BRITISH BUDGET.

Hokitika Guardian, 21 April 1920, Page 1

BRITISH BUDGET.

(By .Electric Telegraph—Copyright.! LONDON, April 19. In the House of Commons, Air Chamberlain, in delivering the Budget said the Budget was a critical one, because the time bad come to lay deep foundations for future prosperity. , Tlie expenditure in 1920 was approximately 144 millions in excess of last ye'ar’s estimates, but 62 millions below the revised estimates of October 1919As regards revenue, tlie result was not merely more favourable than anticipated, but greatly exceeded tlie original Budget estimates. The actual Exchequer receipts were nearly 138 J millions more; Customs and Excise exceeded the estimate by 45 V millions, mainly duo to the increased yield in spirits, beer, tobacco and tea. The increased consumption of tobacco was unprecedented and due, inter alia, to

greater smoking by women. The entertainments duty yielded 10 J millions, or 2 V millions more than was anticipated; Incomo Tax and super-tax 5 millions ; and death duties 76 millions above the estimates. Tlie excess profits surplus was ten millions over the reduced estimate of October, 1919, but showed a deficiency compared with the Budget estimates. This, however, was only a question of delayed payment. Stamp duties wore a record, being ten millions over the estimate. Miscellaneous revenue exceeded the October os- 1 timate by 130 millions and under a

special miscellaneous revenue the war contributions from India and the Colonies were increased by ten millions. Beali Nations from the vote of credit were increased by 413 per cent, mainly owing to the unexpected large receipts by the Ministries of Shipping and Munitions. The floating debt as at 31st ’March, was 1313 millions, a decrease of 100 millions, compared with last year. The worst feature of floating debt mas the borrowing on ways and means. This was the immediate, cause of an inflation of credit and prices. Although the revenue exceeded expenditure, lie was forced, in the first ten clays of April, to borrow 55 millions from the lhinlc of Engl aml on the ways and means account. Owing to the non-renewal and 'ma tu ■ing of Treasury Bills to the extent of 04 millions, he was compelled to raise the Treasury Bill rate and the bank rate was simultaneously raised. This showed the difficulty of having an enormous floating debt, and the urgent need for an effective remedy. Details'of the Budget show there are proposals for a twopenny rate on three ounce letters by post, and a halfpenny for each additional ounce; a minimum of a shilling for telegrams, and a penny for every six ounces _ of newspapers. These give an estimated increase ot 6., millions in the revenue ol the post office Spirit duties will he raised to 12s fid per bottle retail, the beer duty by one penny pier pint; the duty on wine is douhied; sparkling wines are to he 50 ocr cent, ad valorem; an additional ad, valorem duty of per cent, is imposed on imported cigars, with a preferential rebate of one-third on cigars from tlio Dominions and India; also a preferential rebate of one-third is allowed on sparkling wines produced in the E'm-

pire. The standard rate of income of 6s in the £ is unchanged; but a bill will be introduced carrying out recommendations of the Income Tax Commission. The exemptions limit are:—On married men £‘2so; on unmarried men £l5O. The duty on excess profits is increased to GO per cent. The external debt is £1,878,000,000, showing a reduction of £86,000,000 during the course of this year. It will be further reduced by repayment of the, Anglo-French loan. It has been decided to pay the whole loan next autumn without further borrowing from the United States. The sale of “Saving” certificates in the past year amounted to £48,000,000, accounting for nearly half of the reduction made in the national debt. The estimated revenue on the existing basis of taxation is £1,341,500, 000 amb the expenditure £1,177,500,000, lcav-. ing £164,000,000 for reduction of debt. This is insufficient and it is intended to call on the country to make a generous effort to improve its credit, and lighten its future burden. Mr Chamberlain said lie intended to propose imposition of capital levy when the War Wealth Committee reports. The expenditure on the Supply services represented a reduction of nearly GO per cent on the previous year, and the current year will show a further reduction of 25 per cent on the past year.

The estimated loss on tho Post Office was 11 millions.

In addition to the increases already given, the question of telephone charges is to be submitted to a Select Committee.

The petrol tax will be superseded by a license duty on motor vehicles. At. tho end of the year land values duties will be repealed as unworkable. The mineral right duty will be maintained.

As regards spirits, the profits of the trade are alleged to be still unreasonable, so therefore tho duty will be increased to 72s Od per proof gallon. It is estimated the increase will yield £24,500,000 yearly. The beer duty is raised by 30s per barrel, producing 30 millions yearly. Both these increases operate to-mor-row. ,

Referring to wine duties, he'said that only consideration for Allies, especially France and Portugal, prevented previous increases, blit it was impossible to further increase the duties qji spirits, and boor, and leave wine untouched. I t is proposed to adopt the recommendation of the Royal Commission in regard to double income tax. It was confidently hoped the Dominions would adopt these proposals and make relief to capitalists complete. In any caso it was proposed to put them in operation immediately and unconditionally in tho

United Kingdom. Where the Dominion 1 rate of tax did not exceed one-half the United Kingdom rat©, the relief would be complete. This would cost the Exchequer two millions yearly. It was proposed to introduce a new tax, which might in future be a substitute for an excess profits tax, namely, a corporation of one shilling in the £ on the profits of limited liability companies.

As regards income tax the proposals of tho Royal Commission on the subject ot a liquor tax would bo adopted, as well as those in regard to special allowances to soldiers.

The nett cost of the changes'in the present year would be £2,700,000 and £18,200,000 in a lull year. • Tho proposed increase in tho excess profits tax will operate from January Ist, hut in the event of Parliament adopting a war wealth tax, he would be able to reserve his decision as regards tho increase. Assuming the latter at 60 per cent, die estimated the revenue therefrom at 220 millions.

■ Although with a view to preventing .corporation tax on companies being too severe a burden on ordinary sharehold- ’ o! 's, the proposed duty would not ex- ’ deed 2s in the £ on profits remaining ■ alter the payment of interest and. dividends on debenture and preference shares, the yields of this new tax is estimated at 50 millions for a full year, ill addition to the excess profits duty, and 35 millions for tbe current year. Tlie changes mentioned would produce for a full year £198,000,000 while in tho current year they will give a nett additional revenue of £76,000,000, and a total revenue of JC1,418,000,000. in the current year it is estimated to have i. 234,000,000 for redemption of debt, of which 50 millions will he-available iui reduction oi the boating debt., -Moreover, as the result of the changes It is anticipated that £300,000,000 will be available next year for reduction of debt,, half of which will he available for reduction of the boating debt. “iey liave been told, he said, that two such Budgets might destroy the Empire. Ho retorted that twenty such Budgets would redeem the whole of tho Empire’s debt. Mr Chamberlain said he was content to seo, after a, war involving sucli a gigantic financial sacrifice, their position was one of unexampled and unequalled strength, it was true it involved further taxes and sacrifices, which would not bring popularity to tho Cabinet, but they had not thought of their popularity. Their object had been to rise to the level of great responsibilities, so that when they left office they would leave their successors ample revenue, with the country’s credit second to none. Mr Chamberlain further , explained that he thought twenty such contributions as at present proposed j would wipe out the debt. He did net } contemplate that after tho first great reduction that they would continue to , pay on at a rate which would mean tho , extinction of the debt in twenty years. ( AVhen the iirst great reduction had ( taken place, it would be for the country j to consider how far it might relinquish j its efforts. t