War Debts

Grey River Argus, 3 May 1922, Page 5

War Debts

REDUCTION POLICY GIVEN A SPELL THE CHANGES IN BRITISH TAXATION. THE CHANCELLOR’S BUDGET STATEMENT. The British Budget proposes to use any surplus this year on reducing taxes, instead of debts. Chinese rival leaders agree to protect the capital. Japan is backing Dr Sun Yat Sen. Economic matters are now under discussion at Genoa. Russia’s reply to the Allies will be next considered. U.S.A, refuses political, but not trade, recognition to the Soviet. Foreign capitalists seek exclusive oil concessions from the Soviet, which declares for non-dis-crimination. De Valera’s party in Ireland is now prepared to act for itself. At a stop-work meeting, the State coal miners yesterday protested against the 16£ per cent, wage cut. Welsh coal trade is improvin; . Many cities report May Day celebrations. British Budget chroniclers discuss raising revenue out of gambling (instead of by extra beer taxes) as in Australia and New Zealand. Plague is spreading in Sydney. Senator Adamson (Nationalist) suicided in Queensland. Mr Massey announces the personnel of a Taxation Inquiry Commission. On the appeal re Blackball Miners’ Union secretary, decision was reserved. A Northern Territory authority says U is a white man’s country, and that the Australian blacks have never yet had a fair chance to show their ability. LONDON May 1. Sir Robert Horne (Chancellor of the Exchequer) presented the Budget in a crowded House. He pointed out that during the first quarter of the past year, the greatest industrial trouble that Britain had ever known swept over the country. It caused inevitable unemployment, and a loss of revenue. That they had met these distresses without worse calamities, ‘he claimed, testified eloquently to the country's soundness and the solidity of its financial position. The Present Financial Position. The year's revenue totalled £1,124,880,000, which was £91,000,000 below the estimate. The expenditure was £1,079,189,000, leaving £45,093,000 for debt redemption. He declared it was remarkable that, in such a year, the income and super-tax should together have yielded £399,000,000. The excess profits duty had yielded £122.000,000, but the repayments on this had absorbed back £92,000,000 of the amount, leaving £30,000,000. There was an improved value of the pound. This was the first proof of their payments of external debt. During the year the internal debt had been reduced from £1,275,000,000 to £1,029,000,000. The Coming Year’s Revenue. The C hancellor said he estimated the coming year's expenditure at £910,000,000, consisting of the ±*g?' ing amounts: —£303,438,000 for the Consolidated Fund charges; and £520,631,000 for special services. On the existing basis of taxation, he estimated the revenue would be £940.600,000, leaving a surplus of £46,500,000 excluding any provision for redemption of debt. lie always treated the possibility of receipts from Germany as windfalls. Remission of Taxation. In reg. 1 to the corporation profits tax, where the exemption period expired on December 31, he proposed to extend the exemption from taxation for three years. It was proposed to reduce (he basis for tax assessment on agricultural land, from double the annual value to the annual value; while, on land not being used for agricultural purposes, it was proposed to revert to the pre-war assessment basis, namely onethird of the annual value. These changes would reduce the income tax yield by £2,150,000. The payment of the arrears of excess profits duty would be allowed to be spread over five years. The postal rates would be reduced to lid on letters. Id on postcards, and Id on printed papers, operating as from May 31. Telephone charges would also be reduced. These, Together, would reduce the Post Office revenue by £6,500,000. The above concessions would reduce the surplus to £38,300,000. Sir Robert Horne admitted that unemployment was breaking the hearts and embittering lives of hundreds of thousands of the people. “Unparalleled depression is still with us,” he said, “but there are

helpful signs of a revival.'’ The magnitude of the British taxpayers’ burdens had won admiration throughout the world but he thought that in the present circumstances they were .justified in giving some stimulus to trade in the shape of not continuing the policy of debt redemption. Apart from the interest falling due to America, which it was proposed to meet, ■ therefore, it was proposed to devote the rest of the estimated surplus to the reduction of taxation. The income tax would be reduced by 1/- per pound; and the tea duty by 4d per lb from May 15. There would be tax remissions also on coffee, cocoa, and chicory. These reductions left the following figures: Revenue, £910,775,000; expenditure, £910,069,000; surplus, £706,000. DEBT SINKING FUND ADVOCATE. (Received May 2, 5.5 pan.) LONDON, May 1. In the House of Commons, Mr Asquith, discussing the Budget, declared that the surplus of £38,000,000 ought really have been earmarked for the reduction of debt. Only an excess of revenue over expenditure justified a remission of taxation, but not a surplus which was artificially produced. Sir R. Horne was indulging in a great gamble. Mr Asquith said he would be surprised if the estimate for the Supplementary Estimates was not doubled during the year. Mr Clynes said he welcomed a reduction in the tea duty. He declared the way to encourage trade was to reduce taxation on the firms and corporations, and to increase the taxation on individuals. He disapproved of such substantial concessions to the agricultural interests. He advocated a graduated levy on accumulated wealth. Sir F. Banbury described the suspension of the debt sinking fund as the beginning of a bad policy. He urged further economies. Mr Hilton Young, in replying, said the reduction of 1/- in the £1 on the basic rate of income tax did not mean that all income tax would be reduced by that amount. An explanation of how the reduction would operate would be issued later. The customary resolutions were passed, and the debate adjourned. The Budget was variously received in the lobbies and outside Parliament, but, on the whole, created a favourable impression. There is a certain amount of criticism, however, about the suspension of the debt sinking fund, on the ground that conditions are not ready for it. There is, however, a strong counter opinion in the financial circles that Britain hitherto has made undue sacrifices for the redemption of her debts, and that if v. o;;ld be unfair, and fatal to British trade, to continue the repayments at such a speed. Beer and Betting. The retention of the heavy war-time tax on beer has been criticised, on the ground that a reduction would lead to greater consumption, and therefore increase the aggregate yield of the tax. It is contended, on the contrary, that any additional consumption is not wanted. The question remains the pivot of a sharp controversy. A more important claim is that the income tax ought to he extended to co-operative societies. Their turnover was £420,000,000 during 1921. The possibilities of extracting revenue from the pari-mutuel system have also been commented on. The Australian and New Zealand methods of exploiting racing for the purposes of revenue have been mentioned approvingly. The pari-mutuel system is gaining popularity in England. It is pointed out that it could produce progressive relief to the general taxation. The reductions of income tax, and taxes on land, postage, and tea, and concessions to agriculturists are z generally approved, while satisfaction is universal that Sir R. Home has deferred his scheme fur funding pensions obligations, though it is the opinion in Ministerial circles that this will possibly be necessary in 1923. ALLIED TERMS FOR RUSSIA. LONDON, May 1. The Australian Press Association’s Genoa correspondent states: —The draft of the Allied Note to Russia has now been completed, and probably the Note will be delivered to-morrow. It recommends that the president for a mixed arbitral tribunal be appointed by the Chief Justice of the United States, with two other members, one representing all the foreign bond-holders, and the other representing the Soviet. It will be permissible, under the terms, for bondholders individually to make their own arrangements with Russia within a definite period. Failing that, the claims are to be referred to the tribunal. A special tribunal, to deal with private property claims, is to be under a president, elected by the President of the Arbitral Tribunal, the other members to be nominated by the nationals concerned. A memorandum attached to the Note to Russia stipulates that Rumanian treasure, sent to Moscow for security in war time shall not rank as war debt, and must be restored fully, , .. j