FINANCIAL

Hokitika Guardian, 6 October 1932, Page 3

FINANCIAL

BUDGET PROPOSALS. THE REVENUE POSITION (Per Favour of Government). Hon. G. W. Forbes ‘ln the course of the Financial Statement on Tuesday evening' said tney were confronted with [a, prospective budgetary shortage estimated at £-8,300,000' at a 1 tulle when resources / had already been generally strained' in the effort to balance last year’s Budget, and very little in the why of taxable capacity remains. To the extent' of £7,300;000 this huge prospective shortage arose from heavy shrinkages in the various items of revenue. me outlook, however, has- undergone a change for' the better during the past few months, and, as half the year lias now elapsed, more accurate estimates can be made of the probable receipts under the various headings. Accordingly the estimated revenue decreases given in the previous statement have Been varied- somewhat. , ; Customs Revenue. The; main alteration is in respect of Customs revenue, which it was anticipated would fall to £5,000,000. During, tlie first five! months of this financial,, year, however, receipts are £250,000 ahead: of those ior the corresponding period! of last year, imports' for the period l showed a comparative decrease of- £406,000, and, the additional revenue was dire to the fact that the increased .duties! imposed, last year were operative from-Ist. August; -1931, only.. Given a reasonably good season; with an im . provement in overseas prices, of which there are ..hopeful indications, it appears- likely now- that- the value oi exports for the- year v iii l reach last year’s total. This should allow of much the same volume of imports, for, with ,due allowance• for* interest- and other* invisible import . items, the balance of '.'external trade was on the- right side last year. Accordingly, after a careful investigation -of the prospects for various classes of goods, and making-allow-ances for the loss of revenue arising out of the tarifF reductions to he made to give effept to the Ottawa agrepTnentsy I have decided to put the estimate down at £5,700,000, which is approximately £200,000 less than was received last year.

Beer Duty. Beer duty, it is considered, should produce l abou uhe same amount of reAvenue* as was received last year, the decrease in the volume of business be ing offset by the higher duties imposed last year.

The: economic conditions are also adTersely affecting the revenue item' .of “Motor-vehicles—Duties and'.licenses.” Tliere-is a. falling-off in? the registration ■of vehicles,'and this, of course, must be reflected in a lower petrol-consump-tion. It s estimated that the reveue ‘will show a falling-off of approximately £200;000. Stamp and death duties appear to be relatively stable at the lower level reached last year, but it has been deemed advisable to allow for further decreases in. racing revenue, amusement 'tax, afid duty on instruments. On the other hand, allowances has to be made for the receipts from the 10 per cent stamp; duty on interest from Govern, ment securties imposed by the National Expenditure Adjustment Act. Irtcid entally, it may be mentioned'that this latter item will not be afnet gain to the Budget, as it is offset by reduc tions in mortgage interest, particularly on State Advances securities. Taking all factors into consideration, the estimate for stamp and death duties has 'been set down at £2,900,000, which is approximately £IOO,OOO ahead of last year’s receipts. Then there is- iiicome-tax, which under' present circumstances is admittedly the most uncertain item in the Budget. This year’s tax is assessed on last year’s income. It is well known that in many cases profits have fallen away to zero, and; as the assessments have not yet been made and compiled, it is very difficult to estimate the effect in the aggregate on tihe amount of tax due. On such information as is available, I have set the estimate down at £3,400,000 for the year. This is approximately £1,050,000 less than the receipts for last financial year. Lahd-tax due can be calculated with much more precision, although the position is to some extent complicated by subdivisions and revalutions, The main * uncertain element, however, is the ability, of landowners to pay. Last year’s receipts, assessed on the lower rates of tax provided tyr, were £83,000 short of the Budget estimate, and for this year it is deemed advisable to allow for a further decrease of £27,000, Interest Receipts. Apart from taxation, there is a considerable amount of revenue derived rom interest and other receipts. Under interest the. most difficult item is interest on railway capital. This item represents the net earnings of the railways. As previously pointed out, railway revenue directly reflects the depressed state of trade and industry, and .has been falling steadily, although rate of decline is now easing off. To a considerable extent the decline has been offset by saving in exnonditino. but, if the services' are to be maintained, there is a minimum beyond which expenditure cannot be reduced The reductions in salaries and wages assisted the finances .of the Railway Board considerably. Allowing for tins •>nd other relevant factors, it is considered that the net revenue for tins financial year will not be more than '£1,00,000 below .that of last year. . Other interest items will probably '■e adversely affected to an extent es-