BRITAIN’S FINANCES.

Southland Times, Issue 19481, 3 April 1922, Page 4

BRITAIN’S FINANCES.

Taking into account the conditions in industry and trade during the year just closed, the British Government is entitled to congratulate itself on the fact that the tailing off in revenue compared with the previous year, is not more than £301,000,000 and that the estimated revenue was not more than £72,000,000 in excess of the actual returns. The largest single item falling off, compared with the previous year is, of course, in connection with the Excess Profits Duty, which reveals the effects of the depresaon and strikes by almost disappearing. The Excess Profits Tax is not sound in principle, and it is a heavy burden on British commerce at a time when the business world is faced with difficulties, to deal with which, requires to be as free of encumbrances as possible. Strikes and ■dtu’i diwwetftticn in JR,usaia.’a

to trade; and the heavy burden of taxation have weighed heavily on Britain during the year, and the return from the Excess Profits Duty tells its own story. This tax is doomed, but the Corporation Profits Tax will, to somt extend take its place. That the Chancellor of the Exchequer anticipated a serious set-back in the returns from trade is obvious by his budget, but his estimates did not provide for all the effects of industrial unrest and trade depression. His figures show that the falling off in. the revenue to be extracted from trade was in excess of his expectations:

Totals £960,000,000 £813,101,000 * Calculated. If we cut out the tax on motor vehicles as giving no indication of the condition of trade, the figures are less favourable to the extent of £2,000,000, showing that the Chancellor of the Exchequer under-estimated the effects of the slump by £147,000,000 on the revenue from taxation. The receipts from the sale of war assets was also far below the estimate, the difference being £41,367,000, a large part of which may be explained by the trade depresaon. These figures suggest, too, that the budget for the year we have just entered will present some exceedingly knotty problems, in spite of the economies proposed by Sir Eric Geddes’s Axe taxation, but the Treasury’s Geddes Axe Committee. Britain must have relief from taxation, but the Treasury’s difficulty is that the taxable wealth is going to be lower this year than it was in the twelve months just closed, and a diminution in the rate of taxation must be a precarious move, unless there is a big margin between revenue and expenditure. At the close of the year taxation in the United Kingdom was equal to a charge of £l6 18s 9d a head, compared with £l4 5a 3d a head in this country, which is abnormal oxvnng to the influence of extraordinary customs figures. The public debt in the Old Country works out at £lBB 5s lOd a head, compared with approximately £166 in the Dominion.. It will be noticed that while the expenditure chargeable against revenue fell £155,000,000, the nation’s indebtedness is not yet showing any disposition to decrease. The expenditure was actually £10,000,000 lower ihan the estimate, but the anticipated surplus of £176,000,000 for the reduction of the war debt dwindled to £9.5,000,000. An examination of the figures, which reach the public with a promptness that should make New Zealanders envious, will explain much of the British Government’s policy both at home and abroad. In the face of these figures, costly commitments in the Near East rouse the ire of the taxpayer, and he demands a change in the foreign policy of the nation, so that the public purse may get some relief. In these figures, tool appears the explanations of the demand for economies, but while they disclose difficulties ahead, it must be admitted that the result of the past twelve months, with their expensive strikes and withering trade slump, has been to show the wonderful recuperative powers of the nation.

Estimate £ Actual £ Customs 126,000,000 100,000,000* Excise 196,000,000 194,291,000 Motor Vehicles 9,000,000 11,160,000 Estate duties 48,000,000 52,191,000 Stamps 21,000,000 19,638,000 Income tax 410,000,000 398,887,000 Excess Profits 120,000,000 19,412,000 Corporation. Profits 30,000,000 17,516,000