MORE MONEY NEEDED

Dominion, Volume 11, Issue 11, 8 October 1917, Page 6

MORE MONEY NEEDED

LOAN AND TAXES

PROBLEMS FACING THE GOVERNMENT

EXPENDITURE UNDER-ESTIMATED

SHORTAGES IN REVENUE

Very important financial 'questions were considered by Cabinet, on Saturday morning. There was a possibility of issues being raised which could not be considered purely financial, and altogether the meeting was one of the most important' that the National Cabinet has over had. The unpleasant truth that the Government has had to faco in recent weeks is that the financial calculations made when the Budget was under consideration have been upset in certain particulars, and, as it most often happens, the mistake has been on the wrong side. The expenditure is to he higher than was contemplated. It is reported that the Estimates made by the Defence Department'as to the cost of the war to this country were much below the actual cost, and that the miscalculation under this head amounts to no less than three millions for this year. It is also true that the Government, has had to go farther in increasing the allowances and pensions to the dependants of soldiers than was contemplated when the question was first considered 6ome months ago. The allowances to the dependants of men oil active,service are paid out of loan money, and pensions out cf revenue. It is considered that the increased expenditure under the head of war expenses makes it necessary for the Government to apply to the House for more loan authority. When Sir Joseph Ward introduced to the ITouse his rather sta<rBering propositi to r«iise twenty-four millions within this country by way of loan it was well understood that he hoped that lie would never have to raise more than twenty-two millions. Now it is stated that even twenty-four millions will not suffice, and that he will have to ask for more. Losses liavo been made m the revenue, and this, in addition to the need for providing for the interest on the new loan to be°raised, is said to make it necessary for the Government (o ask Parliament to levy more taxes. The railway revenue is down because of the reduced running, and the heaviest _ reduction has been in the most profitable running. Customs revenue already down owing to the shortage of shinning, and the very high freights now demanded on goods from Britain would have the effect of curtailing ™ports even if ships were available. And the lessened consumption of alcoholic liguor. which must be the effect of carher cloßing of hotel bars, will increase the low In "it^s"understood that the amourft Involved in the new proposals which tne Government will have to »*ke & upward* of four millions, but it is possiblo ffiot this includes taxation as well as loan. More financial legislation will, fie required this session. It may ™ form of a supplementary Finance Bill, or it may be incorporated fn the Appropriation Bill. \ . ■ ' _ _.. It is reported that the Government intend to increase the allowance and thu pension payable in respect of every child to ten shillings «i week, but this is not confirmed. The Governmont will again ■consider the Pensions Bill to-day, and it is possible that the advance will be decided upon at that meeting. But when the Government makes the amended proposals to the House, members will be given to understand that no more concessions can be mode, and that e?etjy concession must involve more taxation, it is oven possible that becauso. of this the Government may decide against making anv further concessions at all. _ the financial situation generally is said to be such that it cannot bo viewed without concern. Sir Joseph Ward lias not yet obtained the second section of his proposed loan, and his difficulties in obtaining it will bo increased, now that the second section is to have some millions added to it. Next year lie will need still more money. The War Loan will between thirty and thirty-five millions, and wo shall have to raiso every penny of it in this country. There is only one contention that may be raised in opposition to tho proposals of the Government to raise more revenue. It is that Sir Joseph Ward has made such estimates as to assure linn of a big surplus at the end of the year. Jt niay be'urged that there is no need for the piling up of a big surplus, and that therefore new taxes ore not necessary, this plea may be the more strongly urged because tlie new taxes are pretty sure to be burdensome on the general body of the population. It is admitted that it is not possible to take very much more from the land, and impossible to take very much more from incomes. It in ay be thai the income tax exemption limit mav be reduced, but it is feared that this will bring in very little additional revenue. The Bill'will be awaited with special interest. s