NATIONAL ACCOUNTS

Waikato Times, Volume 122, Issue 20506, 24 May 1938, Page 6

NATIONAL ACCOUNTS

The details which the Minister of Finance gave in his address last week were interesting. Taken on the whole Mr Nash, or his advisers, appear to have estimated the taxation receipts with more than usual accuracy. It is not an easy matter, for so many factors may influence the position, but the Treasury officers were in a position last year that must have assisted them to get close to the mark. The Budget was not presented until the end of September so that onehalf of the financial year had gone. The income tax returns had been received, for the most part, early in June, and while the particulars could not have been ascertained, still the information available should have given the responsible officers a very good indication of the taxable balances. That makes it difficult to understand the very wide margin between income tax revenue and the original estimate. Mr Nash stated that he expected to receive £7,500,000 by way of income tax in 1937-38. Actually he received £9,079,000, so that the item on which most information was available for the estimates was most astray.

The items of taxation afford the following comparison between actual receipts and the Budget estimates for the past year:—

Receipts • Estimates £ £ Customs .. ~. 10,759,000 10,500,000 Beer duty .. .. 978,000 950,000 Sales tax .. ... 3,499,000 3,650,000 Film-hire tax .. .. 82,000 80,000 Gold export duty .. 105,000 105,000 Highways .. .. 2,839,000 3,058,000 Income tax .. .. 9,079,000 7,500,000 Stamp and death duties 3,240,000 3,450,000 Land tax .. .. 1,038,000 1,000,000 Miscellaneous .. .. 45,000 45,000 The income tax, which showed such a marked increase, was levied on income obtained in the previous year, but the members of the Government are confident that last year the national income showed a further marked advance, although the drop in the value and quantity of wool may be of importance. The Minister of»Finance referred to the larger income tax figures as evidence of restored prosperity, and they can be so regarded to some extent. They may have been attributed, at least in part, to more efficient collections, and as the Minister stated, payments of taxes in arrears—a sign of improved conditions—helped materially to swell the revenue. Having regard to the fact that the income tax was assessed on incomes for the previous year, it should be noted that two of the important items relating to 1937-38, sales tax and highway’s, both failed to reach the estimated level by a fair margin. They were, however, well above the totals for the previous year, but it would be interesting to have an explanation of the failure to come up to the estimates. Was the Minister a little too optimistic in this respect, or could the margin in these items be in any way said to reflect the drop in the overseas price levels for some important items of export? Probably the official answer to these questions will be found in the next Budget. The estimate? "or the current year will record the opinion of the Minister and his advisers regarding the current trend of trade, and by the time Parliament assembles, the Minister will have from the returns now being sent in a good idea of any movement in t-he taxable balances of income taxpayers. To be compelled to budget for a declining market would create serious difficulties for the Minister of Finance, and even his political opponents could have no desire to see him faced with that position.