IMPERIAL BUDGET

Otago Daily Times, Issue 18544, 3 May 1922, Page 5

IMPERIAL BUDGET

PRESENTED BY CHANCELLOR., DIFFICULT PERIOD WEATHERED. THE NEW PROPOSALS.' i . REMISSION OF TAXATION. DEBT REDEMPTION DISCONTINUED. Press Association—By Telegraph—Copyright LONDON, May 1. Sir Robert Horne (Chancellor of the Exchequer) presented the Budget in a crowded House. He pointed out that during the first quarter of the year the greatest industrial trouble that Britain had ever known had swept over the country, causing inevitable unemployment and a loss of revenue. That we had met these distresses without worse calamities testified eloquently to the country’s soundness and the solidity of its financial position.The year’s revenue had totalled £1,124,880,000, which was £91,000,000 below the estimate. The .expenditure was £1,079,189,000, leaving £456,693,000 for debt redemption. It was remarkable that in such a year the income tax and the super tax should together have yielded £399,000,000. The excess , profits duty yielded £122,000,000, but repayments absorbed £92,000,000 of this. The improved value of the pound sterling was the first proof of our payment of external debt. During the year the internal debt had been reduced from £1,275,000,000 to £1,029,000,000. COMING YEAR’S ESTIMATES. The Chancellor estimated the coming year’s expenditure at £910,000,000, consisting of £363)438,000 for Consolidated Fund charges and £526,641,000 for special services. On the existing basis of taxation, he estimated that the revenue would be £946,600,000, leaving a surplus of £46,500,000, excluding any provision for the redemption of debt. He had always treated the possibility, of receipts from Germany as windfalls. NEW TAXATION PROPOSALS. In respect to the Corporation Profits Tax, the exemption period for which had expired on December 31, he proposed to extend the exemption for three years. ' It was proposed to reduce the basis for the assessment on agricultural land from double the annual value to the annual value, and on land not being used for agricultural purposes it was proposed to revert to the pre-war assessment basis—namely, on one-third of the annual value, These changes would reduce the income tax yield by £2,150,000. The payment of the arrears of the excess profits duty would be spread over five years. , POSTAL RATES REDUCED. The postal rates would be reduced to lid on letters. Id on postcards, and id on printed papers. The new rates would operate from May 31. The telephone charges would also be reduced. These items together would reduce the Post Office revenue hv £6,500,000. The above concessions would reduce the surplus to £38,300,000. DEBT REDEMPTION POLICY. Unemployment was breaking the hearts and embittering the liyes of hundreds of thousands of people, and the unparalleled depression was still with us; But there were hopeful signs of a revival. The magnitude of the burdens of the British taxpayers had won admiration throughout the world, but he thought that the present circumstances justified the giving of some stimulus to trade in the shape of not continuing the policy of debt redemption, apart from the interest falling due to America which it was proposed to meet. Therefore, it was proposed to devote the surplus to the reduction of taxation. The income tax would be reduced by Is and the tea duty by 4d a pound from May 15, involving remissions also on coffee, cocia, and chicory. These reductions would leave the following figures: Revenue, £910,775,000. Expenditure, £910,069,000. Surplus, £706,000: —A. • and N.Z. Cable. THE BUDGET DISCUSSED. MR ASQUITH’S COMMENT. *“A GREAT GAMBLE.” LONDON, May 1. (Received Mlay 2, at 5.5 p.m.) In the House of Commons, Mr Asquith, in discussing the Budget, declared that the surplus of £38,000,000 ought really'to hae been earmarked for the reduction of debt only. The excess of the revenue over the expenditure justified the remission of taxation, and not the surplus which had been artificially produced. , Sir Robert Horne was indulging in a great gamble. Mr Asquith said he would be surprised if the estimate of the Supplementary Estimates was not doubled during the year. Mr J. R. dynes welcomed the reduction of the tea duty. He declared that the way to encourage trade was to reduce the taxation on firms and corporations, and increase the taxation on individuals. He disapproved of such substantial concessions to the agricultural interests, and advocated a graduated lew on accumulated wealth. Sir Frederick Banbury described the suspension of the Sinking Fund as the beginning of a bad policy. He urged further economies. Mr E. Hilton Young (Financial Secretary to the Treasury), in reply, said that the reduction of Is on the basic rate of the income tax did not mean that all the income tax would be reduced by that amount. An explanation of how the reduction would- operate would be issued later. The customary resolutions were passed, and the debate was adjourned.—A. and N.Z. Cable. OPINIONS ON THE BUDGET. FAVOURABLE IMPRESSION CREATED. BEER TAX CRITICISED. LONDON, May 2. (Received May 2, at 7.15 p.m.) The Budget was variously , received in the lobbies and outside Parliament, but on the whole it created a favourable impression. There is a certain amount of criticism about the suspension of the Sinking Fund on the ground that the conditions are not ready for it, but there is a strong counter opinion in financial circles that Great Britain* has hitherto made undue sacrifices for the redemption of debt, and that it is unfair and fatal to British trade to continue the repayment at such speed. The retention of the heavy war tax on beer has been criticised on the ground that a reduction would lead to a greater consumption, and therefore increase the aggregate yield of the tax. It is contended, on the contrary, that an additional consumption is not wanted. The question remains the pivot of a sharp controversy. A more important, claim is that the income tax ought to be extended to the cooperative societies whose turnover was £420,000,000 during 1921. The possibilities of extracting revenue from the pari-mutuel have been commented on, and the Australasian methods of exploiting racing'for the purposes of revenue have been mentioned approvingly. The pari-mutuel is gaining in popularity in England, and it is pointed out that it could produce a progressive relief to the general taxation.