CABINET CRISIS ENDED.

New Zealand Herald, Volume LXII, Issue 19214, 31 December 1925, Page 9

CABINET CRISIS ENDED.

FRENCH FINANCE PLAN. A UNANIMOUS DECISION. " TIIE SPIRIT OF LOCARNO." MEETING A BIG DEFICIT. MINISTER'S TAX PROPOSALS By Telegraph—Press Association—Copyright. (Received 8.5 p.m.) Renter. PARIS, Dec. 29. It was announced to-day that the Cabinet had reached an agreement in regard to the Government's financial policy and that the Minister for Finance, M. Doumer, has been authorised to submit his proposals to the Chamber of Deputies. It is semi-ofiicially stated that the Cabinet agreement in regard to M. Dimmer's policy is a unanimous one. The Premier, M. Briand, states that the members of the Cabinet introduced the Ijocarno spirit into the Ministerial Council and that an agreement has been reached on all points in an atmosphere of perfect cordiality. It is estimated by M. Doumer that the deficit that will be shown by the 1926 Budget will be 9.000.000,000 francs, including- 2.5C0.000.C00 francs for the amortization of the. public debt and 2,000,000,000 francs for repayment- of advances made by the Bank of Franco to the Treasury. The Minister's Scheme. M. Doumer proposes to meet the deficit by a special tax of one-twentieth per cent on all business payments, estimated to produce 3,800,000,000 francs, and by applying the increases in the income tax to the Budget instead of to the reabsorption of the inflation. The latter plan is estimated to produce 3.000.000,000 francs. It is proposed to increase the tobacco duties, this producing a further 1,000,000.000 francs. It also is hoped by M. Doumer to recover 3.000.000,000 francs from tax evaders, to save 200.000,000 francs on Government expenditure, to obtain 600,000,000 francs from a tax on exports and 103,000.000 francs from an increased tax on Stock Exchange operations. /The new imposts proposed by M. Doumer are indirect taxes. The Radical members of the Cabinet were opposed to an increase of indirect taxation on the grounds that it bears unfairly on the. poor. M. Doumer expresses the opinion that 3,000.000,000 francs of M. Loucher's proposed taxes, which he is incorporating in the 1926 Budget, will form the highwater mark of direct- taxation. He says that direct taxes cannot be collected quickly, whereas the money is needed immediately. Tax on Business Turnovers. The tax ou business by means of which payments M. Doumer proposes to obtain nearly 50 per cent, of the estimated Budget deficit, appears to be simply a disguised tax on business turnovers. This proposal was opposed by the Radical members of the Cabinet, who, however, have agreed to it in order to avoid a Cabinet split on the eve of a Parliamentary recess. M- Doumer, in exchange for this concession from the Radicals, has promised to introduce a bill providing for the reform of direct taxation methods in conformity with democratic principles, thus meeting the Radical demand for a widening of the income tax.