The Timaru Herald. FRIDAY, AUGUST 27, 1915. THE BUDGET AND WAR TAXES.

Timaru Herald, Volume CIII, Issue 15741, 27 August 1915, Page 6

The Timaru Herald. FRIDAY, AUGUST 27, 1915. THE BUDGET AND WAR TAXES.

There will be no comparisons between line financial Statement brought down yesterday and past Budgets. Alike as the proTu. t of a National Government and a pronouncement showing- how the financial burdens of a greet war hare been and are to be met, the Statement read by Sir Joseph Ward last night; is unique among the Budgets of New Zealand. It is not meant to advertise any party; how much of it is Mr Allen's, who had his Financial Statement ready to bring down when the formation of a National Government caused posrnimeirnent, and how much Sir Tosapn Ward's, it would be vain to jr. quire and worse than frivolous'to speculate. The war is making great demands upon New Zealand, financially and otherwise. It is making theni entirely irrespective of local parties, at?d consideration of the Budget vill make most people more convinced of_ the wisdom of the policy which has caused a nonparty Government to be established to deal with the important problems which it raises. Such a Government can be relied upon to do what it' considers best ;n the interests of the whole Do- : minion, uninfluenced by any con- ! siderations which are less than [national. 1 The chief interest in this Bud-

get, admirably clear, concise, and dignified in regard to all the matters which it deals -with, will be focussed naturally on the proposals to raise new war taxed, and to make up the deficiencies in certain branches of the revenue which have inevitably resulted from the war. Thanks to the buoyant resources of this little country and arrangements made with the Imperial Government, the position has been well met till now, but the time has come when new measures are imperative. The National Government admits that the increasmg influence of the war on t,he finances of some Departments, cs shown by returns of the 7 ast four months, gives it "some concern." _ It is estimated that, on the ordinary bases of revenue, the country's general account would show a deficiency at the end of the current year of .£827,941. The amount required for war pensions is computed at a million pounds per annum, issuming that the war will last another year, while the annual interest and sinking fund payable on war loans of say twelve millions will amount to roughlv £'700,000. Like other countries which the war affects, New Zealand must be prepared to make great financial sacrifices, though the prosperity of this country and the nature of its products, always certain of a market while the British Navy rules the seas, ensures that they can be borne here more easily than they can in most.

The position is that two million pounds a year must be raised by new taxation, and increased rates for certain public services, to cover war expenditure direct: and indirect. The proposals for new taxes are set out .so clearly in the Budget that we need not deal with them in detail. It is recognised that everyone should bear some part of the war's cost, and t'hat the chief burden should be borne by those who have ; the broadest shoulders, more especially by those who have had most benefit from the increased value of four million pounds which the war has meant to New Zealand's exports for the year. These were the natural principles .to follow, and they have been applied with the courage of a National Government, with no fear of party consequences- The graduated tax on country lands will be increased by 50 per cent. The income tax will be increased considerably, but the £3OO exemption will not be further reduced. Subject to tShis reduction the income tax will be made applicable to income derived from land, as the primary producer's special contribution to the war which has brought him weal as well as woe. A duty will be placed on motor-cars with differentiation against those produced in enemy countries, and reduced on bicycles. A duty on petrol involves necessarily a tax of fourpence a gallon on kerosene, which the small householder can regard as his chief contribution. Excise beers are to be taxed on a new method, to .discourage heavier draughts, the fax on spirits will be slightly raised, and the prohibitionist will contribute _by a light tax on nonalcoholic drinks. A variety of stamp duties will be raised, and the man who puts a twopenny instead of penny stamp on a receipt will feel that he is doing something' for the war. Sport contributes through the expected duty of 24 per cent, on totalisator dividends; tea and tobacco are not further taxed. Slight increases on post. and telegraph charges, railway fares and freights will be regretted from the point of view of principle, but these and other impositions must be regarded • as purely emergency exactions, which may not have to be continued more than a year or two. The p r oposal to raise two million pounds in New Zealand for public works purposes, somewhat in the manner of the British war loan, debentures, bearing interest at 44 per cent., being issued for amounts of £o and upwards, will not "make money scarce'' to any bad extent while banks, including the Post Office Savings Bank, bear witness to an unprecedented accumulation of money open for investment. The scheme wiill enable small investors to invest their savings in a manner profitable to themselves and to the State. It will encourage thrift, which cannot be too widely practised while the war continues, and if the public works are wisely planned they will not only safeguard employment for many men unsuited to the Front, but cause further development of the industries whose products are our form of "munitions" for the war.