THE H.B. TRIBUNE. MONDAY, JUNE 19, 1916. BUDGET PROPOSALS.

Hawke's Bay Tribune, Volume VI, Issue 159, 19 June 1916, Page 4

THE H.B. TRIBUNE. MONDAY, JUNE 19, 1916. BUDGET PROPOSALS.

Ox Saturday the taxation proposals of the National Government were dealt with at some length in this column, and a more leisurely perusal of Sir Joseph Ward’s Budget sugbut little to be added on this feature of it. One point, however, which has escaped our attention, mat be noted. That is that the proposal with regard to the special taxation of profits attributable solelv to war conditions are such that, although quoted as 45 per cent.,. in rea'itv they levy an extra tax of 40 per cent, only, as excess war profits are exempted from the special o pci cent, tax imposed upon other incomes In doing this, we thing we are right in saying, the Minister is not following tiic example set by the Imperial Chancellor, whose war profits taxation —at a substantially higher rate than that proposed here —is in addition to the taxation paid upon incomes generality including, of course, the war profits themselves. In all. we fancy, that in the United Kingdom excess war profits, accruing to incomes already large, yield to the revenue an aggregate of taxation which falls very little, if anything, short of 70 per cent.

Passing from the question of taxation to the complementary subject of war bonuses on small incomes, we find that it is suggested that the country should, during the currency of the war, find an annual stun of .£400,000 by which to supplement the incomes of all Civil Servants that do not exceed £315 per annum. As these incomes are, under the general exemption of £3OO, already almost universally free from income taxation. it cannot but be thought that the Civil Service is being treated with exceptional favour. In order that these bonuses may be paid the community at large must necessarily bear a hcavied burden of taxation. In very many cases, owing to war conditions, many private concerns cannot afford to make any such concession to employees and hope to keep going, and at the same time are probably being raxed in one form or another" to provide the Civil Service war bonus. So far as the scheme is disclosed, too, there seems to be no discrimination between the Civil Servant who has others dependent upon him, thus feeling severely the increase in the cost of living, and the unencumbered man who has only himself to think of. Tor those w’ith large households to support there cannot, of course, but be some measure of sympathy, to which there might, perhaps, be little objection [to the Government giving practical expression as proposed. But beyond this, we do not think the people are prepared to go. The Minister advances as an additional reason for granting this bonus thar-.the Government is anxious ‘‘to offer some recognition of the extra work w-hicn has been cast upon the officers of all State Departments.” This seems rather a sweeping assertion, and, even if warranted by actual facts, scarcely justifies, under present conditionsj the broadcast largesse indicated by the Budget. The performance of a little extra work is hardly likely to add materially to the cost of living of the individual, but will rathey have a tendency to curtail it by further limiting his opportunities of expenditure. The Civil Servant, as a general rule, has the great advantage over very many others of having his income permanently assured and regularly paid, so that we think that any scheme for indiscriminate bonuses should be strictly scrutinised, if justice is to be done. Probably further opportunity wifi be found for criticism when the scale of distribution is submitted.

A minor matter in which the tew are to benefit at the expense of the many is to be found in the Ministers statement, made with manifest satisfaction, that the rates of interest to bp chjirgpcl by thp Sr-atc Advances Department are to remain unchanged- As these rates arc, when everything is taken into considerstion," substantially less than those at which the State itself can borrow, the comparative few whose wants can be supplied by this Department are obviously profiting at the cost .01 the general body of taxpayers. It is, too, a verv general opinion that rates of interest both for State and private borrowing are not likely to revert to normal for some considerable time after the war closes, and the repayment of State loans to individuals is soread over long periods. It may well be thought, therefore, that the present is a very appropriate time for revising the rates of interest chargeable to borrowers. Phe relatively small proportion which State advances must bear to the aggregate of mortgage investments makes it impossible that they should hate a general result in the way of keeping mortgage rates down.

In the direction of further relieving the householder, it is proposed that steps should be taken for legisla tive limitation of house rents, "his is, without doubt, a matter which demands attention in order to preclude niijust exactions. But the naked suggestion to “restore rents to their prewar rates” contains elements of possible injustice. Every urban landlord is not necessarily a bloated capitalist to whom the rents derived from his house-property are merely an adjunct to other substantial sources of income. Very many of the less pretentious dwellings, those, indeed, of the very character whose occupants most urgently’ need protection, represent the investment of the modest savings of long, laborious and thrifty lives, from which income is derived by those by reason of age no longer capable of hard toil. For these, also, the cost of living has gone up, while the capacity for increased earning is entirely gone. In addition, the cost of maintenance of the buildings themselves has also appreciably increased, while general and local taxation have in many instances both gone up. It will therefore be necessary that due weight should be given to these considerations, and that the general principle of reverting to pre-war rents should be adopted with qualifications.

The day has brought such a confused volume of reports, of such various origin, with regard to the great Russian aggressive movement along practically the whole line south of the Pripet marshes, that, with the limited time and attention that can at once be given to them, they are dfficult of intelligent assimilation. Commencing, however, at the southern end, we have something very definite in an announcement of the fall of Czernowitz which seems to be authentic. This, coupled with the further news that the Russians continue to make progress between the Dniester and Pruth, the latter of which they must have crossed, raises hopes that we may hear ere long ot the isolation of the Austro-German forces in the Bukowina, a purpose which General Brussiloff has no doubt long had in view. He has already advanced far along the railway line that, north of Czernowitz, runs westerly to Kolornea, and only rapid retreat would seem to.give the enemy forces in the Bukowina any chance of maintaining contact with the main lines, and then possibly only in such a direction as would mean the virtual turning of the Austrian right wing. Unless the rot that seems to have set in can be stayed by heavy reinforcements, the possibilities in Bukowina are difficult to men sure. Further north, in Eastern Galicia, progress is not so definitely marked, but'is still substantial, while the movement towards Lenaburg from the north-east still continues. Further north still, in Volhynia, the enemy is evidently being most resolutely pressed, and with such good effect that we are told he is preparing positions as far back as the line from Vladimir-Volynski to Sokal, on the river Bug, a name which has almost gone out of memory, so long does it seem since our Allies were fighting there a desperate fight of self-preservation. While the southern section of the Austro-German armies seems thus to be in a position of grave jeopardy, there is no word of any determined attempt to create relief by an attack in force in the northern section. It is. however, rumoured that MacKensen has been called to Hindenburg's aid. and possibly some heavier offensive measures may shortly be adopted.

The- numerous messages from tbe western theatre indicate increased activity at various points, and the frequent mention of aerial bombardments on railway communications supports previous rumours of enemv concentration being attempted. There is, however, no very definite indication yet as to where the new blow, if really in early contemplation, will fall. Meanwhile the Crown Prince continues the assault upon the Verdun positions, but without making any serious impression upon the general situation. . Although there is word of some activity in the British lines, a press correspondent tells us that a week’s bad weather has had the effect of hamperng infantry operations on both sides. The Italian communiques continue to be reassuring, although there is no direct evidence that the Austrians have very greatly reduced their forces on this front, suggestions being made that they may elect to maintain their offensive in the Trentino in the hope of gaining some decisive advantage. Should this be the case it is all the more gratifying to be able to conclude that General Cadorna has got the position well in hand. Affairs in Greece are working rapidly towards a crisis, which may end in very grave changes in the political control, which has been so sadly abused.