WAR FINANCE

Dominion, Volume 35, Issue 291, 7 September 1942, Page 4

WAR FINANCE

Since the outbreak of war British countries have established new budgetary records with unfailing regularity, and the latest is a Budget that will involve the Commonwealth of 'Australia in an estimated expenditure of £549,500,000 this year. Of that large sum £440,000,000 will be spent on the war effort, and it is proposed to provide £140,000,000 out of revenue and borrow the balance. This is the point on which early criticism appears to have centred. The huge national expenditure has, in Australia as elsewhere, released a great amount of individual purchasing power at a time when the supply of consumable goods is strictly limited and the Government is being urged to restrict it, either by means of increased taxation or by adopting the policy now followed in Great Britain, Canada and South Africa of taking a percentage of individual incomes to be repaid after the war. O'he latter procedure is, in effect, a form of compulsory saving. ■ The growing extent to which the Federal Treasurers have resorted to public loans is seen by the fact that the issues have advanced from £60,000,000 to £240,000,000, and to the larger sum must be added a further sum of £60,000,000 which it is hoped to obtain from savings bonds and certificates. Ihe complete programme for the current year will require £25,000,000 o f borrowed money monthly. The revenue expected from new taxation, £I4,OOO,UUU, is described by one journal as “a puny and ineffective weapon to curb the inflationary effects,” and, it is interesting to note, it is approximately the same as the additional war taxation revenue provided for in the Dominion Budget for the financial year, lhe proportions of civil to war expenditure in the two countries appear to be about the same, but it must be remembered that to the Federal civil outgoings must be added those of the States, which would alter the position materially. . . A study of the financial programmes of the various Dominions will prove of great interest in years to come. South Africa this year will provide £88,400,000 out of revenue to meet an estimated expenditure of £140,000,000, taxation having recently been increased by 11 per cent. Canada expects to'meet 52 per cent, of het total expenditure out of current revenue, and recently imposed substantial taxation increases. Australia has made comparatively small increases in taxation and has an expanded loan programme, and New Zealand proposes to meet a total war expenditure of £133,(XX),000 by raising £41,400,000 in taxation, £56,000,000 in overseas borrowings and £35,600,000 in internal loans and savings. These are the outstanding figures and probably the only thing certain about them is that the records established, great as the figures are, will not last very long.