SOVIET CUT IN DEFENCE VOTE

Press, Volume LXXXIX, Issue 27112, 7 August 1953, Page 9

SOVIET CUT IN DEFENCE VOTE

Malenkov’s First

Budget

(N.Z. Press Association—Copyright) (Rec. 8 p.m.) LONDON, August 5. Soviet deputies meeting in the Grand Kremlin Palace in Moscow will begin discussions today on the first Malenkov Budget which cuts arms expenditure by £321,000,000 compared with last year.

Expert observers in the West believe defence figures presented to the Supreme Soviet represent only a proportion of the total expenditure for military purposes.

They claim that there are many concealed items in the Budget which, in fact represent direct or indirect military expenditure.

The Budget also announced substantial tax relief to collective farmers, who have suffered as a result of lower prices for their products through cuts in State-controlled retail prices.

The meeting last night was a joint session of the two chambers which comprise the Supreme Soviet—the Chamber of the Soviet Union and the Chamber of the Soviet of Nationalities.

Each chamber, from today, will meet separately to hear speeches on the Budget and the national economy.

Finally the two Chambers will again meet in joint session to adopt the Budget and to ratify the decrees issued by the Presidium of the Supreme Soviet.

It is this last item which observers are awaiting because they believe it will hold a clue to the fate of Lavrenty Beria.

The decrees will almost certainly include the one which dismissed Beria, and ratification could be made the occasion for an anti-Beria demonstration by Soviet deputies. The Finance Minister (Mr Zverev) proposed a new law to lower by about 43 per cent, the taxes received from collective farmers and others engaged in agriculture. The law would also provide for a further cut in taxes in subsequent years. Under the draft law the level of agricultural taxation in 1954 would be two and a half times lower than in 1952; he The agricultural tax reforms would compensate the farm population for reduced incomes from the sale of products resulting from the retail price cuts in recent years. In addition to a substantial cut in the taxes on farmers the new tax law would change the system of collecting this revenue. Mr Zverev said the proposed tax would reduce State revenue from this source by £239,000,000. Scale of Taxes

Under it, peasants in the western area of the Ukraine and Byelorussia and in the Baltic States would pay the lowest taxes, averaging three to five roubles for each one-hundredtth of a hectare of land, compared with eight to 12 roubles for most of Russia, the eastern Ukraine and other areas of the Soviet Union. The highest taxes are levied in Central Asia, where the irrigated farm plots of Uzbekistan and Tadjikistan are taxed at 22 roubles for each hundredth of a hectare. Mr Zverev announced that the Budget surplus for 1952 amounted to £3,348,000,000, compared with £2,436,000,000 the previous year. Capital investments in the national economy this year would amount to £13,936,000,000, £9,463,000,000 earmarked from the Budget for this. Mr Zverev said that £3,562,000,000 would be spent on agriculture. The Minister announced that the Government had’decided to cancel all agricultural arrears of past years. However, members of collective farms who have not worked the prescribed nuifiber of days, will have to pay the tax arrears plus 50 joer cent. Revenue provided for in this year’s Budget includes £21,464,000,000 in turnover tax (a form of sales tax), which is a drop of nearly £1,785,000.000; £9,151,000,000 from the State industries; £4,116,000,000 from direct taxation which is £116,000,000 less than last year. Proposing the defence expenditure, Mr Zverev said that the Soviet Union, while conducting a policy of peace and friendship among, nations, took measures of defence against the enemies of peace. This year’s defence appropriations would secure adequate equipment for the armed forces of the Soviet Union and would substantially improve the nation’s defence capacity. Mr Zverev, who spoke for an hour, said the 1953 Budget would further strengthen the might of the Soviet Union in carrying out its big programme of economic and cultural construction and raising the living standards of the Soviet people. Mr Malenkov Attends Mr Malenkov, surrounded by six of Russia’s top leaders, today attended the opening session. He was cheered by the 600 deputies as he entered the Hall of the Soviet Union, which is the first of the Supreme Soviet’s two Houses. With him on the raised dais were Mr Kaganovitch, Mr Kruschev, Marshal Voroshilov, Mr Molotov, Mr Saburov, and Mr Pervukhin.

Mr kruschev sat on Mr Malenkov’s right and Marshal Voroshilov on his left.