PUBLIC FINANCE.

Press, Volume LXVII, Issue 20420, 15 December 1931, Page 10

PUBLIC FINANCE.

REVENUE CONTINUES TO FALL. ' MINISTER REVIEWS POSITION. FURTHER ECONOMIES HINTED AT. (rajess association teleouam.) AUCKLAND, December 14. The Minister for Finance, tho Hon. W. Downie Stewart, to-day issued the following statement on the position of the public finances: The revenue and expenditure figures of the Consolidated Fund for the eight months ended on November 30th have just been completed, and before leaving the Dominion to meet the Canadian Minister for Industries and Commerce at Honolulu, I should like to take this opportunity of placing the position as I now find it before the people of the Dominion. Tho revenue for tho eight months amounted; to £9,400,018, compared with £12,233,814 for the corresponding period of the previous year, but a considerablo falling off was allowed for in tho Budget for tho current year. Receipts from Taxation. Iteceipts from taxation amounted to £7,360,011, including the following items: £ «.»,» ■ •• w OO Stamp and death duties .. 1,601,720 Motor vehicles, duties and licenses • • • • The Customs receipts were . approximately £470,000 short of the appropriate proportion of the estimates for the year. The position of this item- is nearly £IOO,OOO worse than it was at thp end of the seven months, and as twothirds of tho financial year has now gone, the prospects of reaching .even the amended Budget estimate are certainly not promising. In fact, it now appears to be practically certain that there will bo a considerable shortage in Customs revenue, as I have previously .indicated. The position in regard to stamp and death duties is also verj uncertain. The receipts for the eight months are behindhand to the extent of £210,000 on a proportionate basis. Death duties fluctuate from month to month, and for obvious reasons receipts under that heading cannot be estimated with any certainty. There is little indication of buoyancy in tho revenue from racing and amusements and stamp duties generally. Land tax was due at the end of November, the receipt* will not be included in the figures until December. The indications are, however, that the revenue will fall a little short of the estimate. Income tax, of course, is not payable until later in the year. Interest Receipts. Interest receipts for tho eight months •amounted to £1,274,099, and other receipts to £1,360,734. As these receipts for the most part are not Bpread evenly over the year, they cannot be judged on a proportionate basis. I may say that the railways are having a hard struggle to balance shrinkages in revenue by savings in expenditure in order to be able to pay to the Consolidated .Fund the amount of interest budgeted for, but the management is still hopeful of achieving this objective. On the other side of the account the net expenditure for the eight months, including imprests outstanding, compared With the proportionate part of the estimate.for the year is as follows: , Debt Services. Proportion Expendi- Under of estimate. ture, proportion. &■ £ £ 6,953,111 6,591,213 361,898 Other .permanent appropriations—--4,857,363 4,299,50.9 657,854 Annual votes — 4,007,730 4,343,702 204,034 Totals 16,418,210 15,234,424 1,183,786 TiJnfortun*»iely the expenditure position is not so favourable as these figures indicate. The under proportion for debt services is. on account of the item for repayment of the public debt where payments are made at irregular intervals. It is not anticipated that there will be- any saving on debt charges for the financial year. The position is much the same in. regard to the expenditure under other permanent appropriations. Accounting fluctuations account for most of the apparent saving, and by the end of the year the expenditure under these items, which include hospital subsidies, unemployment subsidy, pensions, and disbursements of the ear-marked motor taxation will probably reach the Budget estimate. The position of the vote expenditure is' satisfactory, and reflects the efforts being made to keep the expenditure down to an absolute minimum. The Outlook. As to tho outlook, for tho public finances generally, new external factors are beginning to operate which will render the position still more difficult and, necessitate still more drastic measures to cope with the problem. It is not yet feasible- to make a full statement on this aspect of the matter, but at tho earliest possible date it will be done. A recovery of the public finances can only come after a recovery in trade and commerce generally. The chief factor in this is, of course, the prices obtained for our exports. While there have been some signs of improvement, the extent of the upward movement has been disappointing. Many people hoped for a decided change for the better following the abandonment of the gold standard by Great Britain, but though the indirect effects from this may yet bo important and far-reaching from the point of view of trade, tho hopes have not yet materialised. In other directions the financial trouble in London through higher interest and shortage of funds may quite possibly adversely affect the public finances, and tho interests ,of the Dominion in regard to local conditions, the long'continuod spell of dry weather which, in some districts, is bocoming increasingly severe, will undoubtedly have a prejudicial effect on the season's output and thus militate against off-setting the lower prices by higher quantities. Further, in some districts crops have. suffered from hailstorms and cloudbursts. Altogether, in spite of tho additional provisions of the Supplementary Budget and tho heavy

1,691,720

extra burdens the people have been asked to carry, the chances of making ends meet in the Consolidated Fund 'for this financial year are rapidly disappearing. Difficult Time Ahead. The prospects are that the next financial year will be still more difficult. Under these circumstances further substantial reductions in public expenditure will bo absolutely ncecesary, and all State services, including what are commonly known as the social services, will again have ( to bo overhauled and reviewed in the Hght of present-day. conditions. In drawing attention to these bard facts it is not my intention to discourage people—far from it—but I consider it my duty to keep the country informed under the present rapidly changing conditions as to the position.