The Dominion. WEDNESDAY, SEPTEMBER 1, 1920. COMMONWEALTH FINANCE

Dominion, Volume 13, Issue 290, 1 September 1920, Page 6

The Dominion. WEDNESDAY, SEPTEMBER 1, 1920. COMMONWEALTH FINANCE

Although its path is not in all respects smooth, the Australian Federal Government is at the moment happily placed so far as finance is concerned. As in this country, national expenditure in the Commonwealth has been increasing at a phenomenal rate in recent years, and a further increase of at least seven millions, jiossibly as- much as nine or ten millions, is anticipated during the'current financial year, as compared with that which closed on Juno_ 30. These .ire heavy calls, but it is anticipated that the Federal Government will be able to balance its accounts without asking Parliament to impose any new taxation this year. Indeed, it is expected to forgo the entertainments tax, which brought in more than half a million of revenue. The problems of the Commonwealth. Treasurer are eased by the fact that a revenue' surplus of between five and six millions was realised last year ; but an extraordinary increase in _ Customs revenue is even more important as eliminating any. present need for higher taxation. The Commonwealth revenue from Customs duties last year (to the end of June) totalled £22,304,147, and thus averaged less than £2,000,000 per month. In July, however, the first month of the new financial year, the sum collected in this category was £2,527.861. The Australian Customs authorities anticipate that this average will be maintained, and if it is the Customs receipts for the year will be more than £30,000,000, and a revenue increase of nearly eight millions will be shown under this head alone. The pronounced expansion of Customs revenue is attributed in part to the tariff revision carried out last year. Tho effect of the new duties has only begun to make itself felt during the last month or two. Unless, however, these duties are very inadequately serving their intended purpose of protecting- Australian industries, the unprecedented rise in Customs revenue must reflect a great increase in the volume of trade.

It is the move likely that the development which has done so much to improve the immediate financial outlook in 'the Commonwealth is due in a greater measure to tho general casing of restrictions on trade and the increase in prices than to local adjustments, since in t.his country also, though its tariff has been little altered since the outbreak of war, Customs revenue is at present expanding rapidly. In 1919-20 it showed an increase of nearly a_ million as compared with the previous year, and the Finance Minister anticipates a further increase of well over a million for the current year. In view of the leeway to be made up in import trade as a result of the extent to which the importation of necessary manufactured goods has been hampered by war and after-war conditions, the estimate of Customs' revenue for, the current financial year may easily be exceeded. It is not unlikely that the Sictual sum collected may show proportionately almost as noteworthy an increase as now seems to bo in prospect the Commonwealth. Some politicians and other people, noting the present movement of Customs revenue, are urging the remission of duties, but thero are quite as good reasons in this country as in Australia for welcoming increased Customs returns which may obviate the necessity of intensifying the heavy drain imposed on other sources of taxation. In our'pwn ease, with tariff revision still in prospect, expanding Customs returns are clearly due solely to expanding trade and prices. The rate of expansion, though important in itself, is slight in comparison with coincident increase in direct taxation, and it can hardly be argued that tho New Zealand tariff imposes undue burdens on people of small means. Excluding duties on luxuries and protective duties which could not be removed without widespread protests from wage-earners, comparatively little is left. Tariff revision undoubtedly ought to be undertaken at the first opportunity, but it is necessary much more as a means of reasonably encouraging and fostering local industries (in some cases by admitting machinery or materials duty free, ' or at lower rates) than with a viewto the remission of indirect taxation. It has to be remembered in this connection that a very large proportion of the people of this country pay no direct taxation, for llu reason, mainly, that local exemptions from direct taxation are decidedly more liberal than in any country with which comparisons can fairly be • instituted. There is room for an exhaustive examination by an expert commission of all aspects of the incidence of taxation in this country, but evidently nothing can be undertaken on these lines that will affect the Government's arrangements for the current financial year. Tim utmost 'to be honed meantime is_ that the deliberations of the Finance Committee of the Fouse of Representatives, to which tho Government has submitted its taxation proposals, may result in the removal of some apparent anomalies and afford a mensuro of relief where, it is most needed. Here, as in the Commonwraith. thnurh hardly in the same pronounced degree, an improving .Customs revenue tendsjneantime to ease the general financial situation.