BRITISH TAXES

New Zealand Herald, Volume 81, Issue 24878, 27 April 1944, Page 5

BRITISH TAXES

NO CHANGE MADE BUDGET REVIEW T BUOYANT REVENUE FINANCING OF DEFICIT (Reed. 5.35 p.m.) LONDON, April 25 The House of Commons to-day had the smallest attendance of any Budget day in anybody's recollection. The Chancellor of the Exchequer, Sir John Anderson, spoke for 105 minutes, but took less than a minute to deal with the taxation proposals. "There "will be no additional taxation this year. My prescription for the patient is 'the mixture as before',' said the Chancellor, concluding his Budget speech. From this speech it would appear that the country's wartime balance-sheet has assumed an almost static condition. Apprehensions that the high duties on tobacco, beer and spirits would be raised were unfounded. The effect of the higher wages received by some classes of the community was shown by the fact that the revenue from beer in the last fiscal year was £18,000,000 above the average. Tax Receipts Above Estimate Sir John said that last year's finances had made a better showing than his. predecessor, the late Sir Kingslev Wood, had anticipated. On the revenue side actual receipts from income tax, including surtax, were £1,184,000.000, or £9,000,000 more than the estimate. The excess profits tax realised precisely the estimated £500,000,000. The total revenue amounted to £3,039,000,000, which was £131,000.000 over the Budget estimate, and the excess_of expenditure over revenue was £2,760,000,000, or £89,000,000 less than the estimated deficit.

"We might still reckon that our finances remained on an even keel." tlio Chancellor added. "All reports indicate that the pay-as-you-earn income tax system has been successfully launched. Personal incomes in 1943 wens £600,000,000 above the 1942 total. Of this amount £380,000,000 was paid away in additional taxes and £220,000,000 saved. In spite of the large increase in incomes the amount spent 0.. consumption was actually reduced. In 1938 76 per cent of personal income was spent; on consumption. By 1942 the percentage had fallen to 58 per cent, and by 1943 to 53 per cent." Expenditure oi £5,937,000,000 The Chancellor said he would be justified in asking a very round sum for a vote of credit, which wculd be £5,000,000,000. On that basis the total expenditure to be provided for 1944-45 would be £5,937,000,000. Toward time total various inland revenue duties were expected to provide £122,000,000 more than in 1943-44 and would rise to £2,000,000,000. The increase would be almost all attributable to income tax. He estimated that excess profits tax would bring in £500,000.000. The total estimated revenue for the year would be £3,102,000,000, leaving excess expenditure over revenue of £2,835,000,000. Revenue from taxation would be almost 52 per cent of the total expenditure—a higher proportion than any previous year. It appeared to be within our j capacity to finance the prospective deficit from savings and other sources of non-inflationary character. Sir John mentioned the magnificent contribution from the Canadian Government last year, and said he learned that the Canadian Government would again make a contribution on similar lines to meet external costs of military operations overseas. Loss of Overseas Assets He said Britain had already parted with £1.000,000,000 worth of overseas assets and had incurred overseas liabilities amounting to another £2,000.000.000. "We are not at the end." he added. "We have parted with nearly all of it to our Allies. I make no complaints because we are in this war with all we have got." The excessive cost of subsidies to stabilise the cost of living; was one subject with which the Chancellor dealt. He said that he was not altogether happy about this trend. The cost of living index in 1941 was 28 per cent over the pre-war figure, and 29 per cent to-day. Meanwhile, subsidies had been increasingly costly. They had risen from £70.000,000 in 1940 to £140.000,000 in 1941 and £196,000.000 in 1943. In the current year the cost would be greater still. But for- these subsidies the cost of living index would probably reach 50 per cent above the pre-war level this year. In 1943 the increase in wage rates had risen 35 to 36 per _ cent on an. average, and to-day the rise amounted to 40 per cent. Living Costs May Rise "I am afraid we can no longer regard the present cost of living figures as sacrosanct," he said. "It would placa the stabilisation policy in an altogether false perspective and the purpose of it would be largely stultified if the Government continued blithely pouring out subsidies to keep the cost of living down rigidly to a pre-determined level without regard to the current level of wages and prices." The Chancellor mentioned further assistance to industry in the post-war reconstruction period in the shape of rebates o'c income tax for the installation of new plant, machinery and buildings. Members took the Budget cheerfully and the speeches following the Chancellor's statement contained little criticism, Mr. Arthur Greenwood (Labour — Wakefield) expressed the opinion that we were a long way from inflation at present. "Nothing the Chancellor asks for the prosecution of _ the war," ha added, "will be denied him." Sir Percy Harris (Labour —Bethnal Green) said the feature of the Budget was the unexampled courage of not placing new taxation on the country. There was optimism behind the Budget, which would have a healthy reaction throughout the country. Mr. D. G. Logan (Labour —Scotland, Liverpool) thought the Budget pointed out to Labour and employers a new era of co-operation. SWEDISH MAIL BANNED (Rci'd. 11.30 p.m.) LONDON, April -28 The German authorities have now banned "all mail to Sweden. In their turn the Swedes have stopped all visas for travellers from. Norway.