THE OTAGO DAILY TIMES Wednesday, June 2, 1943. THE CIVIL BUDGET

Otago Daily Times, Issue 25241, 2 June 1943, Page 2

THE OTAGO DAILY TIMES Wednesday, June 2, 1943. THE CIVIL BUDGET

A surplus of £4,155,000 as the outcome of the operations of the Government on the Consolidated Fund for the past financial year provides substantial evidence of the buoyancy of the public revenues. Factors which contributed to this gratifying result were a reduction in the departmental expenditure, a considerable increase in the yield of income taxation, and an increase in the return from the Dominion’s investment in the railways .and post and telegraphic services. The details of the departmental expenditure, which will show where a reduction was effected, are not yet available to us. The revenue was actually only £1,121,000 in excess of that for the preceding year. There was a heavy drop—of no less than £ 1,064.000 —in the receipts from Customs duties, apart from those duties which are specifically allocated to the War Expenses Account, and the current records suggest that revenue from this source tends still to fall. The highway revenue declined by £635,000, in comparison with that of the preceding year. The restrictions on the use of petrol and the virtual dismissal of private motor transport from the roads of the country sufficiently explain this drop. It is, however, offset by the - fact that the railway service enjoyed a fairly prosperous year through the transference of traffic to it, with the result that the Consolidated Fund benefited to the extent of £667,000 in a comparative increase in the payment of interest on the State’s capital liability. The principal contributor, however, to the revenue for the year was the proceeds from income tax, which yielded the unprecedentedly high return of £19,147,000, or £2,635,000 more than was produced by it in the previous year. This figure is, of course, independent of the taxation on incomes that is collected on behalf of the War Expenses Account and the Social Security Fund. Altogether, the sum extracted from the public in direct taxation and, so far as may be judged, provided ungrudgingly by the public, has reached highly impressive dimensions. It is a reasonable 1 surmise that the number of persons whom the income-taxation net embraces has been appreciably increased in the past year or so. The evidence which the revenue from taxation provides of the economic strength of the country should serve as an encouragement to the Minister of Finance to propose steps that would have the effect of widening and extending the sections of the community to which an appeal for subscriptions to the War Loan will be made.

A BLOW FOR THE AXIS It is more than welcome news that the French naval squadron which has been immobilised at Alexandria since the collapse of French resistance in 1940 is at last to become a weapon in the hands of Fighting France. When the Vichy radio broadcast the first announcement of this decision it was, it seems, for once making a truthful contribution to the war news of the day. Nor could the announcement have been made more opportunely than at the moment when General de Gaulle and General Giraud are meeting in North Africa under a pledge to overcome the political differences which have hitherto made French unity in the Allied cause impossible of attainment. With the Axis finally expelled from the African continent French patriots are finding themselves not only willing but able to renew, in effective strength, the struggle for the liberation of their country. French troops played a distinguished part in the campaign which led to the crushing of Axis resistance in Tunisia. Fighting French naval units, operating from British bases, have been participating in the war of blockade against Hitler’s Europe for nearly three years: Other warships came under Allied control in the early stage of the operations in North-west Africa, and it only remained for the allegiance of the Alexandria squadron to be won in order that a background of reality might be given to French hopes and aspirations in a theatre of war which must have an increasingly vital place in United Nations’ strategy for the subjection of the Axis in Europe. Admiral Godefroy, it would appear, was not easily persuaded to abandon his misguided loyalty to the Vichy Government for a more positive gesture in the interests of French honour. But the change of heart has occurred, and it may be assumed that it will be the cause of a depressing reaction in Berlin as well as in Vichy. It will doubtless be many months before any of the newly-acquired ships are fit to put to sea. They have been out of service for too long, and. apart from the refitting that will be required, crews will have to be recruited for them. But at least they escaped the tragic fate that overtook the major portion of the French fleet in Toulon last November, and the day will assuredly come when they will find battle stations in the last phase of the war against Axis tyranny.