TAXATION UP

Evening Post, Volume CXXVI, Issue 82, 4 October 1938, Page 12

TAXATION UP

AUSTRALIAN BUDGET

INCREASE OVER £3,000,000

PRICE OF PROGRESS

(From "The Post's" Representative.)

SYDNEY, September 24. Taxation increases totalling £3,210,----000 were announced by the Federal Treasurer (Mr. Casey) in his Budget speech. They include a 15 per cent, increase in Federal income tax, to yield £1,400,000; sales tax of 1 per cent, to yield £1,300,000; land tax increases of 11.1 per cent, to yield £135,000. These increases are necessary to bridge a budgetary gap of £3,184,000 caiused by increased defence expenditure, invalid and old age pensions, and provisions for national insurance. The estimated defence expenditure this year from all sources is £16,-796,000, compared with £11,531----000 last year. "The question of further loans to assist the Budget was considered," said Mr. Casey. "In view of the large conversion loan to be faced immediately, and the requirements "of State works programmes, however, the Government was forced to the conclusion that the whole of the shortage must j be covered by additional taxation." Companies will contribute £550,000 of the increased income tax, and individuals £850,000. The sales tax is imposed on all goods consumed in Australia unless specially exempted. "In selecting goods for exemption from sales tax," said Mr. Casey, "this Government has been concerned, in the main, to lift the burden of the tax from the requirements of basic Wage-earners, the sick and destitute, primary production, fields which offer particular opportunities for employment, education, science, religion, and the like. The wage-earner has been chiefly provided for by the progressive exemption of most of the prime necessaries of life." REVENUE AND EXPENDITURE. The estimated Budget position for 1938-39 is:—Total revenue based oa present taxation, £89,952,000 and additional taxation of £3,210,000, giving a total estimated revenue of £93,162,----000. The total estimated expenditure is £93,136,000, leaving an estimated excess of receipts of £26,000. "No Government," said Mr. Casey, "enjoys placing a higher burden of taxation on its people, but we believe that the responsible taxpayers of Australia are ready to meet the task of endeavouring to achieve social better- j ment and national security. "The times are too serious to allow of dispersionl of effort in internal poli- j tical dissension, and the Government \ hopes that the Parliament will accept this Budget as a courageous effort to add to' our national security in the widest sense of the term. "Compared with any other country in the world today, our broad economic and financial position in Australia at present is . good. I might. even say remarkably good. We are preparing to meet very large increases in expenditure on defence and social services, and at the same time, maintain our progressive development in the manifold other directions in which the hand of Government is essential for the welfare of the people. We are doing this in the face of world difficulties of a serious order. This endeavour means increased taxation which the Government proposes should be spread in as equitable a manner as possible." EXPORT VOLUME HIGHER. In spite of considerable difficulties abroad, the past year had been one of appreciable advance, said Mr. Casey. Oversea fluctuations and instability had not been seriously reflected in Australia. Employment had improved, building activity had continued to expand. Wool and wheat had suffered recession, wheat heavily. Taking exports as a whole, prices were down 12 £ per cent, on the year, but the volume was higher, resulting in a total export income of £125,000,000 compared with £129,000,000 the year before. Investment of overseas capital in Australia had contimied at a satisfactory rate, and the call on London funds was less than might have j been expected. j I "Prophecy about the future entails ! speculation as to political and economic trends, which at present are very confused/ Mr. Casey continued. "In the political sphere, particularly in Europe, we can only hope for the best. In the economic sphere, I do not believe that the position is as disquieting as we might be led to believe. The recent trend towards recovery in the United States of American may well grow in strength sufficiently to offset and eventually to change the hesitant and downward trends in some other countries. The favourable developments will have to be accelerated appreciably, however, if they are to make themselves felt before the bulk of our own export commodities begin to be sold to the world's markets. j "The remarkable resistance of the Australian economy to adverse oversea developments may be attributed to some extent to an increase in production, which has offset a decline in prices, but I believe that just as potent a factor has been the determination !of those in charge of our institutions not to let their minds be unduly af- j fected by every economic breeze that blows from overseas."