The Times. PUBLISHED ON TUESDAY AND FRIDAY AFTERNOONS. TUESDAY, AUGUST 7, 1917 THE BUDGET.

Pukekohe & Waiuku Times, Volume 6, Issue 299, 7 August 1917, Page 2

The Times. PUBLISHED ON TUESDAY AND FRIDAY AFTERNOONS.

TUESDAY, AUGUST 7, 1917 THE BUDGET.

"We nothing extenuate, nor set down aught in malice."

The third Financial Statement since the war began will, we are afraid, be found a little startling by a good many people. The fact t"hat we are now facing a monthly war - expenditure of nearly two millions means, of course, that the Treasurer is forced to resort to new devices to find the wherewithal. What the ultimate effect of some of these expedients may be we cannot pretend to say. No one is sufficiently expert, or gifted with enough prescience to authoritatively declare what will be exact result upon industry, trade and farming. Hut we are a young, a bouyaut and an industrious community and have just come through three years of unexampled prosperity, so it is quite possible our backs may be able to stand the strain without weaken-

The Excess Profits Tax has been relegated to the limbo of unsuccessful experiments. Theo retically it should have been the very fairest tax possible for the wit of man to devise- In practice, especially in its application to fanners, it turned out a most dismal failure and has been unable to survive the criticism justly levelled at it. The amount lost in this manner is to be re-

couped by an Increase of the income tax on a progressive scale, starting at sixpence in the pound up to £4oo—with the usual exemption of £3OO, and rising steadily till it reaches three shillings upon an income of £6400. This will also apply to farmers, who will in addition be very much more severely hit than previously on account of the alteration made in the deduction allowed. Formerly this amounted to five per cent upon the capital value of the land from which the income is derived ; in future this deduction will be allowed on the unimproved value only.

In the land-tax drastic alterations have been made. Both the ordinary and the graduated landtax have been swept away and a progressive system adopted, ranging from to 10 in the pound. We are sorry to see the vicious practice of refusing to allow mortgages to be deducted from the taxable amount which we drew attention to last Tuesday as applying to the graduated land-tax is imported Into the new tax. Formerly only those with an unimproved value of £SOOO or over were taxed upon their debts. A special concession is to be made to small holders whose lands are heavily mortgaged in the shape of an exemption of £IOOO instead of £SOO, but this will only apply to holders of less than £3OOO. We are afraid the orogressive land-tax will press very heavily and extremely unfairly upon the average farmer whose holding is above that figure and who is unfortunate enough to have his laud saddled with a mortgage. From the ordinary Income-tax the Treasurer expects to raise the sum of £1,600,000, the rate rising from a minimum of 6d in the pound to 3s as a maximum, and from laud-tax £1,250,000, at a rate ranging from ll,d to But in addition it is proposed to raise £3,000,000 for special war purposes from a sur-tax upon Incomes. The rates will range from 9d in the £ to 4s 6d, making the ordinary and special incometax combined from Is 3d to 7s 6d in the £. The extraordinary thing about the proposals is that no attempt has been made to lower the exemption of £3O(J, even when the possessor of the income has uo one depending upon him for support, but we suppose Sir Joseph Ward remembers even in war-time that votes are votes. Last year he defended the high exemption upon the ground that it would only produce £25,000 if the exemption were lowered to £l5O, but fell into the peculiar error of omitting to reckon in the extra £l5O upon which all income-tax payers would then be liable. We trust that this year the House will see to it that everyone except the extremely poor shall pay some trifle directly towards the cost of the war.

We are glad to see that the Treasurer has, at last, turned his attention towards amusements, and are only astonished that so self-evident a potential source of revenue should have escaped so long. Sir Joseph Ward estimates he will receive £BO,OOO from this source. We venture to predict that he can with safety add fifty per cent to this forecast, unless the habits of our people undergo an extensive change- Whatever may be the ultimate sum derived from it it is ear-marked for pay-

ment of military, old-age and miners' pensions. There will be further small increases in the beer, spirits cigarettes and cigars, tea and certain classes of dress material customs duties, amounting in all to £275,000. The total revenue of the country is estimated to produce £17,282,000, a sum £1,084,747 below the actual receipts of last year. It would have been interesting to learn how much of last year's revenue was due to the Excess Profits Tax, but this is a secret the Treasurer is apparently not disposed to make public at present.