THE BUDGET

Press, Volume LXXIV, Issue 22459, 21 July 1938, Page 13

THE BUDGET

INDUSTRIES OF DOMINION

FOR INTERNAL MARKETING Expenditure More Than Doubled ESTIMATES OF DEPARTMENT Salaries Increased By £12,000 TFrom Our Parliamentary Reporter.] WELLINGTON, July 20. More than double the amount spent In 1937-38 by the Internal Marketing Department is estimated to be necessary in 1938-39.. according to the departmental estimates presented in the House of Representatives this evening. The cost of this department has risen from £19,092 to £53,323 (this year's estimate), and the details of expenditure indicate the growth of its activities. Considerable increases in staff are indicated by the sum set aside for salaries, £28,463, which is more than £12,000 above the amount spent last year. Eleven officers of the department will receive salaries of more than £4OO a year, including one at £2OOO, i one at £Bl5, one at £750, and two at £7OO. Besides a total of 17 officers receiving £350 or more, there are 83 members of the clerical, sales, and other staffs receiving £335 and less, to a total ,of- £17,949. Two major items on which no expenditure is recorded by the department for 1937-38 are the purchase of plant and machinery, for which £SOOQ is provided, and the purchase of motor Vehicles and bicycles, at £2QOO. Postage, telegrams, and telephones are provided for up to £ISOO, compared with £829 spent last year. Another large sum, £3OOO, will be spent mainly on accounting machines. Some of the increases are explained as being largely caused by the establishment of the honey and butterpatting sections in Auckland, the but-ter-patting section in Wellington, and fruit marketing. The note to the estimates explaining this is appended to a reference to the purchase of accounting machines, and applies to "remainins increases." It is not clear whether It is intended to apply to the whole of the increased expenditure. NEW PEAK OF EXPENDITURE PUBLIC ACCOUNTS ANALYSED SOCIAL SERVICES DEFENDED "REMAINING PROBLEMS TO BE FACED RESOLUTELY" [From Our Parliamentary Reporter.! WELLINGTON, July 20. Both revenue and expenditure reached record proportions in the last financial year. This, said the Hon. W. Nash, was in accordance with modern trends in public finance and with the Government's policy of increasing the range and scope of social services. "Such a policy requires little justification in the light of present-day enlightened standards," he added. The public accounts reflected the prosperity which obtained in the Dominion throughout the year. A surplus of £BIO,OOO resulted from the year's operations. The position was summarised as follows: REVENUE £ Taxation .. .. 31,664,000 Interest .. .. 2,141,000 Other receipts .. .. 2,254,000 Total .. .. 36,059,000 EXPENDITURE Permanent appropriationsDebt services .. .. 9,441,000 Exchange .. .. 1,828,000 Highways .. .. 2,835,000 Other services .. .. 1,517,000 . Total-J> .. ~ 15,621,000 Annual appropriations— Social services .. .. 11.872,000 Other' services .. .. 7,756,000 Total ~ .. 19.628,000 Grand total .. 35,249,000 Surplus .. .. £BIO,OOO "Much Still to be Done" has already gone some distance along the road of social J™?"oration, but there is much still EL e °?, n , e ' and the remaining problnSV? 11 be faced with the same reso♦hl /? etermination as h as characterised action un to the present,", said Mr Nash. H tpnt° na , tlon could aflord to rest coni.,vJ* so lon S as numbers of its citizens wor«T re . able and willing to work vw£. * ie Ji. the opportunity of proad,,?! for the reasonable comfort and fA«n?£ em^ I J t of themselves and their fltSil?'* Moreover, if any real bene•2L£^ te - be obt ained from the proSf£J2lS C v. ence and invention, it must latinn^ re rl by ev ?jy section of thepopuSm?«« • 1t ,. w ?5 11d be appreciated, too, ' J dual as able t 0 take adruS^sS» 0f the vari °us forms of matewSrP2 gr ? B J °Ji ly t 0 the extent to makw v*, d the necessary means of «rfflsPJL ha demand s effective. A profovriu*e* e ? ten sion of social services ' tSflm. bri 2? these material adva£ «ges within the reach of all. n Exchange Cost £247,000 (comnarJ°! a U n^ eea s e in expenditure ceS ™ « o h f immediately prev!cM g a L e „ a , r \°J £ 4 -°HOOO, social ser£Us9 o(W Unt nl fOr an amoun * of sti.aoa.OOO. Other annual appropria*lfiawSl I ° T^ an in^ease P of SftV? ,' the result very largely of 8S na i defence expenditure yEx«wnge charges were responsible for

DEFENCE OF N.Z. Varied ActivityReviewed HIGHER PAY PROPOSED FOR TERRITORIALS (From Our Parliamentary Reporter.) WELLINGTON, July 20. A review of current and forthcoming activity in providing for the defence of New Zealand is made by the Minister for Finance (the Hon. W.I Nash) in his Financial Statement, which was presented in the House of Representatives this evening. The Minister refers to the progress made in providing aerodromes and extending the work of flying training, in strengthening coastal defences, and providing modern equipment for the land forces, and in reorganising the naval forces. Increases in pay and allowances for the territorial forces are proposed. "It is a striking commentary on modern civilisation that, in spite of the development which has taken place in science and learning, the manufacture of armaments and preparation for war still absorbs a large proportion of every country's revenue," the Minister stated. "In view, however, of the failure, of the policy of disarmament adopted by the British Commonwealth of Nations, it is obvious that if our democratic institutions are to be maintained, rearmament is an urgent necessity, and the Government would be failing in its duty both to the citizens of New Zealand and to the British Commonwealth if it did not take its share of the expenditure necessary for defence. "It would, however, be both unwise and unnecessary to publish full details of the measures which the Government have taken to provide adequate defence for the Dominion, but in view of the increasing importance which such expenditure is assuming in our budgetary position a brief review would be appropriate at this stage. "In last year's Budget reference was made to the inauguration of an Air Defence scheme. This scheme provides for the establishment of two operational stations, a flying training school, and a stores and repair base, in addition to the formation of territorial squadrons and an Air Force Reserve." Air Development To organise the scheme and to coordinate efficiently the administration of military and civil aviation, an Air Department was established by legislation last year. Much work had already been done at Wigram to convert the station into a flying training school. Additional buildings had been erected and others were nearing completion. At Ohakea considerable progress had been made in the erection of the two hangars and contracts had been called for many other buildings. At Hobsonville additional buildings for the accommodation of personntl had been completed and contracts had been called for the buildings required for the custody of aircraft and stores and for the training of technical personnel. The site for the second operational station had been selected at Whenuapai, near Auckland, and surveys were being proceeded with. It was anticipated that building work on this station would commence before the end of this year. "Much work was carried out during last financial year on matters relating to aviation, and during this financial year provision is being made in the estimates ior an expenditure of £1,573,900," the Minister continued. "Of this sum £493,900 is from the Air Department's vote, £730,000 for capital expenditure from the Public Works Fund, and £350,000 from the Consolidated Fund for the development of aerodromes, emergency landinggrounds, and the provision of aeradio equipment. , On Land and Sea "On the military side particular attention has been paid to strengthening the coastal defences, while certain new territorial artillery units have been established. Orders were placed last year for various weapons, mechanised vehicles, and other military equipment to enable the most modern methods of training to be adopted by the forces, and certain of the material is due to come to hand during the year. Work is in progress at the permanent camps at Narrow Neck, Ngaruawahia, Trentham, and Burnham to provide better facilities for territorial training and to fit these centres to carry out efficiently their functions as ordnance store depots. "The system under which single men are enabled to receive from three to six months' continuous military training is being continued and expanded. Such trainees benefit both mentally and physically and they will give added strength to the territorial force. The introduction of motorised transport and mechanised artillery equipment has made more interesting the methods of training of territorials, and instruction is being given them by means of screen-training films. Provision is being made for the issue of a blue uniform to the territorial force, for an increase of regimental fund grants, and for the provision of recreational equipment. "Further to encourage recruiting it is proposed to increase the pay and allowances of the territorial force, to grant pay for days occupied in travelling to and from camps and courses, as well as rail and tram fares to and from parades." Good progress had been made in reorganising the naval forces. Deliveries of material and machinery were coming to hand, and the reconstruction of the storage and repair services at Devonport would be completed by the end of the year. The administration had been overhauled, and steps had been taken to give effect to the policy of maintaining an efficient unit consisting of two modern cruisers and ancillary services sel'f-supporting as far as possible and working in close cooperation with Royal Navy and Royal Australian Navy units in these and neighbouring waters. Details of the steps actually taken wers reflected in the naval service estimates, Mr Nash said. The more important items included provision for completing the reconstruction works at the naval base and Kauri Point armament depot; for the entry of seamen under a short-service scheme of six years' active service followed by six years on the reserve; purchase of land for a naval barracks to replace Philomel as a naval depot; increase of oil fuel; ammunition, and stores reserves; and certain miscellaneous works involving a total of approximately £192,000 expenditure on reconstruction and development works and services.

STATE HOUSING SCHEME TOTAL COST NEAR £5,000,000 CONTRACTS LET FOR 3748 DWELLINGS "NO CHARGE FALLING ON GENERAL TAXPAYER" [From Our Parliamentary Reporter.! WELLINGTON, July 20. "A graver social problem than was appreciated except by the comparatively few in actual contact with the position is indicated by the surveys made by local authorities under the Housing Survey Act," said the Hon. W. Nash (Minister for Finance) in the Budget statement. He explained that the Government had anticipated the seriousness of the situation by setting up, towards the end of 1936, the Housing Construction Department. Since the letting of the first contract in March of last year, 2800 houses were commenced by contractors, and the department had now reached the stage of calling tenders for approximately 100 houses a week. It was evident that yiis represented the limit of the building industry's capacity at present. Loans were also granted by the State Advances Corporation for residential properties of a value of £1,721,000 during the last year. As was pointed out in last year's Budget, measures designed to effect a more equitable distribution of the national income were very closely related to the provision of adequate housing facilities, and the results of the surveys indicated very clearly the inseparable connexion between the incomes of the people and the amenities of life which they were able to enjoy, said the Minister. Surveys Summarised Of the 119 local authorities affected by the act, 105 furnished the necessary returns. An analysis already made of 90 of these returns gave the following:— Population of the 90 towns in question .. .. 655,829 Dwellings .. .. .. 163,429 Buildings used as dwellings which are unsatisfactory but reparable .. .. 21,697 Buildings totally unsatisfactory .. .. .. 3,653 Dwelling units in whicn equipment is only partly satisfactory .. .. 16,174 Dwelling units in which the equipment is totally un- t satisfactory .. .. 13,891 Houses at present providing accommodation below the minimum standard .. 20,260 Surplus persons accommodated in these houses .. 50,686 "Great Progress Achieved" The Housing Construction Department was set up with a view to proceeding as quickly as possible with the erection of houses throughout the Dominion for purposes of letting. Adequate provision was also made through the State Advances Corporation for mortgage funds on the table principle and at low rates of interest for those who desired to own their own homes. "The first contracts for the erection of houses were accepted in March, 1937, and since that date great progress has been achieved," said the Minister. "To date tenders have been called for 4711 houses in 79 different towns. Contracts have been actually let for 3748 houses in 70 different towns, and the average number of houses in each contract is five. One hundred and eighty different contracting firms are carrying out work for the department. Over 1000 houses have been completed, and within four and a half months it is estimated that a further 1000 will be handed over for occupation. The total number of houses actually commenced by contractors from March, 1937, to date is over 2800, and 5000 persons are directly engaged on the work." Houses were completed in the following 28 towns: —Whangarei, Auckland, Otahuhu, Hamilton, Thames, Te Aroha, Tauranga, Whakatane, New Plymouth, Hawera, Wanganui, Marton, Feilding k Palmerston North, Gisborne, Napier, Hastings, Masterton, Lower Hutt, Wellington, Johnsonville, Westport, Christchurch, Ashburton, Timaru, Oamaru, Dunedin, Invercargill. Houses were under way in the following additional 39 towns:—Dargaville, Devonport. Mount Albert, Mount Roskill, One Tree Hill, Pukekohe, Ngaruawahia, Cambridge, Matamata, Morrinsville, Paeroa, Te Awamutu, Rotorua, Te Kuiti, Taumarunui, Wairoa, Waipukurau, Dannevirke, Pahiatua, Carterton, Stratford, Eltham, Patea, Taihape, Levin, Blenheim, Nelson, Greymouth, Hokitika, Rangiora, Kaiapoi, Riccarton, Lincoln, Lyttelton, Waimate, Temuka, Mosgiel, Balclutha, Gore. "It was realised at the commencement that the progress of the housing scheme would depend-very largely on the availability of skilled labour. The operations of the department are, at this moment, being seriously delayed on account of this factor. The average number of artisans employed by the contractors on each house that is under actual construction is only 1.8. This figure explains the long period required by nSany builders to finish their contracts." Shortage of Materials In a lesser degree the department's operations had been affected by the shortage of materials. The Government laid it down in the first place that, as far as practicable, the materials for the houses were to be produced or manufactured in New Zealand. The rapid expansion of the department's operations had, in some cases. been too fast for the manufacturing industries to keep in line. A notable instance was the case of roofing tiles. The stage was reached a few months ago when tile-manufacturers wore refusing to quote for the supply of their products. The department was then forced to import a limited quantity of tiles from Australia. There had also been a shortage of dry New Zealand i timber and fibrous plaster of satisfactory quality. Up to June 30, 1938, the total expenditure on housing, purchase of land, provision of services, administration, etc., amounted to £2,199,115,- while the total commitments for land purchases and contracts entered into from the inception of the scheme to the present date amounted to approximately £5,000,000. In addition, loans granted to local authorities for housing construction amounted to £450,000. "While keeping the rentals of properties as low as possible, the principle has been laid down that full costs are to be taken into account in assessing the rentals, and accordingly no charge is falling on the general taxpayer," said Mr Nash. CHAMBER OP COMMERCE OPINION No comment on the Budget could be made on behalf of the Canterbury Chamber of Commerce last evening, because of the absence in the North Island of the president, Mr W. S. MacGibbon, and the immediate past-pre-sident, Mr V. E. Hamilton.

PRIVATE HOUSE PURCHASING LOANS FROM STATE ADVANCES SUBSTANTIAL INCREASE IN APPLICATIONS [From Our Parliamentary Reporter.] WELLINGTON, July 20. "A decision was reached during the year to liberalise the terms of the State Advances Corporation of lending for the erection of new dwellings, :.nd it was noticeable that during the latter part of the year a substantial increase took place in the number of applications," said the Minister for Finance, when reviewing the housing situation of the Dominion. Advances had been made on a table basis for periods ranging from 20 years to 35 years in the case of house properties, while in the case of good farm properties the period was extended to as long as 45 years. The lending rale in each case had been maintained at 4J per cent., and it had thus been possible to keep the instalments within the capacity of the average borrower. As encouragement to people who had a reasonable amount of cash available and whose income resources were satisfactory, the corporation's policy had been to offer every possible assistance in the way of purchasing building sites and the provision of plans and specifications. Arrangements were made for the preparation of plans suitable for various localities, and these were mad? available to borrowers, who had a good range of types and sizes to select from. The standard specifications which had been prepared ensured that the houses were erected on sound lines, and the corporation's properly supervisors provided supervision during the course of erection of the house, thus protecting the borrower as regarded the workmanship and materials used in the building. During the year ended March 31. 1938. loans amounting to £1,721,000 were authorised in respect of residential properties involving a total of 2480 applicants, and in the case of farm properties, 707 loans were authorised amounting to a total of £1.284.000. In addition a total of £544.000 was authorised in respect of 78 applications from local authorities for general purposes.

"Encouragement By State" EFFECT OF LEGISLATION [From Our Parliamentary Reporter.] WELLINGTON. July 20. "If this Dominion is to possess a properly balanced economy it is essential that adequate attention should be given to the extension of secondary industries," states the Minister for Finance (the Hon. W. Nash) in his Financial Statement, which was presented to the House of Representatives this evening. He claims that considerable progress has already been made in this connexion, and that every encouragement is given to the establishment of new industries and to the extension of existing ones, provided that on investigation they appear to be economically justifiable," he states. "To this end the Bureau of Industry set up in terms of the Industrial Efficiency Act, 1936, has made rapid progress in carrying out its statutory functions." Concerning the proposed iron and steel works at Onekaka, the Minister says that the establishment of an industry of the magnitude required, involves a large amount of investigational work on the ore-bodies, coalsupplies, and other minerals before the exact type of plant required and many other factors vital to the success of the industry can be determined with certainty. This preliminary work is being pushed forward as quickly as possible. "Iron and steel works are essential if our secondary industries are to be developed to a stage required to give us a properly balanced economy," he adds. "The powers of licensing given by the Industrial Efficiency Act are designed to secure greater efficiency in any industry for the benefit of both consumers and producers by regulating new entrants into the industry concerned in accordance with economic considerations and by preventing the establishment of redundant units," Mr Nash states. "The aim of the Government in this connexion is to ensure a maximum measure of goods and of services to the consumer." Although the Bureau had considered a number of applications from industries and individuals desiring the protection which licensing affords, only two of these had been granted during the year ended April 30, 1938, bringing the total number of industries licensed to 16. In each case a full examination of the particular industry was made, and the Bureau had recommended that an industry should be brought within the licensing provisions of the act only where it was convinced that licensing would be in the best interests of the industry and of the consuming public. Two industrial plans prepared in accordance with Part II of the Industrial Efficiency Act had recently been put into operation, and Industrial Committees to administer those plans had been appointed. The industries concerned were flax and pharmacy. The retail sale and distribution of motor-spirit was subject to licence. During the year more than 1800 applications connected with this industry were considered. The preparation of a plan for this industry is at present under consideration. The Department of Industries and Commerce had made extensive investigations into possible new industries. A number of these proposed industries had been found uneconomic of operation, but it was hoped that through the department's efforts several new activities might be commenced locally. The Minister also refers to the -additional protection given some industries by the recent tariff adjustments. "Reports received since the adjustments were made indicate that manufacturing industries received great benefit from the added protection afforded them," he states. "Many have taken steps to expand their productive activities by engaging more workers, installing additional plant and machinery, and erecting new premises. In addition, a number of overseas manufacturers have taken steps for the manufacture of their products in New Zealand. The added protection granted has been a material factor in the encouragement of manufacturing activity in the Dominion to the advantage of both manufacturers and their employees. "A further important matter is the activity resulting from the passing of the Petroleum Act last session," states the Minister in conclusion. "Consequent upon this legislation large sums have already been expended by private firms in prospecting for oil in the Dominion, and if these tests are successful—and there is every indication that the possibilities will be thoroughly investigated—the resulting industries will be of great economic importance to New Zealand."