The Evening Star. WEDNESDAY, AUGUST 16, 1922. THE BUDGET

Evening Star, Issue 18048, 16 August 1922, Page 6

The Evening Star. WEDNESDAY, AUGUST 16, 1922. THE BUDGET

; Tm outstanding feature of a very lengthy f Budget is that" practically no easing of taxation is proposed. The Government set ' up a special committee of experts, who • found that' the country was being taxed ! beyond its strength. Mr Massey evidently does not think so. He budgets fox an expenditure in the current year very little below that of last year, and has to get the revenue to meet it. Very, few people will be surprised at the Government’s decision to go on much in the same old style, budgeting for amounts which loudly proclaim themselves too big.' Beginning with the last pre-war year, the expenditure has mounted as f0110w5;—£11,825,864, £12,379,800, £12,493,107, £14,058,770, £15,120,287, £18,675,593, £25,781,524, £28,068,730, £23,466,858; and this year Mr Massey estimates to spend £27,938,215 (which may possibly be swelled later by the Supplementary Estimates). Ho is content again to face a deficit, as he estimates for a revenue of £26,250,000. The actual deficit last year was £339,851; • the prospective deficit at the end of this year is" £1,688,215. This it is proposed to make up out of the accumulated: surpluses of more prosperous past years, the amount of these remaining in hand at the beginning of this.financial year being £7,531,367. It is only, in this matter of budgeting for a deficit in the meantime that Mr Massey’s action coincides with the. ad vim

given by the Taxation Committee; for the rest their report might never have been framed so far as its influence on the Budget is concerned, doubtless because a considerable part of the year had run its course before either the report was available or the Budget hacll been framed. Nevertheless, it is disappointing to find the labors and findings of the committee practically ignored-, for what concessions the tax gatherer is to make are really negligible. Mr Massey has undoubtedly made efforts to reduce the expenditure. To a limitedl extent he has been successful. If ho keeps within his estimates the current year will mark its zenith having passed, and that a)t least is something to bo thankful for. Though in certain directions he has effected savings, in other directions there have been increases, which he claims to be unavoidable, and the most that can be .said is that the increases have not altogether nullified the effects of the economies practised. Chief among the unavoidable increases ia the increase in the amount required to pay interest and sinking fund—from £8,442,278 last year to £8,983,104 this year. Thus even to keep a high expenditure stationary Mr Massey bad to effect economies of over half a million. He has done more than that. The money Parliament will bo asked) to vote for departmental expenditure this year is nearly £890,000 less than was spent by the departments last year. This is indicative of retrenchment, but it is not of the root and branch kind which expert advice has pressed) as necessary. However, Mr Massey claims that by the end of the two-year period since April 1, 1921,' when he began his retrenchment policy, he will have effected economies totalling £2,352,865, though he admits that it ia difficult to express them ia precise figures. But even reductions such as are here indicated do not bring Budgets back to anything like the same figure as before the war. To do eo altogether would ho beyond any Treasurer's power, since annual charges directly due to the war have increased by £6,380,352, and another million and represents in various ways tlie State’s subsidies towards compensation for the increased cost of living. It is in these and kindred items that the Finance Minister evidently spies) a sphere for the axe. Perhaps the most significant paragraph in the Statement is the discussion of the capacity of the State to meet the charges for “social services,” which are gradually overweighting the ordinary revenue. These have more than trebled since 1914, A change of policy to make, these, especially pensions, resume their due proportion to the total expenditure is forecasted;

That is about alf that this Budget indulges in so far as prospective policy is concerned, and it is fair to assume,' from reference to the Estimates, that legislation to give effect to a changed policy will await next Parliament. The spoonfeeding habit of mind cannot be sloughed at a moment’s notice. As to policy changes in the big commercial departments of State, this Budget is uninspiring. The difficulties of the railways, which managed to pay 1.07 per cent, on their capital cost, are set forth again in rather stale phrases, though it is reassuring to see that the. old! policy of higher and yet higher fares and freights cannot be continued. It has burnt itself out. There is no hint of reductions, however, just as there is an unexpected 1 and unwelcome silence concerning half-hoped-for cheaper postage. That the Government pays lip service to the principle that it is bad to kill the goose that lays the golden egg is here and there discernible, but it still hesitates to act on it. In the last couple of years the yields iu income tax have been falling at the rate of, roughly, two millions a year, until the £4,100,000 Mr Massey expects it to yield this year is just half what it produced the year before last. “The decrease is duo to the largo shrinkage in the incomes of taxpayers generally.” is the naive explanation. A body of experts has said that incomes aro small because trade is being strangled by over-taxation, but the Government makes practically no move to lessen it. Thus wo arrive at our starting point. There is no getting away from it. Our financial policy and administration has got into a deep rut. It professes to want to get out. It rigorously stays in.