CABLE NEWS.

Wairarapa Daily Times, Volume 46, Issue 141002, 21 April 1920, Page 6

CABLE NEWS.

BRITISH BUDGET.

PROPOSALS EXPLAINED. .(By Electric Telegraph —Copyright.) (Australian and N.Z. Cable Association.; V ‘ LONDON, Tuesday. The Budget proposals provide for a twopenny rate on three ounces by letter post, and a halfpenny on eac 1 additional ounce; a minimum ot one shilling for telegrams, and a penny tor six ounces on newspapers. It is estimated that there will be an remise of £6,500,000 in the revenue ot the 1 ost Office. The duty on spirits is raised to 12s 6d per bottle, and on retail beer by a peimv per pint. ' The duty on wine is doubled. Sparkling wines will be 50 per c-cnt ad valorem. An additional ad valorem duty of 50 per cent 'will be made on imported cigars, with a preferential rebate of one-third on cigars from the Dominions and India, and a preferential rebate of one-third on sparkling wines.;.produced m the Empire. The standard rate of income tax, viz., 6s in the pound, is unchanged, but a Bill will be introduced carrying out the fccommendations of the . Income Tax Commission. The exemption linn on married men will be £250, and on unmarried men £l5O. The excess profits duty will be increased to bO cent. The external debt of £l,2'S,000,000 shows a reduction of £86,000,000. During the course of this- year it will be further by the repayment of the Anglo-French loan It has been decided to repay the whole of the loan next autumn, without furthei . borrowing from 'the United States. The sale of Savings Bank certificates during the past year amounted to £45,00U.000, accounting for nearly half the reduction in the national debt. The estimated revenue on the existing basis of taxation will be £1,341,500,000, and the expenditure £1,177,500,000, leaving £164,000,000 for the reduction of the debt. This will be sufficient, and it is intended to call on the country to make a generous effort to improve the credit and lighten the future burden. The expenditure on supply services represented a reduction of nearly 60 per cent on the' previous year, and the current year will show a further icduction of 25 per., cent on the past year. There is an estimated loss on the Post Office of £11,000,000. In addition to the increases already mentioned, the question of telephone charges will be submitted to a Select Committee. The petrol tax will be superseded by a license duty on motor vehicles at the end of the rear. Tlie land values dutv ies will be. repealed as unworkable, but the mineral rights duty will be maintained. As regards spirits, the profits of the trade are still ‘ unreasonable, therefore the dfitv will be -increased to 12s 6d per proof gallon. -The estimated increase will yield £24,500,000 yearly. The beer duty is raised by 30s per barrel, producing £30,000,000 yearly. Both increases will operate to-morrow. Referring to the wine duties, the Chancellor said that only consideration for the Allies, especially France and Portugal, prevented previous increases, but it was impossible to further in - _

crease spirits and beer and leave wine untouched. It was proposed to adopt the recommendations of the Royal Commission in regard to the double income tax. It was confidently hoped that the Dominions would adopt these proposals, and make the relief complete. In any case, it was proposed to put them into operation immediately and unconditionally in the United Kingdom. Where the Dominion rate of tax did not exceed one-half the United Kingdom rate, the relief would be complete. This . would cost the Exchequer £2,000,0(10 yearly. It. was proposed to introduce a new tax, which might in future be a substitute for the excess profits tax, namely, a corporation tax of a shilling in the" pound on the profits of limited liability companies. As the income tax, the proposals of the Royal 3 Commission, subject to a super tax, would be adopted, as well as those in regard to special allowances to soldiers. The nett cost of the changes in the present year will be 2.i millions and 18.*-' millions in a full year. It was proposed to increase the excess profits tax to operate from Is Id, but in the event of Parliament adopting a war-wealth levy, he would be able to reverse the decision as regards the increase. Assuming that the latter was 60 per cent, the estimated revenue therefrom would be £220,000,000. Although the tax would be temporary, a permanent tax would be necessary. With a view to preventing the corporation tax being too severe a burden on ordinary shareholders, it was proposed ‘that the duty would not exceed 2s in the pound on profits remaining after the payment of interest and dividends on debentures and preference shares, yield of the new tax was estimated at £50,000,000 for a full year, in addition to the excess profits duty, and £35,000,000 for the current year! The changes mentioned would produce for a full year £198,000,000, while the current year would give a nett additional revenue of £76,000,000. The total revenue would be £1,418,000,000 for the current year. It was estimated to have £231,000,000 for the redemeption of the debt, of which £50,000,000 would be available for the reduction of the floating sebt. Moreover, as a result of the changes, it was anticipated that £300,000,000 would be available next year for the reduction of the debt, half of which would be available for .the reduction of the floating debt. The Chancellor said they had beep told that two such Budgets might destroy the Empire. He retorted that twenty such Budgets would redeem the whole of the Empire’s debt. Mr Chamberlain said that he 'was content to sec that, after a war involving such gigantic financial sacri-

fices, our position was one of unexampled and unequalled st&'cngtli. It was true that: it involved further taxes and sacrifices, which would not bring popularity to the Cabinet. But they had not- thought of their popularity. Their object had been to rise to the level ot their great responsibilities, so that when they left office they would leave their successors - ample revenue, with the country’s credit second to none. Ah- Chamberlain further explained that though twenty such contributions as at present proposed would wipe out the debt, he did not contemplate, after the first great reduction, that they would continue to pay off at a rate which would mean the extinction of the debt in twenty years. When the first great reduction had taken place, it would be for the country to consider how far it might relinquish its efforts.