THE BUDGET BLUES

Chronicle (Levin), 18 August 1948, Page 5

THE BUDGET BLUES

Press Assoeiation)'

No Sensational Changes Are , Expected This Year

(Per j

WELLINGTON, August 17. It is coiisidered' unlikely that there will' he any seusational changes- involvedi n the Budget whieh the Minister oi Finance, Mr. Nash, will present in 'theXouse of Representatives on Thursday; .hough there will probably b.e some •tmall reductions ih income tax. for th.e -.ower and middle wage£ groups, .j A Government party cauchs • called for 0.30 a.m., on Thursday, expected to aear the -first straight-from-the-horse.''3-•ao.uth story of what is in store for the people who will haye to wait until 7.30" that night when Mr. 'Nash cominences reading the priuted recordl of the Lahaur Government^ -on whieh he ha& been engaged for weeks. The House itelf will not sit on Thursday afternoon ;o there will he ample time for a dis-. cussion in caucus and it is expected ttiat Left-wing members of the Labour PAty /ilf make a last-minute stand for greator concessions to taxpayers at the lower 'evels and tliat there . will he some among the others prese'nt who are expected to give them support because -iext year is election year and this is .onsidered the year when vote catching. .hould be aimed at. Qne precllction made generally, is that, to assist those in tbe lower income groups, the^ amount of personal exemp"ion will be' raised. The suggestion has oeen made that this may apply only to oiarried men or may even only apply to personal- exemption ' (now £100) for wives.. It is held that if a general rise were given. for siugle men, it would re move rnany from the taxation net, altogether. ;^v- ...... ?' . The aanual conference of the Laboqi Party in Dunedin, discussing taxation, recommended that tlie total of "personal exemption sliould be raised to £325 but such an increase is thought to'be highly unlikely. . v> Because. of the high cost of . social security,, it is. not expected that any reduction is possible in the amount oi wages tax and' even Left-wmg members wno have long' advocated it, are not sanguine of substantial increases or apy increases at all in social security benefits — family, siekness or age. Guggestions whieh have been^ aired publicly by members- of the Labour I'artv; include small increases for single old age beneflciaries, many of vvhom lind tlie cost of living, especially in the cities, a heavy burden and also small increases in the family benefits whero ihe number of children exceeds two or three. - ; Oue concession it is expected may be made, is the removal of the saies tax fijjbm public transport vehicles — a step whieh has long been urged by local bodies. A hint of this was given, recently by Air. Nash in a letter to the Public I'assenger Transport Associa tion. One reason w.hich it is- certain x\lr.. Nash will give for the comparative smallness of tax reductions in a- year of Uuoyant revenue, is the need to set aside a mucli bigger sum for dei'ence i ommit uients in tenrts of naval, army. and air force expansion, especially in territorial units. This year's Budget, apart altogether from the attack whieh will he made 'by the Opposition on the failure to reduce taxation, may well bring a crisis in the relations between the leaders of tha Labour Party and the small but growing Left-wing section. The Left-wmg uas in its favour the fear now generally expresced in the lobbies among many of the rank and file Government members, that the Labour Party is on its way out unless drastic measures aa-e taken. The Left-wing section says that | if increases >n social security beneiits are delayed until next year's Budget, •their value in the 1949 general election will he offset by the belief of many, , voters that the increases are made for propaganda purposes only. LabourJs 13th Budget, although unspecfcacular in itself, ys expected to he politically oue; of the most important in the history oh the. Party. Traiie union leaders in Weilingtoii. have r'-^lreajsLy sai'd . thajt if! ;it does npt ;prpvide ,an increase' jniythe "take home" pay for workers, strong opposition from indusfrial lahour is certain.