THE BRITISH BUDGET.

Otago Witness, Issue 3399, 7 May 1919, Page 25

THE BRITISH BUDGET.

EMPIRE PREFERENTIAL DUTIES. (By Cable.) LONDON, April 30. The Budget estimate of the year's expenditure is £1,454,910,000, while the revenue is estimated, at £1,159,650,000. The total of the loans granted to the Allies and. the dominions was £1,739,000,000, including Russia £568,C00,0'00 France £434,000,000, Italy £412,000, Belgium £36,000,000, and Serbia £19,000,000. America during the year lent Britain £325,000,000. In the new Budget the income tax is unchanged. Wine has 6d on the lower duty and. 93 on the higher. Imperial preference- will be based on existing duties. It will be one-sixth on consumable commodities, apart from alcohol, and one third on manufactures. Mr Chamberlain, delivering his Budget speech, said the excess profits tax would be abolished as soon as possible. It would be 40 per cent, this year, yielding £50,000,000. The principal preferential articles would be tea, cocoa, sugar, tobacco, ram, motor spirit, kinema films, clocks, watches, arid musical instruments. The preference on spirits consists of a surcharge of 2s 6d on foreign liquor. The reduced tax on tea will operate on June 2. It is anticipated that the total loss of revenue involved will be £2,300,000.

The British loans to Allies and dominions include £171,000,000 to dominions. The death duties would be advanced on estates between £15,000 and £20,000 from 5 to 6 per cent. ; on estates between £1,000,000 and £1,500,000 from 50 to 32 per cent. ; and over £2.000,000 to 40 per cent. Mr Chamberlain, addressing a comparatively small House, said his* difficulties were' abnormal. The people were less inclined now to lend. their savings than in war time. There was not the same disposition to accept burdens without grumbling. The revenue exceeded the estimate by ,£47,000,000, while the expenditure was £393,000,000 below the. estimate. The daily expenditure prior to the armistice was £7,443,000, and subsequently £6,476,000. The national--debt at the end of March was £7,435,000,000. The estimate of revenue for 1919-20 includes £300,000,000 excess profits. Britain was in a better position to face the future, because our percentage of revenue to expenditure was the greatest of all the belligerents. The estimated revenue in future in a normal year on the existing basis of taxation was £653,000,000, and the expenditure £766,000,000. He proposed to make his Budget on that basis. The Government, said Mr Chamberlain, proposed to appoint a select committee to consider the land value duties, which were at present unworkable. There should be a reliable valuation, of land throughout the country. He proposed to review the motor spirit duty, owing to the expense of collection; also to repeal the excise duty on benzol, dropping the luxury tax and increasing the spirits duty from 30s to 50s per gallon. The new price per bottle would be 10s 6d, instead of 9s. The beer duty would be increased from 59s to 70s per barrel. Tobacco would be unchanged. He estimated that the extra revenue from spirits would be £21,000,000, and from beer £31,000,000. Outlining the preference proposals the Chancellor admitted that he could not disclose a really large policy. His task was only to give effect to the declarations of the Imperial War Cabinet and War Conferences. The present range of Customs duties was not. it could be made wide enough to develop Imperial trade. It was a small beginning, but he predicted that many members would see a really wide structure erected. It was necessary to bring the Customs into line with the excise where the latter existed, because preference must not be granted at the expense of the Home producer. They must also remember the interests of Allies. Therefore a general rule of preference must be a reduction of only 7 per cent, on sugar received from Empire sources and only 2 per cent, on tobacco. The Empire's production of siigar and tobacco could be largely developed. The preference on sugar equalled 4s per cwt, and on tobacco ls©ld per lb. He was grateful for the opportunity of introducing proposals with which his father's name was associated.

Mr W. Adamson, following Mr Chamberlain, said the Budget disappointed Labour, because it involved fresh loans, reduced the excess profits tax, and included colonial preference. The 'workers would not continue to carry the present burdens of taxation while profiteers were allowed to retain unpatriotic gains. The profiteers ought to be compelled to disgorge. The Government should control electricity, transport, and other public services. Sir Donald Maclean opposed Imperial preference. Mr Chamberlain replied that there would be an opportunity later to voice this opposition. Resolutions were adopted authorising the tea, beer, and other duties. Mr Chamberlain said that the preference on the wines would be effected by a reduction in favour of the dominions of the present high duty of Is 3d and Is (?) per gallon, according to strength. The preference would be 6d on the former and Is on the latter. There would be an additional tax on bottled wine of Is and 2s 6d per gallon, and the preference would be 6d and 9d.

The newspapers regard Imperial preference as the most signficant feature of the Budget. The Tariff Reformers are jubilant at the recognition of the principle, -whereas the Freetraders declare it a mere sham. They say that preference is impossible "without a tax on food. The unexpected drop in the excess profits tax causes satisfaction, and the increased death duties are approved in all quarters in view of the necessities of the situation.

In the lobby financial opinion is plainly favourable, and regards the Budget as sound, hampering industry as little as possible, while the balance sheet is better than anyone had dared to hope. The Budget shows a total deficit of £275,260,000. The new taxes and the increases in existing taxes during the current ' year will yield £41,450,000, after allowing for a loss of £2,300,000 on the preference proposals, leaving a net deficit of £233,810,000, which sum is to be raised by borrowing. The preference proposals for a full year will involve a loss of £3,100,000.

Sir Donald Maclean, resuming the Budget debate, said that the great spending departments which were spreading devastation throughout the country must be curbed. Mr Joseph Chamberlain had said that complete Imperial preference would invariably enta-H taxes on food. Mr Austen Chamberlain interposed: "The Government does not intend new food taxes."

Sir D. M'Lean continued, stating that great trade with the dominions could not be developed without granting preference on corn, meat, and wool. He regretted that he must fight the proposal. Colonel Amery defended the Government's proposals. He said this was not a direct issue between free trade and protection. It was questioned whether we regarded the Empire as a unit, and whether we were willing to promote intercourse, understanding, and development, thus strengthening the dominions. It was a worthy policy to carry out, irrespective of the old party divisions. We were entering a new period of the Empire's history of output, and should deal with the industrial, social, and economic problem in ' a new spirit, aiming at a wider unity.

The brewers and distillers are organising opposition to the Budget proposals for beer and spirit duties. - The Labour Partv intends to move amendments to the Budget, demanding a levy on capital, the continuance of the excess profits tax, the withdrawal of Imperial preference, and the raising of the income tax exemption limit to £250.