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Thursday, 8 July 1926

SenatorPEARCE (Western Australia - Vice-President of the Executive Council) [6.15]. - I lay upon the table of the Senate, by command, Estimates of Receipts and Expenditure and Estimates of. Expenditure for Additions, New Works, and Buildings, &c, for the year ending the 30th June, 1927, and the Budget 1926-27 Papers, presented by the Treasurer (Dr. Earle Page) on the occasion of opening the budget of 1926- 27. I move -

That the papers be printed.

As honorable senators are aware, this course is adopted to give them the earliest opportunity to consider the financial statement of the Treasurer, because usually theAppropriation Bill is presented too late to allow of a general discussion. The placing of this motion on the notice-paper gives them that opportunity. Honorable senators will agree that, in presenting the statement to-day, the Government has established another record. This is the earliest date in the financial year on which the financial statement has ever been presented to the Federal Parliament. It will be of great value to honorable senators in discussing the important legislation to be brought forward, and will enable the commercial and industrialcommunity to make, in good time, any arrangements so far as they are affected by the proposals. To do this it has not been possible to give all the detailed information usually presented with the budget, but this will be given as early as possible. The information now in the hands of senators, however, is sufficient for budget purposes. The transactions are shown upon the clear plan adopted last year of dividing the accounts into parts, sothat the cost of government proper, the position of our business undertakings, and the cost of the Territories, may be readily ascertainable. In addition, an elaboration of this division has now been made in connexion with our financial transactions with the States, which are set out in Part IV. of the Estimates.

Turning to the accounts of 1925-26, it will be observed that the estimates of expenditure were exceeded by £1,174,254. The increase was due chiefly to the following : -

 

The interest and sinking fund estimates were exceeded because provision was made on the assumption that only a halfyear's interest would be required in connexion with the conversion of the £67,000,000 loan in December last. A conversion loan, however, was floated with the right of subscribers of new money to receive interest from the date of their subscriptions.

The invalid and old-age pensions increase was due to the earlier operation, from September, of the additional payment of 2s. 6d. per week, instead of from January, the date on which the estimate was based.

The bounties increase was due largely to the increased export of Australian wines, which, owing to this bounty, are competing abroad most successfully with the European wines. The expenditure in excess of the estimate on account of this item was £172,109.

Iron and steel products bounty accounted also for an excess of £31,005, and the balance of the net increase in bounties and other special appropriations is. made up. of sundry other increases and decreases.

In the ordinary votes of departments, £38,183 of the increase is for minting silver coin to replace British coin withdrawn from circulation. The actual receipts due to the profit on this replacement were £207,036 in excess of the estimates.

The estimate provision for science and industry investigations was exceeded by £25,466. This represents the amount that was anticipated, when the budget was framed, would be paid from the trust account.

On the revenue side the chief increases on the estimate were : -

 

The large increase in Customs and excise was due to the contemplated reduction in duties not becoming operative last year. Reductions in duties do not operate until the amended tariff is passed by Parliament. The increase in direct taxation is due almost wholly to income tax, the normal growth of taxable incomes (6 per cent.) being much exceeded, and the position in regard to arrears being improved.

As regards Part II. of the Estimates, business undertakings do not -show any considerable variation from the estimate.

Under Part III., Territories of the Commonwealth, the expenditure was £46,537 less than the estimate. This was due to the amount provided for the transfer of staffs and office equipment to the Federal Capital, £50,000, not being required during the year. The surplus at the close df the year was £286,944, which it is proposed to set aside as follows: -

 

In addition to this surplus, however, the following amounts not provided for in the budget of 1925-26> were paid to trust fund in anticipation of a surplus in the accounts of the year : -

 

Coming to the programme for 1926- 27, it will be seen that provision has been made for a readjustment of the finances between the Commonwealth and the States. More particular reference to these proposals will be made later. Under the loan expenditure, which last year was £7,682,089, it will be seen that nearly half (£5,000,000) of the total provision for 1926-27, £10,560,499, is set down for the Postmaster-General's Department, for land and buildings, and extension of telegraph and telephone services. Commonwealth railways absorb £1,474,500, and the Grafton-South Brisbane railway, £1,000,000. The expenditure on war and repatriation services, mainly War Service Homes, is estimated at £938,202.

Other estimated loan expenditure for 1926-27 is as follows:-

 

In addition to the total loan provision mentioned, provision is also made for £3,400,000 inrespect of loans to States for immigration. This sum is intended to meet the expenditure under the terms of the agreement, which has been made with all States except New South Wales. The total contemplated expenditure is £34,000,000. The scheme provides for the absorption of 450,000 migrants in ten years.

There is also provision for £2,000,000 for loans for theFederal Capital Commission, which is proceeding as rapidly as possible to complete the necessary buildings for the opening of Parliament at Canberra in May, 1927.

Coming to the ordinary recurring expenditure out of revenue for 1926-27, it will be seen that the total provision under this part of the Estimates is £49,287,443, being a reduction of £3,096,804 on the expenditure for 1925-26.

The largest items in the decreases, amounting to £4,432,467, are £2,500,000 on account of naval construction and £1,000,000 on account of special payments for debt redemption. From the total decreases, however, it is necessary to deduct increases amounting to £1,335,663, the largest item in which is invalid and old-age pensions, £747,618, on account of the2s. 6d. per week increase, which did not operate for the whole of 1925-26.

The strictest supervision is being maintained over expenditure, and the Government is pursuing policies such as the amalgamation of Commonwealth and State Income Tax Departments, to reduce duplications, and permit of further savings.

As regards the estimated revenue for 1926-27, the receipts, apart from the special taxes that are to be raised for payment to the States, are estimated at £51,382,000, a decrease of £7,614,261 on the receipts for 1925-26. The chief items of decrease are: -

 

 

Sitting suspended from 6.28 to 8 p.m.







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