BRITAIN’S BUDGET.

Taranaki Daily News, 3 May 1922, Page 5

BRITAIN’S BUDGET.

SURPLUS OF REVENUE. TAXATION REDUCED. LOWER POSTAGE RATES. SIGNS OF REVIVAL By Telegraph.—Press Assn —Copyright. London. May 1. The Budget discontinues debt redemption. The surplus of 40 millions will be devoted to reducing tayation A shilling will be taken off the incometax. the basis of farmers’ assessment will be halved, fourpence per lb will be taken off tea and a halfpenny off postages. Received May 2, 5.5 p.m. London. May 1. Sir Robert Horne (Chancellor of the Exchequer). in presenting the Budget in a crowded House, pointed out that during the first quarter of the year the greatest industrial trouble that Britain had ever known swept over the country, causing inevitable unemployment and loss of revenue. That we had met these distresses without worse calamities testified eloquently to the country’s soundness and the sonaity of its financial position. The year s revenue totalled £1.124.PSO.OCO,* which was £91,000,000 below the estimate. The expenditure was £1,079,189,000, leaving £4>.G93,000 for debt redemption. It was remarkable that in such a year income and super tax should together have yielded 309 millions. The excess profits duty had yielded 122 millions, but repayments absorbed 92 millions of this. ' REDUCING THE DEBT. The improved value of the pound sterling was the first proof of our payment of our external debt. During the year the internal debt had been reduced from 1275 to 1029 millions. The Chancellor estimated the coming year’s expenditure at 910 millions, consisting of £363,438,000 for Consolidated Fund charges, and £526,631,000 for special services. On the existing basis of taxes he estimated that the revenue would be £946.600,000, leaving a surplus of 4d% millions, excluding any provision for the redemption of debt. Sir Robert Horne said he had always treated the possibility of receipts from Germany as windfalls. In the corporation profits tax, where the exemption period expired on December 31, he proposed to extend the exemption for three years. It was proposed to reduce the basis for the assessment on agricultural land from double the annual to the annual value, while on land not being used for agricultural purposes it was proposed to revert to the pre-war assessment basis, namely, one-third of the annual value. These changes would reduce the income tax yield by £2.150,000. The payment of arrears of the excess profits duty would be spread pver five years. LOWER POSTAL RATES. The postal rates would be reduced to three half pence on letters, a penny on postcards, and one halfpenny on printed papers, operating from May 31. Telephone charges would also be reduced. and these together would reduce the post office revenue by six and a half millions, and the above concessions would reduce the surplus to £38,300,000. Unemployment was breaking the hearts and" embittering the lives of hundreds of thousands of people. Unparalleled depression was still with us, but there were hopeful signs of a re-

The magnitude of the British taxpayers’ burdens had won admiration throughout the world, but he thought the present circumstances justified giving some stimulus to trade in the shape of not continuing the policy of debt redemption, apart from interest falling due to America, which it was proposed to meet. Therefore, it was proposed to devote the surplus to the reduction of taxation. Income tax would be reduced by a shilling, the tea duty by fourpence per pound from May 15, involving remissions also on coffee, cocoa and chicory. These reductions left the following figures: Revenue £910,775,000 Expenditure ........ £910,069,000 Surplus £706,000 “A GREAT GAMBLE.” Mr. H. H. Asquith (Leader of the Liberal Party), declared that the surplus of £38.000.000 ought really to have been earmarked for the reduction of the debt. Only an excess of revenue over expenditure justified a remission of taxation, not a surplus which was artificially produced. Sir Robert Horne was indulging in a great gamble. Mr. Asquith said he would be surprised if the estimate of the supplementary estimates was not doubled during the year. Mr J. R. Clynes (Leader of the Parliamentary Labor Party), welcomed the reduction in the tea duty. He declared the way to encourage trade was to reduce taxation on firms and corporations and increase taxation on in dividual?. He disproved of such sub etantial concessions to agricultural interests, and advocated a graduated levy on accumulated wealth. Sir Frederick Banbury described the pension of the sinking fund as the beginning of a bad policy. He urged further economies. Commander E. Hilton Young (Financial Secretary to the Treasury), replying, said the* reduction of a shilling on the basic rate of income did not mean that all income tax would be reduced bv that amount. An explanation of how the reduction would operate would be issued later. The customary resolutions were parsed and the debate adjourned. —Aus.NX Cable Assn. OPINION ON THE BUDGET. MATN PROVISIONS WELCOMED. REVENUE FROM RACING. Received May 2, 55 p.m. London. May 2. , Th® Budget was variously received in the lobbies and outside Parliament, but on the whole it created a favorable impression. ■ There is a certain amount of criticism about the suspension of the sinkfog fund on the ground that the

ditions axe not ready for it, but there is a strong counter opinion in financial circles that Britain hitherto has made undue sacrifices towards the redemption of the debt, and that it is unfair and fatal to British trade to continue repayment at such a speed. The retention of the heavy war tax on beer has been criticised on the ground that a reduction would lead to greater consumption, and? therefore an increase in the aggregate yield of the tax. It is contended, on the contrary, that additional consumption is not wanted, and the question remains the pivot of a sharp controversy. A more important claim is that the income tax ought to be extended to co-operative societies, whose turnover was £420,000,000 during 1921. The possibilities of extracting revenue from the parimutuel has been commented on, and the Australasian methods of exploiting racing for the purpose ot revenue have been mentioned approvingly. The parimutuel is gaining popularity in England, and it is pointed out that it could produce progressive relief to general taxation. The reduction of the income tax, inland postage, tea and concessions to agriculturists are generally approved, while satisfaction is universal that Sir Robert Horne lias deferred the scheme for funding pensions obligations, though it is the opinion in Ministerial circles that this will possibly be necessary in 1923.—Aus.-N.Z. Cable Assn.