WAR FINANCE.

Taihape Daily Times, Volume 8, Issue 83, 6 April 1916, Page 5

WAR FINANCE.

BRITAIN'S BUDGET. FIVE MILLIONS A DAY. NEW TAXES TOTAL £500,000,000. £1,559,000,000 SPENT LAST YEAR. SERIOUS ECONOMIES NEEDED. DOMINION LOCAL LOANS. PUBLIC SPIRIT PRAISED. TAX ON AMUSEMENTS. INCOME TAX RAISED. LONDON April 4. In the House cf Commons to-day Mr Reginald McKenna, Chancellor of the Exchequer, delivered his Budget. He said that the shortage of tonnage had considerable effect upon the revenue, as had also the prohibition of certain imports. He assumed that the war would last through the whole financial year. The actual expenditure last year was £559,000,000, or £31,000,000 less than the estimate. The actual net loan issues to the Allies amounted to £264,000,000, and to the Dominions £52,000,000. In the latter case this was £16,000,000 less than was estimated, this result being due to the public spirit of the oversea Governments, for which Britain owed them thanks. (Cheers.)

£313,000,000 FOR THE ALLIES. Making allowances for certain facts the total financial assistance to the Allies was £313,000,000. In pursuance of the scheme to purchase American securities, they bought a considerable amount out of the funds, and by resale built up a large reserve to meet future needs. The purchase money included last year's expenditure, and the proceeds constituted an asset in America with which to begin the current year. MEETING THE DEFICIT. The total revenue for the year was £336,767,000, an increase of £31,753,000 above the estimate. The expenditure was £1,559,000,000. and the deficit Avas met by borrowing £600,000,000 by war loan in June, £154,000,000 by the sale of Exchequer bonds; £50,000,000 by the AngloFrencli American loan, and the balance by the sale of Treasury bills. Our total war indebtedness was £2,140,000,000, of which £368.000.000 was advanced to the Allies and the Dominions. Relief would come to us in the future in regard to these items, but we were responsible now, and had to bear the whole dead weight. The additions made to our taxation fully assured the national creditors that the capital and interest were secure. AN INEVITABLE INCREASE. There would be an inevitable increase in the expenditure during the coming year. War services accounted for £1.120,000,000. and there would be an additional £30,000,000 of miscellaneous expenditure, bringing up the war expenditure to over £3,000,000 daily. Advances to the Allies v and Dominions would be placed at £450,000,000. The consolidated services, including interest debit, ref}rihojd £137,000,000, and with other services brought up the total to £1,825,000,000 —almost exactly £5.000,000 daily. He would he disappointed if serious economies were not effected during the year and the larsre total reduced.

He thanked His Majesty for his kindly gift of £IOO,OOO for the war. On Mr. Asqnitli's return Cabinet would decide how it would be spent. REVENUE OF £509,000,000. He estimated the revenue for the year at £509,000,000, of which permanent taxation totalled about £423,000,000, leaving a deficit of £1,323,000,000. In addition also Ave have to meet a new charge for interest and Sinking Fund, which was calculated at £79,000,000. Regarding the new taxes the object would be to get revenue to meet obligations and to pay as large a proportion of the war cost as possible, and distribute fairly the burden of taxation. He therefore proposed to impose taxes which would bring in £SOO-,000'.000| small increase in the income tax, small incomes rising to a maximum of 5/-. Earned incomes up to £SOO would pay 2/3, five hundred to a thousand, 2/6, and then rising by successive stages to 5/-. UNEARNED INCOME StfALE. The new scale on unearned incomes would commence at 3/-, incomes not exceeding £3OO rising by sixpenny stages to 5/- pn incomes exceeding £2OOO. He estimated that the increases would produce £43,500,000. The super tax would remain unchanged. Dealing with the double tax, he said j it would have to be deq.lt with in the j promised reconstruction of income I tax laws. For the present, where the I

Dominions tax was not less than eigh{teenpence he would not impose any fresh burden. A Voice: What does that mean? Mr. McKenna: It means that whatever they suffer they will continue to suffer. B'ut they will not sutfer more. Th e additional tax would not apply I to the naval or military forces.

£5,000,000 FROM AMUSEMENTS. The new Customs and Excise taxes were estimated to bring in £21,800,000. He would tax amusement tickets, including football and horse-rac-ing, rising from a halfpenny to a shilling, according to the cost of the seat up to 12/6, with an aditional shilling for seats above that amount. He estimated that these would realise £5,000,000. Also impose a tax on railway tickets, yielding £3,000,000.

BRITAIN'S BUDGET. CUSTOMS AND EXCISE. EXCESS PROFIT TAX. LONDON April 4. Continuing his Budget Speech in the House of Commons to-day Mr. McKenna said: There would be an additional halfper pound duty on sugar, yielding: £7,000,000, and that on cocoa, coffee, and chicory would be increased to sixpence per pound producing £2,000.000. On matches there would be 3/6 Customs and 3/4J excise on every ten thousand matches. Mineral waters would pay fcurpence a gallon, yielding £2,000,000. He proposed to double the present duty on motor cars. Motor cycles net exceeding 4 hcrse-power would pay two guineas, higher-powered three-quarters cf the duty on motor cars. The motor duties would realise £300,000. Th e excess profit tax was increased to 60 per cent. Summing up, Mr. McKenna calculated that by March, 1917, he would require to meet in an ordinary year £338,000,000. Our permanent revenue was £423.000,000, leaving a surplus, after another year of war, of £85,000,000. WHEN PEACE COMES. When peace came we would have a margin for remission of taxation. Civic courage was as important as military courage. We ought to justify the claim that we would net be found wanting in these virtues.