THE BUDGET.

Stratford Evening Post, Volume XXVII, Issue 99, 27 August 1915, Page 5

THE BUDGET.

deficiency on the estimated expenditure (without provision for war pensions, interest and sinking fund on war loans, additions to superannuation funds and supplementary estimates) of £827,941. Referring to the necessity for increases of revenue to meet the deficiency, war expenditure, pensions, etc, the Minister says:—l estimate the receipts for 1915-16 as follows: Land-tax, £886*000; income-tax. £l,090,000. It is proposed to increase the land-tax l>y the addition of 50 per cent, to the present rates of graduated tax on country lands. The increase in the income-tax will he obtained bv an extension of the existing schedule of graduated rates from Is Id to 2s which rate will be readied at £5,600, and the imposition of tax of 33 1-3 per cent, to the schedule rates. This will give si rat* varying from 8d on the lower taxable income's to 2s s,l on the higher ones. In view of the fact that many business people whose incomes are taxed are also paying land-tax. and in many cases graduated land-tax, this is considered to he a high enough rate to impose, as in many instances the combined taxes will be equivalent to a tax of over 5s in the £1 of income. Reduction of exemption: It is not considered 'advisable to attempt to obtain anv increased revenue by;lowering the exemption, as in addition to the fact that the additional expenditure that would be incurred would not ho warranted by the result, the class that would be affected by such _ a change is already paying its taxation through the Customs, and is suffieientlv burdened by that and by the increased cost of living. It is not proposed to increase the tax on mortgages. . As all classes of the community will. J am sure, desire to join in the necessary sacrifices to help the country at this juncture, I would ask those who use non-alcoholic beverages to join in providing a part of the extra revenue necessarv. I propose that an excise duty of Id per. gallon be put on all

non-alcoholic beverage* to by. defined

It is difficult to estimate what thu revenue from this nil] be, but I put it down, i" round figures, at £20,000. We shall, however, not be aide to ascertain definitely what is to be expected from ibis until it has bad a full vear's trial. The lull benefit to the revenue "I the increased duties on spirits will not accrue for many months, as merchants, anticipating changes in the tariff, have cleared from bond all available slocks of these articles. The amount of inflation of revenue during the last two months duo to this cause lias been about £IBO,OOO. Tt should also be remembered that the new duties will be in force for .seven months of the year only, that there are large stocks of motor-spirits and kerosene at present stored in the Dominion, and that the ensumption of most articles will be reduced on account ol war conditions, the absence of many of our men oil active service, and other causes. Taking all these facts into consideration I do not think the increases for the present financial year due to the new duties can be safely estimated at more than £120,000. In these proposals 1 have elected to touch a few special articles, and not to increase the duties on the necessaries of life. The resolutions to impose the additional duties will be brought down to-night. Tt is generally recognized that those who have been making profits due to the war should give an additional amount towards the financial requirements of the country. I shall not be contradicted when I. say that large profits have been derived from the sale of wool, meat, and dairy-produce. To provide for a reasonable contribution to defray a portion of* the cost of the war I propose that the incometax shall apply to income derived from land. Five per cent, of the capital value of the land will he deducted from the assessment of the income, and the exemption of £3OO will also be allowed. T estimate that £250.000 will he obtained by this alteration, and considering the high prices that have been realized for sheep, wool, meat, and dairy-produce, it is not a large contribution from those affected. The total increase of income-tax proposed will amount to £~051,G60. and will reach those whose additional profits have been due largely to the war.

INCREASES AND ALTERATIONS

OF DUTY

To make up the shortage of revenue due to war conditions, ami toj strengthen our finances, it will he' necessary to impose duties upon some articles commonly regarded as luxuries. An all-roun<J duty of 10 per cent ad valorem on motor-cars, and 50 per cent, additional on cars made in countries which are now or may be enemy countries. Bicycles which have hitherto borne a duty of 20 per cent, it' British, and 30 per cent, if foreign, will be reduced to.the same rate as motor-rears, \\\i,th the same c6nditipns.a.s. iregards, enemy countries: A ( duty of .-Id per gallon will be placed oil ,motor-spirits /and kerosene. : I' dfl not tjiink any exception can'he taken to the proposal for increasing the duty on, petrol, etc., for motor cars. Kerosene, which; formerly had a duty f fed a gallon, is also included. Petrol cannot be.taxed to produce the revenue necessary unless this is d Tyres are to remain free from British and neutral countries, with a 50 per cent, ad valorem tax on tyres from enemy countries. Excise beer, which has hitherto paid 3d per gallon by means of stamps attached to the casks upon delivery from the brewery, will be taxed by an entirely new method. The Government's proposal in regard to the beer-tax is one that should commend itself to the House. It alters the syste!". chiefly to ensure that lighter ales—that is, ales with less alcohol in them—should be manufactured in tin.-, country, i am satisfied as the result of close investigation by the Customs Department that the full revenue I indicate under these alterations will be obtained. The duty will lie assessed on the quantity and with respect to the specific gravity of the worts pitched for fermentation. The worts of low gravity will pay a minimuni duty, which will increase with each unit of rise in gravity. Spirits will be increased from 16s per proof gallon to 17s per proof gallon. The total increased revenue from the foregoing adjustments is estimated at £340,800, of which sum £55,000 is represented- by increased beer revenue.

STAM P DEPARTMENT INCREASES

I propose'an increase on the duties on conveyances, transfers, leases, settlements, common deeds, and other assessable instruments mentioned in the Second Schedule of the Stamp Duties Act, 1908, by 25 per cent, The amount of duty realised from this source during the last year was £175,000. Alter making allowance for a shrinkage in land transactions, it is estimated that the increased tax will yield £40,000 per annum. Bank-notes Duty.—The duty at present is 15s per cent.. and realises £60,000 annually. I propose to increase this tax to £1 per cent. I estimate that this increase will produce £20,000 per annum.

Hank Cheques.—The duty is at preset'ld. I propose to increase the duty to 2d. This increase i". estimated to produce £50,000 annually. There are large numbers of blank cheques stamped with Id in circulation, ami these may be used with an additional adhesive stamp for a period of one year. All unused cheques stamped with Id will be called in and an allowance made for them.

Receipts.—The duty at present, is Id on every receipt for £2 and upwards. It is proposed to increase litis •duty to 2d. It is difficult to estimatej the amount that will be realised from i this source, hut after a careful •■•«>nj sideratinu of all available data J luu put it down at £ 10,000.

Dentil Duties.- There is rut luueli room for increase in these duties, ,moi is it desirable to increase the duty on small estates, although they receive liberal treatment under the present:- |. nv- There is one class of bene'icia--ies, however, which escapes vc\v lightly in the matter of succession duty. I refer to the children of wealthy persons. At present such t;hddreu do not pay succession duty on a less sum than, £20,000 each, which lor all practical purposes exempts them from duty. It is proposed reduce this exemption to .toOOU for each child and to impose a duty of 2 per cent. on successions over this amount. I er-.ta-mate that this duty will realise .‘TO.000 per annum. .Mortgages ot Dand or any Interest therein.—lt is proposed to impost* a stamp duty of os per cent, on mortgages. This tax is estimated to pi >- duce £IO.OOO. On release, reconveyance, or dischafge ol mortgage, a fixed duty of 10s. This tax is estimated tn produce £BOOO. In the Dnited Kingdom an ad valorem duly has been imposed on mortgages lor man\ \eais. This duty is not a recurring one, and should not cause any hardship in its incidence.

Subsales of Property.—A new stamp duty is to be imposed on all subsales ol property at the same rate as il the purchaser took a transfer or conveyance of the property. This duty is estimated to produce £IO,OOO per annum. It will fall almost entirely on the land speculator. Totalisator Dividends.- 1 propose as a war-tax- a duty on totalisator dividends of 2} per cent. This is estimated to produce £75.000. POST AND TKLEGIUPH CHARGES.

1 propose to make some small additions to the charges leviable for postages and telegrams; and. although it is anticipated that the amount realisable will amount to £.'580,000.. yet, owing to the vast number of pieces of mail-matter and telegrams handled, it is estimated a very small increase in the 'minimum charges to which they are subject will yield the sum indicated.

J propose that the initial rate on telegrams be increased by 2d, that 'id be added to the inland charge for telegrams, that the initial charge for bureau communications within a radius N ol twenty-five miles be <>d for both subscribers and non-subscribers, instead of as at present ."id for subscribers and t>d for lion-subscribers, and that a special wax-lax of Jd be levied on all articles posted except newspapers.. The amount realizable under each heading is estimated as follows:—Telegram and cable messages: Increase of initial rate of "id. £50,000; Bureau messages: Initial rate made tfd to all. £20,000; Postage war-tax of U\ on all articles posted except newspapers, £310,000. Total. £3*0.000. RAILWAY INCREASES. The railway passenger and" goods rates will be ' increased -to the -extent of £360, 1 000' per annum.., This becomes a necessity from causes due chiefly to the war. ;ind it is impossible for the • Railway 1 Department to provide sufficientl ways and means under conditions now existing. Prices of -piaterial required for the maintenance and extension of the services have risen enormously, f may give a lew instances: The cost of canvas has increased 100 per cent.;'rails, 12 per cent.. fastenings, 9 per cent.; steamer freight on rails. 102 per cent. Girders, ironwork, and general materials have also increased greatly in price. In ihe locomotive branch an average increase of JO per cent, has taken place in respect to materials used in building and repairing engines, cars. and wagons. In view of the foregoing and the fact that indications point to still further advances, it is evident that the Department cannot satisfactorily carry on its operations and provide 31 per cent, on the capital invested unless the rates are raised to meet the emergent conditions arising out of the war, and after carefully looking into the whole position it is proposed that passenger rates be raised by S.} per cent., and goods (excepting timber) by 10 per cent. Assuming that effect is given to this proposal, the rates operating for conveyance of dairy and other farm produce and live-stock will be less than those ruling in 1894, when the industries were either languishing or in their infancy, while the proposed advance is so infinitesimal as to be negligible as far as the increase of prices over the counter are concerned.

The effect of the proposed increase in rates would be as follows;—Butter Kid per £IOO of value: cheese. Is per £IOO of value: wool,! Is Sd per £IOO of value j frozen meat, 2s Sd per £IOO of value: sheep. Is 8d per £IOO of value; cattle, 3s 9d per £IOO of value. I omit timber for the reason that the increase would be on white-pi tic li 1 Is yd per £IOO of value, and on redpine JLI -"is •mI per £IOO of value: Timber is used more or less by all classes of the community, and the general increase proposed to be put on other goods if applied to timber would injure the industry, which is at the moment prejudicially affected In the war. Discrimination in this article is consequently a necessity. In regard to passenger fares, the 8 l--'i per cent, proposed works out at a penny in the shilling, and ibis would be applied in all cases excepting workers' tickets. An adjustment of excursion rates also will be submitted. I estimate these changes will produce £350,000 per annum. While the revising of the Customs tariff ge"<neraliy in regard to nerciin matters is a necessity the subject is one of swell importance and difficulty that n c;,r.not be dealt with at present.

NATIONAL MINISTRY'S FINANCIAL STATEMENT. DRASTIC NEW TAXATION PRO* POSALS. OPENINC REMARKS. Wellington. August 27. In the House last night, the Rt. Hon. Sir Joseph Ward. Minister of Finance. delivered the Financial Statement. In the course of his opening remarks, he said: 1 wish specially to emphasize the fact that none of the proposals 1 am compelled to submit for additional taxation and revenue have been suggested by party considerations; they have been framed solely with a view to the needs of the 'country and the welfare of the mass of the people. The Financial Statement which was delivered by my predecessor in the House on the 6th August last year was prepared and printed before the outbreak of the war. and at that date it was not possible to forecast the effects which the war was likely to produce u'vm our finances. Shi'-> then the conditions which ordinarily 'regulate the country's trade haVe been, 'subjected to great disturbance, and the result has. been reflected in our Railway and Customs revenue, from (both of which solves the returns for the year 1!) 11-15 did not reach tin* estimate made in last year's "Budget.

On the other hand, certain sources of internal revenue have shown a marked increase over the estimate, and the actual revenue for the year represents an excess of £219186 over the previous year's figures, "while the total expenditure for the vear was less than the estimate by £184.748. The result of the year's operations gives a net surplus of £72.142, which 1 think, under the exceptional condrtions~"obtain:ing during the year, may he considered very satisfactory. The total credit balance in the Consolidated Fund at the 31st March, 1915. was £149.047; but to enable honourable members to accurately gauge the result of the 'year's operations it is necessary to deduct the balance carried forward .from the previous year—£426.9os, less £:550,00() transferred to: the Public i

Works Fund, or a net deduction of £7(5.905. The Government wdl hava| not only to fade the prospect of a falling'revenue, hut will have also to provide for heavy additional charges on the Consolidated Fund to meet the an- ' luiul interest and sinking fund in connection with the war loans, war pensions, and similar obligations. Nor must we overlook the fact that it will* he necessary to provide loan-moneys with whfcli to carry on public works and other services in the. Dominion, 'tti! inte'resV- and- 'J&rang'rand charges on which will further increase our. annual .e^x^ndifjjr^u£~ of Conaolfiliated Fund. In facts the Government in its duty jf If did not.^JnV make, ample provision for -raising sufficient additional' reveiiue it to meet its inci<eased 'obligation's. ; ' ', , LOAN-MONEYS. | Witli thei oF. ; placihg the posi. tio'o regiu-ding the> recent loatk transactions i clearly•' before honourable members 1 will classify the requirements of the Dominion under the following headings:— fa.) Loans for war expenses;

(b.) Loans for works contracted for; (c.) Loans for works in progress awl

extensions;

(d.) Loans for works other than those, referred to under headings <h)

and (c)

(e.) Loans for redemption purpose"

Up to the ittst March the war cost us, roughly, £2,750,000, including liabilities outstanding at that date, and the rate of expenditure uecessanh* increases in proportion to Mie number of men we put into the held. Moneys required under heading (b) and (e) relate chiefly to public works contracted for or in progress, and some correspondence took place with the High Commissioner as to the possibility of raising funds in the open market in London for the purposes named. The prices quoted seemed to indicate that no puhlic-work.s loan could be floated except on terms which were not sufficiently favourable to the Dominion, and the Government accordingly determined to utilize local funds to meet present requirements. The amount of the deposits in the Post Office Sav-ings-bank has largely exceeded tho amount of the withdrawals, thus providing a considerable amount of money for local needs.

REY FA F F A XI) EXPEXDITFRE.-

I The revenue for the year 1914-1915 was estimated at £12,488,370, and the total collections were £44,845 less than. this estimate. The expenditure for the same period was estimated at £12,564,551, and was actually £184,74S less. The gross public debt at th« end of the liuam'al year amounted to £100,059,910, and the net debt to ' £96,644,455. In the year 1916, loans I totalling £9,906.474 will fall due. X</ great difficulty i s anticipated in arranging for the renewal of these.maturing loans. j On the Ist April last there was a (■ash balance of £695,762 available for public works. ancT the balance of loanmoney lo he raised under then existing authorites amounted to £1,475.000, making a total of £2,170,762 with which to commence the current year. The estimated revenue for 1915-16, on the basis of existing statutory limitations, totals £11,676,254, leaving a