The Dominion. FRIDAY, NOVEMBER 5, 1915. A NEW ERA IN FINANCE

Dominion, Volume 9, Issue 2611, 5 November 1915, Page 4

The Dominion. FRIDAY, NOVEMBER 5, 1915. A NEW ERA IN FINANCE

The London newspapers which arrived by this week's English mail devote a great deal of space to Mr. M'Kenna's Budget speech, and to comment and explanation with regard to various phases of war finance. The critics recognise that in view of the'"-altogether unprecedented nature of the problem which the Chancellor of the Exchequer had to face it is not surprising that.he has - found it necessary to make some rather startling departures from the traditional method of British Government finance. In referring to the daring nature of some of his proposals one newspaper remarks that, '/many were the idols he shattered in the House of Commons when he inaugurated what may be fairly described as a now era in finance in this new age which began with the war." Some idea of the magnitude of the task which the British Government has to grapple with is conveyed by a glance at the following summarised balance-sheet for 191516:- I Est. Revenue: On existing taxation .£272,110,000 New taxation ... 30,924,000 New postal charges 1,980,000 ■Total 305,011,000 Est. expenditure : 1,590,000,000 Deficit for .rear (roundly) ' *1,«5,M0,0M ««adTr»igW of debt- •£2,200,000.000

The estimated rate of expenditure down to March 31, 1916, is put at upwards of £4,500,000 a day, and it may be over £5,000,000 a day in tho latter weeks. The total' of £1,590,000,000 is made up thus:

Navv 1110,000,000 Avm'y 715,000,000 Advances to other Powers 423,000,000 Pre and Post-Moratorium Bills 1)0,000,000 Ordinary services, including charge for debt 170,000,000 Food supplies, etc 50,000,000 The public were of course aware that the increases in taxation would be extremely heavy, and the demands made by Mn._ M'Kenna did not come as a surprise. The extra burden was regarded as inevitable and the fine spirit in which the taxpayer has accepted the big addition to his load is a good indication of his determination to make whatever sacrifices may be necessary in order to achieve victory. The proposals are undoubtedly _ drastic, but their fairness is admitted by the great majority of critics. The Chancellor has endeavoured to spread the burden as evenly as possible in proportion to means ovcr_ the whole community. It is manifestly right that every citizen ought to pay his just share of war taxation. The guiding principle should be equality of sacrifice. Mr, M'Kenna has made a very severe call upon tho wealth of tho rioh, but the wage-earner has not been allowed to go scot free. The British Budget proposals mean taxation that will be actually feltthat will make a real difference in the daily lives of a considerable section of the community.

AVhen we consider the great sacrifices the British taxpayer is called upon to make in order to meet the cost of the war, the New Zealand burden shrinks into comparative in-! significance. Thanks mainly to the British Navy our export trade goes on w r ith practically no interruption. Tho war has not interfered to any great extent with the Dominion's ability to earn the money with which to pay for its share in the struggle. But Britain is not in such a fortunate position. Mr. Asquith tells us that Britain is buying goods from abroad in excess of its exports to the extent of £30,000,000 monthly, as against an average of £11,000,000 before the beginning of tho conflict. This means that while taxation has been largely increased the country's ability to pay .has been considerably reduced. The British Government realises that it would be both unfair and unwise to attempt to throw the whole weight of the war bill on any limited section of the public. If £6000 is to be taken from the man with an income of £20,000, the limit of exemption at the other end of the ladder is reduced from incomes of £IGO to include incomes of £130. This means that a man with no children earning £2 15s. a week has to pay a share of the war taxation, the amount in his case being 12s. Id. quarterly. The increase of 50 per oent. in the tea, coffee; and tobacco duties will give thousands of people who are not touched by other forms of taxation an opportunity of contributing something, however little, to the cost of defending their country from a Power that has sworn to encompass its ruin. In New Zealand incomes up to £300 escape taxation, andj apart from the ono per cent, primage duty, there is practically no taxation on the necessaries of life. It cannot bo oontended that our War Budget is either as drastic, or as even in its pressure, ,or as courageous as that devised by Mr. M'Kenna. Anyone in New Zealand who may be inclined to whine or grumble about the' taxation he is called on to pay — and wo admit that the taxes might havo been more equitably spread —should remember that Mr. M'Kenna's Budget imposing extraordinarily heavy new taxation to the extent of over £100,000,000 was accepted by the British public without complaint. Indeed, we are told that it was received "with approval amounting almost to enthusiasm." It is the bold and courageous course that carries the, public with it in these days of big happenings, and our own Government might well take this lesson to heart, not merely in its handling of the financial problems with which it is faced, but in other matters as well.