Manawatu Evening Standard. THURSDAY, JULY 1, 1937. PROSPERITY IN AFRICA.

Manawatu Standard, Volume LVII, Issue 180, 1 July 1937, Page 8

Manawatu Evening Standard. THURSDAY, JULY 1, 1937. PROSPERITY IN AFRICA.

Buoyancy of Hade and State finance, chiefly due to the handsome price being' received for gold, of which the country is the chief source, continues to be a feature of the Union of South Africa, as revealed in the recent Budget presented by the Minister of Finance (Mr Havenga). There seems to be no cloud on the country’s financial horizon, despite the fact that it would almost seem, after years of improvement, there is little further room for more, and it is safe to predict that, so long as the gold price remains good and gold is to be found in the Union, the country will continue to thrive. South African trade for the first time in history topped the ,£200,000,000 mark in 1936, an increase of nearly £23,000,000 as compared with the previous year. Imports totalled £86,000,000 and exports £114,000,000, so that the balance was a most favourable one. The country continued to buy most of its requirements from the United Kingdom, with the United States next and Germany third. These countries have maintained their positions of the year beforehand indeed the Union’s trade policy seems to have undergone very little change in respect of buying. The splendid results of the gold mining companies have been a windfall to the Treasury. Encountering several periods of deficits, and raced with heavy relief expenditure for farmers on account of droughts, the Union Government got an immediate solution to its most pressing problems by imposing additional taxes on gold yields, and, as everyone knows, the precious metal lias become even more valuable and gold mining companies’ profits have soared. 1 So from a perplexing situation the Government rode on the wave of prosperity, and this year Mr Havenga was able to announce a surplus of no less than £s,o(lo,ooo—the fourth consecutive surplus since the Union left the gold standard in 1933. Receipts from taxation exceeded the estimates under nearly all heads, income and Super-tax being especially buoyant. But there is a fly in the ointment—the Minister refuses to disburse his surplus in tax relief, lie persists in refusing to budget lavish!ly or to be open-handed, for, with ! caution, lie is devoting three million pounds of the balance to debt redemption and the rest is being transferred to a loan account. He has decided that the present prosperity of the Union must be used in order to make the country’s capital position as strong as possible, because, he says, there is a grave danger that the people will forget that prosperity is almost inevitably followed by a depression, and lie has consequently budgeted for another surplus next

year so that he may further strengthen the Union’s loan account. A small concession is a remission expected to total £650,000 in Customs dues, and the tax on petrol will be a penny less. It should be noted that the Union’s income tax is still among the lowest rates in the world, so that the risk of unpopularity arising for the Minister through accusations on that score is slight. The policy, viewed broadly. appears sound, and there must be numerous Treasury heads in other countries who look with envy on South Africa’s happy position.