WAR FINANCE

Wairarapa Times-Age, 26 June 1940, Page 2

WAR FINANCE

THE CANADIAN BUDGET BIG DEFICIT IN SIGHT. DESPITE HEAVY TAXATION. By Telegraph—Press Association—Copyright. OTTAWA, June 24. The Finance Minister, Mr Ralston, announced in the House of Commons s war time Budget of 1.148,000,000 dollars. New taxes are expected to yield 110,000,000 dollars, making a total revenue of 760,000,000 dollars. The Minister said it would be unsafe to expect a deficit of less than between 550,000,000 dollars and 600.000,000 dollars.

The new taxation includes a national defence tax which will start at 2 per cent for unmarried loersons with an income of 600 dollars, and increases in the personal income tax. Married persons with no dependants earning 3000 dollars, who pay 36 dollars at present, will in future pay 195 dollars. A 10 per cent tax will be imposed on all imports except those which come under the British preferential tariff. There will be other tariff changes and also an excess profits tax of 75 per cent. Automobile sales will be taxed from 10 per cent on 700 dollars to 80 per cent on 1200 dollars. There will be heavy increases in the taxes on tobacco and cigarettes. The Minister said that the financial year, which ended on March 31, resulted in a deficit of 118,000,000 dollars, which exactly equalled the war expenditure. ■ He forecast an increase of 700,000,000 dollars in the national income, bringing it to a total of 4,500,000,000 dollars, a very large proportion of which could be diverted to war purposes.

The total revenue in 1939-40 was 562,000,000 dollars, and the expenditure 681,000,000 dollars. Revenue received from taxation was 32,000,000 dollars more than that collected in 1938-39, and the amount received from September 1. 1939, to March 31, 194&, exceeded that of the corresponding! period in 1938-39 by 51,000,000 dollars. The net public debt had risen to 3,271,000,000 dollars on March 31.

The Minister warned the people of the necessity for a reduction in personal consumption, and drew attention to the heavy increase in imports. The Government intended to give priority to war requirements and the export industries in providing foreign exchange. He gave a warning that economic collapse would follow encouragement of private spending and increased prices.

MAXIMUM EFFORT DEMANDED BY MINISTER. LONDON. June 24. Canada's first war time Budget is regarded in England as an indication of Canada’s determination to put all its strength into the war.. It is the largest Budget in the Dominion’s history. The expenditure proposed is about three times as great as Canada’s expenditure in recent normal years, and this increase is due wholly to the war effort.

There will be new duties on gramophones, radio sets, and other articles. It appears in London that the new tax on motor-cars, rising to 80 per cent of the selling price, is so heavy that it will almost prohibit the purchase of cars and leave the industries free to turn to production for war purposes.

The Budget shows Canadian resolution to fight on with the utmost vigour and to make all. possible sacrifices to that end. Mr Ralston made it clear that he was calling on all Canadians for a maximum effort. It was the Government's policy to bring about as rapidly as possible the full employment of all Canadians and the full use of their industrial strength and resources.