MEETING THE SHORTAGE

Taranaki Daily News, 29 April 1931, Page 7

MEETING THE SHORTAGE

INCREASE IN PETROL TAX BULK OF EXCHANGE FUND INCIDENCE OF INCOME TAX ' INSTALMENT DUE EARLIER British Official Wireless. Rec. 5.5 p.m. Rugby, April 27. Regarding the problem of finding the necessary additional revenue of £37,366,000 Mr. Snowden said there were the strongest obstacles to any increase in the rate of taxation. Taxes which would reduce the main consuming power of the masses must be harmful to trade. On the other hand, he regarded this Budget, like the last one, as one dealing with a temporary emergency and justifying temporary measures. Members would be aware of the nature of ' the exchange account representing £33,000,000 advances as credit during the war to be utilised by the Treasury for purchases in foreign exchange and to finance payments for obligations abroad. Up to recent days it was not possible to reduce the amount beldw £33,000,000. The present circumstances arose from the Hague agreement and the establishment of the Bank of International Settlements.

Previously Britain received the payment of reparations and of instalments of French and Italian, war funds in sterling, but it had now arranged that these funds should be placed to Britain’s credit in the Bank of International Settlements in dollars, which they could utilise in making payments of foreign debt. These arrangements had been working for a year. It did not follow that the exchange account could be dispensed with altogether, but no doubt the amount was excessive for present or future needs apd could be reduced by £20,01)0,000. > INCOME TAX REARRANGEMENT. The Chancellor said he had decided, not to propose any increase in the standard rate of income tax but to tide over the period by a concession whereunder the tax which became payable in two equal instalments would be modified so that the first instalment, payable in January, would be three-quarters of the total. As a result the Exchequer would get the extra quarter of a year’s tax within . the present financial year, and the estimated gain would be £10,000,000. Mr. Snowden proposed that the remaining £7,500,000 should be raised by increasing the present rate of duty on oil from 4d per gallon to Od, which would still leave petrol no dearer than befo.e Mari and lower in price than last September. This would give him the funds he needed to balance the Budget. 'The revenue would amount to £803,500,000 and the expenditure to £803,366,000, giving a nominal margin of £135,000. Any drop which occurred in th? finances of the year should be,met by economies. The Budget js generally regarded as unsenSational. It has pleased those who c • skier an increase in direct taxation should be avoided at all costs. MoLris'i,. whose petrol tax is now sixpence & gallc . instead of fourpence, appear to be resigned to the situation.

Mr. Snowden’s raid on the dollar securities fund is described as a clever manoeuvre renflneScent of Mr. Churchill’s raid on the road fund. The Conservative, Mr. S. Samuel, says Mr. Snowden has succeeded in balancing the Budget by “robbing the money box on the mantelpiece, ’ The Daily Mail says the Budget is neither wise nor prudent. It helps no British worker or taxpayer. The payment of three-quarters instead of half the assessment in January, 1932, will inflict a cruel hardship on thousands of modest homes, and Seriously embarrass business. “UNWARRANTED OPTIMISM.” The Times editorially says the oustanding features of the Budget are unwarrant I optimism, misplaced fertility of makesnifts, and a display of the ingenuity of the tax extractor instead of zeal for economy. The raiding of the dollar exchange will damage Britain’s credit, while in view cf Germany’s position it involves an unwarrantable risk. The taxpayer is like a dentist’s patient who has escaped from the most painful attentions until the next year. The . Morning Post described the Budget as « “Sufficient unto the day scheme.” It states that Mr. Snowden is trusting to Providence to escape a deficit at the end of the year and has closed the existing, gap by a process of jugglery, Tfie Daily Herald (Labour) approves of the Budget on the ground that there are abundant signs of the end of the worst trade depression in eight. The introduction of the land values tax makes the Budget a landmark in financial history. Other City editors describe the Budget as much less unsettling than was at first feared. z

Brewery and tobacco shares are buoyant and oil shares have recovered as the impost on petrol is less than was expected. The Daily Telegraph says the Budget within the limitations of Mr. Snowden’s free trade principles is an eminently sensible piece of work. It recognises the paramount duty to Jet the taxpayer off lightly.