BY BORROWING.

Auckland Star, Volume LXIV, Issue 96, 26 April 1933, Page 7

BY BORROWING.

BALANCE BUDGET. BRITAIN'S DEFICIT. U.S. War Debt Payment Upsets Equilibrium. £32,000,000 SHORTAGE. (United P.A.-Electrie Telegraph—Copyright) (Received 1 p.m.) LONDON, April 25. The House of Commons lengthily cheered the Budget presented by the Chancellor of the Exchequer, Mr. Neville Chamberlain, which, if not spectacular, was' certainly definite testimony of the nation's grimly successful struggle to maintain preeminence in financial stability. The lobbies accepted the Budget as more or less inevitable, though some of the younger members were disappointed at being refused an unbalanced Budget with a reduction of the income tax. The most impressive part of- Mr. Chamberlain's speech was when he reluctantly demolished, as impracticable, the idea of budgetting for three years and instantly cutting 1/ off the income tax for the psychological effect on the country's spirit, even at the risk of not balancing the Budget and gambling on trade recovery, which was now at the stage of materialising. "But what if the psychological response is not what was expected and confidence falters, or even withers before the balance of the Budget is restored?" he asked.

One of the main points in the Budget speech was that the year's deficit of £32,000,000 will be met by borrowing. In the face of the present strain this is as satisfying as surpluses in the more prosperous times. = • ■ Excluding the American war debt payment, there is a surplus of £11,250,000 in current revenue over current expenditure. . ~ ' Beer Revenue's Heavy Drop. The beer revenue is £6,000,000 below the estimate and is the lowest yield for 13 years. There were 12,000 persons liable for surtax in 1931, who were not liable in 1932. The Irish Free State duties yielded £2,500,000, and ttie. Ottawa duties £1,750,000. He did not propose to provide either for debt payment to America or for debt receipts from other countries. The year's saving in interest would be £22,000,000, and the real saving to-day, compared with two years ago, £113,000,000. Big drops in personal income w,ere shown in the surtax yielded, which was £11,000,000 below the estimate. Income tax was £8,000,000 below. The Exchange Equalisation Fund had stood the test of experience in keeping exchange steady. The estimated total revenue for 1933-34 on the present basis of taxation was £712,750,000. The Chancellor stated that he had decided before America went off the gold standard that t%t would be necessary to increase the Exchange Equalisation Fund. He realised that America's action was in no way related to conversations with other Countries, but was prompted by purely internal considerations. Increase in Heavy Motor Fees. It was proposed to renew the hops duty for four years, and to make a substantial increase in the taxation of heavy road vehicles from January- 1 next. A penny per gallon on fuel gas and lubricating oils would be added. " The Chancellor said he was making Bo provision for redemption of debt. The beer duty would be reduced to 24/ per barrel, effecting a reduction in the retail price of one penny per pint with the quality improved. He had been advised to reduce taxes even at the risk of not balancing the Budget, though this seemed to him not in the best interest of the country. One shilling off the income tax would cost £50,000,000. The income tax rate will not be changed, but the Chancellor said he would restore the half-yearly payments. "The United States share our desire for infoi-nnfinnal ro-nneration, and