The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, JANUARY 19, 1933. FRENCH FINANCE.

Hokitika Guardian, 19 January 1933, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, JANUARY 19, 1933. FRENCH FINANCE.

France, which during the earlier lean years of .other gr-oftt powers’, had a i eniarkabl’y successful series of yea-i s is at last feeling the p.ncli of difficult tinieis. Tnough the budgets of 19aA-2J-3ij, showed remLrkable surpluses, tuese have now disappeared and this was revealed by the Budget estimates for 1933, which Were presented to- the Chamber of Deputies on November 14 last. The impression of •a. drastic change is reinforced by a new report, just published, which gives the deficit for the year 1932, calculated by experts, as £136,000,000, That presumably is for nine months, because after about- two years’ experience of an Afiril-Marcli financial year France decided in October, 1931, to return to the system of making the calendar and financial years coincide. The Budget estimates were framed for the period from April 1, | 1932, to December 31. They proI vicled for a balance with a nominal surplus of approximately £24,000 at par of exchange. These expectations have not b:e:i realised, and there is the possibility of a very substantial deficit, a recent survey of the position showing a prospective revenue of some £351,000,100 to meet an expenditure of £447,809.003, leaving a- deficit of £96,800,000. Plans to raise further revenue and for reductions in expenditure together with the saving by the conversion of internal debt effected in September wop estimated to reduce the deficit to £65,000,C00. The debt conversion consolidated a long series of 5, 6 and 7 per cent, bonds, making a single 4£ per cent, tax-free loan repayable by sinking fund in 75 years. The conversion was very successful, and the annual saving was expected to be rather more than £8,000,000. With all that was done, there remained a deficit of £65,‘000,000. The methods proposed to bridge the gap thrown an interesting light on'French finance. Before imposing any new taxation the Government drafted a scheme to prevent evasion of income- tax legitimately due, This was -estimated to , increase the yield of £8,000,000 at par of exchange, The figures are eloquent of the; 'aversion the French show to paying direct taxes. New taxation, chiefly on motor vehicles, on coffee and on liquors, was estimated to produce £12,030,0-00. The rest of the gap was bridged by transferring certain pension liabilities and public works expenditure to loan account, and by economies and salary reductions. It is ft remarkable feature that with a deficit of £65,000,000' to cover only £12,000,000 of ii,ew taxation was proposed. This appears like the rigid application of economy. In fact, of the total, the administrative- economies amount to little more than £4,000,C00. Salary reductions account for nearly £lO,800,000, but no attempt- is made to deal with what are described as badly swollen war pensions. It is also notable that the amount expected from collecting taxes which should be paid but -are openly admitted as being evaded equal's two-thirds of the estimated yield from new taxation. It is interesting to note that the average taxation per head for the year ended March 31st. last, was £9 10s in France and £l6 8s in Great Britain, so that •at present France in comparison, should be fully equal to bear further taxation to -enable the budget to be balanced.