houses to make into homes. This means improved methods of farming, more efficient makers of clothes and builders of houses. Given the co-opera-tion of these producers, the. Government will guarantee a collective security for our family life, for the mothers and the children of the nation, in which all who share in producing shall shave in utilisation. Furthermore, social security is a prime essential to the enjoyment of a fuller life —involving cultural as well as material things—that should be the heritage of our people. “To suggest the inevitability of slumps and booms, associated as they are with affluence for a limited number during a period, and followed by unemployment. destitution, hardship, and privation for the masses, is to- deny all conscious progressive purpose. The Government know that they cannot isolate the Dominion completely from all the effects of prices overseas, but they are determined to use to the fullest extent all the labour and materials in the Dominion for the provision of the maximum of our requirements; whilst taking every step to exchange our surplus commodities through trade with nations overseas. The only real limitation to production is our own labour and material resources. “There is much unreasoned criticism with regard to the use of credit. Money and credit are means to an end. It cannot be too strongly emphasised that more production and better services are the essentials of security and of higher living standards and that money or credit is useful only when it serves this end. This means that the Government, to succeed, must have the full co-operation of workers in all fields — on the farm, in the factories, on our roads, and in commerce. “Ours is one of the most richly-en-dowed countries in the world. The Government will do their best to use that endowment for the benefit of all our people.”

TREMENDOUS EXPENDITURE. STRONG CRITICISM. BY FARMERS’ UNION PRESIDENT. CHRISTCHURCH, Tuesday. “I am absolutely dumbfounded at such .a tremendous expenditure,” said Mr. W, W. Mulholland, president of the New Zealand' Farmers’ Union, in commenting on the Budget. “It seems as though they have got an expenditure bug which is carrying them beyond all reason.” Mr. Mulholland noted with grave concern the smallness of the surplus anticipated. No one, he said, could regard world conditions as stable and the violent fluctuations of the market in Wall Street were a serious warning, of which considerable"notice should have been taken. “Such a staggering expenditure as that is more likely to have the effect of increasing hardship on the poorer people. If there is the slightest recession in overseas prices there will be that effect. Of course that remark does not apply to those in receipt of fixed payments from the State so long as those payments can be made,” Mr. Mulholland added. “It must be remembered that the increasing revenue is due to improved conditions and these longer conditions improve the greater becomes the possibility of a fall in prices that will immediately do away with the wherewithal to make those fixed payments. While. I am not surprised, I am naturally disappointed that the very unjust land tax put into operation last year is being continued. I hope that the suggestion that land and income taxation is to be reviewed during the session is a ray of hope. I don’t think it is, all the same.” Mr. Mulholland described the reference to proved hardship in the payment of the land tax as being probably only sufficient to save those who would be made bankrupt if they were forced to pay the tax.. He thought it did not represent any relief from any tax burden other than that fear that there was not a general appreciation of the meaning of the deficit in the Dairy Industry Account was also expressed by Mr. Mulholland. That deficit of £650,000, he said, was officially a deficit in the Dairy Industry Account of the Government. Actually it was an overdraft standing against the farmers of the country, to be paid off when prices rose to that extent' beyond the Govern-ment’s-guarantee to dairy farmers. — (P.A.)