The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” GISHORNE, WEDNESDAY, APRIL 9, 1941. THE FINANCIAL FRONT

Gisborne Herald, Volume LXVIII, Issue 20526, 9 April 1941, Page 6

The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” GISHORNE, WEDNESDAY, APRIL 9, 1941. THE FINANCIAL FRONT

Following the sensational developments in the war during the weekend a blanket of fog appears to have settled over the operations on the main fronts. So far as the Balkans are concerned it is likely that some little time will elapse before the present obscurity is removed. The various armies have yet to take up their positions and to determine what ground they will seek to hold, where they will attempt to advance, and where strategic considerations dictate a withdrawal. So far there has been no real test of strength and nothing in the way of a major engagement and the only policy is to await developments before attempting to form .conclusions. In Africa, too, there appears to have been a lull, but the Allied conquest of Abyssinia seems to be only a matter of time. In Libya, the enemy has made some headway, but his territorial gains are of no consequence. In the meantime, the war in the air continues with undiminished intensity over the greater part of Europe and a large part of Africa. In this sphere the Royal Air Force appears to be more than ever on the offensive and is securing good results. At sea, Germany continues her relent-

less efforts to cripple British shipping, but although she is able to inflict further heavy losses there is no reason to assume that British control is seriously threatened.

This week attention has been directed to another aspect of the conflict, and that is the financial front in Britain, where the Budget has served once again to remind the people as a whole of the burdens which the war inevitably imposes upon them. The last Budget, it will be remembered, was criticised mainly because it was not considered to be sufficiently drastic. It is hardly conceivable that the present one will be subjected to the same objections. On the contrary, it is notable for the manner in which it makes a direct and heavy attack on the taxpayers’ pockets. There is something refreshing about the bluntness of the Chancellor’s approach to the question. There is no attempt to give any sugar-coating to the pill. He wants an additional £500,000,000, more than £lO per head of the population, and he takes it straight out of wages and incomes instead of resorting to the popular and specious method of imposing new indirect taxation. The fact that revenue from taxation will be £1,000,000,000 more than in the last pre-war year may be accepted as evidence, not only of the burden imposed by the war, but, more than anything else, of the enormous financial resources of Great Britain and of the willingness of the people to make whatever financial sacrifices are demanded by the light for freedom.

The new rate of British income tax of 10s in the pound appears, on the Taco of it, to be an enormous impost, but the figure is apt to be misleading in that it is neither the minimum nor the maximum rale. After all, the average individual is not concerned with the rate of income tax so much as with the amount he has to pay. If the workers of Britain should feel that they are being mulcted with undue severity they can console themselves with the thought that the deductions from their earnings are almost fractional compared with the position in New Zealand. This applies particularly to those on the lower scale. A married man earning £2OO a year in Britain, for instance, makes no net income tax payment but is compelled to subscribe £l3 a year as a compulsory saving. In New Zealand his tax amounts to £2O a year. An Englishman with three children pays £32 9s as income tax and £2O

Its as compulsory saving on an income of £SOO a year. In New Zealand his taxation amounts to £64 7s Gd, or nearly double the rate in Britain. In New Zealand taxes on income last year were estimated to yield the equivalent of £ls a head, but even the new imposts in Britain will only bring the amount per capita to £l3. The tax burden at Home, therefore, is still less than that in the Dominion.

The compulsory saving feature of the British Budget is an interesting innovation and no doubt is an adaptation of the scheme proposed some time ago by Mr. J. M. Keynes. The object is only partly to obtain revenue, an equally important consideration being to restrict the purchasing power in the hands of the masses and thus avoid, or minimise, the dangers of inflation. Another important factor is that after the war there will be a substantial sum saved by the people towards the cost of reconstruction. There is little question that the people of Britain will accept the Budget philosophically and even with a measure of gratification. It is something to think that despite the harrowing ordeals of the past year the industry of the country is in such a state as to be able to afl'oid this additional drain on its resources. More than that, the amount demanded by the Exchequer is some measure of the speed with which money is being spent, and that, in turn, is an indication of the extent to which essential industries have been developed and the output of war materials accelerated. Above everything else the Budget is evidence of the nation's soundness, and the manner in which it is presented and debated is a further tribute to the functioning of democracy in war-time.