Patea & Waverley Press FRIDAY, AUGUST 2, 1929. A MATTER OF MONEY.

Patea Mail, Volume L, 2 August 1929, Page 2

Patea & Waverley Press FRIDAY, AUGUST 2, 1929. A MATTER OF MONEY.

ALTER the various eulogists are finished describing the neAvly established British Labour Government as really Liberal, Radical, Moderate, “Peace and Employment Government,” etc., avc shall arrive'at the hard fact that the test is one of finance. Like Lenin, the British Prime Minister has produced an N.E.P. (New Economic Policy). The Bolshevist’s N.E.P. Avas a step aAvay from State control, AAdiereas the plan of Mr. MacDonald is an extension of State management. The Economic State Department or Council under the charge of the Hon. J. H. Thomas is expected to Avork AA’onders, but, after all, it is the “Exchequer” Avhich Avill remain the chief Department of State. Hoav arc the funds to be found for the great projects visualised is the practical question. The total revenue is £758,104,000. Of that half is raised in the manner folloAving: Income tax £237,620,000; super tax £56,150,000, death duties £80,570,000. This £374,340,000 is paid by tAvo and a-quarter million of the people. It is not suggested by the Labour Party that the rest of the population, or any considerable section of it, should be heavier taxed. We can quite understand the millions 'practically untaxed voting quite cheerfully for those Avho Avill place more taxation on the two million five hundred thousand avlio pay the direct taxes at present. The present Chancellor of the Exchequer has said “no one realises more fully than I do the valuable Aveapon that avc have in taxation for realising much of our Socialist aims. But it is a weapon Avhich requires to be used Avith discretion.” Tavo points in that statement call for serious thought—the reference to taxation as a ‘Weapon,” and Avhat exactly is meant by “discretion.” Of the general programme adopted by the party Mr. Snowden says, “of the 63 items of the programme tAvo-thirds' aaull call for financial assistance from the State.” The party adopted and Mr. Snowden approves of another tax to be called the “sur-tax;” It is intended to put a graduated sur-iax on unearned incomes of over £SOO per annum. This is called “taxing the idle rich.” The optimists of the party think this sur-tax Avill produce £85,000,000, others of the party estimate it at very much less. Mr. W. W. Pain, the eminent banker, points out, in the “Times,” that the sur-tax on “unearned” incomes is putting the instrument of taxation to iicav and Avholly illegitimate uses. He foreshadoAA’s that it Avill shake the general feeling of security and cause people to take their capital to other countries Avhere security is greater. So the question of AA r hother the adding of this sur-tax to flhc .already imposed income tax, super tax, and death duties is really discreet cannot be avoided. Then avc are told the Government Avill shortly arrange a diplomatic and trade agreement with Soviet Russia. The step involves the lending of at least £150,000,000 to Russia on her assurances, Avhich no doubt Avill be readily given. In 1924 the same parly proposed to lend Soviet Russia from £100,000,000 to £200,000,000. It is just another rather large question of finance that is contemplated. Other methods of relieving the financial pressure which the Labour Party endorses are a further increase on the “denlh duties” and “drastic reduction of expenditure on armaments.” On the first of these Mi;. SnoAvden says: “The question should be not Avhat the Exchequer will take from the Avcal-

thy testator, but what it will leave to his heirs.” This financing is built on the assumption of large fortunes is a permancy whereas it may prove quite otherwise. Altogether the matter of money is likely to prove a rather severe test to the netv Government and it seems likely to raise other issues of policy which may prove severe tests of Britain’s standing in the world. Fundamental principles may receive scant consideration at party congress or on the hustings yet they have to be reckoned with afterwards.