The Grey River Argus FRIDAY, May 1, 1942. BIGGER WAR BUDGET.

Grey River Argus, 1 May 1942, Page 4

The Grey River Argus FRIDAY, May 1, 1942. BIGGER WAR BUDGET.

The outstanding fact in the ; very timely and very clear financial statement which Rt. Hon. P. Fraser, Acting-Finance minister, last night submitted to - Parliament is. of course, the enormous increase of expenditure. It will be double the outlay of last year, and totals £133,000,000, leaving a deficit of more than one hundred millions, which, however, is largely being met by new measures which arc fortunately within the capacity of the country. Under the scheme of taxation hitherto existing, there naturally would be a decline in revenue, but even so, the Budget ■could be balanced without additional imposts did not the wai* entail a further growth in expenditure. A noteworthy feature of the statement is the fact that the Social Security Scheme is not merely solvent, but shows for the period an increase of a million pounds on the credit side. The two main sources of increased revenue exceeded the estimates, while very consider able economies are revealed. The borrowings, while amounting to £43,000,000, were financed in an admirable way, the Reserve Bank playing a very useful part. Housing construction, while largely curtailed, absorbed only three and a half millions, whereas the current year’s outlay in this direction is down to about half a million. The actual war borrowing, about thirty-one millions, has 'coincided with an increase of only a few millions more in the public debt, whilst debt demptions totalled over- ten millions, and interest on the debt has increased only by about a million and three-quarters. The deficit of £50.000,000 requiring to be met by new revenue is to be met to the extent of about I £14,000,000 with new taxation and the remainder will be found in national savings and borrowing, including a first loan next week, of fifteen millions. The war during the year is entailing credit from the United Kingdom, being obtained to the extent of £46,000,000, while under LeaseBend financial arrangements there is a sum of ten millions involved. Doubtless the more immediate public interest will centre in the now taxation, including the doubling of the super lax on income and the tax on sales. The Government. has nevertheless taken the utmost care to ensure that the burden shall fall most equitably on the community, there being exemptions and bonuses to meet the <-ase of the families of wage earners, whereas imposts on larger incomes have . further been increased. Thus earned individual incomes will pay at the rate of 18s in the £ at the £3,700. level and unearned incomes at the £2,500 level, whilst company taxation is advanced to 14s. I These rates are certainly high, comparatively, as well as absoi lutcly, but they are still an ini-

post on income, and need not entrench on capital. The socalled luxury taxes hit smokers and drinkers very hard indeed, and tea-drinkers, even if rationed. have now the laugh on them. There is just the possibility of the goose being at least sickened to a -degree such that the estimates might be scarcely realised. On the other hand, having regard for the family, there are so many commodities v exempted from sales tax, that other commodities all have to be exploited to the utmost. The position cannot be regarded otherwise than in the light of the fact that the sacrifices entailed are imposed to lafeguard all that the country is and has. It would b)e suicidal not to be self-reliant in this crisis. Our forces must have everything it is within the power of the Dominion to afford, so that their struggle for our defence shall be successful. It may thus be predicted that the loan issue will be speedily subscribed. In that event, the slogan of the Government, “Pay as we go,” Will be as much a reality throughout the current year of warfare as it has been since the war began. When it subsequently comes to the period of •rehabilitation and reconstruction, the national credit will remain sound. Meantime, as Mr. Fraser has pointed out, there is only a certain and a. decreasing quantity of commodities available for the people generally, and consequently the increased circulation of money means no increase in the value of. such money. On the other hand, if it is invested in the war effort, the returns are certain when. the equivalent in wealth is again in supply and in quest of demand. The financial statement is in all respects a reassuring one.