DEFICIT OF MANY MILLIONS

Timaru Herald, Volume CXXV, Issue 18545, 16 April 1930, Page 9

DEFICIT OF MANY MILLIONS

Mr Snowden’s Second Budget LABOUR PROPOSES HEAVIER TAXATION. In the House of Commons, the eagerly-awaited Budget was presented by the Chancellor of the Exchequer (Mr Snowden). The Budget disclosed a deficit of £14,000,000, and the Labour Party’s proposals, involving additional taxation of £42,000,000, 1a ave not been received with any enthusiasm by the British Press.

“HEARD ALMOST IN SILENCE.” MR SNOWDEN’S BIG EFFORT. (Untied Press Association— By STectrla xe.-*grapn—Cop v right.) LONDON, April 14. More than ordinary tenseness marked | the feeling in the House of Commons i this afternoon, than is usually felt, in I anticipation of the presentation of the Budget. Awaiting the Budget. It was Mr Snowden's second Budget, but the last time the task was easy. This time he faced a deficit. Not only was the floor of the House of Commons, but all the galleries were crowded. Something drastic was expected. The secrets were so carefully guarded | that usually well informed circles were ignorant. Would Mr Snowden show himself a bold imaginative Chancellor? Would he rise above party? These were the questions which were uppermost when Mr Snowden entered the house £ + 3.30. Instantly a wave of sympathy went out to the Chancellor. His spinal affection gives him much pain, and makes him walk slowly and stiffly. Mr Snowden is universally liked, and when he entered, walking with the aid of two sticks, the Conservatives were willing !at heart to cheer with Labour supporters. Mr Snowden toyed with the key of ! the Budget box awaiting the end of a long series of questions, and then produced from the box the speech, which he had typed himself. It was heard for the most part in silence. Budget in Brief. Some outstanding features in the Budget speech were that the income tax standard rate has increased sixpence. The increases in income tax and the supertax will yield £31,500,000. This year death duties increased to 50 per cent and supertax on large incomes increased by a graduated scale by (threepence to 1/6. Safeguarding was allowed to lapse, but the M’Kenna duties were retained.

The Deficit of Millions. The Chancellor said the financial year ending March 31, closed with an actual deficit of £14,500,000, instead of the estimated surplus of £4,000,000. The revenue fell short of the estimate by £11,750,000. There were deficiencies on the spirit duty of over £1,400,000, and on beer duty of nearly £1,800,000. The sugar duty was nearly £1,600,000 short. On the other hand, tobacco duties continued to show their good record, yielding a surplus of £2,800.000. The income tax, yielding £237,500,000, was £2,000,000 below the estimates, though it showed an advance on the yield of previous years, if the various changes in the rate of the tax were taken into account. So far, therefore, as income tax might be taken as a barometer of the nation’s prosperity, one was entitled at least to say that industry, as a whole had continued to hold its own. The surtax was £1,500,000 below the estimates. Stamp duties owing to the decline in stock exchange transactions, fell short of the estimate by the large sum of £5,250,000. With regard to expenditure, Mr Snowden said the Ministry of Labour required a supplementary estimate of nearly £7,750,000. On other services there was a saving of about £1,000,000. It was thus that the total expenditure exceeded the estimates by £6,750,000. Budget Proposals. Mr Snowden estimated the total expenditure for the current year at £782.000,000. He estimated the revenue on the baste of the existing taxation at £739,750,000. The difference which he had to make good was over £42,000,000. Mr Snowden then announced changes in taxation by which he proposed to raise this amount. The standard rate of the income tax would be increased by 7d, to 4/6 in the £. Small incomes, however, would still pay only 2/- on the first £250 of taxable income, as at present so that three-quarters of the income taxpayers would not be affected. The surtax would be increased. The increase in the initial rate of the surtax would be from 9d to 1/- in the £ on income in excess of £50,000 a year. It would be from 6/- to 7/6. With regard to death duties, he proposed to amend the existing scale by increases of from 10 to 20 per cent on estates from £120,000 to £250,000 onwards, and to increase the scale gradually from £250,000, to reach the rate of 50 per cent on estates of £2,000,000. The duty on beer would be increased by an equivalent of Id per gallon, which was too small to justify any alteration in the retail price. Labour’s Fiscal Policy.

Regarding the safeguarding duties, the Chancellor said these duties were not primarily revenue duties, and under the Acts imposing them, four of them were due to expire this year, namely the duty on lace, on June 30, and the duties on cutlery, gloves and gas mantles on December 31. He proposed to allow these duties to continue till the respective dates, but not to renew them. The consequential loss to the revenue would be £521,000 tnis year and £823,000 in a full year. In regard to the McKenna duties of 33 1/3 per cent on imported motor cars, clocks, matches, musical instruments, and cinema films, Mr Snowden said he regretted that the financial position would not permit him to carry out this year the Government’s pledge to remove all existing fiscal duties, but it was the Government’s intention to do so before this Parliament ended four years hence.

Ollier Points. Mr Snowden added that the Government intended to levy a contribution on land values. The first essential step was to prepare a valuation list, which must take some time. He proposed to provide for valuation in a separate Bill. Regarding the position of the national debt, Mr Snowden said during the past financial year the total deadweight debt had been reduced from £7,500,000.000 to £7,469,000,000. and the floating debt had been reduced from £837.000,000 to £737,000,000. which was the lowest finance recorded since the war. Reception of Speech. Mr Snowden spoke for an hour and three-quarters. He passed through the ordeal wonderfully. As a physical effort and the lucidity of his exposition of the speech was admirable, as the Budget was at once provocative, commonplace, mechanically efficient, uninspired and drastic, but an unimaginative one. Great surprise was the reimposition of 6d income tax. Few speculators took this into consideration across the e loomy landscape of increased taxation Mr Snowden cast few fitful gleams of humour. A shout of jubilation followed the announcement of the retention of the McKenna duties. “Take care” reported Mr Snowden, grimly. “I may change my mind yet before Parliament is finished.” Mr Lloyd George and Mr Churchill warmly congratulated the Chancellor when he resumed his seat. Debate After Easter. Parliament will adjourn on Thursday for Easter, and the Eudget debate will be continued after its re-assembly. PRESS COMMENT ON BUDGET. LITTLE ENTHUSIASM AROUSED. (United Press Association—By Electrio Telegraph—Copyright.) (Received April 15, 9.10 p.m.) LONDON, April 15. None of the political parties are specially enthusiastic over the Budget. The Conservatives criticise it as commonplace; the Liberals describe it as steep but straightforward, while the Labour members are more concerned over the omissions than the contents. It is estimated in the lobby that an increase of 6d in the income tax will yield £29,000,000 for the full year, but changes of graduation decreases the yield to £24,000,000. Middle-class earned incomes below £IOOO are practically unaffected, while incomes of £ISOO only pay about £l3 to £2O more, according to what is earned, or from investments. Nottingham is the storm centre of the Budget. The duties on lace expire in ten weeks, when the staple industry of the town will be menaced by unrestricted foreign imports. Manufacturers say there is consternation at the decision not to renew the safeguarding duties, especially as the threatened increase in the United States duties is virtually prohibitive of British laces.

The motor industry welcomes the retention of the McKenna duties. Although the expected relief from the horse-power has not materialised, the industry generally is relieved at the fact that there is no further taxation. The “Daily Telegraph” says the Budget is another step along the dangerous road, the end of which will be that three-quarters, or seveneighths of the community will be enjoying full political power and complete control of expenditure without personal contribution to revenue, except through the consumption of tobacco, spirits, beers and a few food commodities.

A responsible section of the Press legards the Budget as increasing the burdens of industry, and stresses the drain on the capital resources of the nation.

The “Times” says: “The Budget is like the speech—essentially unimaginative. It does not reveal a single new idea, and it will deepen the disquieting impression that the wealthier section of the community is merely being exploited by the Socialist Government in order to provide the expansion of the social service.