BRITISH BUDGET

Grey River Argus, 30 April 1938, Page 3

BRITISH BUDGET

LONDON RECEPTION, LAust. & N.Z. Cable Assn.] LONDON, April 27. Tn contrast to last year, the city lias lost no time in accommodating itself to the Budget. After an initial setback, all markets have regained their firmness and closed the day with a number of impressive gains. P. and O. stock ruse a shilling on the resumption of interim dividends. Gold shares continued in favour, and oils also were higher. Tea shares were unchanged, as the tea duty was long foreseen, and had been discounted. Industrials mostly were firm, as it was recognised that the concession of extra wear and tear machinery allowance offsets the Increased income tax. The firmness of markets in face of the budget is regarded as a most healthy sign, and lends colour to the view that recovery is at last under way. RUGBY, April 26.

In the, course of the Budget speech, introducing his proposals for increased taxation, Sir John Simon said in his judgment the extra revenue should be met partly by direct, and partly by indirect taxation. The major contribution should come from direct taxation. However, he accompanied the increase of the standard rate of income tax to 5/6 in the I by concessions to industry and to smaller incomes. The deduction from profits under Schedule A for wear and tear, would be increased by 20 per cent This concession would cover many important basic trades, giving a great deal of employment, and was aimed at avoiding any decrease in industrial development.

The concession to individual taxpayers—which, the Chancellor estimated, would offset the increase in the standard rate for about 2,000,000 'of them with smaller incomes—would have the effect that there would be no increase of the tax on earned income, in the case of a single person, lup to £290 per annum, or in the case of a married man with one child, up to £460 per annum, or with two children, up to £540 per annum. From the increase in income tax he expectied £22,250,000 this year, and £26,|500,000 in a full year. The increase in petrol taj- and the tax on heavy [oils would yield £5,350,000 in the current year. The higher duty on tea, which would maintain intact the existing margin of preference, would, he anticipated, give him £2,750,000 and £3,250,000 in a full year. The Chancellor estimated the revenue, on the existing basis of taxation, at £914,400,000 of which £336,000,000 was to come from customs and excise, and £514,250,000 from the inland revenue. The corresponding estimates for last year were £863,100,000, £333,0ut),000 and £46,650,000 respectively. Income tax, he estimated, would yield £319,000,000 or £21,000,000 more than last year. With the additional taxation the proposed total estimated revenue came to £944,750,000, giving him a surplus of £352,000. An important section of the Budget speech was devoted to the subject of tax avoidance i which Sir John Simon defined as the adoption of in genious methods for reducing liability—methods which, although within the law, none the sense defeated its intention. He announced a number of proposals for dealing with various practices of this nature, adding that they were intended for a minority only. The great majority of taxpayers accepted the national burden without any effort to avoid it. As a nation they were entitled to take pride in their general and high standard of actual performance regarding taxation.

The Chancellor said the net increase in the National Debt last year was £257,750,000 nominal, of which £203,000,000 was covered by assets count.

As to the increase in the petrol tax of a penny a gallon it may be noted that the last occasion pn which the tax was increased was 'in September, 1931, when there was an increase of twopence a gallon, while earlier iri