STILL HIGHER TAXES

Wairarapa Times-Age, 6 January 1943, Page 2

STILL HIGHER TAXES

PROPOSED IN AUSTRALIA I 50 PER CENT INCREASE IN LEVY ON INCOMES. GRADUATED IMPOST ON WAGES. (Special Australian Correspondent.) SYDNEY, January 5. A total increase in Australian income taxation of 50 per cent is foreshadowed in the announcement that the Federal Government must meet about £70,000,-, 1 000 in unforeseen war expenditure ,dw- ; ing the current financial year. About;;., £50,000,000 of this will come from new. taxation, which may be partly in the form of a wages tax ranging from sixpence in the pound on incomes of £2OO to 2s in the pound on £lOOO and over.' The new taxes are expected to be heavier on the lower income tax groups than any imposts since the Curtin Government took office in October, 1941. The higher Australian income tax groups are already being taxed as much as 18s in the pound. From £2OOO upward direct income taxation in Australia is heavier than in Britain. On £2OOO an Australian pays £763 in income tax, while a Briton pays £761. On £lO,000 the Australian taxation impost is £7829, as against £6763 in Britain. However, political observers suggest that incomes will probably be scaled down so that few Australians will receive more than £l5OO net a year.

RISING WAR COSTS. The rising cost of war materials, ex-tra-reverse lease-lend assistance, for the American forces, shipping maintenance, repairs and replacements are the major factors lifting Australia’s war expenditure this year from the four-months-old Budget estimate of £440,000,000 to £510,000,000. Total expenditure for all purposes will be £620,000,000. At present income tax revenue provides about £106,000,000, of which £42,000,000 is levied on incomes over £lOOO.

About 7 per cent of Australia’s total income falls into the under £4OO class, and taxation of this main group is expected to be substantially heavier than in the past. Compulsory war loans are. being widely advocated as the method for meeting the Government’s increased financial commitments, and all commentators point out that a very serious aspect of the new taxation is its likely effect on the next £100,000,000 Austerity Loan, due to be floated in February or early in March. This loan must bp filled for the Government’s loan objective of £200,000,000 for the year to be reached.

LIMIT IN SIGHT. “There is reason to think that once the new taxes have been imposed the Government will consider itself at the limit of the taxable capacity of the Australian public, in both the personal exertion income and company fields,” writes the “Sydney Morning Herald’s” political correspondent. “It believes that the taxation scales must not be so crushing as to destroy altogether the incentive to personal exertion represented by the higher salaries. It is also believed that such rough and ready methods of wartime taxation as a 100 per cent profits tax warmly advocated in some Labour quarters would defeat their own ends. A 100 per cent profit tax, some Ministers declare, would conserve the positions of companies which were doing well in peacetime at the expense of other companies which were struggling before the war. The Government’s taxation proposals have no specific relation to pressure by some sections of the Labour movement for conscription of wealth as a sequel to the extended use of the conscription of manpower for militia and other purposes. However, they provide an answer to claims by some Labour propagandists that the higher income classes should be even more severely dealt with.”