THE BRITISH BUDGET.

New Zealand Herald, Volume LIX, Issue 18080, 3 May 1922, Page 7

THE BRITISH BUDGET.

■ I ■ TAXATION TO BE REDUCED. LOWER RATE ON INCOMES. FARM LANDS ASSESSMENT. | LIGHTER CUSTOMS DUTIES. ' POSTAL CONCESSIONS. By Telcurftph—l'reaa Association— Copyright A. unci N.S. LONDON, May 1. The Chancellor of (lie Exchequer, Sir Robert S. Home, delivered his financial statement to-day. It announces the dis- j continuance of the Debt Redemption scheme. The surplus of £40,000,000 is j devoted to reducing taxation. One shilling comes off the standard income tax rate of 6s id the £, the basis of the assessment of farmers' income is halved, 4d per lb is taken off tea, and postage rates are reduced by one-halfpenny. Sir Robert, in presenting the Budget to a crowded House, pointed out that during the first quarter of the financial year the greatest industrial trouble Britain had ever known swept the country, causing inevitable unemployment and loss | of revenue That wo met theso distresses j without, worse calamities eloquently testified to the country's soundness and solidity and its financial position. The year's revenue totalled £1,124,880,000, which was j £91,000,000 below the estimate. Expen-j diture was £1,079,187,000, leaving £45,693,000 for debt redemption. It was remarkable that in such a year income and super-tax shouk'. together have yielded £399,000,000. The excess profits duty yielded £122,000,000, but repayments absorbed £92,000,000 of that sum. The improved value of the sterling was the first proof of our payment of our external debt. During the year our internal debt had been reduced from £1,275,000,000 to £1,029,000,000. Estimated. Net Surplus, £38,000,000. The Chancellor estimated the coming year's expenditure at £910,069,000, consisting of £363,438,000 for Consolidated Fund charges and £546,631,000 for Supply Services. On the existing basis of taxation ho estimated the revenue at £956,600,000, leaving a surplus of £46,500,000, excluding any provision for redemption of debt. Ho always treated the possibility of receipts from Germany as windfalls. In the corporation profits tax, where j the exemption period expired on December 31, it was proposed to extend the exemption for three years. It was proposed to reduce the basis of assessment on agricultural land from double the annual to the annual value. On land not. being used for agriculture it was proposed to revert to pre-war assessment basis, namely, one-third of the annual value. Theso changes would reduce the income tax yield by £2,150,000. The payment of arrears of excess profits duty would be spread over five years. The postal rates would be reduced to lJ,d on letters, Id on postcards, and }d on printed papers, operating from May 31. Telephone charges would also be reduced. Theso together would reduce the post office revenue by £6,500,000. The above concessions would reduce the surplus to £38,000,000. Unemployment was breaking the hearts and embittering the lives of hundreds of thousands, continued Sir Robert. Unparalleled depression was still with us, but there were hopeful signs of a revival. Stimulus to Trade Justified. The magnitude of the British taxpayers' burdens and the way they wore met had won admiration' throughout the world, but he thought the present circumstances justified giving some stimulus to trade in the shape of not continuing the policy of debt redemption, apart from interest falling due to America, which it was proposed to meet. It was therefore proposed to devote- the surplus to the reduction of taxation. The income tax would be reduced by Is, tea duty by 4d per lb. from May 15, involving remissions on coffee, cocoa, and chicory. These ' reductions left the following figuresßevenue, £910,775,000; expenditure, £910,069,000; surplus, £706,000. Mr. H. H. Asquith declared that the surplus of £38,000,000 ought really to have been earmarked for reduction of the debt. Only excess of revenue over expenditure justified the remission of taxation, not a surplus which was artificially produced.. Sir Robert Home was indulging in a great gamble. Mr. Asquith would be surprised if the estimate of the Supplementary Estimates was not doubled during the year. Mr. J. R. Clynes, Labour member for the Platting division of Manchester, welcomed the reduction in the tea, duty, and declared that the way to encourage trade was to reduce taxation on firms and corporations and increase taxation on individuals. He disapproved of such substantial concessions to the agricultural interests, and advocated a graduated levy on accumulated wealth. Sir Frederick Banbury, Coalition-Union-ist member for the City of London, 1 described the suspension of the sinking fund as the beginning of a bad policy, i and urged further economies. , Lieutenant-Commander Hilton. Young, Financial Secretary to the Treasury, replying, said th£ reduction of Is on the basic rate of income tax did not mean 1 that all income tax would be reduced by i that amount. The explanation of how ) the reduction would operate would be issued later. GENERAL APPROVAL. , SOME POINTS OF CRITICISM Australian and N.Z. Cable Association. (Reed. 11.15 p.m.) ' LONDON, May 2 Ihe Budget was variously received ir • the lobbies and outside Parliament, am ron tho whole favourably. There is i v certain criticism on the suspension of thi Sinkin" Fund, on the ground that condi tions are not ready for this, but then ' is a strong counter-opinion in iinancia circles' that Britain hitherto has madi undue sacrifices to the redemption of he: debt that it would bo unfair and fatal t< ' British trade to continue repayment a such speed. ' The retention of the heavy war ta: on beer is criticised on tho ground tha '," reduction would lead to greater consump . lion, and, therefore, would increase th i! affpreccate yield of the tax. It is con a tended, on the other hand, that additiona consumption is not wanted. The quostioi remains the pivot of a sharp controversy A most important, claim is that the in come tax ought' to be extended to cc operative societies. * whose turnover i; 1921 was £420.000,000. The possibilities of extracting revenu from tho pari mutuel is commented or and Australia and New Zealand method of exploiting racing for the purposes o I. revenue are mentioned with approval ~ The pari mutuel is gaining popularit j in England, and it is pointed out tha it could produce a progressive relief c 8> general taxation. Tho reduction of th n income tax, inland postage, and th© dut I. on tea, and the concessions to agricir , turists ara generally approved; whil { satisfaction is universal that Sir Rober Home has deferred the scheme for fund > in? the pensions obligations, though th s opinion in Ministerial circles is that thi will possibly, bo necessary in 1923.