The Daily News. FRIDAY, APRIL 23, 1920. THE BRITISH BUDGET.

Taranaki Daily News, 23 April 1920, Page 4

The Daily News. FRIDAY, APRIL 23, 1920. THE BRITISH BUDGET.

The Budget statement delivered by Mr. Austen Chamberlain (Chancellor of the Exchequer), in the House of Commons on Monday testifies to the determination of the Government to eope with the colossal financial problems which the war has caused. Even a cursory perusal of the cabled summary must convince the reader that the proposals may justly be regarded "as a courageous attempt to adjust the country's incomings and outgoings, and reduce the national debt," which on March 31 totalled £1,313,000,000, a decrease of a million compared with last year. It is not easy for people in the Dominions to realise the gigantic nature of Britain's national balance sheet, but the figures given afford sufficient material wherefrom instruction may be obtained. The actual receipts for the year were nearly 138| millions, a result not merely more favorable than had been anticipat, ed, but greatly exceeding the estimate, some of the increases being very large and not free from peculiarity. It will come as somewhat of a shock to old-fashioned people to find that the unprecedented consumption in tobacco is partly due to increased smoking by women—a veritable sign of the times. The yield of the entertainment duty (10J millions) would seem to show that the people have taken to pleasure whole heartedly after the stress of the war. The Chancellor had the satisfaction of stating that the .external debt of £1,278,000,000 had been reduced by 86 millions, and during the year would be further reduced by repayment of the An-glo-French loan, without further borrowing from the United States. This demonstrates how courageously Britain is facing her liabilities, recognising the urgent need for an effective remedy of the difficulties caused by having such enormous floating debts. The Chancellor estimates there will be a surplus in the current year of 164 millions available for the reduction of the external debt, and

as he recognises this will not be | sufficient, he proposes to call on > the country to make a generous effort to improve its credit and ■ lighten future burdens. Probably ' one of the most gratifying features of the Budget statement is • that which relates, to reduction of . expenditure for, supplies by nearly ! sixty per cen£ over the previous i year, while,a further reduction of : 25 per cent' will be made this year, i But for the unsettled state of Ger- | many, Russia, and Turkey it is probable a very much larger reduction would have been possible, but Britain cannot afford to take risks that might endanger peace. To bring the expenditure within the income necessitates not only every possible economy consistent with security, but involves even heavier taxation. Although the postal rate is to be raised to a minimum of twopence for letters and a penny for newspapers, it is estimated the loss will amount to eleven millions. In heavily taxing liquor, the Chancellor is acting in accord with the bulk of public opinion, the increases being fairly drastic on spirits and sparkling wines, also on cigars, with rebates on wines and cigars produced in the Empire. No change is to be made in the standard rate of six shillings in the £ for income tax, but the excess profits' duty is raised to sixty per cent., while a new tax of a shilling in the £ is to be imposed on companies' profits. The double income tax which has created so much hostility in the Dominions, has been settled on the lines previously diseussed. Parliament has not yet decided the question of a war levy, but whatever action is taken on that matter the revenue will not be affected, as if the levy is adopted it will take the place of the excess profits tax which is estimated to produce 220 millions. With a little more courage the Chancellor might have screwed up this tax on a sliding scale until it acted as a deterrent against excess profits, though the need of national revenue is so great that it is no wonder the temptation to bring this 220 millions into the Treasury proved irresistible, and the same argument applies to the tax on the profits of limited liability companies, especially those in the cotton industry. It is not surprising to find members of Parliament representing trading and manufacturing interests asserting that this heavy taxation will hamper the country's reconstruction and cause a rise in prices, but the higher the prices soar the larger will be taxation proceeds, and as the world is clamouring for manufactured goods there is no, probability of Britain's export trade suffering in the immediate future. The consumers will, as usual, have to pay whatever price is asked, and it may fairly be assumed that the critics who raise their voices against this extra taxation are not in the slightest concerned with the long-suffering consumers, but are championing the cause of the profiteers. Britain needs urgently all the money that she can secure without borrowing, and with a revenue of 1418 millions should be able, to readjust her finances on a sound basis, especially if the pruning knife is freely used on expenditure. To be able to pay off 234 millions of debt this year and 300 millions next year will have a marked effect on British currency. "We have been told," said Mr. Chamberlain, "that two such Budgets might destroy the Empire." and his retort that twenty such Budgets would redeem the whole of the Empire's debt, is convincing evidence that the Government thoroughly realises its duty to the Empire and has the courage of its opinions. It is a relief jto know that the process of piling up debt is over, and that the Government is not afraid to set the country's finances on a sound basis, even though it may entail sacrifices on the part of the people. The Chan cellor may be over sanguine in bis financial aims, but he is giving practical proof of his sincerity—and that of the Government —in "laying deep foundations for future prosperity."