HOMELAND BUDGET

Greymouth Evening Star, 11 September 1931, Page 7

HOMELAND BUDGET

DEFICIT OF 741 MILLIONS

CHANCELLOR’S PROPOSALS

[BRITISH OFFICIAL WIRELESS.]

RUGBY, September 10. In the . Commons, Mr ’Snowden opened the Supplementary Budget, embodying the proposals of the National Government for dealing with the financial emergency. The speech lasted an hour and-a quarter.

By the proposals for economies and new taxation the estimated deficit for the present financial year ending next March, 74J millions has been changed into estimated surplus of U millions. The economies total seventy millions in a full year, and 22 millions in the present year. The Budget provides for raising an additional 39 millions this year and 80 millions in-- a full- -year, by additional taxation. ' The standard rate of income tax is raised by 6d to 5/- in £l, and there is an increase of ten per cent, in the amount payable as surtax on incomes over £2OOO. Relief for industry, roughly offsetting the increase in the standard rate, and which it is hoped will encourage replacement of old plant, is given by means of increases of existing allowances for depreciation. The personal allowance for married men is reduced from £225 to £l5O, and for single men, from £235 to £lOO, and allowances for children from £6O to £5O, for the first £5O, and to £4O for the second. These are the chief factors in determining the exceptions. The limit of allowances in respect of earned • income, however, is increased from one-sixth on the maximum of £250 to one-fifth on a maximum of £3OO. Under the provisions of the last Budget, the first £250 taxable income, pays at four-ninths standard rate. It is now provided that the tax be levied at half the standard rate only on the

first £175 taxable income. The changes in income tax are estimated to yield 29 millions this year, and 57A millions next year.’ Four arid a-half, millions this year, an*d ten millions next, are expected from the increase by a penny per pint tax on beer, and 2i millions and 4 millions respectively, from the increase of 8d per'pound on tobacco. An increase of 2d per gallon on oil gives 4 millions this year arid 7i millions in a full year. The scale of the entertainment tax is altered to yield a million this , year and 2£ next.

HOW DEFICIT AROSE. In giving the figures of the threatened deficit for the current year Mr Snowden reminded the House of the grave warning he had given in February and again on, the eve of the adjournment in July regarding the budgetary position. The trade depression reduced the yield of taxes and at the same time increased national expenditure and national income had been failing. While seven years ago, the Unemployment Fund was paying its way and paying off the debt, this year it was costing the. Exchequer about 100 millions. Mr Snowden explained that the Government had decided that borrowing for the unemployment and road funds must cease, though this involved an addition of 34 millions to the votes for the year. He put the fall in revenue at 29 millions, 25 millions of inland revenue and 4 millions of customs and excise. The suspense of the war debt payment under the Hoover plan accounted for 30 millions. Supplementary estimates of a million brought the total to 94 millions, less 193 millions saved on the interest and sinking fund of the American debt, making the total deficit this year 743 millions. Mr Snowden estimated the deficit from next April, if no changes were made in the present provisions for revenue and expenditure at 170 millions, therefore large economies were essential, so were the increases in taxation. The country must face up to the position. The proposals for economy were given in a white, paper and Mr Snowden did not go into details, but he emphasised that nine-tenths of the items were proposed, adopted and approved by the late Labour Cabinet, before its resignation. The economies, .together with the decision to reduce the sinking fund from 50 millions to 323 inillions this year, and next, left the Chancellor with a net deficit for the. current year of 39 millions, ’to be provided for by the additional tax as already detailed. The Government’s

ECONOMY PROPOSALS set out in the White Paper, secure reductions in expenditure estimated at 22 millions in the current financial year and a saving of £70,032,000 in a full year. The largest saving is effected under the heading of unemployment insurance. The reduction of expenditure! from the unemployment fund amounts in a full year to £25,800,000, and the income of the fund is supplemented by increases in the contributions, from employers and workmen aggregating 10 millions. This result, is mainly achieved by the reduction of the weekly benefit rates, except that for dependent children, by ten per cent. The benefit for an unemployed single man'is thus reduced from 17/- to 15/weekly, corresponding cuts being made in other rates. The saving from this reduction is £12,800,000. The increase in weekly contributions by employers and employed, and the Exchequer to 10 per cent, with the corresponding increases in other classes of contributors, and limitations of benefit to 26 weeks, followed by transfer to a provisional class, wjll produce ten millions, The removal of anomalies effect 15 millions economy. / The saving to the Exchequer by all these, thus totals £35,800,000. /Other economies include the salaries of Ministers, Members of Parliament, civil servants, members of the defence services, over 4£ million. Regarding salary reductions, Ministerial salaries receive reductions ranging from 20 per cent, in the cases of £5OOO and over, to 10 per cent, in cases under £2OOO. Allowances to Members of the Commons will be reduced by 10 per cent.

Regarding the Defence services the economy totals 5 millions, exclusive of savings.on pay and pensions. It is recognised this will be difficult in view of the reductions made during the recent year.

Regarding education, 15 per cent, cut on teachers’ salaries is imposed, which accounts for neraiy 6 millions, of the total saving of £10,300,000. The economies in pay, etc., take effect on October 1.

Note: — ' Owing to bad atmospherics several 'of the economies were too doubtful to forward for publication. Press Assn.- ..... RESOLUTIONS UNOPPOSED (Rec. September 11, 2 p.m.) LONDON, September 10. The beer, tobacco, petrol and other resolutions were agreed to without a division and the House rose. Budget cuts for the full year 193233 are as follow: — Ministers, Judges, Civil servants and defence force, salaries* £4,534,000 Other defence services £50,000 Education £10,300,000 Universities ... - £150,000 Health services - - - £1,250,000 Police £500,000 Agriculture .... £655,000 Forestry .... £478,000 Empire Marketing Board £250,000 Unemployment Grants - £500,000 Unemployment Insurance £25,800,000 (with increase of £10,000,000 in contributions). Road Fund - - - £7,865,000 Miscellaneous - - - £2,500,000 Total £70,032,000

MR SNOWDEN’S SWAN-SONG. RAPTUROUS SCENES IN COMMONS. LONDON, September 10. Introducing the Budget, Mr Snowden confessed that it was the most disagreeable task of his life. This was the most vital of the after-War budgets, necessitated by the fact that the nation for a considerable time was living beyond its means. Mr Snowden’s speech will take a place among Westminster’s historic orationsHis voice quivered and his hand trembled as he realised it was his farewell after a quarter of a century’s Parliamentary career.

He sat down amid amazing scenes. The galleryites, abandoning traditional decorum, clapped widly. Con servative millionaires and representatives of noble families crcwded around him; indeed every occupant of the Government Benches sprang on to their seats, waved handkerchiefs, and tumultuously cheered a Socialist who for every minute of the past half-hour had been taking toll of their fortunes. The Labour members opppsite were hypnotised into silence.

ADVERSE TRADE BALANCE.

LONDON, September 10.

The "Daily Mail” says: Sir Robert Horne estimates the adverse trade balance at seventy-five millions sterling, the prospect of which is causing grave anxiety.

MR. HENDERSON V. TARIFFS

(Rec. September 11, 8 a.m.)

LONDON, September 10.

At the T.U.C. Congress. Mr. Henderson said that his idea of equality of sacrifice differed from that of some of his old colleagues. He had not thought it right to begin with the poorest of the poor, and therefore had said “Let’s begin at the other end.” He also suggested that a conversion loan should make a very fortunate programme. He paid a tribute to the glorious example of Australia. He said he was as strong freetrader .as anyone, but if faced with a large cut in unemployment payments, or twenty per cent, revenue tariff, as an emergency expedient wherefrom the- revenue would be assigned for the unemployment, he was going to try the value of that experiment. DINNER FOR PREMIER. RUGBY, September 9. Arrangements are being made for a complimentary dinner of a non-poli-tical character, to be given by Scots to Mr. MacDonald in London on October 12, his birthday. Many Scottish Associations in London are represented on the organising committee, which has the support of Scots reminent in literature, art, law and commerce. Lord Elgin will preside.