THE BUDGET.

Hokitika Guardian, 3 August 1917, Page 1

THE BUDGET.

(Per Favour of Government)

WAR I.OAN. In view of a very large expenditure wiiic/i is being incurred it. will be heoessMiry to take stops to 'raise wit bin the 'Dominion-at any early* date a fr-esli loan for war purposes, anti..the House will be asked to grant’ authority to enable an amount of £24.000,000 on The able an ambunt of .1:24,000,000- to be borrowed. The whole of the sum will not bo borrowed at onee. 1 'propose to |>iEt a loan for .£12,000,000 on tlie. market with. as little delay as possible, i hope it will no!; be necessary Jotraise a second loan of more than £10,000,000 hut authority for a margin of an additional £2,000.,000,,is desirable. " The rate of ipterest will lie If per <;ont.,«nnd will be free of income-tax. 1 will subjrtit a proposal ■ iindef which n portion p|»;this: loan will be made available for payment of death duties I may state that a propose to introduce a measure this session which will ?nable subscribers to, the new loan'do accept either bpinls or inserihed stock at their option, and also to convert' existing war bonds into stock, while the usual provision for the is,sue of war certificates through the Ppst Office will he oontinued,

In the event of the voluntary contributions falling short of the amount. ••’<'- quirod, 1 will ask thy House for authority |o introduce, a system of compulsory contribution, under which person.--who have not. done tlieir part; in helping to provide sie necessary' finance for carrying on the "‘nr, and fpr providing adjecpiaie payment to soldiers and theii dependants, will he. assessed with additional heavy taxation, which l will fully /explain .when dealing with taxation. I will ask the House to make the authority applicable to those wh,d neglected to take- tip their part not only of the last, war loan., hut of any future war loan- ''

This compulsory system will not be enforced against those-whose incomes are under £7OO per annum. .Those whose earnings are below that amount must bo trusted to* contribute voluntarily.

This may lie regarded asj somewhat' drastic measures, but 1 regret to say it is necessary, as there are many persons of means, mid also companies, who subscribed very 'little, and in some eases nothing at all, to the last loan. I would earnestly impress upon the country the .fact that our part in the war can nof he carried on without the necessary ways and means, and all who possess means and do not realise what is their -clear duty must he compelled to'waive- the same sacrifice as those who.do recognize their duty. INVESTMENT TX IMPERIAL WAR HOAX.

T have mentioned that the ordinary revenue reserve invested in London amounted to £3.1)17,732, hut there are moneys belonging to other funds also invested there.

While I was in London the great Imperial War Loan' was being floated, and, after nonsuiting, the Right, Hon. the Prime 1 Minister, -if wa s decided that it would he a fitting thing for this, important part, of tine' Empire to subscribe a substantial sum towards the loan. T accordingly- arranged for the realization, of £5,000,000 of Dominion funds which were then invested in f.ondin on shortdated securities and invested the amount. in jtlie Imperial loan. This investment also- possesses the great advantage of providing an additional £5,000,000 of gilt-edged securities for use from time to time in Dondon for financing the 1)0111 in ion should such at any time be necessary. The ordinary revenue' reserve referred to above contributed £2,073.000 towards this £5,000,000, I propose, ifo ask members of parliament, patriotic societies and other, throughout the Dominion who have already done such excellent- \york , in couppetion with the wav to assist the Government as far a s possible by advocating the war loan. I feel sure that the deep interest which is being taken/ in the welfare of the Dorninion by members - and others mentioned will ensure their loyal and hearty support and I ciin .confident that their assistance will be grpatly appreciated by the Government and the country.

OLD AGE. -MILTITARY., WIDOW* AND MINERS PENSIONS. Some relief on account' of the extra cost of living should be given to old age, and military pensions, widows and miners, and tp enable this to ho done I propose to provide £120,000. This will give to old age, military, widows and mn|ers suffering from pneumoconiosis spnie substantial assistance during the present unusual Conditions. . WAR BONUS. There can be no doubt that those who are in receipt of a fixed income by way pf salary feel the pincli due to war conditions without having the opportunity of adding to their incomes, and it is necessary that the State, as the largest employer of labour, should recognise this. A war bonus to make provision upon linos similar to that pf last, year.will therefore be authorized, and Parliament "Will 00 asked to vote a sum of £400,000 for this purpose this year. EXTRAVAGANT LIVING. The National Efficiency Board has put forward proposals \yjth a view of placing a restriction during fhe. war on fhg importation of certain articles which rnny be. eopsiijored to he luxuries, and by this means checking the exfravagapeos of some of the people of New Zeidand. . The Customs estimate a reduction of revenpo of £230,000 if these proposals are carried out. While I entirely sympathize with the ! objects which' the Efficiency Board i seeks to attain.! regret , to 'say that

after making enquiries I line! that there are so many difficulties in the way that, lam not able to give effect to the Foard’s recommendation; If this were done- 1 should have to obtain the deficiency of revenue by some other means of taxation. At present it is impossible to give up revenue^without restoring an equal amount through' some other avenue . MOTOR-CARS, Regarding the suggestions made frdih 'tiine to' {line that a further duty should be imposed upon motor-ears, I wish to state the position for the information. of honourable members. Tho amount 1 ol : du.iy collected ’ on motor-ears imported last year was £l4B, 315, This »$ an amount' of ry.yomio that cannot fit present by with. 'Nearly -DO per cent, of the motor-cars imported since tH* Kto com.pieneed were for utility purposes ati.d can in no sertse lie classed as pleasure cars. The average price paid per. car imported into New Zealand was £l5O. j\lotors for business purposes have come to star here as is the case all over the world. Wo wahi tl.m rdvyuiiy, .The duty at proout, i s 20 per cent.' with a preference of

10 per. cent.,' to Great Britain and any part of the Empire that reciprocates with ns. > ; AMUSEMENT TAX - I propose to levy a duty on admissions ,to place of amusement similar to that imposed in Great Britain by the Finance. ((New Duties) duty 1 ’ will commence at IcV where the price of admission., exclusive of the duty.'-does not-exceed fid-/ proceeding iji graduations until It reaches a duty of,ls. on admissions of 12s fid.', with nn additional Is. for,every 10s. or fraction of 10s, of 12s fid., in the price of admission. . | «,The amount of revenue that source is £BO,OOO, and will he devoted to paying the war homis to old ago and military pensions, and widows, and to -miners suffering 'from pneumoconiosis.. EXCESS-PROFITS TAX. j With reference to the exyess-pjofits duty, it will ho remembered that last year 1 asked the House, in response ( to a generally expressed wish, tio levy special taxation on the extra profits that had accrued to taxpayers owing to tho war. On investigation it wa s found here, as it had been found in England, and was afterwards found in Canada, ; .Frapc?, and the. United States, that the difficulties of ascertaining exactly the actual profits resulting from the war were almost insuperable.. - The machinery required fpr the purpose was too ela'bprqte to enable the revenue/to be-collected when it was required. \

Tlu''method adopted here was subsi antially on the lines of the 'English excess profits tax. hut as the amount realised did not -reach my estimate I propose this year-to readjust this form of taxation. I may say that if the prolits-tax were to be retained and doubled in rate, so as to make iit DO per cent, it would not provide the amount required; I therefore must ask . flic House to authorize such a change of taxation’ as n il! make .it certain that larger .sums shall lie contributed by those who have not paid their just share under the profit s-tax.' Tile adjustment 1 propose will not only provide' the amount of revenue 1 require, hut - •will ensure that every one shall contribute in proportion to his means. Experience of fthe excess-profits tax has. also shown that it is inequitable. Tile.concessions necessary to avoid hardship in ..some eases resulted in the escape of nufiiy other taxpayers who were in a position to pay and, in my opiniofi, should have paid. The main reason for this is that the conditions here are different from those in the'older countries. In tliis young country there is a larger proportion of concerns in the process of devdlopment than is the ease in the older countries, and the tax pressed unduly .on them. The profit's made on shipping and’munition contracts in (treat Britain arc enormous. There are thousands of long-established industrial, commercial, and general businesses that can be safely relied on by the Home (Government to ensure' a largo amount of revenue from a profitstax. It is not so here; on the contrary, the purchase .‘by the'British mentttof our principal staple products has largely reduced the profits that, under ordinary conditions, lypuld be earned by export- business houses, and an equivalent amount caiipot be eollecto- spread over such'a large number of producers, who are spiling their induce to the British Govprnnipnt- A earefuj estimate for. t|iis year . shows that, owing to the greatly increased price of stocks jniportetj for sale, .. the •Margin of profit will- be materially ipduepd, and it would not lip safe to rely upon receiving this year a revenue approaching the amount, as I have said was bp]pw my estimate, and was Ulsufiieipnit for requirements. Ip plaeo of the pxepss-prpfits tax I will ask the House for authority to obtain the a*dit.iopal revenue frqm a progressive laip! find income tax. Any system of taxation should be capable of such >- pansfion as will lpcet all legitimate requirements of the State and what I propose will, I feel sure, meet this requirement. -