Extract from the
SOUTH CHINA KORNING POST
17th
dated
January, 1941.
232
Total
War Budget
as-
war intrudes further into the life of the Colony with the Budget introduced in Council yesterday: it is our first real since at taste of war finance, budgetting time in 1939 the war in Europe had scarcely begun. The complacent will read the proposals with some shock: com- ! pared with the slowly growing normal expenditure the sudden jump to the record total of $67,000,000 carries the figures up to the plane of the tronomical. All must have realised, however, that, with rising costs and increasing com- mitments, especially the ex- pensive and inescapable pro- visions for defence, Govern- ment's financial requirements would be substantially greater. Upon reflection, it may be agreed that the outlook might have been much worse. Ordinary revenue, with some additional minor taxation, reassuringly still reaches its expected levels, covering also much expenditure which could properly be debited against the war. The special war expenditure for the current year (estimated at $2,000,000) is approximately $12,000,000, and the war taxation will not pro- duce more than $10,000,000: yet there is no deficit. There is room for congratulation, and satisfaction is a good basis for optimism and determina- tion. Acquiescence in a new sense of values also will be wise, for the calls for money are likely to be greater. It should be aided by the reason- able, responsible and sympathe- tic attitude of Government, which invites the community's assistance and expresses full cognisance of the community's problems. No further plea for loyal cooperation should be necessary.
With an expected deficit of $7,000,000 for the coming year, a reserve already below the de- sideratum level of $10,000,000, and another special war bill of at least $12,000,000, further taxation is unavoidable, plung- ing the Colony again into debate on ways and means. High light of the prospect is, of course, the War Taxation. This was estimated to yield about $6,000,- 000, and produced $9,500,000. Even that proves to be not
enough. Government confesses: that to ask for more is embar- rassing. Somewhat lamely it reminds the taxpayer that the probable yield of the original Income Tax plan was estimated at $10,000,000, and that Govern- ment accepted the Taxation
less Committee's
productive alternative scheme with reluc- tance. In turn, Government must be reminded that in the face of popular opposition it hastened to, disclaim the original $10,000,000 expectation, and that with a transparent deprecation it hur- riedly accepted the Committee's
plan, to produce $6,000,000, pre- tending that the recommenda- tions were a representative opin- ion, despite the repeated conten- tion that it was not. However, as the Financial Secretary said yesterday, no one wishes to re- vive the controversy now, and recrimination serves no pur- pose. Obviously, upon the Corporation total, the taxa- tion should have produced more, and if it is to do so this year it must be revised. Op- position to straight Income Tax being strong still, the revision would better be within the framework of the existing scheme. The public will need no assistance in finding the delin- quent. While salaries and rents contributed as expected, and corporations twice as much as was hoped, the tax on firms' pro- fits failed to fulfil expectations. This result bears out last year's criticisms and the prophecies of evasion. Government has ferred the matter back to the Committee and the response will be awaited with close interest. The public is with the Govern- ment in the opinion that the existing inequities and imper- fections must not be aggravated: the opportunity offers to reduce them.
re-
The responsibly minded sec- tions of the community approve the principle of direct taxation -stipulating that the money
be well spent. Defence, of course, overshadows all other claims. Here it must be noted that the $15,000,000 being spent on defence this year (including gifts to the Imperial Government) and the $12,300,274 to be spent next year, do not include the Volun- teer Forces, nor all the Air Raids Precautions outlay, nor the De- fence Contribution of $6,000,000 (this year $7,500,000). The
position would be clearer if de-
fence expenditure were all pro- vided for in a separate Budget. The Colony's total expenditure on defence (without counting incidental items). is something like $20,000,000, plus whatever gifts are made to the Imperial Government-or about one third of the total revenue. So far, i the Colony has contributed to Britain's war effort two gifts of £100,000 each, an annual gift of £200,000 from Exchange Stabi- lisation profits, about £100,000 from the publicly subscribed bomber fund, and some smaller private donations and loans: the little local naval building pro- gramme has not yet been com- menced. In the opinion of many, the Colony is not doing enough—except, as Government says, that local defence is a de- finite contribution to Empire defence. The proportion of de- fence expenditure to total re- venue is so high, however, that the time has come for more care- ful allocation and supervision. The dormant fear of waste has not yet prompted outcry: but as taxation increases Government must expect to be called to ac- count.
There is general regret that defence expenditure has not been made to serve dual purposes. The welcome air raid shelter tunnels will apparently be of little other use beyond dor- mitories for the destitute-hard- ly an acceptable permanent adaptation. To excavate them as underground parking places for motor cars would give them better value. The ideal conver- sion would be to something of social betterment or develop- ment. Instead, the community is left to agree to additional pro- vision-approving the Govern- ment's policy of not neglecting advancement but of striving still to improve the amenities--and to hope that the money available wil suffice. Some great ex- pectations must be abandoned temporarily; but Government is correct in insisting upon pro- ceeding with establishments which will be socially and economically constructive. Whe-
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