BUDGET PROSPECTS

Wairarapa Times-Age, 24 June 1940, Page 4

BUDGET PROSPECTS

EXPECTATION OF HEAVY TAXATION ON ACCOUNT OF RISING WAR EXPENDITURE. SOCIAL SECURITY POSITION (By Telegraph—Press Association.) WELLINGTON, This Day. The general expectation is that the Budget, which is to be presented on Thursday night, will contain drastic taxation provisions, bringing the position in New Zealand more into line with that in the United Kingdom. Statements made by the Minister of Finance, Mr Nash, in recent months will have prepared individual taxpayers for a heavy charge on incomes. The cost of New Zealand's share in the war for the current year was estimated three months ago at £33,000,000 but the serious change in the international situation, the introduction of conscription, and increased provision , for home defence are likely to increase > substantially the expenditure that will' 1 ’ have to be met. From time to time the Minister of Finance has warned the people that greater efforts and sacrifices might be called for, and has stated at the same time that the Dominion should pay for the war as far as possible as it went. While details are naturally not available, a broad hint has been given of a compulsory loan, the nature of which is as yet unknown, and an excess profits tax, which is likely to be 100 per cent, specially in view of recent Ministerial statements that no one should profit from the war. When the excess profits tax was adopted in Britain, the years for which the income levels were fixed were 1936, 1937 and 1938.

There is also considerable speculation in Parliamentary circles on the likelihood of an increase in social security taxation. No contributions to the fund are made from military pay, and the quarterly levies of men in the services are paid by the Government. While the revenue is thus reduced future financial responsibilities of the fund remain.