RECAST FINANCES

Evening Post, Volume CXII, Issue 84, 6 October 1931, Page 8

RECAST FINANCES

TO-NIGHT'S BUDGET INCKEASE IN TAXATION DEPARTMENTAL ECONOMIES MORE IN PROSPECT The unenviable task will fall to Bie lot of the Minister of Finance (the Hon. W. Downie Stewart) in the House of Representatives this evening of reading an outline of financial proposals which, in view of the continued decline in the country's revenue, must spell additional taxation on the people at a time of extreme depression. The manifest fact of the heavy decline this year in the Customs revenue, as well as the serious falling-off in the value of primary produce, make it plain that drastic measures must be taken to stem the resultant ebb in the national accounts. Unpleasant as were the proposals introduced by the United Government two months ago, the supplementary Budget to be presented to-night may be expected to be even more drastic. With the exception of those changes •which came into effect immediately by resolutions affecting the Customs, Mr. Forbes 's Budget proposals have not yet teen agreed to. In brief, additional revenue by taxation was to be found-by a 20 per cent, increase in incomo tax, a reduction in the incomo tax exemptions and duties on steamer tickets and art union tickets—estimated to yield £780,000; by indirect taxation through the Customs a sum of £1,060,000 was to be found; while non-taxation measures, Buchas wago and salary reductions, economies, etc., were estimated to elect-savings of £5,056,000. The sum effect of Mr. Forbes's Budget was to make up a prospective deficit ot £6,896,000. Since that Budget was presented, the' national income has suffered to such an extent that it is expected the deficit for the current year will amount to something like £1,000,000 more than tho ex-Minister of Finance anticipated.

In the face of tho change which has come over tho financial situation in-recent weeks, the Coalition Government will have no alternative but to stiffen up the proposals advanced earlier in the session with a view to gathering in revenuo from direct sources in such measure- as to endeavour to balance the increased anticipated deficiency. " ' ■ ' PRUNING DOWN VOTES. Opportunities for off-setting the deficit by making further economies in departmental adminstration were shown whemthe Inter-Party Economic Committee was sitting, and since, tho formation of:: tho Coalition Government, heads of' Departments, working in conjunction with their responsible Ministers, have been carefully ro-examining their estimates with the object, of pruning aown votes wherever possible. A substantial, economy is being effected by this mealfs,-but it has been necessary to reßort to further taxation means as well in order to make ends meet. This ■will be done both directly and indirectly. As thoro is always a tendency for Customs increases to defeat their own ends by retarding imports, and as tho yield from the Customs tariff is already falling below expectations, it is unlikely that a large amount will be sought by that means, and it is believed the Government' will adopt tho surer jnethod of taxing moTO assured sources of income. The indirect taxation is expected to affect the petrol tax. It is understood that recourse to economies by further wage reductions in the Public Service is not contemplated. It is .probable, however, that an effort will be made to retire Civil Sorvants who have had 35 years' service and upwards. RELIEF FOR FARMERS. The primary producers have been so hard' put to it in meeting their, obligations and remaining in production that it is.believed relief will be given to them in land taxation and by a readjustment of Tural rates. The Governmont is also understood to be sympathetically inclined towards them in the matter of providing facilities for the supply of fertilisers by a substantial State subsidy. To-night's Statement will indicate the broad lines of the Government's proposals, and .it is not expected that details of departmental economies will be rovealcd. In fact, it is said that some of these havo yet to be worked out,'and that thero is no justification for rumours that largo reductions, such as a half-million curtailment in the Education Vote, will be indicated. The Financial Statement may also give a lead to the House as to tho necessity for adopting tho recommendations of the Railways Board for the abandonment of construction on the six lines which it is not expected will prove payable propositions. THE GENERAL ELECTION. It is stated that the expediency of postponing the General Election has not been decided by Cabinet, and that no reference to that important question) will be contained in Mr. Stewart's statement. There has been an exceptional demand for tickets for the public galleries at to-night's sitting _of the House, and spectators aro not likely to bo kept long in anticipation of what the new financial proposals contain, for Mr. Stewart's speech will probably be concluded within forty minutes.