Defence Bill Cut 46 Per Cent.

Greymouth Evening Star, 16 April 1947, Page 7

Defence Bill Cut 46 Per Cent.

Dealing with the estimates, Dr Dalton said that the proposed defence expenditure, including the Ministry of Supply’s military spending, represented a reduction of 46 per cent, on last year’s expenditure.

The estimated expenditure of the civil and revenue departments at £1,726,000,00 was £47,000,000 more than last year’s. The Government would spend £40,000,000 less for the hire of ships, £6,000,000 less for civil defence, and £89,000,000 less for UNRRA. The extra £29,000,000 was to be spent on education, and would cover the cost of raising the school-leaving age—a reform long promised and too long withheld. Dr Dalton said that the increase for housing and national health services, preliminary expenses, would be £25,000,000, for pensions £23,000,000, and for family allowances £4,000,000. He had been told that there were 200,000 more eligible babies than the actuaries allowed for. The Ministry of Food estimate was £50,000,000 more than last year’s expenditure, owing to cost-of-living subsidies, which would total £425,000,000, including £392,000,000 for subsidies on food prices, which would be £44.000,000 more than last year. The subsidies on utility clothing and footwear prices would total £33,000,000, against £19,000,000. Commenting on these subsidies, Dr Dalton- said: “We might seem to be towed along independent of our own decisions by rises in prices all over the world and also hitched to the out-of-date and generally discredited, cost-of-living index. The policy of subsidising the old index paid good dividends, but we mZt review it afresh. A new index will be brought into operation and I shall keep the old index steady and stable until it passes out of use in a few months.”

Earning Right to a Deficit Dr Dalton pointed out that the revenue represented 21s 7d for every

pound of Budget expenditure, but “if we are to balance the Budget over a series of years we must earn the right to a budget deficit in another year by recording a Budget surplus this year. Now the effect of taxation changes must be to fortify, rather than to weaken, the revenue for both this year and even more for future years.”

Dr Dalton continued that Government borrowing this year would be for replacement Of maturing debts or for new capital development. He expected to borrow £50,090,000 lor the National Coal Board, £200,000,000 for housing loans, and £90,000,000 for temporary houses. There would be large financial operations for the compensation of owners in industries and services being taken into public ownership. Referring to the cheap money policy. Dr Dalton said he expected to have public opinion increasingly behind him when it was realised that on the continuance of the maximum rate of 2| per cent, depended all hope of serious tax reliefs in the future. “There is no other way in which the Budget can be balanced,” he declared. Britain’s Problems

Dr Dalton said that no other country faced such a tough external problem as Britain—a strange ironical result of the war in which Britain bore the brunt without thought of cost and saved many others from defeat. He feared that the 1947 overseas deficit would be a good deal higher than the £400,000,000 in 1946 unless vigorous action were taken to reduce it. The hard currency deficit was likely to incre.ELe owing to the rise in prices, particularly in the dollar countries. Dr Dalton said the effect of the income tax concessions on a single man I would be that he would pay no tax until his earnings reached £2 12s a week. He would not pay the full standard rate until his earnings exceeded £5 10s a week. He was pre T pared to examine the whole question of motor taxation between now and the committee stage of the finance bill, subject to losing no motor taxation revenue.