BRITAIN'S DEBT.

Taranaki Daily News, 21 April 1920, Page 5

BRITAIN'S DEBT.

THE BUDGET PROPOSALS. FLOATING DEBT REDUCED. /TEW CHANNELS OP TAXATION. Sgr Telsr»ph.—Pre** Assn.—Copyright. Received April 20, 5.5 p.m. London, April 19 In tlie House of Commons, Mr. Austen Chamberlain (Chancellor of the Exchequer) delivered.the Budget. He said that this Budget was critical, because the time had come to lay deep foundations for future prosperity. The expenditure for 1920 was approximately £144,000,000 in excesa of last year l ! estimates, but £62,000,000 below the revised estimates of October, 1919. As regards revenue, the result was not merely more favorable than anticipated, but would greatly exceed the original Budget estimates. 'The actual Exchequer receipt* were nearly £138,500,000 more. Customs and excise exceeded the estimate by £45,500,000, which was mainly due to an increased yield from spirits, beer, tobacco, and tea.

REVENUE FROM LUXURIES. The increased consumption of tobacco was unprecedented, due, inter alia, to greater smoking by women. Tne entertainments' duty would yield £10,500,000, at £2,500,000 more than anticipated. Income tax and super-tax would yield £6,000,000, and death duties £7,500,000 above the. estimates. The excess profits surplus would be £10,000,000 over the reduced estimate of October, 1819, but a deficiency compared with (he Budget estimate. This, however, was only a question of a delayed payment, Stamp duties were a record, being '£10,000,000 over the estimate. Miscellaneous revenue exceeded the October estimate by £130,000,000. Under special miscellaneous revenue, war contributions from India and the Colonies increased : £10,000,000. Realisations from vote credit increased 41.3 per cent., mainly owing to unexpectedly large receipts by the Ministries «f Shipping and Munitions. THE FLOATING DEBT. The floating debt as at March 31 was '£1,313,000,P00, a decrease of £100,000,000 compared with last year. . The worst feature of the floating debt Was borrowing on ways and means. Thi9 ■was the Immediate cause of an inflation of credit and prices. m Athough the revenue exceeded the expenditure, he was forced in the first ten days of April to borrow £55,000,000 from the Bank of England on the ways and means account. Owing to the non-renewal. <rf -maturing Treasury Bills to the extent of £64,000,000 he was compelled to raise the Treasury Bill rate and the Bank rate simultaneously. He raised these to ahofr tb« difficulty of having an enormous floating debt, and the urgent need Sat an effective remedy.

LIQUOR DUTIES RAISED. Details of the Budget proposals show (fiat spirits aie raised 12a 6d per bottle, retail beer by a penny a pint, the dntjr <m wine is doubled, and sparkling wifti will be 60 per cent ad valorem. An additional ad valorem duty of fifty per cent, k placed on imported cigars, with a preferential rebate of one-third on cigars front the Dominions and Indie. There is ft preferential rebate of one-third on sparkling wines produced in the Empire. The standard rate of income tax of 6s is unchanged, but a Bill will be introduced carrying out recommendations of the Income Tax Commission. The exemption limit on married men is £260, and unmarried £l5O. The excess profit* duty is increased to sixty per cent. It has been decided to repay the nrhol* Anglo-French loan next autumn without further borrowing from the United States. The sale of savings certificates for the .past year amounted to £48,000,000, accounting for nearly half the reduction of the national debt.

EFFORT TO IMPROVE CREDIT. The estimated revenue on the existing Mlis of taxation js £1,341*500,000, and the expenditure £1,177,500,000, leaving [£164(000,000 for the reduction of the debt. This is insufficient, and he intended to call on the country to make a generous •Ifart to improve credit and lighten the ftttnre burden. The expenditure on supply services repteeented a reduction of nearly sixty per cent, on the previous year, and the current year will show a further reduction of twenty-five per cent, on the past year. Ttfe estimated loss on the Post Office is (£11,000,000. Hie question of telephone I Khaigts will be submitted to a select committee. The petrol tax will be superseded a license duty on.motor vehicles at the end of the year. Land values duties will be repealed as unworkable, but mineral rights will be maintained. As regards spirits, the profits of the trade are still unreasonable, and thereto* the duty i* increased to 72s 6d a proof gallon. The estimated increase will yield £24,500,000 yearly. The beer duty is raised by 30s a barrel, producing 1 £30,000,000 yearly. Both increases operate to-morrow. /

double income tax,

Referring to wine duties, the only consideration was the Allies, especially France and Portugal, which prevented previous increases, but it was impossible to further increase spirits and. beer and leave wine untouched. It is proposed to adopt the recommendations of the Boyal Commission in regard to the, double income tax. It was confidently hoped the Dominions would idopt proposals and make relief complete, but in any case it was proposed to put them in operation immediately and unconditionally in the United Kingdom. Where the. Dominion rate of tax did not excted one half of the United Kingdom rata, relief would be complete. This ' would cost the Exchequer £2,000/100 yearly. \ It wag proposed to introduce a new tax ■ which might in the future be a substitute for the etces* profits tax, namely, a corporation tax of a shilling in the £ on the profits of limited liability companies. As regards income tax, proposals were made for a special allowance to soldiers. The proposed increase of the excess profit* tax would operate from January Ist, hut in the event of Parliament adopting a war wsiilth levy he would be ftblfe tn

reverse his decision as regards me increase. YIELD FROM NEW TAX. With a view to preventing the corporation tax being too severe a burden on ordinary shareholders, the proposed duty would not exceed.two shillings in the £ on profits remaining after the payment of interest and dividends, debentures and preference shares. The yield of the new tax was estimated at £50,000,000 for the full year, in addition to the excess profits duty, and £35,000,000 for the current year. The changes mentioned would produce for the full year £108,000,000, while the current year would give a nett additional revenue of £70,000,000, and a total revenue of £1,418,000,000 for the current

year. It was estimated to have £234,000,000 for the redemption of the debt, of which £50,000,000 would be available for the reduction of the floating debt. Moreover, as a result of the changes anticipated, £300,000,000 would be available next year for the reduction of the debt, half of which would be available for the reduction of the floating debt. VAST TASK AHEAD. They had been told that two such Budgets might destroy the Empire. He retorted that twenty such would redeem the whole of the Empire's debt. Mr Chamberlain said he would bj content to gee, after a war involving such gigantic financial sacrifices, our position one of unexampled and unequalled strength. It was true it involved further taxes and sacrifices, which would not bring popularity to Cabinet, but • they had not thought of their popularity. Their object had been to rise to.the level of their great responsibilities, so that when they left office they would leave their successors ample revenue, with the country's credit second to none.

Mr. Chamberlain further explained that, though twenty such contributions as at present proposed would wipe out the debt, he did not contemplate, after the first great reduction, that they would continue to pay off at a rate which would mean the extinction of the debt in twenty years. When the first great reduction had taken place it would be for the country to consider how far it might relinquish its efforts.—lmperial Service.