THE BUDGET.

Press, Volume LIX, Issue 17806, 4 July 1923, Page 14

THE BUDGET.

SUBSTANTIAL REDUCTION IN TAXATION.

INCOME-TAX ON LAND TO BE REMITTED. Penny Postage On October ist. INCREASED NAVAL APPROPRIATION.

WELLINGTON, July 3. In tho House of Representatives tonight the Financial Statement wa3 delivered by the Minister of Finance (the Kight Hon. W. F. Massey). The following is a very full summary of the Statement: — I have the honour to submit the annual statement of the finances of the Dominion as at March 31st, 1923, and in doing so desire to congratulate tne Committee upon the satisfactory position of the Consolidated Fund, Ordinary Jtevenne Account, which at the end of the year disclosed a surplus of revenue over expenditure amounting to £1,315,683. This gratifying result is attributable to the general improvement in the condition and prospects of the Dominion, brought about principally by the revival of the overseas demand for our produoe and by economical administration. - ■ Full particulars of the revenue and expenditure will be found in the tables attached to this statement, and in the published accounts which accompany it. CONSOLIDATED FUND : ORDINARY REVENUE. Revenue. The estimated revenue for the year 1922-23 amounted to £'26,200,000, whilst the actual amount received was or £1,329,443 above the estimate, and £547,563: less than that collected during 1921-22. The principal increases were a3 follow: — £ Customs ... 936,8-56 Beer duty ... ... 153,230 Stamp and death duties- 136,737 Tho main increase in Customs duty took place during the last five months of the year, and is due to the change mado in the tariff in November, 192 i; to largo importations of soft-goods during the March quarter; and to the duty collected on alcoholic liquors and other luxuries. . The following increases are attributed to increased rates of duty: Tobacco, cigarettes, etc., £277,738; tyres for motor-vehicles, £61,135. Increased importations of apparel, drapery, textiles, boots, and silks account for increased revenue totalling £667,724. ■Another source of increased revenue has been the extra preferential duty levied on foreign goods; for exampie, <Toftoa piece-goods, increase £19,8y2; tools, £9800: sewing-machines ana typewriters, £3680. .The gross increase in Customs duty amounted to £1,028,869; but after deducting decreases due to the change in the tariff and in the revenue collected oa spirits, the net excess is £936,856. There was a decrease of £2,267,369 in land and income-tax. and in this connexion I may explain that in 1920-21 Jhe total tax collected was £9,937,923; ljßl-22, £7,640,803; in 1922-23, , £5,873,434. The income-tax collections are based on the business transactions and assessments thereon for each preceding year, and indicate the course of the post-war depression. When the estimates for 1922-23 were prepared, it was anticipated that there would be a further decrease of £2,040,803. Notwithstanding this, reductions were granted m taxation during 1922-23 amounting to £929,100, so that a gross of £2,969,903 would have eventuated had not the assessments for 1921realised move than was expected. ono OU » W 411118 hav © been less by £2,869,903, but recovered to the extent of £702,534, so that the actual . «®crease was £2,287,369 only. '.fcMflhSSo.? 3 - a ? omiaal increase of *416,009 in departmental and other receipts, but this is due to an alteration in the system of accounting whereby receipts formerly credited to certain departmental votes are now credited to revenue—a change that ensures closer parliamentary control over tho annual appropriations. Expenditure. The totel expenditure out of the Account amounted to £26,263,<60, being £2,203,0/8 under the expenditure of the previous year, and £1,801,946 less than the amount appropriated by Parliament. expenditure under the three main heaaa was as follows: * SrL 1 ?" 6 «P«cial Acts .. -4,073,957 Interest and sinking fund charges (including £111,171 paid off debt on ftooount oi Imperial funded ' .. 8,899,957 Annual appropriations .. .. 13^289^846 „ ... .. ' .. £26,263,760 vxenparea -with, tho previous year tho decrease* are:— g Civil List and special Acts .. 357,926 Annual appropriations ~ .. 2 303 831 <3ecreaa© ~ o 757 Xjcba an increase in the interest, unking fund, and repayment cbargea of .. .f 457,679 J-&aving ths net decrease as mentioned abova ~ t , £2,1203,078 The higher rates of interest ere mainly the reason for the increase of £457,679. but _ the estimated expenditure under this heading for the current year shows a decrease of £233,782. The decrease in expenditure in annual appropriations and under special Acts, apart from interest and sinkingfund charges, was £2,660,757. Tho savings in departmental expenditure are common to nearly all votes, the principal reductions being:— £ Post and Telegraph expenses 336,145 Public buildings ... 31,217 Defenoe and IN aval ... 222,629 Lands and Burvcy ... 63 295 Customs 33*123 Hallways ... 1,527 053 p JSaucation 65 571 ' Agriculture ... 00*979 [ Marine . J4j491

5 Result of Year's Operations, 1922-23. £ Jalanco broughtforward, April Ist, 1922 ... 7,531,367 £ ifcven'uo ... 27,579,443 Expenditure— Permanent charges and appropriations 26,263,760 Leaving a surplus of ... 1,315,683 Total 8,847,050 Deduct—■ Payment to Loans Redemption Accfc. for redemption and cancellation of securities ... 8,159,960 Transfer to Discharged Soldiers' Settlement Depreciation Fund ... -50,000 Balance at March 31st 1923 £5,637,090 £5,637,090 The year's operations taken in conjunction with the overseas trade figures and banking returns afford proof of the recuperative powers of the country, and of the progress made in the adjustment of the economic situation. Whatever may be said to the contrary, the country is making a speedy recovery, and the upward movement is increasing in strength and confidence. 1 believe we have reached the end of the period of unrest and uncertainty; but, although most of our temporary difficulties have been surmounted, conditions are still , far from normal, so that continued prudence is necessary. The sound financial position that we have attained should therefore be regarded as affording an opportunity to iighten the burden of taxation and to relieve industry and commerce, rather than an indication that stringent economy and good management may be relaxed. Economies. Last year when outlining the progress of the economy policy initiated early in 1921 I gave an estimate of further expected savings, and stated that in departmental votes and under special Act?, "the gross savings, with other proposed economies, were expected to amount to £4,028,863. The figures for 1922-23 show that, with the savings effected last year, the reduction over the period referred to amounts to £3,735,049, the difference being chiefly due to the fact that the third deduction from the cost-of-living bonus or increase granted to public servants was not made. The scope for effecting economies is limited, and further savings in expenditure at this rate cannot be looked for if the services of the country are to be efficiently maintained, and adequate provision made for growing needs; nevertheless, the practice of strict economy continues to be imposed on Departments. The increased rates of interest and expenditure due to normal expansion have made the problem of reducing expenditure and ' standardising financial sacrifice extremely difficult, but a net saving of £2,203,078 for the year is a notable achievement.' In many cases essential expenditure has had? *o be postponed or seriously curtailed. Expenditure, however, must be regulated by income, and in the development of our great resources it is necessary that the annual charge should be kept proportionate to the ability of the country to provide the revenue. Accumulated Surpluses. The balance of accumulated surpluses brought forward on April Ist, i 922, amounted to £7,531,367. Included in this sum was £2,129,420 of excess Customs revenue received in 1920-21, which was reserved to meet the anticipated fall in revenue. This reserve was utilised during the greater portion of the year, but when the -■ffect of economy was felt in the reduction of expenditure and the revenue came in, the necessity for this reserve disappeared, and the amount was restored to the- Accumulated Surpluses Account. It will be observed that £3,159,960 was applied in redemption of securities of a nominal value of £3,160,030, which were cancelled and discharged from the public debt. I propose to apply a further £500,000 to meet redemption of loans maturing during the coming year. Legislation will also be submitted to you authorising the transfer of £1,000,000 to the Public Works Fund, and £IOO,OOO to Education Loans Account for school buildings, thus providing funds for capital expenditure without borrowing. The total interest-bearing investments from the surpluses' amount to £17,260,000, giving an annual income of £712,870, which is permanently re-1 lieving taxation to that extent. ! The advantages of applying tho ac- i cumulated surpluses to capital purposes ! in preference to borrowing moneys at I high rates of interest, will, I think,' be recognised by honourable members. Somo objection has been taken to the use of the surplus for soldier settlement purposes, but owing to the embargo on the London market it was practically impossible at the time tho money was most urgently required, to float loans on anything like reasonable tonus, if at all.

The following statement shows how the accumulated surpluses have been applied:— STATEMENT SHOWING HOW ACCUMULATED SURPLUSES HAVE BEEN APPLIED. _ ~ -Ey transfers t-o £ £ acoamulated surpluses at 31si Discharged Soldiers Set- . March, 1320 .. .. 17,538,976 tlement Account—- „ Surplus for financial year IS2O- 1920-21 .. . 13 330 GOO 21 6,132,033 1021-2-2 .. 170,W0 ~ Surplus for financial year 1922- 13 sxxvui •23 1,315,663 Discharged Soldiers Set- ' ' is Excea# Customs revenue re- tlement Depreciation stored from Ordinary Bevenua Fund Account— Account .. ~ 2,109,420 1320-21 .. 60,000 1921-20 ... .. 150,000 1922-23 .. ... so.eoo Public Works rund, 192-0-21 .. .. 600,009 Reserve Fund Securities Account, 19-20-21 1,200,000 redemption, 190122 .. .. 360,011 Loans redemption, 192223 3,169,960 Ordinary revenue (excess Customs rer.) — To balance revenuo • and expenditure, 1921-22 _ .. 279.551 To provide for estimated shortage in revenue, 1922-23 .. 2,129,420 ' 2,409,251 Balance, 31st March, 1923 ... ... E,637,090 £27,116,313 . £27,116,312

PUBLIC WORKS FUND. The expenditure upon public works amounted to £3,912,836, or £1,548,521 less than the expenditure for the year 1921-22. Full details will be furnished by my colleague, the Hon. Minister for Public Works in his annual statement. The requirements of ths current year should be adequately met by the loan of £3,000,000 recently raised in London, and by the transfer of £1,000,000 from the surplus revenue. The obligations imposed by the war make it essential that the country should be developed and expanded and its production increased by a progressive policy of works and settlement. To do this it is necessary to provide outside capital, but our borrowing must be confined to directly and indirectly productive purposes, and in view of the increased interest and debt-reduction charges, its extent must be a matter for very careful consideration. If the war debt be considered apart from the ordinary debj;, a considerable portion of which provides its own interest, the public debt is by no means excessive. If the weight of debt has increased during recent years there are normal forces in operation which tend to diminish tho burden. Our prosperity depends almost entirely on our primary products, and in the matter of productivity this favoured land continues to show a wonderful response to all demands. Statement Showing the Position of the Public Wor&s I'imd as at 3lb„ March, 1923. Balance brought forward on April Ist, 1923 .. •• i 29,682 Keoeipta—-jbo»n-inoney: Aid to .f UOIIG Works and Land Settlement Act, 1921 .. .. 2,902,420 Transter Irom Bailways Improvement Authorisation Account in terms of section 5, eub-aec-tioa (1), Finance Act, 1922 •• 1,000,000 Other receipts ... 22,337 3,924,757 •4,354,439 . Expenditure— . Under appropriations 3,850,047 Other expenditure .. 5,562 • Charges and expenses of raising loans .. 57,276 | 3,912,883 1 Balance at March 31st, 1.923 .. £441,554* •Balance on March 31st, 1923, is made up as follows: —• Cash in Public Account .. 10,859 ' Investments .. 230,600 Imprests in the hands of officers of tho Government .. 200,695 £441,644 FIVE PER CENT. BRITISH WAR LOAN STOCK. The amount of this stock, redeemable at par, but purchased for investment purposes at £95 and held by the different accounts at March 31st, 1923, totalled £2,570,000, nominal value. The price quoted on the market at that date was £lO2. As the purchase price was £2,441,500, this represents profits on the transaction amounting to £179,900, less accrued interest for four months included in the quotation price, leaving a net investment profit of £137,540, in addition to the interest earned at 5 per cent. Subsequently in 1922-23 loan moneys amounting to £2,000,000 were temporarily invested in this stock at prices varying from £99 5s to £99 13s 9d and sold as required, the balance remaining at March 31st being £130,000. Some of the early sales showed a slight loss, but the net return on this investment of £2,000,000 yielded above 5 per. cent., leaving the unsold securities with accrued profits or £3237. REDEMPTION AND RENEWALS. The loans which matured during the year amounted to £9,004,986, to w;hich must be added £8975 matured loans, for which debentures had not been presented up to March 31st, 1922, making a total of £9,013,961. Of this sum securities amounting to £2,431,695 were redeemed, and £6,576,706 renewed at rates of interest varying from 4 to 5% per cent. In addition to the redemption of securities at maturity as above, other securities totalling £6,034,506 were redeemed as under: — £ In terms of section 24 of the Finance Act, 1921-22 (before maturity) .. Funded debt .. .. 141,171 £6,034,506 making a total 0£ £8,466,201 redeemed during the year. Securities remaining unpresented at March 31st, 1923, totalled £5560. TREASURY BILLS. It was not necessary to issue Treasury bills in anticipation of revenue until November Ist, 1922, and then only to the extent of £250,000. The bills were paid off by March 31'st, and none was outstanding at the end cf the financial year. CUSTOMS AND EXCISE. j Revenue, 1922-23. I Estimated. Amount Compared realised, with Estimate. £ £ £ Customs .. 5,160,000 6,157,394 997,394 (in excess) Excise, lbeer .. 650,000 612,479 37,521 (short) Tctall .. £0,810,000 £6,769,873 £959,873 (in excess) j The new tariff came into operation on November 3rd, 1921, and, in anticipation of increased duties on spirits and tobacco, merchants had cleared all stocks of these goods from the bonded warehouses. The result was that, during 1922-23, the increased duties on proof spirits amounting to 36s per gallon, and to 4s 8d per pound on tobacco did not take full effeet. More duty was, however, realised, than was antici-.

pated, especially during the concluding months of the financial year. A return of duties collected on spirits and tobacco for the eight months ending July 31st, 1922, as compared with the eight months ending March 31st, 1923, shows that the stocks cleared in anticipation of a rise in duty have in a large measure been disposed of. A steady revenue of about £900,000 per | annum from spirits, and over £1,200,I 000 per annum from tobacco, as compared with an average of £700,000 on spirits and £950,000 on tobacco before the change of tariff, is expected. The excise beer duty represents a total of 12,655,630 gallons of beer brewed at an average duty per gallon of ll.Gld. The quantity brewed for tho previous fianancial year was 13,669,777 gallons. Imports and Exports. The values of the imports and exports for the past three financial years are as follows: —■ Imports. Exports. £ £, 1920-21 67,463,269 48,219,672 1921-22 ... 35,986,060 43,794,883 1922-23 37,112,779 45,548,700 An analysis of the value of goods regarded according, to origin Bhows that the proportion received from Great Britain is 52.2 per cent, of the total as against 48.5 per cent. last year, and 51.5 per cent, in 1914. The percentage on the same basis received from tho United States was 15.4, as compared with 11.6 per cent, in 1914. A comparative return of the value and tonnage of goods according to the countries whence imported during 1922-23 as compared 'with the three previous years will be of interest.

ESTIMATED CUSTOMS REVENUE FOB 1923-24. The usual enquiries have been made from the banks, and from merchants. An optimistic feeling prevails, and there is reason to expect that the imports for the current year will show an increase over those of the year just closed. 1 The increased prices realised for our primary products abroad, and the good prospects for the immediate future, have caused merchants to increase their orders. The extension of the preferential tariff in favour of Great Britain and the reciprocal agreement with Australia are also bound to cause some increase of revenue. The estimate for the 'financial year 1923-24 is accordingly set down as under:— & Customs revenue .. .. 7,000,000 Excise beer .. .. 750,000 Timber export duty and other receipts .. 7,000 Total .. ..£7,757,000 INLAND REVENUE DEPARTMENT, Land Tax. The land tax receipts, compared with those of 1921-22, show a decrease of £96,314, The comparison is as "follows: — ' £, • 1921-22 .. ~ 1,637,816 1922-23 .. ... 1,541,502 Decrease . * .. £96,314 This decrease represents portion of the reduced revenue expected as a result of the reduction in the super-tax from 33 l-3rd to 10 per cent., the balance having been compensated by the increased value of land in districts revised, under the provisions of the Valuation of Land Act. The subdivision of large ta? properties into smaller and non-taxp'aying holdings has beea. another contributing factor in the reduction. The reduction in the_ supertax afforded relief to all land taxpayers, a great many of whom had been compelled to meet the land tax payment out of capital. Income-Tax. As compared with the receipts for 1921-22 the income-tax received in 192223 shows a decrease of £2,171,055, as follows: — jg 1921-22 .. .. 6,002,987 1922-23 .. .. 3,831,932 Decrease .. ..£2,171,055 The decrease in the income-tax is duo to the large shrinkage in the income of . taxpayers generally, and to the removal of the super-tax of 20 per cent. I have already referred to the fact that the estimated decrease was abated by a business recovery reflecting favourably on the previous year's assessments. Stamp and Death Duties. The net revenue derived from stamp and death duties was £3,581,291, or £855,291 in excess of the estimated receipts. The following table shows tho comparison with the previous year:— 1922-23. 1921-22. £ £ Adhesive stamps 72,375 252,235 Impressed stamps 122,597 209,459 Duty on instruments ...• 537,726 552,043 Death duty ... 1,779,178 1,443,313 Gift duty ... 50,674 69,441 Company licenses 58,106 54,981 Bank-note tax ... 210,577 227,079 Totalisator revenue ... 607,656 515,243 Amusement-tax . 137.546 103,815 Rates, fines, and miscellaneous 4,856 16,890 3,581,291 3,444,504 The increase in death duty is due to the. operation of the provision of the Act of 1921 to charge interest on duty unpaid on the estate of a deceased person after three months from tho date of death, which has resulted in the early payment of duty. When the Act came into force on December 22nd, 1921, there were many estates of per-

sons who died prior to that date in j respect of which duty did not become payable until after March 31st, 1922, so that in the year 1922-23 mpre than a year's death duty was collected. Portion of the decrease in adhesive stamps is accounted for by crediting Court fees and other fees collected by means of stamps to the respective Departments, under the heading of "Departmental receipts." These liavo hitherto been included' in Gtamp revenue. The estimated revenue for tho current year is £3,364,000. WORKING RAILWAYS. The gross receipts from working railways amounted to £6,727,802—an increase of £84,211, on the previous year's The working expenses amounted to £5,502,497. Tho net revenue is therefore £1,225,305, representing a return of £3 0s lOd per cent, on the capital cost. The actual revenue received was £27,802 in excess of the The (improved financial position ia the outcome of economies effected during the year. Although there has been a slight improvement in the revenue during the year the Department is still confronted with many difficulties, and the need for _ exercising rigid economy still remains. The disastrous floods which have recently occurred in Otago and Canterbury will unquestionably have a far-reaching effect on the traffic on the South Island lines for some time to come. The combination of these circumstances make it necessary to be conservative in the matter of estimating the revenue for the ensuing year, which, for that reason, I place the figure at £7,000,000. On the expenditure side provision has to be made for working the OtiraArthur' 3 Pass electric section, and on that portion of the North Auckland line which it is hoped to hand over to the working railways during the ensuing year. I anticipate that the expenditure will amount to' £6,050,000. POST AND TELEGRAPH DEPARTMENT. The net amount of revenue collected by the Department during the year was £2,705,030. The principal items were—Postages, £1,289,496; telegrams, £699,444; and telephone-exchange receipts, £595,967. Th© expenditure totalled £2,112.543. The cash reeeints tjans exceeded payments by £592,487. This fa the largest surplus in the history of the Department, despite the fact that the period covers two months of the financial year during which reduced rates were in operation. Deposits in the Post Office Savings Bank amounted to £26,682,427, and withdrawals to £27,769,263 —an excess of withdrawals over deposits amounting to £1,086,836. The amount of interest added to depositors' accounts largely exceeds tho excess of withdrawals. The amount nt the credit of depositors at March 31st, excluding interest for the year, was £4:2,764,86:?'. The position is now improving, as, since the close of the year, the amount of deposits has exceeded the amount of with-

which has sine© made available fcr general application. 257,924 acre 3, subdivided into 416 Holdings, and comprising mostly scatrtered Crown, settlement, and nationalendowment sections, were offered for selection; whilst, excluding miscellaneous leases, some 380,000 acres of Crown, settlement, and national-en-dowment lands ana reserves, subdivided into 963 sections, were taken tip during tie same period, the miscellaneous leases covering 101,000 acre 3 m4fci3 holding. The area available for settlement us 508,403 acres, and 401,742 acres are under survey at tho present time. Preparations are also being made for tiie surreys of fl total flddvtionul QX63> of 485,596 acres. DISCHARGED SOLDIERS' SETTLEMENT ACCOUNT. The following statement shows tho extent of the financial operations m regard to loans authorised and ad- ! vances made under the Discharged Soldiers Settlement Act, 1915, and amendments, up to tho end of the financuu year: Advance Authorised, lcndo. £ £ Section G, Discharged Soldiers Settlement Act, 1915: Advances on current account:— 4732 returned soldiera 4,237,159 4,163,2.t0 Section 2, Discharged Soldiers Settlement Amendment Act, 1917. Advances towards purchase of farms, market gardens, orchards, and discharge of mortoiSd" returned soldiers 3,850,082 8,848,1£i2 Section 2, Discharged Soldiers Settlement Amendment Act, 1917: Ad- • vances towards purchase and erection of dwellings and discharge ol mortgages trereon:— 1.1,363 returned Boldiers 8,130,930 7,959,275 21,£34 returned soldiers 21,278/221 2<j,j70,703 £ Repayments of principal .. 2,173,113 Translera to Realisation and other accounts —Securities in course of realisation 173,436 Transfers to Property Account— Securities . bought in by Department on default of mortgagors .. 623,783 Balance on mortgage £18,100,371 The gross receipts for the year amounted to £1,431,353. Of this sum £716,667 represents repayments of advances, while receipts in respect of interest and sundries total £714,686. Although prices obtained for primary products improved considerably the proceeds -were insufficient to ertablo all soldiers to fully overtake the ar» j

drawals. There are 690,790 depositors, and the average for each depositor is £64 4s 4d. _ Other business of the Department included the issuo, of money-orders and postal notes to the total value oi £5,020,890, and the payment on the same account of £4,699,767. War-loan certificates redeemed up to March 31st amounted to £3,349,0/4. Increased expenditure arising out of war conditions still continues; but, as a result ef the successful efforts made to keep down expenditure, the amount asked for this year is £162,000 less than that voted tho previous year, although it includes statutory increases in salaries due to the lower-paid officers, and an of £25,000 for overtime which previously was compensated for by the allowance of "time-off." At the end of the financial year the total number of employees was 8574 7542 permanent officers, 395 temporary employees, and 637 casual men. The number at the end of the previous year was 8679—7657 permanent officers, 429 temporary employees, and 593 casua 1 men. A reduction of 10-5 in the total number employed was thus effected during the year. PENNY POSTAGE. On and after October Ist, 1923, the penny-postage system will be re-estab-lished within the Dominion, to all parts of the British Empire. I estimate that the loss of revenue by so doing will be in the vicinity of £250,000. But, in view of the buoyancy of trade at the present time, the loss should be of a temporary nature only, for there will be a large increaso in the volume of correspondence posted, which before very long will bring the revenue up to the original level. The loss in revenue during the unexpired portion of the present financial year will be about £125,000. TELEPHONE RATES. Honourable members are aware that the question of amending the telephone charges has been unuer discussion for some time. The whole matter has received the consideration of the Government, and it has been decided to bring the amended charges into opera-tion-on the same date as the reintroduction of penny postage—namely, October Ist nest. In order that honourable members and the public generally may be able to see at a glance the effect of the amended charges, I have included in the Budget tables a statement illustrative of the position. It will be observed that the rate 3 decided upon mean a fairly substantial reduction on those at first proposed!; and I am hopeful that, with a full year of the increased revenue, the telephone branch will be self-supporting. The profits of the Postal branch, which in the past have been supporting the Telephone and Telegraph branches, can now be handed back to the public as a concession by way of penny postage, to which I have already referred. LAND SETTLEMENT. The demand for virgin lands has been restricted, only sections in favourably situated localities being taken up. The Government is continuing to offer all available lands for general application, in most cases with preference to discharged soldiers. During the vear a total area of 29,588 acres was set apart for selection by discharged soldiers, principally in the North Auckland and Hawke'a Bay districts. Proclamations setting apart 46,546 acres of Crown land ana 3812 acres of settlement land for discharged soldiers were revoked in order to open these lands for public selection, owing to the redue'ed demand by discharged soldiers. The total area set apart for selection by discharged soldiers to the March 31st, 1923, was 1,397*339 acres* a large proportion of

.vui_«_vuuu JWU uuiiiig mv period pf low pnces. In order to afford relief, postpdnernenta of instalments were granted where the circumstances appeared tci warrant such. At the end of the year tho amount outstanding on the postponement account was £67,165.. Aneara m respect pf interest and principal payments amounted to £541,125.. A substantial reduction has been made in the arrears carried forward from, previous years, due principally to the* improved prices of butter, wool, lamb,, etc. Further reductions might have' been made, but it was considered advisable to reinvest a large portion of the proceeds either in the direction of further "improving soldiers' propertiesi or acquiring more suitable stock. Out; of the receipts from the sales of farmproduce, etc., approximately £275,000' was readvanoed. "With a. view to adjusting, if possible, the position of soldier settlers who Buffered: from tho economic depression, Enquiry Boards have been set up for each land district. Their reports are' now coming to hand, and as a result legislation will be submitted during the: present session to give effect as far as possible to the recommendations made, by tho Boards. The most critical period appears to have passed. The crisis, however, disclosed those men who would never, under any circumstances, have become successful, and their replacement by more suit blc and more experienced men. is taking place. During the year loans amounting to £868,650. were authorised to 915 soldiers, of which £425,125 were granted to 532 soldi-ra for tho erection of dwellings, the balance being principally in the direction of advances on current account to aid in improving and stocking lands that have Ixxn purchased privately, or in resp3ct of vacant Crown and settlement lands that have been selected : these rep it sent new transactions. In addition to the sums authorised as abuve namely, £21,278,221 the amount of £3,058,050 lias been borrowed for tho purchase of lands for the Discharged Soldiers' Branch of the Land for Settlements Account, and rents, recoveries. etc., amounting to £44,379 were accounted for last year. There are also other lands acquired in the Land for Settlements Account which have been proclaimed for discha gad-sol-dier purposes, of tip value if £2,514,0J0, and from tlie Native Land Settlement Account, valued at £500,000. The capital therefore provided from all sources for discimrged-soldier settlement totals approximately £26,148,000. Up to March 31st the large sum of £8,<X)0,000 had been advanced out of this account to soldi.rs for housing purposes, but further a), plica tins for"loans to purchase or erect dwellings for residential purposes must now be dealt with by tho State Advances oiSec, which, in view of tho liberal prevision made for housing, should suffice to meet requirements. Applications to finance purchases of farms or to discharge mortgages aro now considered only from invalided men who were previously unable to take advantage of the scheme, but who have recovered to take up small farms. New applications for hwns on current account will be receivable from such applicants as have made their own financial arrangements to purchase land, or who take up Crown or settlement land or abandoned farm 3, but this cannot be continued indefinitelv, rind after a date tobc subsequently fixed no further applications can be* received. Additional advances on current account, tor development of farms or to stock areas developed, may be granted np to the maximum as recommended by Land Boards, and the system of rendvancine against credits from sales of stock prc£ duce, etc., will be continued in terms of the regulations, but will cease when the occupiers are sufficiently well established to carry on without State aid. BEPATBIATION. The benefits under the Repatriation Act ceased to apply to other tuan tubercnlar or other seriously disabled soldiers after December 31st, 1922. ■ Up to that date assistanco had been rendered to 03,108 discharged soldiers at a total cost of £2,329,992. The following figures indicate the number assisted^

the nature of tho assistoaoo giv&si, and tho cost: — I Number Nature of Assistance, assisted. Amount. L °Businesa ... 6,386 1,1^,686 Furniture, tools, 7tsa#w. eto. 10,910 7t58j620 Grants— • Training, sustenanoe, etc.. ••• '.533 7'^ Transportation ... 3,488 /,Sol D "Sr eots ° fr 1,123 P S t " '"""T 26,668 Totals ... 63,108 2,3129,992 Recoveries hare • be«n amount received Tip to March olet, l y being £1,260,645, or Go per cent, of the total advanced. At that dat<» 000 l loans had been entirely repjud. nrtftn To the end of the financial year 192223 losses had been mad© in 24.0 cases, the average loss being £7O. AGBICUIiTUEE. Tho improvement in the prices obtained for agricultural prouuete been well maintained, and mutton, Iwjter, and cheese prices show a d<Jcided increase up to the end of the financial 3e The total value of produce exi»rted was £42,248,751, or 93 per cent. of-tne value of all exports, which totalled £45,548,700. . , , Mutton and lamb are m good demand on the Home market, but the prices offered for beef are still unsatisfactory. ... There has been a substantial increase of 70G,C00. in the total number of sheep in tHo Dominion, from 22,23}2,259 to 22,928,864, the principal increase boinc in the North Island. The output of dairy-produce has tnia season shown a, greater increase than during any previous year. Sixty thousand tor.3 of butter and 63,000 tcos o? cheese were exported, a record which establishes this Dominion as tho jjreatest exporter of butter-fat in tho world. Despite the unstable markets prices were fortunately higher at the time when our heaviest shipments wem arriving than in, the same period of tho preceding year. Indications point to an extension of the industry doling th® present year if prices remain, profitable, especially in fcomo districts not hitherto associated with dairying. Tho raluea of dairy products exported are: Butter, £10,324,569; cheese, £5,484,417; dried, milk, £284,085: condensed milk, £27,555; sugar of milk, £10,639; totalling £16,111,265. The total fruit area in commercial orchards throughout the Do minim is approximately 30,000 acres. Boms 108,314 cases have been exported this j season'under a Government guarantee of lis per case, which covers expenses, { and arrangements have been mads for the shipment of a further 25,000 cases before the export season cloece. Tho following figures show tho quantities of fruit exported during tho last three years:— Export season. Number of Cases. 1920 ... / ... 84,$ aS , 1921 ... ' 52,001 1922 120,4®J Tho beekeeping industry fa oteadily extending. The hooey .export fijjurea for the last three years are as follows: Cwt. Value. £ ' 1921' ... 7,638 30,935 1925? ... 8,542 31,943 1923 ... 10,605 43,0315 The estimated area sown in wheat in 1992-23 is 285,000 acres,, and in oats 385,000 acres, a decrease in both cases when compared with the previous ;peor. The estimated yield per acre of wh*;at ia 30.48 buslie',3. and of oata 39.50. Tho net expenditure under tho Department was £208,197, being £615,979 less than in 1921-22. NAUEU AND OCEAN IBLA20) PHOSPHATE. An important increase in the demand for phosphate fertilisers has taken place, the importations of Nauru'and Ooean Islands phosphate rook for 192223 totalling 51,430 tons, an inereaso ot 16,337 tons over 19i 1-22. Tit© mors extensive use of phosphates will, of codrsa, mean a resultant increase in production. A large plant for the crushing of phosphate rock and the manufacture of phosphate manures was recently completed in the South Island," milking five large works in operation, thr&& being located in Auckland, one near Christ-church, and one close to Dunedin. nanoßATioK. During tho past year assisted imraif ration, under the nominated policy, as progressed satisfactorily. A total of 6737 migrants liavo arrived ;Rt a cost to the Dominion of £l2 per licad. Special facilities have been offered to farmers, farm labourers, and all sliilled artisans required for secondary industries. Under the authority of the Umpire Settlement Act, 1922, the> Imperial Government may 00-bperato with the government of any of hia Majeaty'tiDominiona in—(1) Development or llandsettl. ment scheme, or (2) assistance with passages, initial allowances, special training or ot: erwise. Although Tft has been deemed advisable that applications for land from our own soldiers and setshould be dealt with first, a satistactory agreement has been made with the British Government under \chich passage rates for intending emigrants f ay o been reduced from £26 per iidult to £lB per aduit, and all children tinder the age of twelve years free. This agreement more than favourably 'compares with Great Britain's agreements with other parts of the Empire, aitd it is anticipated that upon its renewal a.t July Ist, 1923, further substantial roauctions will be made to—(I) Mairried men with families, and (2) children and juveniles under the age of nintiteea yeara. This should be the means of attracting increased numbers of immigrants to our shores, and of making' our total per annum not less than ten thousand. Tho two main objects of the Gtwernment in tl\a scheme which has been adopted are—(l) That only the very best typo of immigrant shall bsi asSLstetl to the Dominion, and (2). that on arrival they are assured of work accommodation. DEFENCE. ,1 ?'? ont of the Consolidated Fund for defenoo, including ordnance services and the maintenance and training of the Territorial Forces, duro}£t financial y Car ending March amonnted to £250,113 .or less than tho amount appropriated. This result has been obtained | by the exercise of the strictest economy 1 the trai H WAS BXPENBITUBE. C-.V 14 gross - cx P«nditur© from the vote for . tll ° P ast year was £642,9£8. This included £179,434 for tho medical treatment of returned soldiers for war disabilities; £41,711 for transport adjustments; £35,387 for war Zealand and abroad, and battlefield memorials in France; £7292. war gratuities: £20,000, refundfto War and bread subsidy paid on behalf of Aow Zealand troops in. tho United Kingdom; £190,729 for repatri--5111(1 «*pe««s; and j'-x r 9 " m 6"ellfineous war expenditure. After allowing for recoveries tor sale of surplus stores, £49,204; sale of medical stores, £33,812; repayments of repatriation loans and expenses, £303,606; and other miscellaneous creditSj £84,545, thoro remained a net expenditure of £108,799. The estimated net expenditure for the current year is £534,868, in which provision is made to meet New Zealand's liability to the Imperial shipping liquidation for transport charges totalling approximately £500,000. The deky in settling this item is due principally to it l lu S° , am ounfc of work haudletl by the Imperial Shipping Liquidation Department, which in the latter sUig<!s of ww war «tntro!U><3 oractically the whole

of the Empire's- sMseieur * -Sal is bemg made to ££SfcL*fflßM the current Of tW £3.SQj>fm iSj-kl T Jl loac-rederaption p^rpeSs^! has cdraadj b&m trSLPffl pended ra th« pitodhe* tioa of seeuritka, tvJWI tmues. A bdano® present forms p«rt of avail, ible fop housing purpose wljen required. transactions are will be reduced War Etps i r.«e« Aocttas^gSs® It is my lcientron tJsat, balances, and should be devot«d to the war debt, and jf imrifffflffif lation will be to thia mtentica. T wMhb naval BEFias^ll The expeaditera ca y ~".k| the financial year l mads up tg Permanent charges—. Naval Defence Aei. N<m 'lg Bepayment ef Annual appropriation """'r' Defase® 'l-M The time has arrived | participate to 6 gnstsr (naval defence-of, s3sa sums a share of t&e Wiß'tffl entails. I propose, honourable members crease the total defence to £500,000. S|g|m| will include the woiMag vided for rrithln not exceeding tioa torrarda tha "cost of SBH a naval base at will ba pi more Valev te New Zealand than tms countries in the PatiSe. The Chatham will i» be exchanged for sa burning light eraiaar. The Admiralty lta.T« «eaaSH| necessity for the pruiliilMi jHH reserves in the of commercial stocks, are practically moment —before are sent to the Stnd^lSm item, therefore, has the estimates for the ton oil tank at" DgTTOiagfcMHg|||j has proved to be eßnaovQa^wH a repairing and siar!ng?oig§3ffi small squadron. ■ 'fll Items appear la Ot* hhH effecting certain ments in tho facilities' repair b&ae at estaalishments them. of £SOOO haa beast 6flS™BH view to relieviag mant of the been paying under agreement Harbour Board £150,000 over a as under that now derives the gresftcsift ImhhS docking and- repair of I may add authoriliea prefer the im|WM expenditure in land to any 'diferf, even with regard to tSw wH tion towards the e«* 6f at Singapore, may pceteriflH| ference between tbs ture and the proiiesed tion of £500,000 strengthening the The ezpenditnre sources on ediaestioa «ad|ffl the past financial year lue(^™H Votes from Consoiidatei mm Department at Special Acts . mH ■ Teachers* I imary Education SeNevm^H Rational endowneai Education loans PubHe Buddings firs ' ance Fond *Does not include coat of The amounts expended &m§3H ment revenue reedved by »n9 ing bodies «f Uiurerally amm secondary schoois. asaattaMHg £83,000, sboold be addqd ing a totsl espendiku® ire&ism aburces of £3,38^€00,4» caiLiiMiß accounted for ehk% ly tHH in the economies. t - The financial p«eiU«i» r £**;;||jH| that the Chnronment Itct hadim ed to sxercLM ike gnefert fIWHI its expenditure, '«■ vice eonneeted with, unduly curtailed, and l%s «|MH| vities have been maini*lß«6. , '™H ing need for inczea«njjt modation has :meiv«4 consideration of t&e ChwgfWßllHH since 1918-19 the sbss of 6SE| has been expended tax flat'wH purpose. The cxp«Bdi{s.?« largely in excess of as for the five yeam 1915, the eapM buildings, amoimted MIHH Where possible prelta , gßß»''jwW given to claims for I For many of these iehagSß '*|MM been an insistent demand eral staffing and better-ImMH commodation, and steps are being taken ta mand. In sehools staffing has been shewn to avoid unduly laige has been given for the additional assistants. where overcrowding has Government has provides!! Mjß buildings, and! is to overcome the shortage ffIPMH For the infbrmaiion flf.liMH [members I have inelad«d £at£sHß [tables a statement wbicK | enormous icerease in the <WHH| 'cation since 1911-12, and I may be seen : that this isqHSffl tionai service haa not I have arranged to prerMsH creased sum for hoo poses in this year's transfer of £IOO.OOO 0? lated surpluses to thfi'lfgHH Loans Account. DKPABTMENT Of BsSI Tho amount appropriated for hospitals and £425,000, but owing to tiW'SK subsidies were claimed than usual the expenditure WpKlßji ceeded the estimate. The quired for the current year wjffli the actual maiatenaaee Hospital Boards again shesS|®B| reduction. There is an ever, in the capital as maintenance cMtge# mate result of tho capital Hospital Bo.irds sbcuM prudence in embar'cisg absolutely essential eapiUi Mj ture. The net exp<nd»ta*» partment ia 1922-S3 way #jggM than voted, and a» this amount is required year, due prinaijMkHJy t® tdMNMB the war service institßtafflS |^M|

I being used for civilian trcatt for which the full cost is not now reretl. Steps are now being takon lip rlirccticu of handing over t'lese tutions to Hospital Boards. JTATE ADVANCES OFFICE. 10 substantial benefit derived from owing money at the low rate of 4} cent, interest to build houses and lire liomcs is of great advantage to 8 persons desirous of owning their properties. The Amendment Act ast year, authorising advances for purpose of redeeming mortgages at ate of interest not exceeding 5* cent., is affording settlers much re* and sineo October last advances lling £884,090 hava boon authorfor this purpose. he Amendment Act of last year also lorised loans on chattels at a rate ; nterest not exceeding 6J per cent, toe applications for advances on this 133 of security have been fairly nurnand a considerable number of ,ans has already been granted. The new business for the year was as ollows: — No. Amount. & ,oans granted to ■ settlers .. 2,149 1,211,635 ,oans granted to ... workers • • 1,754 878,150 ' ,oans granted to local authorities .. 213 478,035 jj Totals .. 4,116 £2,507,820 " For the purpose of building houses M ju d acquiring homes a largo sum has 14 been advanced during the last four H rears. The following is a table of the loans authorised from the Ist April, 1919 to the 31st March, 1923: S ' Number. Amount. 't For housing purposes— £ > To Settlers _ •• 4,382 .2,250,138 ! To workers (includ- . intr Housing branch) d ,861 0,000,939 To release mortgages on '« 1 home properties — To settlers • • _ 380,223 ! To erect workers' dwellings—- > To local authorities 100 471,735 Total .. •• £6,109,030 In addition to the above, it should be noted that £8,000,000 has boen advanced to soldiers for housing purposes out of tho Discharged Soldiers' Settlement Account. The Advances, Office has aided many borrowers and granted to them numerous' concessions, which have enabled numbers of settlers to retain possession of their holdings during the difficulties of the last few years. The gradual return to normal conditions, with the advent of improved prices for our primary products, is slowly but surely 'iclping mortgagors to overtake their liabilities and regain their former posi- , l.ions. I propose further to extend the operations of the Stat® Advances Office, iind to grant larger loans than tho law at present allows. The terms and conditions under which, advances are made will also be rendered easier for ;he borrower. The maximum advance ihnt may be granted to a Bettlor iB to ;>u increased from three-fifths to 75 per cent, of the value of the security, uul the maximum advance that may be obtained by a is to be "inTensed from three-fourths to 95 per :-ont. of the value of the security in tho case of buildings alreadv erected md up to 95 per cent, of the cost of :he land, dwelling, and improvements vhore buildings are to be erected. Loans will be granted for terms not xceeding twenty, thirty, or thirtyand a-half years, at the discretion 1 the Board. PENSIONS. The following payments were made luring the yoar ' ended March 31st, 11)23: £ WfKv pensions • r„.- 1,489,392 )ld-atae pensions .. >. 755,213 ft'idoyrV pensions . ~ 188,004 pensions . .. ■ 52,371 Maori ty'nr pensions .. 34,110 MiwtbV pensions .. .. -33,491 riih»f#ns under Civil Service .'Act., 1908 .. .. 20,937 |filitary Pensions under De- , , fence Act, 1909 .. -3,058 Petitions under Judicature Act, 3808 .. ( 8,444 Police pensions .. .. 474 Kuitdfy pensions aiid annuities ... ' ... 4,844 £2,589,838 Ftom this total is deducted £62,329, lepfeenting £28,547 from national endowments on account of old-age pensipia, £2611 from gold duty in respect of.Winers' pensions, and £21,171 from Biui4ry refunds of all classes of pension, leaving a net charge against the Consolidated Fund of £2,537,509. / War Pensions. The grand total of actual payments fflhde in respect of war pensions to the 31st March, 1923, is £8,824,436. The annual liability of each class of war pension in force at the end of the.'year is shown in the following tablesAnnual Class of Pension. Number Value. At. •• £ £ Soldiers (permanent), .. 6,686 279,760 49 Soldiers (temporary) .. 11,892 586,923 49 Dependants (tem- ' ' porary) .. 908 69,308 76 Widows of soldiera .. 1,969 210,569 107 Otter dependants .of deceased soldiers .. 6,005 203,297 34 26,460 £1,349,857 £sl . From the Ist July, 1922, the adminBtraUon of the medical treatment of discharged soldiers was transferred froffl the Defence to the Pensions De- i Jwteient, and this change has brought stoit better co-ordination in the pen'and medical treatment of war Primers. sie report of the War Pensions "Uaitoi has received careful consideration during the and legislation Vill.be introduced giving effect to the jpiaion of the Government. This legnation Undoubtedly will make condi"Mj easier and better for totally or Partially incapacitated returned solinsurance DEPARTMENT. . The tife branch of this Department ir successful year. The new busine M» amounting to £1,286,609, was above the standard of pre-war and the number of policies in fttee o n the 31st December, 1922, be--69,487, represents a total insurance bonus additions of £17,449,101. operations of the Accident hare also been successful. IfATIOHAIj PEOVIDENT FtTNTJ. membership of the fund at the December was 22,200, the contribuW income £132,000, and the accufund £790,000. The sum of nv.ti Was P allowances to anand to widows and children, gj amount of £39,000 was claimed the fund by way of maternity l^ttwanees—£7ooo to contributors M 4 £32,000 to members of approved Waaiy societies. STATE FIRE INSURANCE department. -.tho State Fire Office had another year, although heavier losses 'we sustained than in 192 L The net

[profit, after providing £20,369 for : payment of income-tax, amounts to £46,402, as compared with £39,324 for 1921. The office continues to attract its full share of new business, and a satisfactory increase in premium income was secured. It ha 3 also been possible substantially to PUBLIC SERVICE SUPERANNUATION FUND. The total number of contributors to the fund oil .March 31st last was 14,992, and the total revenue £073,9(J;j, including members' contributions £2iy,4K6, interest £121,320, and Government subsidy £172,000. The amount expended during tho period was £346,454, which comprised retiring and other allowances £254,676, refund of contributions £83,420, and cost of administration £o'Jl.j. The total number of allowances existing at the end of March was 2253, representing an aggregate annual payment of £224,914. 11 le amount invested on March 31st last was £1,71)9.041. The nbovo figures relate to the period of fifteen months ended March 3lst, 1923, the financial year of the fund having been changed by statute. Thus tho amount shown as Government subsidy represents two annual payments eaeh of £86,000. RAILWAYS SUPERANNUATION FUND. This fund amounted on March 31st, 1923, to £584,219, an 'increase of £40,688 for the yoar. The revenue received during the year amounted to £23O,USD, made up of contributions £126,967, interest £26,175, and Government subsidy £70,0C0. The expenditure from the fund amounted to £178,470, including retiring allowances amounting to £143,331. TEACHERS' SUPERANNUATION FUND. , Under section 54 of the Finance of last year the financial year, previously closing on December 31st, was extended to January 31st. The following figures are therefore for a period of thirteen months —from January Ist, -1922, to January 31sb, 1923. This fund amounted on January 31st. 1923, to £779,636, an increase of £97,859 for the thirteen months. Tho amount invested was £736,348. The revenue for tho period was £216,934, including contributions £100,192, interest £45,042, and Government subsidy £71,583 (thirteen months at £43,000 per annum, as provided under the Act, together with the additional £20,W0 voted'last year). The expenditure was £119,075, including retiring allowances £100,131, and refund of contributions £16,357. NATIVE. The earnings of the. Native Land Court and Maori Land Boards were £13,914,* as against £13,002 in the previous year. 51,623 acres of Native land l , at a cost of £1(0,099, has been purchased froxn the Native owners on behalf of the Crown, the gross area acquired since 1910 lieing 1,298,723 acres, at a total cost of £3,012,191. Included in the land so acquired are areas purchased for thu European tenants. Among these purchases is included the Native owners'. interests in the Taumaranui Native township, for the purpose of giving the tenants the freehold. Good progress was made with regard to thiß township, a sum of £69,785 having -fceen disbursed to the Natives, while the purchase of the interest of the Native owners in the Te Kuiti Native township is also in hand. PUBLIC TRUST OFFICE. On March 31st, 1923, the value of estates and funds under the control of tho Public Trustee amounted to £28,904,798, an increase of £3,407,019 for the vear. Exclusive of office premises and plant, the investments held on March 31st, 1923, on behalf of tfie Common Fund and on behalf of estates and funds tho moneys of which axe specially invested, amounted to £16,426,324, made up as fOUOWB : £ Moritgageg ... ... 10(,527,1305 Local bodies' debentures ... 4,511,416 Government securities ... 952,589 Land Settlement Finance Act debentures ... 60,192 Fixed deposits with banks 4,014 Private debentures and shares in companies ... 2,979 Overdrafts by way of advances to estateu and to beneficiaries ... 807,077 Properties acquired by foreclosure ... ... 70,552 £16,426,324 Of this total the sum of represents advances made during the year as follows: — £ Mortgages ... ... 1,275,659 Government securities ... 209,86*1 Local bodies' debentures ... 955,877 £2,441,404 In addition, investments valued at £1,799,041 were held by the Public Trustee on behalf or the Public !&r vice Superannuation Fund, making the total investments £18,225,365. The position of mortgagors improved very much during the year, and a considerable reduction was made in the amount of. outstanding' interest. In the previous ybar concessions by way of interest allowed on funds on amounted to £57,500. In view of the improved results of the present year's working it_ is proposed to grant further concessions to estates and beneficiaries, firstly by reducing the commission charged for certain classes of estates, and secondly by waiving all special fees in connexion with the administration of .estates, so that the commission rates fixed will be tho sol® charge for administration. WESI'EKN SAMOA. The revenue of the territory has been well maintained, but is still lnBumcient to meet the expenditure which is considered necessary m tne discharge pf the mandate obligations, particulariy in respect of education aud medical services. An additional grant of £2\AA) is provided to meet the deficit of 1921-22. The trade results for the year naive been satislactory. The statistics which wili be included in the third Mandate .Report show that whereas in 1919 and 19zO the imports into Samoa exceeded the exports, the latter for the year 1922 exceeded the imports by over £82,000. The tonnage and value or Copra, the principal product of the group exported last year, are also the highest on record for any one previous educational and medical eenices nre being steadily extended. The value and completeness of our medical organisation and equipment at Apia has been recognised Dy the London School of Tropical Medicine, which has ottered to co-operate with the Administration in tropical medicine research by sending at its own charge one of its experts in tropical diseases, together with a laboratory assistant, to work with our medical staff. The Government has gratefully accepted this generous offer, from which great good not only to our own Native peoples but the inhabitants of all tropical countries i may be confidently expected. The Samoan Observatory has completed another year of valuable scientific work. The results are now ready for publication. Arrangements have also been made for the Observatory to undertake the duty of receiving all daily weather reports from Pacific stations (Suva, Tahiti, Tonga, Rarotonga, p a2 o Pago, Ocean Island, Norfolk Island, and Noumea), issuing stormwarnings, recording and checking meteorological statistics, and publishing the results. This service is entire y practical, and roust, be of incalculable benefit to shipping in the Pacific. |

COOK AND NIUE ISLANDS. The trade and revenue of the islands during the year have shown a gratifying improvement, and all indications for the future are most encouraging. Tho estimated expenditure from the consolidated revenue for the coming year will be £SOOO less than last year. INSURANCE ON PUBLIC BUILDINGS. On March 31st tho balance at credit of the Government Fire Insiiranco Fund, established in 1913 for the purposo of rebuilding or renovating public buildings destroyed or damaged by fire, was £40,825 —an increase of £3075, as compared with tho balance at the end of the previous year. As usual, the principal amount paid over is in reBpect of school buildings, amounting to £8542, whilst only £715 was paid over for other buildings, the total claims on the fund last year being £.9257. The annual contribution of £IO,OOO was paid over by the Treasury, and interest amounting to £2332 was credited to the fund by tho Public Trustee. STORES CONTROL BOAED. The Stores Control Board, under the chairmanship of the Minister of Public Works, was constituted on May sth, 1922. The object of the Board is to improve the methods of purchasing the large quantities of stores required by Government Departments, and for this purpose it is vested with the purchase, control, and disposal of all Government stores. In tho past each Dejjartment arranged its own purchases, with the natural result that when stores of tho same class were required Departments came into competition with each other, thus hardening the markot and tending to raise prices. Under the present system Supplies and Tenders Committees, [ consisting of trained buying officers, have been established in the principal centres to arrange for the purchase ot stores. These committees meet weekly to consider requisitions for stores. Tenders or quotations are then called for the combined requirements of all Departments, thus securing the beuefits of bulk buying and eliminating interdepartmental competition. Considerable economies have been effected, and many thousands of pounds saved to taxpayers. These results have been achieved practically without addition to staffs. The standardisation of stores commonly used by all Departments is being undertaken. . The preliminary enquiries make it certain that large savings ean.be effected by atandari3ing materials and equipments. Some general contracts available to all Departments have also been arranged. This policy will be gradually extended, but the present unstable markets are not favourable to its rapid development. DEPARTMENTAL BALANCESHEETS. Departmental balance-sheets for the past year in commercial form will be, submitted to honourable members during the session. These balance-sheets are proving valuable aids in the direction of economy, and their preparation has undoubtedly brought about closer and improved administration. FBEE OF INCOME-TAX SECURITIES. Conversions during the year totalled £2,261,820, whilst applications totalling approximately £700,000 are under action. The original securities had a currency running to 1941, but the Government has the right -to redeem the converted stock on and after September Ist, 1927. In addition to these conversions, redemptions and renewals of maturing loans amounting to £1,682,515 have been made, whilst purchases of stock and cancellation in terms of > section 24 of the Finance Act, 1922, totalling £839,440 (including stock tendered for tax payments, £84,700), and death duties stock redeemed, £107,670, gives a total gross reduction in free of in-come-tax securities of £4,891,445 for the year. / Purchases of stock at market rates have been made at prices that more than Bet off the interest charges on the money used for the purpose, so that converted stock means an increase in the assessment of taxable interest. The total value of these securities issued—viz., £51,733,405 —has therefore been reduced considerably, the balance outstanding at March 81st, 1923, amounting to approximately £44,000,000, and it is hoped to effect a further reduction. NEW ZEALAND INSCRIBED STOCK DOMICILED IN LONDON. I have completed negotiations for a reduction in the charges made by the Bank of England for the tnanagoment of New Zealand inscribed stock registered in the books of tho bank in London. This matter has been under consideration Bince 1913-14,. but owing to the outbreak of war the proceedings were necessarily deferred. The bank has reduced its charges from £350 per million of stock inscribed to £3OO per million, with effect from 1913, and has refunded £30,676; but against this there is a claim . for no less than £14,383 by way of Imperial incometax which I am endeavouring to have remitted. The bank's charges for issuing new loans have also been reduced from 5s per cent, to 2s 6d per cent. The charge of £3OO per million in London compares unfavourably with tho cost in the New Zealand Treasury of managing stock inscribed in New Zealand, which is about £l4O per million. The charges of some of the pri vate banks in London are as low as £l5O per million. lam going into the question, however, and hope to make such arrangements as will effect a further reduction. 1923 LOAN. In order to maintain capital expenditure at the necessary standard a loan of £3,000,000 for public works was raised in London. In addition £1,000,000 has been borrowed for redemption in part of loans maturing in London, making a total issue of £4,000,000. This loan was floated in May, and issued at £92, rate 4 per cent., and was well received, being over-subscrib-ed, the lists closing three days before tho time specified. The loan runs to 1943 with the option for redemption ten years. earlier, and the flat rate is therefore. £4 6s lid per cent., or if not redeemed" until 1943 the cost -is £4 12s 7d per cent. As illustrating the excellent terms to the Dominion on . this issue, the following comparison of | recent loans is given:— i Amount of Date. Borrower. • Loan. £ Jan. 23 New South "Wales 4,000,000 Foil. 6 South Australia.. 2,000,000 Feb. 23 Victoria .. 6,000,000 ilur, 21 British Govt. .. 15,000,000 Apl. 20 New South "Wales 6,000,000 11ay 7 Zealand Govt. 4,000,000 May 11 Indian Government 20,000,000 J had the option of accepting the rate of £9B at 4J per cent., but in view of the desirability of establishing a 4 per cent, basis decided to adopt that rate, wTiich works out slightly to our advantage in interest charges. The judgment exercised in deciding the date of issue on the advice tendered to me is well justified by the results as within a few days the market hardened. an Indian loan at 4£ per cent, bringing only £9O. The success of the issue was most favourablv coinmented upon by .London financial criticß, who expressed "their appreciation of the

sound position of our finance. The terms of the loan are considered to have initiated an improvement for colonial loans in general, and to further exemplify the fact that the credit of New Zealand stands high in the financial world. FUNDED DEBT. The funding of our debt to the British Government' has now been completed under a memorandum of agreement, dated September 6th, 1922. The Acts under which the funded loans were originally issued, together with the amounts, are as under: — Public Revenues Amendment Act. 1914 (section- j 8)~y-War Expenses ... 2,037,4111 Public Revenues Amend- j ment Act, 1915 (section | ;5) —War Expenses ... 8,105,992 Finance Act, 1916 (section 3-5), (War expenses) ... 4,736,842 War Purposes Loan Act, , .1917 ... ... 4,830,000 Finance Act, 1918 (section 1 10). (War expenses) ... 6,600.000 Naval Defence Act. 1909 ... 863,131 Aid to Public Works and Land Settlement Act, 1910 191,010 Land for Settlements Act, 19 0S ... ... 37,778 I ■ £27,532,164 The funding was carried out on an i annuity basis of 6 per cent., the total payment each year being £1,651,930. Interest is at the rate of £4 19s 5.88 d per cent., the balance of tile 6 per cent. I going to reduction of the debt. The first half-yearly payment of j £825,965 was made to the British Government on December Ist, 1922, cal- | culated as follows: — 1 £ Half-year's interest at £4 1 19s 5 BSd per cent. ... 684,794 | 'Balance —repayment of principal 141,171 £825,965 Under the agreement the amount of j £27,532,164 will be automatically discharged from the public debt in about tliirty-six years. The amount payable for amortization in 1523-24 is £292,964, a;d w 11 gradualy increase per annum as the interest-payment reduces on the lessening debt. An important condition of the agreement with the British Government is that the whole or any part of the funded debt may be redeemed at any time. IPUBLIC DEBT. The gross public debt as at March 31st, ,1923, was £218,953,324, compared with £219,054,335 at March 31st, 1922. Therefore I am in the pleasing position of being a"ble to nanotfnee that on the. transactions for the year the debt has been decreased by £101,061. This decrease is due to the fact that while the amount raised for oublie works, electric supply, land-settlement and other purposes, totalled £Q,365,140, loans agiTegatiTic £8.468,201 were redeemed, £5,225 386 being provided by cash and the balance by the issue of fresh doben. turns. The amount of £8,365,140 was raised for the following purposes:— 'Public Works Fund— £ General Purposes Account 2,902,420 Wa>hou and Ohinemuri Riyera Improvement Account 60,000 Electric Supply Account ... 514,470 Education Loans Account ... 595,020 Discharged Soldierß' Settlement Account ... ... 304,435 Native Land Settlement Account ... ... 255,235 States Forests Acoount ... 214,188 L,ind for Settlements —Discharged Soldiers Settlement Account ... ... 164,000 Hauraki Plains Settlement Account 1 ... ... 88,000 Rangitaiki Land Drainage Account ... ... " 60,000 Swamp Land Drainage Account ... ... 45,000 Samoan Loan ... .. 10,000 Scenery Preservation Aocount ... ... 9,000 Mining Advances Account 6,000 Amount raised for stamp duty on transfers not yet allocated to accounts (held in Deposits Account —Loan Stamp Duty 5,234,818 For fSflemption of loans ... 3,130,322 Total raised £8,305,140 The amount of £8,4-68.201 was paid off from tho Redemption Fund and surplus revenue, as follows: Iransfers from — Ordinary Revenue Ac- * count' ... ... 8,160,030 " (for funded debt) ... 141,171 Electric Supply Account ... 600,000 Land for Settlements Account ... ... 250,100 Discharged Soldiers' Settlement Account ... 45,210 Cold Storage Advances Account ... ... ,38,000 War Expenses Account ... 1,046,740 Sinking fundß set free ... 57,000 Debentures redeemed by issue of securities in redemption ... ... 3,227,950 £8,466,201 The gross debt as it now stands may be subdivided as under: — ■ £ Ordinary public debt 116,067,273 Discharged soldiers' settlement • ... 9,759 216 War Debt ... ' ...80.563 885 State Advances dekt ... 12,562,5550 £218,953,334 The debt at March 31st, 1923, was held ae under:— Amount. Gross Annual Interest Charge. Held in.— '£ & New Zealand 106.125.568 4,654.56? Australia ... 2159.490 94.648 London ... 110,668,268 4,808.167 £218.953.324 £9,567.384 Annual sinking fund_ 762,002 Repayment of Imperial Debt 392,964 Total £10,612 350 Of the annual charge, £1,954,359 will b© recouped to the Consolidated Fund from trading and investment accounts. ' The sinking funds accrued are—- £ PubTlc Trustee 7,201,126 State Advances ... ••• 4 '365,060 Ordinary Revenue Account 2,:207 State Coal-mines Account ... 29,532 Commissioners of Pubiio Debt. Sinking, Funds £11,879,-o/ In connexion with the £27,532,164 owing to the British Government now permanently provided for on an annulate Raturn pen Date Issued per c-ent. maturing. at cent. £ s. d. £ 8. d. 6 1?32-42 93 10 0 62 c 5 1932-42 99 0 0 5 X 6 5 1932-42 99 10 0 50 10 4 1931-33 94 10 0 414 3 44 1335-45 94 0 0 4 19 3 4 1333-43 92 O O 4 12 7 4§ 1950-55 90 0 0 S 211 ity basis, it is of interest to note that tliis provision, together with the sink* in<r funds of £4,160.066, held by the Public Trustee, has Tiad the effect of bringing the war door- for which future provision requires to be made down to approximately £49,000,000. Advantage was EaSen of the low rate ot interest ruling in London to issue temporary securities for £1,000,ouo at 3 per cent., with a currency of about nine months, the proceeds being used to redeem 4} per cent, securities outstanding. I have already arranged for renewals totalling £500,000 at a

lower rate—namely, £2 2s 6d. Those transactions represent a saving of approximately £20.000 in interest charges for the year. This, together with the reduction in tho charges for management of stock and loan issues in London, and the handsome profits derived from investments in British securities, in' f i -.lies to-; coess which lias attended the direction and control of our London finance. On January Ist, 1923, loans amount- i ing to £500,000 matured in Australia, and were met by the issue and sale of redemption securities for that amount. Honourable members will find attached a table which sets out the tang- : ible of tho State, totalling | £195,000,000, made up of expenditure on railway construction, public build- I ings. telegraphs, etc., £68,000,000; funds, investments, advances, j etc., £59,000,000; Crown lands, settlement lands, etc., value £30,000.000; : and State forests, etc., £38,043,000. It J is safe to state that with stable'finance I and good management in detail, most ! of them will, with the continued pros- i perity of the country, substantially increase in value and productive power. PUBLIC DEBT REDUCTION. I have previously referred to the public debt sinking fund 3 and the desirability, in view of our increased indebtedness, of establishing a systematic process of debt-reduction, in place of the present method of accumulating sinking funds that are not available for redemption purposes when required. Honourable members will be asked to provide facilities for the purchase of redemption and cancellation of suitable securities before or at maturity out of a debt-repayment fund account. By this means 1 expect to effect not only a saving in interest and sinking fund charges, but at tho safiao time an annual reduction of debt. There will be no interference with the sinking" funds . already accrued. Those I propose should be capitalised, and the interest thereon, together with the annual contribution, applied directly to the reduction of the debt, LOANS FALLING DUE. Loans falling due during the seven years ending with the year 1980 are as follows: T-ear ending / Slat y March. London. Australia, N.Z. Total. & & & £ 1924 1,747,200 8,000 7,798,365 9,548,865 1525 888,100 12,20:) 11,272,797 11,6-8.097 1928 1927 1,000 948,200 4,012,980 4,957,160 11378 1,000,000 .121,000 4,7C3,120 5,834,126 1929 1980 00,094,528 —• 2,048,570 32,143,033 83,180,828 1,079,700 49,681,239 63,791,767 I hav® completed the necessary arrangements to meet our liabilities both in London and Now Zealand for the current year, but honourable members will see from tho table Ehat there are heavy redemptions or renewals within the next two years. RESERVE FUND IN LONDON. In 1907 tho sum of £BOO,OOO was, uttder the authority of the Reserve Fund Securities Act, borrowed from the Post Office and remitted to London for tho purchase of gilt-edged securitiea, to be held in reserve for the purpose of hypothecation should occasion arise. The debentures issued in Now Zealand, which had been renewed from time to time, were repurchased' from the Post Office during the year, cancelled, and discharged from the public debt, tho Loans Redemption Account having been provided with tho necessary funds by tho inclusion of £BOO,OOO in the amount transferred from surplus revenue for reduction of debt. The Reserve Fund now stands clear of all liability at £2,000,000 profitably inTested, and ia a most valuable aid to our London finance. BANK OF NEW ZEALAND. The following dividends were received from the Bonk o£ Now Zealand for tho year 1922-23: — i & ■ A Preference shares (£500,000) 60,000 B Preference shares (£625,000) 62,500 £112,500 In conformity with the powers conferred by section 12 of the Bank of Now Zealand Act, 1920, the Bank has announoed tho intention of making a fresh issue of 1,125,000 kharea available to shareholders, and the Government has tho option of taking up 375.000 shares, or. one-third of the new issue. This option will be exercised, thus bringing the Government holding up to 1,500,000 shares. This will be a very profitable investment. For the ten years ended March. 31st, 1923. the Bank had, exclusive of the £375,000 bonus shares issued in 1920, contributed) £3,754,947 to the State by way of dividends and taxation, including bank-note composition. THE STATE GUARANTEE. Since the dose of the war numcroils requests have been made that the State should guarantee the financial activities of local bodies and other semi-publio institutions, and thus assume liabilities for which it is not responsible, except perhaps beyond ensuring the proper allocation of the moneys to the purpose for which they were authorised to be raised. The State guarantee in connexion with the lgans of local bodies has .jeen very sparingly used, as I was advised by our financial agents in London that tho issue of such guaranteed loans had a detrimental effect upon our credit, for the reason that they were regarded' flfl forming part of the indebtedness of the Domimon. COST OF LIVING. The cost of living has shown little improvement during the past twelve months, and appears to have steadied after the sharp fall in 1921. This factor was taken irito consideration by the Government in deciding that the third deduction authorised to be mado on January Ist last by the Public Expenditure Adjustment Act should not _be made, while at the same time the improved state of the finances lessened the urgent necessity for further reductions. TARIFF ALTERATION. It has already been' announced that a resolution will be brought down abolishing the duty on tea in bulk from British Dominions, and reducing the duty on tea in packets, and on foreign ! tea. by 3d the pound all round; this will mean a remission of duty amounting to £112,£90 per annum if the calculation is based on tho figures for tho year 1922. In addition, it is also proposed to mate a few adjustments or alterations to the tariff of 1921. One of these will deal with the recently established glass bottle industry. Tho other few alterations wil! be of minor importance. FLOOD BELIEF. Honourable members will be asked to Tatify my action in providing financial assistance to those settlers who suffered loss in the recent floods, particularly in tho South Island. The machinery of tho State Advances Office and the Valuation Department is being employed, and on the reoeipt of satisfactory reports, which are furnished by applicants who require assistance, advances are being made on easy terms, and at the comparatively low rate of 5 per cent, interest, to enable settlers to carry on their farma.

VALUE AND TONNAGE OF IMPOSTS. BritieJj Ports Per cent. United States of of America. Per Cent. Other Foreign of Countries. Per Cent, of Totak. Tear. Value. £ Tons. M ® — § -2-3 3 § Value. Tods O 0> O C EH>» t-lB £ 3 J 1 g Value. O d o o HEH £ Tons Total Valuo. Total Tonnage Value. Tons 1319-20 1020-21 1921-22 1922-23 .. 91,915.915 i. 51,846,718 .. 27,897,065 .. 29,606,876 1,084,071 1,590,198 1,234,778 1,SOU,424 S3 77 8,086,038 23.5,2.19 77 75 11,584,781 368,975 77 84 5,973,578 190,153 ' 80 83 5,386,821 223,985 25 IS 2,160,MS 17 19 4,031,770 17 13 2,115,517 14 11 2,113,079 67,555 130,534 37,720 50,708 7 5 6 G G 3 6 3 32,162,119 67,463,269 35,986,060 37,112,77$ 1,336,846 2,109,707 1,462,651 1,584,117