THE BUDGET

Hokitika Guardian, 27 April 1938, Page 6

THE BUDGET

CHIEF POINTS THEREIN.

ENORMOUS COST OF ARMAMENTS (United Press Association —By Electric Telegraph—Uopyrignt). (Received this day at 12 noon). RuGßi', April i:d. An increase of the standard rate of Income Tax by sixpence, to 0/6 in the pound sterling aiid the announcement of the purchases of wheat, whalq oil and sugar already made by the Gov* eminent to • ensure" stocks during the early months of any emergency, were the chief points of interest in the bud* get statement iriatle by fell* John Simon (Chancellor of the Exchequer) in the Ci uivutu Coimriuns. The Chancellor also announced an increase in the Petrol lax by one penny, to niiiepence per gallon, aiid of the duty on tea. by twopence per pound. Sir John Simon prefaced his proposals to increase taxation by putting before the House arguments for ana against filling, by borrowing, a gap- of £30,660,600 which remained between the’ revenue and expenditure after he had estimated the yield in the coming year of existing taxes at £914,400,006. lie pointed out The prospective deficit was due to rearmament, the originally estimated cost of which at £1,500,000, - OGO was going to be substantially exceeded.

Though it had been decided from the beginning that rearmament should not be financed entirely from taxation, and borrowing up to £400,000,000 over five years had been authorised, there were three things to be borne in mind, in forming a proper judgment.

The first was that in the defence estimates for the current year tney had already provided for taking £7OO, 000,000 from outside sources. Therefore the gap to be filled* was really £l2O, 000,000, of which they had already decided that £90,030.000 should not Ingot by additional taxation. Secondly , the Government had announced and were already in the course of carrying out, ail acceleration of the rearmament programme. The whole country realised the necessity of, aiid approved of that decision, but it meant substantial supplementary estimates later in the year not included in the total expenditure for which lie was budgeting. . - He intended that those supplementary estimates should be met out of a loan money under tlie Defence Loans Act.

The third consideration was the most serious, aiid important of all. They had to look beyond the present year.

The peak of the' defence expenditure would not = be reached until next year, or perhaps even the year after. Moreover a huge' 5 outlay ‘oh -war 'material also involved higher annual maintenance. :

The Chancellor said that lie had come to the conclusion that he would not be doing his duty if he followed the ' easier course by borrowing “We must' take some proportion of the increased expenditure on our shoulders by increasing taxation now.” “By so doing we shall reach our difficulties hereafter,? and we shall show the world that the country' does not quail when it faces the burden of expenditure.” . , Describing the out turn of the last financial year, the Chancellor said that revenue amounted to £872,580,660, an increase over the budget estimate of nearly £48,000,000 over the financial year.

COMMENT OF LOBBIES.

(Received this day at 12.5 p.m.^

LONDON, April 26,

The opinion in the Lobbies was that while the budget would be unpopufai throughout the country, it was nevertheless, the inevitable sequel to the international situation, illustrating Mr Neville Chamberlain’s determination, regardless whether the reactions were unfavourable politically, to put defence above everything. Moreover, the budget which is interpreted as a proclamation to foreign countries timt Britain is prepared to spend every available penny on rearmament, is. regarded as » direct message to the dictators that tlie entire country is ready to share the burdens.

Sir John Simon (Chancellor of the Exchequer), warning that the peak year of defence expenditure may not he before 1940, and his continued emphasis of the ever-amounting cost of maintenance, was considered by many to he preparing the community to shoulder ■■ even greater burdens before the programme was fulfilled.

A PACKED COMMONS. ' LONDON, April 26. The first Member of the House of Commons claimed his seat at dawn. Members packed the floor the moment the House was opened, and Members of diplomatic corps, visitors from the Dominions, and distinguished people thronged the galleries for the annual budgetary scene, but the usual political excitement was somewhat lacking because the succession of recent tense debates on the international situation had rendered to-day’s occasion somewhat an anti-climax.

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