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BUDGET SUMMARY TOMORROW
FOR CABINET
£500,000,000 Estimate
CANBERRA. — Tomorrow Federal Cabinet will
receive from the Treasurer (Mr Chifley) an outline
of the £500,000,000 Budget to be presented to Parlia
ment toward the end of August.
Mr Chifley will submit
figures showing that the
war expenditure for the new fin
ancial year will be at least
£400.000.000, In adidtion to a
civil expenditure of a little more
than £100.000,000. He will In
form Ministers that the estimate
of war expenditure Is tentative
because nobody can foresee what
Australia's needs will be In the
first half of 1943.
Taxation Is not, to be Increased
in 1942-43 beyond the estimated
£12,000,000 to £15.000,000 addi
tional to be obtained from in
come tax. provided the uniform
tax legislation is validated by the
High Court,
n the basis of last financial
year's revenue and war loans, this
would leave a cash deficit of at
least £180,000.000.
loan needs
It Is clear from these figures
th: t the Curtin Government in-
: mands during the next 12 months.
War loans and war savings in
the fiscal year Just ended yielded
a total of £127.000.000. leaving a
gap of from £80.000,000 to
£90.070.000 between war expen-
; d'ture and receipts from all
- sources. To finance this year's
expenditure on the same basis
would require about an additional
£100,000.000 from loans.
In each case the gap will have
to be closed by the use of bank
credit.
As long as the Government Is
able to obtain over-subscription
of its war loans, it Is not likely to
consider adoption of compulsory
loans; but many political observers
agree with the Opposition leader
(M'r Fadden) that the time is not
far distant when the Government
will be compelled to adopt a system
of post-war credits similar to that
which caused the Fadden Govern
ment to be overthrown last Octo
ber.
The Curtin Government, how
ever, considers that pressure of
rationing during the next 12
months will force ever-Increasing
sums into the savings or trading
tanks.
Its belief is that these must ul
timately find their way into war
loans, or into the central bank, to
be used as backing for credit ex
pansion for war purposes,
i The revenue deficit for the year
Just ended will be . found to b?
something like £200,000,000 when
the accounts are made up. War
expenditure will probably total
£320.000.000. or nearly £100,000,000
more than the estimate, and
civil expenditure will reach
£110,000,000. Revenue when the
figures are taken out may exceed
£200.000.000.
Because national survival Is
bound up In war expenditure, re
venue deficits have ceased to have
the significance which they once
held for Federal Treasurers. The
coming Federal Budget will he at
least five times greater than the
Spender Budget of a couple of
years ago. which created amaze
ment because It topped the
£100.000,000 mark.
Today the astronomical figures
with which the Federal Ministers
are dealing are regarded as mea
surements of human energy and
production rather than as mea
surements of value.
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