THE BUDGET

Evening Star, Issue 15892, 26 August 1915, Page 4

THE BUDGET

COMING DOWN TO-NIGHT. SALIENT FEATURES, WAR TAXATION OUTLINED. INCREASED DUTIES. (From Our Parliamentary Reporter.] WELLINGTON, August 26. The National Government’s first Budget will be presented to Parliament to-night by Sir Joseph Ward, Minister of Finance. Although the document will hardly be equal to the British Chancellor’s War Budget, which Was characterised as “the most tremendous instrument in the fiscal history of Great Britain,” it will certainly prove to he the most unique and interesting in the history of the New Zealand Parliament. It will be unique in character, and strikingly radical in import, especially as regards its proof of the effective influence of the wair, even on a country which of all the scattered British communities has suffered least from the catastrophe and conflict ; and. also in respect of the need for special measures to counterbalance those disturbing causes, and to help in serving the tremendous necessities of the Empire. The Budget, in short, will indicate that, notwithstanding the wonderful prosperity and good fortune of New Zealand, all classes will bo called upon to make a financial sacrifice, more or less proportional, to provide and maintain this country’s effective co-operation, against the enemies of freedom. The sting of sacrifice will be softened, doubtless, by the fact, that its extent has been announced on the very day that the people have learned with pride and gratification that our men were the first to reach the highest height so far. gained in Gallipoli. Theirs is a great sacrifice. The most importaiit point will bo a statement as to the Government’s proposals to impose special taxation for the purposes of war and for balancing the financial deficit occasioned by the European conflict. These proposals will be outlined in general terms, the details of taxation to bo included in the necessary legislation Which will he introduced within a week; It is necessary, I understand, to raise by special taraiion art additional two millions sterling revenue to meet New Zealand’s abnormal expenditure in connection with the war, and also to make provision for the sharp decline in revenue owing principally to the prolonged shortage of shipping for the import trade. The deficit in the estimated revenue for the last financial year was about £BOO,OOO approximately. In addition to the' deciease in revenue has been an abnormal in(reaso in expenditure, with no near prospect of an end to the demand for .money for the requirements of the war. The new pension scheme to provide adequate allowance for the gallant men maimed by the wav and benefit for the dependents of those who have made the greatest sacrifice, the total of these heroes being, one regrets to say, dose on 900, alone represents an increase of £900,000 per annum. In expenditure tho incident of war taxation will be comprehensive, although distributed in a manner calculated to tax the people in proportion to their financial, resources. To put it in a homely Way, the fat man will be Whacked more severely than the lean man. Tire War has been financially profitable to some classes, and these require no sympathy; they ought to pay for their good, fortune while so many folk long for the stalwart lads who will return no more. SOURCES OF WAR REVENUE. Tlie main sources of war revenue by special taxation will be these : Land and Income Graduated Land Tax, which will, I understand, he fairly substantially increased on the graduated scale. It will probably bo found that in respect to the highest incomes the in.preaso will represent 25 per cent., approximalely. As regards land taxation, the details are not ascertainable, but tho increase will probably be more than a penny in the £ additional. The present exemptions will, as previously indicated, stand. Postage will likely bear a special tax of a tolerable extent. I opine that it will represent a 50 per cent. 1 increase on present rates. Tim telegraphic charges will' probably be increased, as the State’s loss as regards telegrams as almost notoriously heavy. The Stamp Department is almost sure to be giveil an opportunity to collect more revenue for war purposes. Banking institutions will be deemed, it is understood, quite able to contribute more in respect of cheques and notes. The total isator, which is an absolute luxury, will gain further attention, although racing clubs are likely to escape a further tax upon their incomes. Tins special sporting tax will be imposed, I believe, on totalisator dividends, and possibly people who back a winner will nob resent a substantial deduction from their hardly-gained profits. Ah effort will be made to tax war profits, but the method of this question is still a thing to guess about. I do hot know, but possibly fortunate merchants and producers will have to pav more for railway transport, and it will*be a good thing, too, it these taxpayers are prevented from collecting the tax and more from the people. Motor cars may become a little more costly to those who can afford to make their lejsure a race with time. As regards special taxation through tlie Customs, the necessaries of life will not bo further taxed. Those apprehehenvo merchants who withdrew tobacco and tea frantically from bond miTvfc have spared themselves any anxiety. Neither tea nor tobacco will be included in. the taxation proposals. Beef, spirits, and lugh-dass wines will secure attention to a l'casOTabie degree. It is hot expected that the result of the enhanced beet " J * lncleßfio Gw price of a pot of It may be necessary for us all to be content this year with simple, inexrfen.Sl f ve !lo hdays. There is a good prospect of excursion fares, bn railways being revised, if not eliminated altogether. There may he other sources of special revenue, but the foregoihg is enough to no bn with. fa Finance. As regards the ordinary' finance of the Dominion, the Budget Will contain niaiiy exceptionally interesting features, and much illumi’nalliig information indicative of the resources of the country-. During the War period, notwithstanding the disturhhig influences of the war, which were felt for a fconsiderable portion Of the financial year Undlr revietv, revenue and trade were almost amazingly buoyant. Exports for example, i&erea&a heftiarkabiy, their total value being £26,000,000, as” against £25,000,000. Imports Were about thS same, the difference being duo largely to ike '■dearth, of shipping. Though the revenue fell short of the estimate by a-con-siderable sum, the actual revenue exceeded tire expenditure by about £400,000, Which ratist be considered highly satisfactory. The sum of £550,000 was transferred from

the Consolidated Fund to the Public Works 1 Account, which was in a very satisfactory condition at the end of the financial year (March 51), The transfer to public-works the previous year was £675,00$ t PUBLIC WORKS: TWO MILLION ■ LOAN. . A public' works loan of £2,000,000 will be raised in New Zealand at 4i per cent. Authority for an additional million Of Treasury bills will also be sought. indebtedness and interest. The necessities of the War have very substantially increased the gross Public Debt of the Dominion. The total last year was £99,750,000, while the net debt amounted to a little over £91,600,000. The country’s indebtedness since the outbreak of the war has already been increased by over £12,000,000, which means a noteworthy increase in the ■ annual charges for interest and sinking fund.' The expenditure in .this direction last year was no less than £3,071,448. The increase this year will he very substantial. 1 STATE ADVANCES. Notwitlistanding the heavy demand upon the State’s financial resources last year, the Government were able to maintain a helpful policy as regards advances to settlers, workers, and local bodies. The total advances amounted to £1,787,000. The highest outlay was in the first month of the war. REVENUE-EARNING DEPARTMENTS. Tlie Railways and Customs Departments experienced a shrinkage in revenue directly due to the influences of the war in the Dominion’s trade. Tile Savings Bank and other State departments had a very satisfactory year. There will be a considerable increase in the railway rates. COST OE LIVING AND EXPLOITATION. In respect to new legislation, the most interesting reference in the Budget will concern the bid problem of the cost of living. 1 It is the intention of the Government to introduce legislation dealing With the high cost of living, but it Is unlikely that proposal will secure the desired remedy. A Bill will be introduced later on hiaking provision for the prevention ol extortionate profits.