REVENUE

Nelson Evening Mail, Volume LXIII, 2 August 1929, Page 5

REVENUE

Details of the .vear's accounts of the Ordinary Revenue Account«of the Consolidated Fund will be found,in the published accounts. The revenue for hie year amounted to £23,599,676, rf which £l7 836,234 was derived from taxation and the balance, of £5,763,442 from interest earnings and sundry revenue and recoveries from various State activities. The revenue from taxation includes £l.243,577 oti account of petrol-tax, motor license fees, etc.. which are specially earmarked for highways purposes, to that the revenue from taxation for general purposes amounted to £16,592,t//i. In total the revenue is not comp.i'.iole ■with that received in 1927-28, as last year the total revenue and expoaditura of the Post Office were not comprised in the Consolidated Fund, which ii curled only interest on capital as an item of revenue. Another complication from the point of view of comparison arises from tho fact that the petrol-tax operated for only part of 1927-28. Apart from Post Office receipts and motor taxation, last year's revenue represented an increase of £496,497 over that of the previous year. There it Will

be seen that most of the increase was in the interest receipts, and that the taxation items showed relatively little increase/ over the previous year. In fact, this lack of buoyancy in the revenue from taxation for general purposes was the principal cause of the deficit, in that the former Minister of Finance had anticipated an increase of approximately £426,000. whereas the results showed an increase of only £IOB,000. The mainstay of the revenue—Customs duties —showed an increase of £ll,663 over the previous year, but fell short of the estimate by £306,748, mostly due, I find, tea marked decline in the duty collected on spirits. Beer duty, however, was well maintained, and slightly exceeded the estimate for the year. Coming next to direct taxation, this also proved disappointing for the most part. The income-tax receipts for 192728 were exceeded last year by a relatively small margin of £37,148, but the results for 1928-29 were short of the estimate of £89,123. This, of course, is a reflex of the tardy recovery of the trading position, to which I have already made passing reference. As regards land-tax, this was not only a little short of the estimate), but £14,155 less than was received for the previous financial year, 1927-28. I find that there has been a steady shrinkage in land-tax over the last few years, due to the subdivision of estates and the adjustment of country valuations consequent upon the decline in some of the inflated land-values to a more economic level. Subdivision of estates is in the true interests of the Dominion, and the Government will not complain of loss of revenue from this cause. Stamp and death duties were estimated to produce last year practically the same amount as was received for the previous year. The results, however, showed aii increase of £71,353 over the total for 1927-28. Death duties contributed £17,457 and gift duty £27,686 to wards this increase, while adhesive and impressed stamps produced £49,111 more than for the previous year. These increases however, were partly offset by r. fall of £26,711 in totalisator revenue. The revenues other than from taxation, amounting to £5,763,442, fell short of expectations by an amount of £46,pno It may perhaps be noted that these departmental revenues amounted in the aggregate to considerably less than was received in T 92 7 -28, hut the reason fortius is that the 1927-28 total included the whole of the Post and Telegraph menue,' amoaating to £3,323,<«:0, whereas last vear only interest on Post Office capital* amounting to £428,000, was included in the revenue. These changes arise from the Post and Telegitnh Amendment Act, 1927, in terms of which the Post Office accounts have been separated from the Consolidated Fund and placed on a commercial basis. As honourable members know, the Consolidated Fund <s kept purely on an annual cash basis, which is not suitable for a commercial undertaking which requires continuity of finance in order to build up depreciation and renewal funds, etc. The change in system meant that the Ordinary Reven te Account received considerably less assistance from the Post Office -'ast year than was the case in 1927-28 but the additional receipts fornerly received and used for general pnposes repraented the Post Office Depieciation Reserve. which of cour.--? should nave been held intact until such tune as the moneys were required for the renewal of telephone and telegraph hnes' and apparatus, all of which are comparatively short-lived assets. Capital expenditure on telephones and automatic exchanges has been very heavy in the last few years, and if the change had not been 'made, to enable a proper Depreciation Fund to ho created it would have meant that the excess receipts being wrongly used to relieve the taxpaver in the 'interim would have had to be' made good within a comparatively short period when renewals became necessary. The only other way would have 'been renewal'out of loan-money, and that of course would be quite un'sound. Under the circumstances the set-"ting-aside of the Post Office revenue after meeting working-expenses and interest charges was the right and proper thing to do, notwithstanding tha temporary inconvenience to the Consolidated'Fund.