By the end of this year the total amount due by the Allies to us will be $8,110,000,000, and I should hope that we should be able to deduct Dominion and obligation debts, making a total of $5,920,000,000. The amount of our national debt at the end of last year was $29,250,000,000. The amount of our liability on the basis I have stated is $34,280,000,000, and, taking 5 per cent. on this amount as the rate of interest, the total comes to $1,900,000,000. This, added to the normal expenditure, makes a total amount of $3,400,000,000.
Now, how is that to be met? Taking the Inland Revenue taxation alone, it amounts to $2,700,000,000. The Inland Revenue officials have assured me that they have made a very careful and a very conservative estimate. Taking this estimate, there remains a deficit on the full year of $550,000,000.
To make good this $550,000,000 I shall impose new taxation which, on the full year, will bring in $570,000,000. The Inland Revenue, in their estimate of result of existing taxation, take no account whatever of the excess profits duty, but that duty, as I have pointed out, is expected to yield $1,500,000,000.
Assuming--an assumption that may last for half an hour [laughter]--that the income tax remains at 5s, that should reach $375,000,000. Of course, that must be supplemented. It depends upon the state of trade and credit, but I think I am quite safe in saying that this amount, which they have left out of their reckoning, is more than sufficient to counter-balance any error made with regard to existing taxation.
He followed this with a statement contrasting the financial condition of Great Britain with that of Germany, as follows:
Up to June, 1916, according to the statement of the German Financial Minister, the monthly German expenditure was $500,000,000; it is now admitted to be $937,500,000, which means a daily expenditure of $31,250,000, which is almost the same as ours. But it does not include such matters as separation allowances. As to the war debt, the German votes of credit up to July amounted to $31,000,000,000. Up to 1916 they imposed no new taxation at all, and in that year they proposed a war increment levy. Assuming that their estimates were realized, the total amount of taxation levied by the German Government was $1,825,000,000, as against our own amount.