Evening star., 1912-09-02
REVENUE TOO LIGHT
Union of South Africa Has a
Big Problem to Meet.
FACES $8,75O,000 DEFICIT
Drastic Retrenchment Only Can
Avert Contingency.
DEFENSE SCHEME Is A FACTOR
Press Blames "Happy-Go-Lucky
Finance Methods" for Fact That
Credit Is Threatened.
ss,75o,ooo DEFICIT
DEFENSE SCHEME IS A FACTOR
BY J. M. EGAN.

BY J. M. EGAN.
Foreign Correspondence Of The Star
| CAPE TOWN. S. A., August S, 1912.
with public expenditure mounting up
Eand additional commitments. such as
the defense scheme. looming ahead, the
| outlook for the taxpayers of the Union
| of South Africa is not of a very cheer
| full character. 1t is predicted that, fail
| ing drastic retrenchment. the country
will next year be faced on the basis of
the existing revenue, with a deficit of
| something like $S,750.000.
Reviewing the situation, the Cape
Times remarks that the outstanding
fact which the country would do we'll
| to bear in mind and to impress upon
| its representatives in the various con-
stituencies is that the present scale of
expenditure in the union is very large
| ly in excess of the capacity of the
| revenue from existing sources to meet
it. Last year the expenditure incurred
was $S3,190.000. During the current
year an outlay exceeding this amount
| by nearly $2,500,000 is estimated.
mo doubt Gen. Smuts will follow
| the excellent example of his predeces-
| sor, who issued last year at the close
OF the session circular enJOln1ng the
strictest economy in all departments,
with results which were satisfactory"
| says the Times But the country must
be under no illusions. The situation is
! cal enough. A deficit will only be
| averted by drawing on the railway
funds and by absorbing the surplus of
these Hs res resources viii be available. If
we assume that ordinary revenue and
ordinary expenditure are on the same
scale during next year the country will
| tune of some $6,70O,00O in order to
| make both ends meet. The alternative
| is heavy retrenchment in every direc-
| tion.
Defense Scheme Expensive.
1.-THE capacity of the country to bear
| increased taxation need not, in present
circumstances, be argued, but before
taxation is imposed the government
must make clear the case which would
| alone justify an increased burden on the
| taxpayer, and must prove that the pub
| lie expenditure is on the lowest scale
| compatible with efficiency. Next year
the country will be called upon to face
| heavily increased burden in respect of
| the defense scheme, which will begin to
| operate with full effect January l, and
| this additional expenditure, the amount
OF which has never yet been stated. but
tional annual outlay Of from 100000 to
| y, 50O,OOO must be added to the pros
| pective shortfall of $6, 100000, to which
we have already referred. Next year, in
| fact, on the basis of present expenditure
| and with the additional cost of defense,
there will be margin Of getting on for
| $1OOOO,OOO between revenue and expend-
| iture-and on the wrong side. We state
Ithe facts in the belief that pressure of
public opinion during the recess may
| bring the government to realize that it's
present methods of happy-go-lucky
finance cannot continue If the credit Of
| the union Is to be maintained"
In his recent speech at Riversdale Cen
Botha took occasion to reply to criticisms
passed in the house of commons on the
effect on capital Of the union govern
| ments taxation proposals.
Seeking Outside Capital.
| Il have read the debate" he said, with
great regret. and 1 think that every
friend of the British empire will share
that regret. 1t was said that we desire
to prevent capital from coming into South
Africa, and 1 must say that have never
heard any more ridiculous talk Are we,
| the population of South Africa, such fools
/ that we should wish to cut our own
throats. and have We not shown in the
past that We want to get capital into the
| country to develop our industries and
other resources? My government and
parliament will never consent to have
legislation introduced to prevent the in
| f1uX Of capital On the contrary, we
shall do everything to encourage capital
coming into the country, because we feel
that there is room for ample develop
ment in South Africa, which cannot be
achieved without capital.
| I'VE shall do our utmost to see indus
| tries started and have the country de-
veloped in every possible direction. Would
| the fact Of our taking steps to impose
reasonable share OF taxation on the peo-
pie who make a lot of money out Of
the influx of capital? Surely not! But
| wish to say this: II in any other part of
the world people think that we by our
/ legislation are treating them unjustly,
government has sympathetic ear for
their grievances. il they will bring those
grievances before us in the right place."
Defense Department Criticised.
| According to the Pretoria correspond
ent of johannesburg journal. the de-
partment Of defense has not given gen.
eral satisfaction by its preliminary Sc
lections for admission to the military in
struction course at Bloemfonten. This
course, which is to last six months will
be followed by an examination. success
full candidates thereafter receiving their
commissions and being appointed to va
rious centers of training in the union.
| Up to the present. says the corre-
spondent, the stamp of men invited to
| Bloemfontein by the department Is pro-
foundly unsatisfactory, and. while some
care has been exercised to avoid any
| undue signs OF racial preference, many
of the selected men are without any
qualifications emitting them to further
military training at the national ex-
pense
In few specific instances Gen. Smuts
has carried his passion for equity to
an absurd extent, each Dutch or each
British nominee being. as it were. paired
with a member Of the other race with
/ out due consideration being given to
any other qualifications enjoyed by the
respective subjects for instruction. Most.
IL not all, of the vacancies have now
been filled, and, as far as the Transvaal
representatives are concerned, the con-
| tingent of students is remarkable for
nothing so much as its heterogeneity.
Sufragists Are Active.
Like other parts Of the world, South
Africa has its woman suffragists, al
though, happily, they have not yet re-