POLICY OF SELF-RELIANCE.

Lyttelton Times, Volume CXVII, Issue 17198, 19 June 1916, Page 6

POLICY OF SELF-RELIANCE.

Although ho did not say so in precise terms, Sir Joseph Ward conveyed the impression in his Budget speech that the Government proposes to pay an appreciable part of tho war costs out of current revenue—that is, by taxation. This view is supported by the obvious fact that tlie estimates of revenue for the current year have been cast on a basis so low as to bo mildly described as conservative. We may say at once that such a policy is to be highly commended and is sure to meet with widespread approval. Tho unexampled prosperity of the country makes this courso a duty, while the circumstance that the prosperity is duo to the war greatly emphasises the obligation. It is difficult to set out any ruling or precedent that might be taken as indicating the proportions in which war costs ought to he divided between present and future generations. History and precedtent have to be discounted bocause there never was a war of anything approaching the magnitude of tho present struggle, and also becauso the conditions in different parts of the Empire must bo taken into account. The conditions so far as Now Zealand is concerned arc wholly favourable. Geographically and commercially we are extremely fortunate. The duty then certainly devolves upon us to make adequate return for the safety and comfort enjoyed', and for tho commercial gains to be counted quite easily iu millions of pounds sterling per annum. At a pinch, by cutting out non-essentials and mobilising tho national resources, New Zealand could probably meet the wholo of her war expenditure on the principle of spot cash, and avoid any addition to the national debt. Wo are putting the case in an extreme form, of course, and d'o not suggest that such a heroic policy would he wise. Tho people of to-day are fighting for posterity as well as for themselves, so that future generations, within limits, may with perfect fairness he loaded with a war debt. Besides, it would probably bo doing a greater injury to posterity to cripple ourselves and disorganise the industrial and commercial fabric than to bequeath an increased national debt. As things are just now, however, and promisq to continue, tho Government could reasonably ask the taxpayers to pay a stated proportion of the war expenditure—say one-fourth or one-third —out of current revenue. Our opinion is, as wo have said, that the Government does not intend to add the whole of the war cost to the indebtedness of tho country. If tho Minister of Finance were* not working in the direction that we suppose, tho people would be curious to know why he budgeted for a. revonuo that is bound to bo exceeded and for an expenditure of nearly £14,4.00,000. Tho following table showing the estimated and actual revenue for 1915-10 and that anticipated iu the current year will illustrate our point :

Totals .£12,676,‘254 £14,510,137 £14,591,401 •On basis of existing' statutory limitations. In comparing the details in the first two columns it must bo remembered that tho £1,000,000 representing new taxation and increased charges should ha distributed over the items in tho first column; but what we are endeavouring to emphasise is that the revenue was not far short of two millions ovor

the estimate. The calculations for the current year appear to ignore the important consideration that th,o .new taxes and other enhanced charges wore collected over little more Ilian half of the last financial year, -whereas there will be a full twelve months' yield' in 1916-17. Only unforeseen and unusual circumstances, it would therefore seem, can prevent the revenue largely eclipsing the estimate. In any ease, there arc to he added to tho £14,591,000 expected under existing statutory limitations two substantial items —the war profits taxation estimated to bring in £2,000,000, and the special income tax, to yield £750,000. The war profits from which it. is intended to take 45 per cent arc verymuch greater than the Minister of Finance has indicated, and we can only suppose that in the kindness of his heart Sir Joseph Ward is “breaking it gently.” From a statement supplied in tho Budget wo have calculated the increase duo to price and not to quantity in the returns for primary products last season over tho season of 1913-14. The figures aro impressive e.

These figures take no account of the increased value on the local consumption, which must have been very large. The discovery of war profits, which are to bo taken in regard to all businesses in addition to pastoral and agricultural industries, will not be made exactly on the basis of the foregoing table, but tho particulars are sufficient to givo Romo idea of tho extent of a portion of tho war gains intended to be taxed. If all war profits pay 45 per cent into the Treasury* it does not seem extravagant to say that the year’s revenue may exceed £20.000,000. That would' enable the country to pay off and be done with a substantial proportion of the military expenditure. "What with this prospect and the proposed issue of war bonds the Government is making largo strides in the way of self-reliance. Wo are suro the groat bulk of the people heartily approve this policy, whatever may be said as to the apportionment of taxation-

Estimated. Actual. mated. 1915-16. 1915-16. 1916-17.* £ £ £ Customs 2,800,000 3,566,171 8,300,000 Railways Stamp and 4,000,000 4,484,337 4,450,000 death duties Postal and 1,220,000 1,470,307 1.470,000 telegraph . Land and in1,345,000 1,639,917 1,750,000 come tax . 1,345,000 2,440,475 2,540,475 Beer duty Registration and other 124,000 157,692 195,000 fees . 100,000 106,263 101,605 Marine . 50,400 » 6,328 45,850 Miscellaneous 419,000 421,505 423,500 Territorial 210,000 219,314 211,000 Endowments 02,654 92,655 90,971 Other rec'pts Row taxation and ether charges 1,000,000 12,073

Butter . , . r,11.2C6 Cheese . . . 478.321 Coal . . . Cold . 88,375 , Hides . 105X48 < Beef . . 507,620 La mb . 422.660 Mutton . 712,931 Potted meat . . 53,995 Oats . 31.90S Flax . , 48.088 Saueaso skins . 58,161 Sheepskins . 29,908 Tallow . . 31,5 oo Wool . 4,080.625 Total . . £7,354,756