BRITISH BUDGET

Wanganui Chronicle, Volume 83, Issue 98, 28 April 1939, Page 7

BRITISH BUDGET

REVENUE PROSPECTS THE CHANCELLOR S SPEECH MOTORISTS TO PAY MORE (British Official Wireless) RUGBY, April 26. Dealing with revenue prospects in presenting the Budget, the Chancellor of the Exchequer, Sir John Simon, said he thought it prudent to put customs and excise revenue al £338,000,000 (about £2,500,000 below last year’s receipts), income tax at £327,000,000 (£9,000,000 less than the actual receipts for 1938), surtax at I £66,000,000 (£3,000,000 more than the past year), death duties at £77,000,000 and stamp duties at £21,000,000 (both the same as last year) and the national defence contribution at £25,000.000, which was a full year’s yield for the first time. Close to Expenditure The total estimated revenue on the existing basis of taxation was £918.330,000. The estimated revenue was thus within £4,000,000 of the expenditure, apart from the large increases in the defence expenditure decided upon since the defence estimates were presented. In February, when defence expenditure was estimated at £580,000,000, he announced the intention to obtain £350,000,000 from loan money and the remainder from revenue. The total, now required for defence was £630,000,000, compared with £430,500,000 last year and £265,000,000 the year before. He proposed that of the additional £50,000,000 required for defence over the February figure, £20,000,000 should come out of revenue, bringing the total for defence to be found out of revenue to £247,750,000 and the remainder out of loan. What was really involved was that the taxpayer owuld have to find £942,000,000, while defence loans would bring in another £380,000,000. Entertainment Duty After announcing a small reduction in entertainment duty and the repeal of medicine and stamp duties. Sir John Simon said he proposed putting an excise duty on photographic films and plates manufactured in Britain, and the rate of duty he proposed was 4£d per square foot, which would be equivalent to about 2d on the most popular sizes of roll film commonly used by amateur photographers. X-ray films and films used for medical and scientific purposes would be exempt. He had no wish to hamper the production of British motion pictures and he proposed to allow the rebate usual to excise duty of whatever wastage occurred, as he understood it did occur. Concurrently, Customs duty on blank films and plates would be increased. He prefaced his announcement that he did not propose raising the standard rate of income tax by saying he thought any measure which would have" a generally depressing effect on industry ought to be avoided.

Horsepower Tax Referring to the increase in the motor-car horsepower tax, Sir John Simon recalled that users of motor vehicles had enjoyed a reduction of 15s for five years. Dealing with the modification in surtax and estate duties by way of percentage additions to the present rates, he said any fair-minded man would recognise that the surtax rates were already exceedingly high. Nevertheless, the principle of applying increased contributions from all quarters must be adhered to. With regard to the proposed increases in direct taxation, he said, the basic duty on tobacco at present was 9s 6d a pound. This would he raised to Us 6d a pound. The present duty on foreign raw sugar was equivalent to 9s 4d a cwt., and the new rate would involve an additional 2s 4d a cwt. Favourable Reaction City circles regard the Budget as favourable, except for the increase in tobacco and motor taxes, although in the case of motors it is believed that the intention is to divert the motor manufacturing industries to armaments. The increase applies only : to private cars. | The faqt that there is no increase ; in income tax is regarded as a bull i point for business. Generally it is believed that Sir John Simon has I distributed that burden of taxation as i fairly as possible. An Automobile Association official ' said that taxation on motor vehicles and fuel in 1937-38 yielded more I than £84,700,000. It was estimated ’ that on the existing scale the yield [would be £93,000,000 for 1938-39. Cars

were no longer a luxury and must be used for business purposes. A tobacco expert expressed the opinion that the increase in the duty would cause people to turn increasingly to Empire tobacco, which would still enjoy a preference of 2s a pound duty. A large firm of photographic dealers said that the shilling roll favoured amateurs. The duty was to be increased by 3d and not 2d as the Chancellor estimated. The tax was so unexpected that it was impossible to visualise the results. Taxation Changes

The estimated yield of the taxation changes for this year will be £24,270,000, and for the full financial year £33,945,000. The principal increases are: Motor vehicles duties, £6,250,000 and £11,500,000; surtax, £4,000,000 and £4,500,000; estate duty £3,000,000 and £5,000,000; tobacco, £7,000,000 and £8,000,000; photographic plates and films, £BOO,OOO and £1,000,000. LABOUR VIEW OF BUDGET LEVY ON WEALTH PROPOSED PRODUCTION OF MUNITIONS Received April 27, 5.5 p.m. LONDON, Apjil 26. Major Attlee, Leader of the Parliamentary Labour Party, broadcasting Jjis views on the Budget, said: "Sir John Simon does not plan for the future. He makes no proposals for paying off debts, and the Press and city magnates would rage if a Labour Chancellor acted similarly. Only a third of the extra taxation comes from the wealthy and twothirds from motorists and smokers and consumers of sugar. The Government should gtop tax dodging and fortune making from the nation’s needs; secondly, make a levy on accumulated wealth; thirdly, plan lhe country's economic life; and fourthly, organise the production of munitions so as to prevent waste and high prices. Sir John’s Budget is designed to maintain and increase the present inequality of distribution of wealth."