Wairarapa Times-Age THURSDAY, JULY 25, 1940. THE BRITISH BUDGET.

Wairarapa Times-Age, 25 July 1940, Page 6

Wairarapa Times-Age THURSDAY, JULY 25, 1940. THE BRITISH BUDGET.

ALTHOUGH it is being criticised as “tmud,’ the ninendeH A Budget submitted to the House of Commons by the British Chancellor of the Exchequer (Sir Kingley \\ ood) maj e ‘ iso ablv be regarded as embodying a national economic and fniancial seconds- and supports wortlulyuh. deeds. British fi<'htin<>- forces on land and sea and in the an. Saci fl s .u-o bou. " demanded of the notion which not; W would have been deemed impossible, but it is not niiltu that. Z will be met and that it: need be the y*'™ deeper calls upon its resources m order to attain the 1 military strength that will enable it to wm the war. While the British system of taxation is being elaborated and extended for war purposes, mam reliance is std p ace upon a tremendously heavy direct call on incomes. O'itstand o- ainoiw rhe new imposts is a purchase tax, subject to fairly wide 'exemptions, but still imposing a levy of twelve per cen • on manv articles of common use and of twenty-lour pel ce ■ on luxuries. Like our own sales tax, the British purchaseJ.m is open to the objection that the amount ol rerenue obtained by this indirect method might be raised 11 less disturbance and disorganisation of trade and at less c - .. t to taxpayers. In Britain, as in this country it has been de eided, however, that the sales tax will bring in revenue which cannot be obtained as readily, or perhaps with as little accoi - panying complaint, in any alternative way. While that position holds, there is something to be said for the British proposal that the tax should be doubled on luxury articles.. Particularly in war time, there is much to be said for the special taxation of luxuries. In the extent t which it is met, such taxation presumably falls on those nho can well afford to pay, and no doubt a heavy impost on luxuries serves a useful and beneficial purpose also in tending to concentrate expenditure on necesaries. In this particular, as m some others of much greater importance, the British Budget olfeis a lead which may be followed profitably in New Zealand. .It is true that some widely popular luxuries, such as tobacco and . liquor, are already taxed very heavily m this country, but the total field of luxuries is one which the Minister of Finance is well entitled to survey with a view to obtaining a maximum — 7, 5 . " 'As a whole, in Hie calls it makes upon the pockets of the people, the British Budget is cast on bold lines, though even so the possibility is left clearly open that still heavier calls may be made as time goes on. It is proposed meantime to raise in the United Kingdom approximately 1,501) millions sterling per annum in taxation and another 2,000 millions per annum bv the process of voluntary saving and lending to the State. 01. the huge annual total of 3,500 millions thus made available, four-fifths are to be devoted to the prosecution of the war and one-fifth to civil purposes. This is a vastly greater national war effort than the people of New Zealand are yet being called upon to make. Ol: the total amount of £98,500,000 to be raised by taxation and borrowing under the current New Zealand Budget, only about forty per cent, or two-fifths, is to be devoted to war purposes andour War Expenses Account includes an amount of nearly ±20,000,000 to be borrowed overseas. The pre-war aggregate national income of the United Kingdom was estimated to amount to 5,000 millions sterling, but'it is considered that in war conditions the figure may have risen to 6,000 or 7,000 millions. Of that increased income, 2,800 millions are to be spent on the war. Something like onehalf of Britain’s total production is thus earmarked for war purposes. The New Zealand aggregate of private incomes in 1938-39 (the latest period for which figures are available) is estimated at £185,000,000. Our estimated war expenditure in the current, year, from revenue' and loan (£37,500,000) amounts to just over'one-fifth of that total, and, as stated, it is proposed meantime to meet more than half of our total war expenditure by borrowing overseas. Obviously we are as yet making a very much lighter call on our resources in meeting the costs of the war than are our kinsfolk in the United Kingdom.