The Timaru Herald. WEDNESDAY, APRIL 16. 1930. THE BRITISH BUDGET.

Timaru Herald, Volume CXXV, Issue 18545, 16 April 1930, Page 8

The Timaru Herald. WEDNESDAY, APRIL 16. 1930. THE BRITISH BUDGET.

Facing a deficit of £14,500,000, instead of an estimated surplus of £4,000,000, tlie Chancellor of the Exchequer of Britain, had to choose between drastic retrenchment with sweeping economies in administration and the curtailment of the Socialistic, policy measures or an enormous increase in the burden of taxation now pressing heavily on the people. Mr Snowden estimated the expenditure in the current year at £782,000,000. This is by no means the highest demand made on the national purse during a single year. But, as the Chancellor pointed out, if he based the revenue for the year on existing scale of taxation, the balance would be on the wrong side of the ledger by £42,000,000. The problem, then, facing the Chancellor was how to provide many millions more in the current year when revenues on all sides are falling. Mr Snowden replies by announcing increases in the levy the State makes on various sections of the taxpayers. The proposals outlined by Mr Snowden suggest further increases in the present appalling burden of taxation, notwithstanding the fact that British trade is declining and unemployment is tragically increasing month by month. The critics have been urging that ruthless economy has become the first condition of Great Britain’s survival, but the donjinant political parties are pledged to extravagantly costly schemes. Early in March the estimates of the civil service and revenue departments for the current financial year , were issued. They showed a total of £368,095,208, which is an advance of £47,905,103 on the previous estimates. Civil estimates for 1930 total £295,685,558, an increase of £46,198,878, over the total of the estimates for 1929, including supplementary estimates. Labour comment on the Budget reveals that Labour Members are more concerned over omissions than the contents, hut even Mr Snowden realises the difficulty of the financial situation, and it is clear that the Chancellor’s repeated warnings to the Labour Party that he can afford no more costly legislation, are well founded, for we have the revelation that he has had to provide £42,000,000 of extra money to balance the Budget in the coming year. Doubtless the Government, has explored several avenues where economies could be effected. As the result of a special effort, at the request of the Chancellor, the Admiralty succeeded in cutting down its estimates by nearly four millions. This means that the total demand for the Xavy for the current year will be just over £51,000,000 —a year in which the estimates were £1,250,000 below those of the previous year. Then there is a cut of more than £2,000,000 on tlie Army. But the widening of the scope of the pensions scheme and the liberalising of the unemployment insurance benefits cost the national purse an extra burden of £11,500,000. It is

not easy to say just what effect the new weight of taxation will have on the fortunes of the British industries. For the last ten years the nation has been mercilessly bled by the taxgatherer. At first the effect of the bleeding was not obviously disastrous. But it has now proceeded so long and upon such a scale that the sufferer is in danger of collapse. On the top of a fantastically high income tax, crazy death duties on capital have been imposed. So at last all the financial fountains are beginning to dry up simultaneously. Land, houses, shares are all now falling in value. The point has been readied where an increase of existing duties instead of bringing in more is likely or, indeed, certain to yield less. Thus, when in 1920 Sir Austen Chamberlain placed a 50 per cent, surtax oil cigars, the receipts from cigar duties fell from £858,000 to £322,000 —a warning against the folly of such frenzied finance. In present circumstances industry is unable to obtain tlie capital which it must have if it is to expand, or the profits which it needs if it is to keep efficiently equipped. A great investment trust lias just disclosed the alarming face that of 740 investments widely distributed over the world the most unprofitable have been those in British basic industries!