The Dominion FRIDAY, MAY 20, 1921. THE NATIONAL FINANCES
The figures of national finance for 1920-21 which were gazetted last evening show a surplus of revenue over expenditure touching the record total, for the Dominion, of £6,124,000. The disclosure of this handsome balance to the good on the- operations of the year is,, of course, in itself very satisfactory, in summing up the present situation and outlook, however, it must not be overlooked that the balances available, in the Consolidated I'und at the end of the financial year were only'eight and a half millions sterling as compared with seventeen and a half millions at the end of the preceding year. The reason for this heavy reduction in available balances is that the Government has found it necessary to finance a variety of special obligations out of the Consolidated Fund. For instance, the amount of revenue transferred to the Discharged Soldiers’ Settlement Account totalled approximately thirteen and a half millions. A sum of half a million was transferred last year to the Public Works Fund, and £1,200,000 was transferred to the Reserve Fund 'Securities Account under amending legislation passed last session. The revenue for the year was £34,192,000— almost three times the revenue of the last pre-war year, and an increase of £8,117.000 on the revenue of 1919-20. The Principal items contributing to this remarkable increase are Customs duties and income tax. As the result of a boom in imports which is already falling away Customs revenue increased fiom £4.830,000 .to £8,408.000. Income tax receipts rose from the 1919-20 figure of £6,369,000 to £8,248,000. Expenditure for the year totalled £29.063.(500, an increase of £4,287,000 on the 1919-20 figures.' Permanent appropriations —chiefly debt and war and other pension charges—absorbed £12.234,000, an increase of nearly a million on the previous year. Annual appropriations 'totalled £15,834,000, an increase of more than three millions as compared with 1919-20. Railways expenditure advanced from £4.305,000 to £6.211,000; that of the Postal Department from £1,941,000 to £2,588.000. and under the head of education, there is an increase from £2,031,000 to £2,460,000. The growth in Departmental expenditure is very largely due to wage and salary increases, while in the case of the Railways Department the high cost of coal is also an important contributing factor. It is particularly obvious that the big surplus disclosed is the outcome of abnormal conditions which are now rapidly changing. It is accounted for to a great extent by the tremendous expansion of imports as a result of which Customs receipts for the year were almost doubled. During the current financial year there will certainly be a considerable drop in Customs revenue. Owing to the fact that income tax is based on the returns of the past and not the current year another high collection of direct taxation is in prospect, but in view of the adverse conditions of trade, and industry now ruling, an ultimate decline in receipts from direct, as well as indirect, taxation must be anticipated. Since revenue is bound to fall away to some extent, the disclosed increase in expenditure assumes a sdmewhat formidable asnect. The extent to which demands on the public purse have expanded may be appreciated bv comparing the increase in national expenditure during the last seven years (approximately since the outbreak of war), and ”i the seven years preceding. The following table shows that while national expenditure increased in the seven years to March 31, 1914, bv just over four millions., it has since. -in an equal period, increased by four times as much: — Annual Increases expenditure, seven years.
Taking the same 'basis of comparison, it is seen that permanent appropriations—that is to say, debt and pension charges which for a long time to come will constitute a dead-weight charge on public revenue—have increased more than six times as much in the seven years since 1914 as in the seven years preceding:--Permanent Increases appropriations, seven years.
These enormously-Jncreased burdens, and the prospect of a more or less serious slump in revenue, emphasise the need for the caution the government is displaying in regard to financial commitments. The figures for the year just closed are large, and the substantial surplus will assist the Government in meeting the difficulties that lie ahead. These figures, however, afford no ground whatever for an idea that the Government has plenty of money available with which to satisfy indiscriminate demands. On the contrary there is every reason for the exercise of both economy and caution.
£ £ 1907 7.774,000 — 191+ 11,825.000 4,051,000 1921 26',068,000 10,243,000
1907 £ 2.998,000 £ 1914 4.2.16.000 1.238,000 1921 12,234.000 7,998,000
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Dominion, Volume 14, Issue 201, 20 May 1921, Page 4
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759The Dominion FRIDAY, MAY 20, 1921. THE NATIONAL FINANCES Dominion, Volume 14, Issue 201, 20 May 1921, Page 4
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