BRITISH WAR BUDGET

Lyttelton Times, Volume CXVI, Issue 16751, 5 January 1915, Page 6

BRITISH WAR BUDGET

Whatever proportion of our community may fail to realise the magnitude and seriousness of the war—as it has been suggested that many people fail to do—would probably find enlightenment in a perusal of English newspapers. One impressive aspect of the situation is that of the cost. In his War Budget speech in the House of Commons last November Mr Lloyd George gave some particulars of expenditure and submitted proposals for loans and fresh taxes that are feebly described as unparalleled. The cost of the first year of the war, the Chancellor said, is estimated at £450,000,000. In accordance with British tradition, the Government has determined not to finance the war wholly by loan, and consequently finds it necessary to drastically increase several of the revenue taxe9. With such enormous bills to meet, however, tho proportion of war expenditure defrayed out of current taxation will necessarily be considerably less than was the case in regard to other wars. About one-third of the expenditure over the South African war and about one-half of that in connection with the Crimean war were met by taxation, but it obviously would oppress the community unduly to raise anything like such proportions of present war expenditure by taxes, direct or indirect. As has been reported by cable, the Parliament authorised the issue of a war loan of £350,000,000, the sinking funds are to be tapped for a moderate contribution, and between £60,000,000 and £70,000,000 is to be raised by increased taxation. It is no surprise to find the brunt of the increases falling upon income tax payers. The schedule, in fact, is doubled, bringing the rate charged upon " unearned " income to the stiff tax of 2s 6d in the pound. It is estimated that the increased yield of income tax for this year will ainount to £44,750,000. Mr Lloyd George stated that the Government had considered very carefully the idea of a tax on wages, but had abandoned it with reluctance owing to overwhelming practical difficulties. Th« beer duty has been raised from 7s 9d to 25s a barrel, this sum being calculated to enable the brewer and publican to pass the increase on to the' consumer at the Tate of id per half-pini A falling off of 35 per cent in consumption is anticipated as a result of the extra charge, and after allowing for that the increased duty is calculated at £17,050,000. In order that what the Chancellor humorously described as "the elusive teetotaller" might not escape participation in the heavier taxation, the duty on tea was raised from 6d to 8d per lb. This is estimated to yield an additional £3,200,000, on the assumption of a 6 per cent decrease in consumption. Mr Lloyd George explained that spirits were allowed to escape extra taxation because the trade could not stand another staggering blow like it received in 1809—-when, it will be remembered, an additional duty was the cause of a substantially decreased consumption. Sugar has escaped because the supply even now is inadequate, and wines because an extra duty would hit Prance heavily. In considering these impressive figures, we must not forget the still more impressive fact that they provide only for the first year's war expenditure. Should the war last for even two years it cannot cost Great Britain much less than £1,000,000,000, and after the end of next July the circumstances will soon demand another huge loan to supplement the new taxation. In this oonnecti6n Mr Lloyd George told the House of Commons that he was bound to assume that the war would be long rather than short, for "we are fighting an enemy who cannot give in on any terms we can accept without a smashing defeat." Such is the'financial burden that the Mother Country is bearing, and bearing with fortitude and courage that are only matched by the bravery of her soldiers and sailors. Any good people in this country who may have been calculating on the cost of our aid to the Mother Country ought to bear in mind what she herself is doing, and to resolve that New Zealand also will take up its share of the burden, possibly a heavy financial share, a* uncomplainingly.