FINANCIAL STATEMENT.

Bruce Herald, Volume LI, Issue 67, 30 August 1915, Page 4

FINANCIAL STATEMENT.

INCREASED TAXATION. GRADUATED LAND TAX INCREASED 50 PER CENT. POST, TELEGRAPH AND RAILWAY RATES INCREASED. IMPOST ON LIQUOR AND MOTORS. • The Financial Statement was presented by Sir Joseph Ward (Minister of Finance) in Committee of Supply on Thursday night. We abbreviate the Statement, which comprises 33 foolscap pages:— It has become my duty to lay before hon. members a statement of the present condition of the country's finances, together with an explanation of the arrangements made by the Government to meet the expenditure of the Dominion during a period which may be described as the most momentous in its history. Perhaps I may be permitted at the outset to remind hon. members on both sides of the House that the National Cabinet was formed for the purpose of advancing the Dominion. When we agreed that this step was necessary in the exceptional circumstances in which we found ourselves, we all must have recognised that for a time party controversies would have to be set aside in order that we might uuite in an earnest effort to achieve the great objects we had in view. This is the spirit in which the proposals are framed, and I am sure it is the spirit in which you will consider them.

REVENUE. The revenue for the year 1914-1915 was estimated at £12,488,370, and the total collections amounted to £12,443,525, or £44,545 less than the estimate. EXPENDITURE. The expenditure for the year 19141915 was estimated at £12,564,551, and the actual expenditure amounted to £12,379,803, or £184,748 less than the estimate. Result of year's operations: Balance brought forward, April 1, 1914, £426,905; receipts during year, revenue £12,443,525, other receipts £8420 —total, £12,451,945. Expenditure during year: Appropriations, £12,379,803; excess of receipts over expenditure, £72,142; transfer' to Public Works Fund, £350,000; balance March 31, 1915, £149,047. THE PUBLIC DEBT. The gross public debt at the eud of the financial year amounted to £100,059,910, and the net debt to £96,644,455. STATEMENT OF WAR EXPENDITURE. During the year the war expenditure brought to account amounted to £2,171,835, while the liabilities at that date were estimated at £596,000 in addition. PUBLIC WORKS LOAN. On April 1 last there was a cash balance of £695,762 available for Public Works, and the balance of loan money to be raised under then existing authority amounted to £1,475,000, making a total of £2,170,762 with which to commence tne current year. Amounts of advances paid over during the year ended, say, March 1, 1915: Advances to settlers, £1,136,475; advances to workers, £313,025; advances to local authorities, £336,295; —total, £1,785,795. The commitments as at March 31, 1915, were as follows: —Advances to settlers, £267,157; advances to workers, £79,640; advances to local authorities, £335,625;—t0ta1, £682,422. LAND AND INCOME TAX DEPARTMENT. The net receipts for the past year in this department amounted to £1,339,959, made up of land tax £799,641, income tax £540,318, and compared with the figures of last year show an increase of £18,236. L estimate the receipts for 1915-1916 as follows: —Land tax, £886,000; income tax, £1,190,000. It is proposed to increase the laud tax by the addition of 50 per cent, to the present rates of graduated tax on country lands. The increase in the income tax will be obtained to an extension of the existing schedule of graduated rates from Is 4d to 2s, which rate will be reached at £5600, and the imposition of a super tax of 33 1-3 per cent, to the schedule rates. This will give a rate varying from 8d on the lower taxable incomes to 2s 8d on the higher ones. In view of the fact that many business people whose incomes are taxed I are also paying land tax, and in many cases graduated land tax, this is considered to be a high enough rate to impose, as in m&ny instances their combined taxes will be equivalent to a tax of over 5s in the £1 of income. POST AND TELEGRAPH CHARGES. 1 propose to make some small additions to the charges leviable for post-! ages and telegrams, and although it is anticipated that the amount realiseable will amount to £380,000, yet owing to the vast number of pieces of mail matter and telegrams handled it is estimated a very small increase in the minimum charges to which they are subject will yield the sum indicated. PROPOSED INCREASES OF REVENUE. Though the demands are large, it is well within the capacity of the country to provide the necessary ways and means to meet them, and it must not be forgotten that every country engaged in the present war has to face huge deficits and to shoulder burdens of an unprecedented nature. In this respect New Zealand is in a similar position to other parts of the British Empire. With the object of providing for the deficit and for the interest and sinking fund required for the final payment of all war expenditure it is necessary that some adjustments in taxation and in the rates for public services should be authorised by Parliament. The financial position created by the war is one calling for prudent and vigorous treatment, and must be faced by the Government and the people with inflexible coutage. I cannot 1 too strongly impress upon every section qf tKe community

the necessity for care and economy, especially in the matter of luxuries, until the great war now raging is over. REDUCTION OF EXEMPTION. It is not considered advisable to attempt to obtain any increased revenue by lowering the exemption, as in addition to the fact that the additional expenditure that would be incurred would not be warranted by the result, the class that would be affected by N such a change lis already paying its taxation through | the Customs and is sufficiently burdened [ by that and by the increased cost of living. It is not proposed to increase the tax on mortgages. DUTIES ON LUXURIES. To make up the shortage of revenue due to war conditions and to strengthen our finances it will be necessary to impose duties upon some articles commonly regarded as luxuries. An all-round duty of 10 per cent, ad valorem on 1 motor cars and 50 per cent, additional on cars made in countries which are now or may be enemy countries will be imposed. Bicyclos will be reduced to the same rate as motor cars, with the samo conditions as regards enemy countries. A duty of 4d per gallon will be placed on motor spirits and kerosene. Tyres are to remain free from British and neutral countries, with 50 per cent, ad valorem tax on tyres from enemy countries. Excise beer will be taxed by a new method, which, while not increasing the price, will tend for the brewing of lighter ales. Spirits will be increased to 17s per proof gallon. An excise duty of Id per gallon is to be put on all nonalcoholic beverages. STAMP INCREASES. Increases in the Stamp Department are: —Bank-note duty to £1 per cent, bank cheques to 2d, stamps for receipts for £2 and upwards 2d. The exemption from death duty is to bo lowered from £20,000 to £SOOO for each beneficiary, and a duty of 2 per cent, over this amount will be imposed. A stamp duty of 5s per cent, will be imposed on mortgages, and a new stamp duty on all subsales of property at the same rate as transfer or conveyance of property. As a war-tax it is proposed to impose a duty on totalisator dividends of 24 per cent. POST AND TELEGRAPH. The initial rate on telegrams is to be increased by 2d; the initial charge for bureau communications within a radius of 25 miles will be Cd in all cases. A special w- -tax of M is to be levied on all articles posted except newspapers. RAILWAY INCREASES. Passenger rates are to be raised by 8 1-3 per cent, and goods (excepting timber) by 10 per cent. IN CONCLUSION. The Minister of Finance concluding his Statement says:—"ln adjusting the taxation and the rates for various public- services my object has been to do so without imposing additional charges on the cost of living. I have refrained from reducing the exemption for in-come-tax, which still remains at £3OO, and no tax is payable upon earnings of the people below that amount per annum. Ou the other hand, I propose to alter the income tax and other taxes so that those who have been making large profits due chiefly to the conditions produced by the war shall pay a considerable portion of their earnings to the country. I summarise the proposed increases in taxation and rates as follows:—Land and income tax, £619,000; post and telegraph, £380,000; railways, £300,000; Customs, £285,000; totalisator dividends, £75,000; beer duty, £;j>s,ooo; bank cheques, £50,000; land mortgages, ; £48,000; receipts, £40,000; conveyances, transfers, etc., £40,000; succession duties, £30,000; non-alcoholic beverages, £20,000; bank-notes, £20,000; subsales of land, £10,000; total, £2,032,600."

" In conclusion, there is no portion of the civilised work! which is not to a greater or less extent feeling the effects of the war. The people of this Dominion, in common with their fellowcountrymen in other parts of the Empire, are offering their sons ungrudgingly in order that the Empire's cause may be successfully vindicated, and no tribute that this House could offer to the memory of those men who have given their lives at their country's call would be too great. Nor is it possible to thank sufficiently those men and women who have sacrificed their money and their comfort in order that they may assist in succouring the wounded and in other ways have furthered the great cause which is to all of us a privileged trust and a sacred duty. Let us hope that before I again have to submit a review of the finances of the Dominion to the House and to the country this devastating war will be a thing of the past, and that the Empire will have merged triumphantly from au ordeal which, however much we may deplore its frightful incidents, has still had the effect of welding together more closely the component parts of the Empire and has taught it afresh that in unity lies its great strength. The critical times through which we are passing have caused a wave of patriotic enthusiasm to sweep through the Empire, the effect of which must inevitably make for liberty and justice and for the righteousness that exalteth a nation.''