GREAT WAR FINANCE

Gisborne Herald, Volume LXVI, Issue 20056, 30 September 1939, Page 13

GREAT WAR FINANCE

NEW ZEALAND MEASURES MAINLY BY LOANS MANY AVENGES INCREASED In view of the announcement of the financial measures to be adopted in New Zealand to meet war expenditure, it is of interest to recount the measures taken in the Dominion during the 1914-19 war. Loan moneys then accounted for an overwhelming percentage of the total—in fact £68,500,000 out of total receipts of £69,086,000.

The extent to which funds will be required now depends of course on the duration of the war, but the average yearly expenditure from 1914 to 1919 of £12,000,000 gives at least an approximate idea of what may be needed. Now, as 25 years ago, a war expenses account is being set up to handle all financial arrangements. Loan Authorities For this account in the financial year 1914-15 authority was given the Minister of Finance to raise £2,000,000. This was duly raised, and later loans brought the total at March 31, 1919—the close of the last financial war year to £68,500,000.

Expenditure for the first year’s operations of the account were £2,172,000, for the second year £5.938,000, for the third £14,392,000, for the fourth £17,014,000, and for the fifth £21,592,000. Total expenditure to March 31, 1919, was £61,106,235. At that date there was a credit balance in the account of £7,980,000, receipts having reached £09,080,000.

Supplementary taxation adjustments in the Great War began in the year following the outbreak of hostilities, when 33/i per cent was added to the former rates of income tax, the incidence of which was extended to cover incomes derived from land and mortgages of land. The intention was to let increased taxation fall on those making increased profits from the sale of wool, meat and dairy produce.

Additional customs duties were placed on a number of import items, plus an almost universal primage duty of 1 per cent. New scales of beer duties, stamp duties and totalisator taxation were introduced; and charges for certain public services such as railway travel and post- and telegraph services were increased.

Excess Profits Duty

In the following year the principal item in additional taxation was the imposition of an excess-profits duty of 4Etaper cent on excess income in the 1915-16 year, compared with the “standard” or average income assessed on previous years.

Further, all incomes, subject to the usual exemptions, were taxed an extra (id in the pound on assessable incomes up to £9OO and an extra 1/- on incomes over £9OO. Slight increases were also made in certain stamp duties.

The excess profits duty was not reimposed in 1917 owing to insuperable, assessment difficulties cropping up. But customs duties were again increased, beer duty went up again and tobacco manufactured in New Zealand was subjected to additional excise duties.

Also in 1917 a new form of tax—the now well-known “amusements tax”— came into being as a wartime measure, but no alterations in taxation law were made during 1918.