Wairarapa Times-Age WEDNESDAY, APRIL 9, 1941. A BOLD AND SIMPLE BUDGET.

Wairarapa Times-Age, 9 April 1941, Page 4

Wairarapa Times-Age WEDNESDAY, APRIL 9, 1941. A BOLD AND SIMPLE BUDGET.

TT seems likely that the fourth British War Budget, of which some leading particulars were given in cablegrams from London yesterday, will come to be regarded as a model of its kind. In its total financing of the present war to date Britain lias set a splendid standard and given a lead worth following everywhere in such matters as the proportion of war costs met out. of taxation, in the check imposed on inflationary tendencies, and, in the extent to which that is practicable, on the burdens to be borne when the war is over.

In the Budget now presented by Sir Kingsley Wood, the best features of British war finance are emphasised and extended. A most remarkable and highly creditable achievement appears in the fact that of British Government expenditure during the first eighteen months of war totalling the huge sum of 4,650 millions sterling, 2,000 millions have been met by taxation and 1.000 millions more by oversea resources—that is to say, the disposal of investment and other securities held abroad.

With an undetermined period of war yet to be provided for, the Chancellor finds it, necessary and advisable to impose still heavier burdens on the British taxpayer. The rigours of the Budget appear in such details as the raising of the income tax rate from 8s (id in the pound to 10s in the pound (so that with surtax a maximum rate of Bls (id in the pound will be reached on the highest incomes) and in the raising by Is (id in the pound of the ‘‘reduced rate’ on the first l.l(i;> ol taxable income, so that this rate will now be (is (id in the pound instead of ss. In these demands, and in making incomes ol £llO and over (instead of £l2O as hitherto) liable lor income tax thus bringing in an additional two million income taxpayers unprecedented calls are being made on a democracy at war, hut current reports declare that the Budget has been received in Britain with almost universal approval and applause.

Impressive as il is in the direct, and lar-reaebing le\\ it imposes on current national resoitrces for the prosecution ol the war, the Budget is marked also by wisdom ami foresight in the extent Io which it looks to the after-war period and seeks to establish conditions in which the nation, as .Sir Kingsley \\ ood puts it, will be able “to pursue the post-war sequel which all desired to see achieved.'’

In the conditions in which Britain today is lighting for life and for more than life, the demands of the taxgatherer must needs he heavy. Save within narrow limits, attempts to ease and lighten these exactions in particular instances would not. only enfeeble tin 1 'war el’forl, but would lend dangerously to unleash the evil forces of inflation. One of the most noteworthy features of Sir Kingsley Wood’s Budget is the method adopted of reconciling current financial and economic needs with a measure of ultimate relief for those upon whom Avar taxation will press with the greatest severity and hardship. In the case particularly of married taxpayers with families, whose incomes are small or moderate, a substantial part of the extra taxation now being levied is to be returned to the taxpayer alter the war in a Bost Office savings account. The maximum amount to be returned in this way to any one individual will be fitib.

The Budget has been called one of the simplest of the last hundred years, but in its combination of taxation ami compulsory saving—an admirable method of reconciling safeguards against inflation with limits on hardship to the individual —it is likely to be called also one of the most ingenious. Valuable possibilities appear, too, in the arrangement under which twenty per cent of the excess profits duty, which remains at 100 per cent, 'will lie returned to industry after the war. It may lie assumed that the intention here is that these funds should be applied after the war to such developments of industry as will work out with national benefit.

Tn its broad design, and in particular features ol' which compulsory saving is the most outstanding, Hie British Budget sets an example which might be followed with great advantage in this country. Allowing for all the differences that distinguish a country highly developed and industrialised from one at a relatively early stage of development and handicapped heavily by present and prospective restrictions on export trade, we arc far from having brought to a satisfactory adjustment the relative proportions of-our war ami other expenditure and we should be able to do more than we have done yet towards meeting the costs of the war directly out of current revenue. In these matters Britain has given a lead we should bi 1 proud to follow in the extent to which our national circumstances make that course practicable. The combination of taxation and compulsory saving is a device which obviously has strong claims to consideration in this country in association \vith other developments in war finance. <