The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. WEDNESDAY, APRIL 13, 1927. A GLOOMY BUDGET.

Auckland Star, Volume LVIII, Issue 87, 13 April 1927, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

WEDNESDAY, APRIL 13, 1927. A GLOOMY BUDGET.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distanoe, And the good that toe can do.

The numerous forecasts by Mr. Churchill's Budget have prepared the general public for practically everything that the Chancellor of the Exchequer told the House of Commons on Monday. Xot even the most confirmed optimist can regard the financial prospects of the country as cheerful and inspiring. Following on a shortage of £3G,000,000 for the previous year, a prospective deficit of over .€2],000,000 is now admitted; and as Mr. Churchill ieels bound to pay off some part of the previous deficit, he will need to find something like £40,000.000 of additional revenue to balance his accounts. Rarely, if ever, in our modern Parliamentary history, has the House of Commons been compelled to listen to such a financial statement, and the best that can be said for Mr. Churchill is that under these very trying circumstances he acquitted himself with characteristic resourcefulness, self-possession and courage. It was easy for the Chancellor of the Exchequer to explain to the House how difficult it has been for the country's revenue to keep pace with public expenditure. The estimate of £32,000,000 loss on account of the general strike is probably quite moderate; and Mr. Churchill s critics <lid not help matters bv attributing to the (iovernment some share of responsibility for this calamitous industrial conflict. Mr. Churchill apparently made an impressive appeal to the House in regard to the heavy payments on account of Britain's debt to America; and his determination not on any pretext to confiscate any portion of the sinking fund, no doubt has the sympathetic support of Parliament and the country. The weakest part of his speech was clearly his attempt to defend himself and Government against the charge of departmental extravagance, though he has, in fact, good grounds for his assertion that to wipe out the deficit by a cut of £40,000,000 in the national expenditure would cause a financial convulsion into which no (iovernment would dare to plunge the nation. But the most important part of a Budget is its constructive side and here Mr. Churchill has had to face a task of extreme delicacy and complexity. In the present depressed condition of the country's trade and industry, no great increase in revenue can be expected from the sources of supply already laid under contribution. Mr. Churchill proposes to levy import duties (with an Imperial preference rebate) on motor tyres, to increase the duties on matches and tobacco and to supply his immediate needs in part by anticipating revenue from direct taxes to the extent of £20,000,000, in part by utilising the Road Fund reserve of £12,000,000. In this way he believes that he can increase the country's revenue for the coining year by £38,000,000, which would balance his Budget and leave him with a nominal surplus of over £16,000,000. If these expedients fail, Mr. Churchill told the ltuuse that he proposes to increase the tax on sugar and to raise the income tax. It is probably a mistake in tactics to foreshadow these measures. For indirect taxation of any kind is deservedly unpopular and the outcry of the wealthier classes against a heavy income tax has deafened and bewildered many a Chancellor of the Exchequer during the past half century. But Mr. Churchill at least has the courage of his convictions, and though his Budget is not likely to satisfy anyone, and it certainly does draw a depressing picture of the country's position, the Chancellor ot' the Exchequer can claim that his financial statement is quite as ingenious and effective .-s the unpropitious circumstances will permit.