8.—6

XXV

The exemption will be allowed in full on assessable incomes up to £600 only, and will then decrease by £l for every £l of increase in the assessable income over £600, so as to disappear at £900. The amount of revenue which I estimate will be obtained from income-tax under these proposals is £1,600,000. SPECIAL WAR-TAX. For the purposes of a special war-tax I propose to retain the tax at present assessed under section 5 of the Finance Act of last year on all assessable income in excess of £300, but it will be graduated in the same way as the progressive incometax, and will have an all-round addition of 50 per cent, to the schedule rates. The minimum of the rates charged for income will be Is. 3d., and the maximum 7s. 6d. This I estimate will yield £3,000,000. When introducing the taxing Bill I will circulate for the information of honourable members tables showing the effect of the alterations upon taxpayers for land-tax and income-tax. SUMMARY. To summarize, the amount of tax that I estimate will be received under these proposals is as follows : — £ Land-tax .. .. .. .. .. 1,250,000 Ordinary income-tax .. .. .. 1,600,000 Special war-tax .. .. .. ..3,000,000 Total .. .. .. .. .. £5,850,000 Minimum. Maximum. The rates will be, — s. d. s. d. Land-tax .. . . .. . . 0 1-| 0 10| Ordinary income-tax .. .. ..06 30 Special war-tax.. .. .. ..09 46 The proposed taxes, taken with our Customs duties, estate and succession duties, and other taxes, will give us a system which combines as nearly as possible ability to pay, equality of sacrifice, and universality of taxation ; it avoids all unnecessary complexities, is sufficiently simple to be readily understood by all taxpayers, and is comparatively inexpensive in collection. EMPLOYMENT FOR RETURNED SOLDIERS. We have to look forward to the time when our brave soldiers will return to this Dominion at the conclusion of the war. The country's duty, in addition to providing land, is to see that those requiring work are fully employed until they settle in the ordinary avocations of life, and a special sum not exceeding £2,000,000 spread over a period of two years will be devoted to public or other works for the purpose of providing employment for these soldiers. Part of this amount will be made available through the State Advances Department, for local bodies, who will be asked to assist in this laudable work. CUSTOMS. The Customs revenue for the present financial year is most difficult to estim ate. The difficulties of transport, risks of loss, high freights, and restrictions upon the exportation of many classes of goods from Great Britain make it impossible to measure with any degree of accuracy the volume of trade which will reach .New Zealand while the war continues. The oversea shipping companies state that it is quite impossible to give an estimate of the number of arrivals during the next twelve months, as shipping orders, owing to the exigencies of the war, are cancelled from day to day. Still, with the experience of last year we may expect that despite all difficulties a fair proportion of the orders placed abroad will come to hand.