Wairarapa Times-Age FRIDAY, JUNE 4, 1943. OUR FINANCIAL WAR LOAD.

Wairarapa Times-Age, 4 June 1943, Page 2

Wairarapa Times-Age FRIDAY, JUNE 4, 1943. OUR FINANCIAL WAR LOAD.

TX its leading details, the Budget laid before the House of Representatives last evening by the Minister of Finance (Mr Nash) was a calm and unsensational survey of the enormous war load the Dominion is carrying and must continue to carry. Mr Nash gave particulars of proposed war and civil expenditure for the current year which in the main are open to critical examination only from the standpoint of ensuring that the best possible value is obtained for money spent and that everything practicable is done to prevent waste.

With a war like the present on hand it is not a cause for complaint that an unprecedented drain is being imposed on our national resources. Every consideration of prudence and of regard for a full-powered and continuing war effort demands, however, that most provident use should be made of the resources that are and can be made available.

There will be a general feeling of relief, though hardly of surprise, that'no additional taxation is proposed for the time being. It may be noted, however, that the decision not to increase income tax rates for the current year appears to be to some extent contingent on adequate support of the war loan —the Third Liberty Loan of £3s,ooo,ooo—which opens next Tuesday. At all events the Finance Minister observed on this point:—

If during the month of June every one determines to place all his or her surplus into the War Loan, the sum required will not only be obtained but further taxation will be unnecessary. The effect of subscription to the loan, if made by all classes and groups of people, will have the same beneficial effect on stabilisation as if the same sum were raised by taxation. This is not an exaggeration. Provided the loan is bnilt up by a sufficiently wide call on available savings, even more may thus be done to limit inflation than would be done by collecting an equivalent amount in taxation.

So far as expenditure on objects other than the actual conduct of the war is concerned, the proposed outlay this year of £6,500,000 on national development works —£1,500,000 more than was similarly authorised last year—may appear to be in some degree open to question. It has to be remembered, however, that there are heavy arrears of work to be overtaken as far as that is practicable, notably in power development and housing.

General approval, it may be assumed, will be given to the proposed increases in Avar pensions, widows’ pensions and age and other benefits under the Social Security scheme. An increase in the hospital benefit from 6s to 9s a day will also be welcomed, though whether it will be considered to go far enough may be another question.

The commanding interest of the Budget, as has been suggested, is in the emphasis it sets on the magnitude of our tremendous war obligations, to which limits have yet to be set. That we should have spent to the end of last March a sum of £230,000,000 on the war—considerably more than double our total outlay on the 1914-18 war —is a state of affairs which in the comparatively re’cent past might well have been regarded as unbelievable.

The war expenditure of the Dominion in 1942-43 was £144,000,000 and the estimated war expenditure for the current year is £148,000,000. Taxation receipts last year reached the almost incredible total of £86,800,000, and of that amount 68 per cent was found by way of direct taxes. Even so, there was a net increase in the public debt during 1942-43 of £78,427,000, all but £4,519,000 of that sum being raised within the Dominion. It is sufficiently obvious that the problems arising out of our present level of national expenditure do not and will not relate only to the remaining period of the war.