Evening Post. WEDNESDAY, JULY 24, 1940. WORKING TO PAY

Evening Post, Volume CXXX, Issue 21, 24 July 1940, Page 8

Evening Post. WEDNESDAY, JULY 24, 1940. WORKING TO PAY

The Supplementary Budget presented by Sir Kingsley Wood adopts the same principles as the two War Budgets presented by the former Chancellor of the Exchequer. There is a change made in the purchase (or sales) tax to which objections have been voiced, but it is a change of form and weight only. Formerly it was proposed that people, as they spent, should contribute to the revenue. Now, it is proposed that they shall contribute nothing on the most urgent and essential purchases — farm machinery, certain medicines, and children's boots and clothing— and more on less essential spending. Apart from this the Supplementary Budget differs from Sir John Simon's Budget only in size and weight of expenditure and measures for meeting it. The colossal scale of the expenditure is difficult to realise. On the war alone for the full year it will amount to £2,800,000,000, about £7,500,000 for each day of the year. In the last four weeks it has been £57,000,000 weekly, or over £8,000,000 a day. Against this terrific war expenditure may be set the amount for civil expenditure, £700,000,000 —and this includes over £230,000,000 for service of the National Debt. New Zealand may take note that four-fifths is for war and one-fifth for other purposes.

Of the total of £3,500,000,000 it appears that taxation will contribute £1,500,000,000— though it is not clear what the new taxation will yield. In Sir John Simon's last Budget the taxation revenue was estimated at £1,234,000,000. But after paying this the people are asked to give still more by way of loan. Sir Kingsley Wood estimates the national income at £5,000,000,000 a year and the State needs £3,500,000,000 of this. Taking the nation as a whole, the Chancellor states, one-half of what they earned would go to the State and they could only spend the other half on themselves. For three and a half days of !the week the country would be working for the war effort, and the people could only consume the goods they produced in the other three and a half days.

It is this measure of possible consumption that regulates the Supplementary Budget, as it regulated the War Budgets of Sir John Simon. The taxation, supplemented by saving, is designed to take from the people all income above that required for the necessaries of life with a modest allowance for relaxation. Only in this way can the country avoid the competition of surplus income for the purchase of goods in short supply. It is this competition —otherwise inflation—-that the Chancellor, following the principles laid down by Sir John Simon, is endeavouring to prevent He expresses confidence that inflation will be avoided. Certainly the people who are prepared to bear such heavy burdens deserve to be saved from the miseries that inflation brings in its train. They are working hard— working to pay for the war—and making tremendous sacrifices. Financially, as well as in all other ways, the British nation is attaining new high levels in sacrifice, unselfishness, and cheerful endurance.