The Daily News. SATURDAY, JUNE 17, 1916. THE BUDGET.

Taranaki Daily News, 17 June 1916, Page 4

The Daily News. SATURDAY, JUNE 17, 1916. THE BUDGET.

Those who were looking for startling announcements in the Budget, which ivas laid before the House last night by the Miniver of Finance (the Right Hon. Sir Joseph Ward), will ho somewhat disappointed, for, beyond the tax of fortyfive per cent, on year profits, and the embargo on capital leaving the Dominion, there are but few novelties in finance raising, but there are a number of provisions worthy of note. It is essentially a war Budget, and the task before the Minister was that of meeting the exceptional demands created iu consequence of the war, and no additional taxation is suggested except that required for war expenditure, so in this respect it is very similar to the Budget for the past year. The exceptional prosperity 01" the Dominion, and particularly of the primary producers, justifies the Minister in nis view that the additional burdens will be cheerfully accepted. Possibly taxpayers will be astonished that the Customs Department has net been utilised to provide an appreciable quota to the national exchequer. There has been much said and written about the need for economy and the still further necessity for checking the outflow of money from the country, and yet the Budget contains no proposal for import duties on luxuries which might very reasonably be expected to bear a fair share of the extraordinary expenditure that lias to be met. It is satisfactory to find that steps are to be taken to restrict the transfer of money from the Dominion, until twelve months after peace is declared, except in regard to the ordinary transactions connected with trade and commerce. This embargo will affect banks and others controlling money. The object of this is to enable the Dominion to maintain its financial resources and utilise them to the best advantage. Th's is distinctly a wise and prudent decision, the outcome of which should be apparent later in the stimulus given to industrial ard commercial expansion Another • matter dealt with is that of Koep'ng down the rates of interest on loans to local bodies, five and a half pei cent, being the limit j emitted, while the State Advances Department is keep inj; the rate at four and a half. Tins also will meet with general approval, as will the proviso restricting the interest on deposits, which will apply to all monetary institutions. While money is plentiful there exists far too great a caution in letting it be utilised in undertakings that would benefit the country. The possibility of a change !a financial cond : tions after the war has induce! the Minister not to spend or earmark last year's surplus of over two millions sterling, part of which he-has already invented in Treasury Bills and the remaind will be used in a similar manner, the object being to keep this surplus as a liquid asset, the investment oejng regarded as a set-off by New Zealand agaioet the war funds so generously advanced by the Motherland. The intention is excellent, but in view of the fact that the Motherland is bearing such a colossal financial burden, and that it is expected the Dominion will have to borrow a furthe; twelve millions! from the British Government oyer and 'above the eight and a half millions already obtained, it ,vouid seem to be more in accord with the dignity and selfrelianc» of ihe Dominion to utilise the surplus for reducing the strain on the Motherland, and it is quite within the finaneiil power of the people of New, Zealand to nrovide locally a further three millions, especially as. it is proposed to issje war bonds bearing four and a half per ceflfc. interest, the amount being limited to the financial needs of the Dominion. These needs might justly include a fai.' proportion of the amount proposed to he borrowed from the Imperial Government. With regard to the financial position as disclosed by the Budget, the chief feature for eongratu':.tion is the reduction by £74,074 of the expenditure r,n annual appropriations, though the amount of economy is by no means as large as it should have oeen. A p-!-;iiliariiy of the year's income end expenditure is the fact that the surplus practically represents Jie amount of the ; ncrea;,ed revenue, while the estimated revenue for the current year oniv slightly exceeds the total of last year's receipts. \Vfth regard tp the aew taxes, the outstanding feature is the imposition of a ta.c of forty-five per cent, on war profits, exclusive of die five per cent. Income taw This is undoubtedly a iicavv inmost, but It is onl» an act -ol

justice that war profits should bear the burnt of war expenditure. The producers will probably feel the tax severely, but they will recognise its fairness, and it will certainly be some satisfaction to householders to know ihat the high prices they have been paying for foodstuffs will now be taxed in aid of war expenditure. The proposal to bring down house rents to prewar rates is certainly to be commended, ns is Hie maternity bonus and the subsidy fo friendly societies with regard to annuities. The prosperity of the Domin'on has only been rendered possible by the freedom of the seas and the safe conduct of our produce to the Home market, and for that we have to thank the Pjitish .Navy. That fact should ,-iore than suffice to outweigh any objection to the new taxes, particularly as the outlook for the year is bright with promise ot the continuance of prosperous times. On the whole, the Budget may not.be the best" that could be evolved, but it suits the special time and circumstances, and criticism will probably be directed more to its omissions than its provisions.