THE PUBLIC ACCOUNTS

Press, Volume LXXXVI, Issue 26120, 24 May 1950, Page 8

THE PUBLIC ACCOUNTS

Figures Announced By

Prime Minister

“OVER ALL DEFICIENCY OF £25,309,320”

(New Zealand Press Association)

WELLINGTON, May 23,

The Prime Minister (Mr Holland) announced to-day that ine net result of the Public Accounts for the year ended March 31 last was an over-all deflciency of £25,309,320.

There was a surplus of £4,307,741 in the Consolidated Fund, but this was offset by the use of social security reserves amounting to £2,587,253, war expenses reserves amounting to £1,029,808, and the creation of Reserve Bank credits totalling £26,000,000. Taxation from all sources amounted to £135,556,034.

Mr Holland said that the over-all deficiency of £25,309,320 was obtained by combining the net results under one heading from the Capital Accounts, the Consolidated Fund, the Social Security Fund, and the War Expenses Account.

“This is the only way of obtaining a clear picture of the country’s finances,” Mr Holland added. “When determining whether there has been a surplus or a deficit for the year, the traditional practice has been to deal only with the Consolidated Fund. It must be obvious to everyone that when some taxation and other revenue is paid to the Consolidated Fund and some to the Social Security Fund, and some to the War Expenses Account. the transaction of these accounts should be amalgamated to ascertain the year’s true surplus or deficit of revenue.

“I go further, and say that no Government can claim a surplus if. while having an excess in one account, it has. in respect to other accounts, to call upon the Reserve Bank to create much larger sums of money than it, the Government, was able to borrow from the community.” In a summary c-f transactions issued with the statement. Mr Holland set out the position as follows: RECEIPTS Taxation from public .. 135.556,034 Borrowed from public for capital works .. .. 19.399,460 Other receipts .. .. 24.463,083 Total .. .. .. 179.418.582 Deficiency .. .. .. 25,309.320 Grand total .. .. 204,727,902 EXPENDITURE Payments out of Consolidated Fund. except £12.000.000 transfer tc Social Security Fund . . 103,688,892 Payments out of Social Security Fund .. .. 46,360,426 Payments out of War Expenses Account .. .. 4,279,124 Repayment of public loans from Reserve Bank funds 11,000,000 Payments out of National Development Loans Account 34,399.460 Total .. .. .. 204,727,902 Deficiency made up by: Social Security reserves used .. .. 2,587.253 War expenses reserve used 1.029,808 Created credit issued by Reserve Bank .. 26,000,000 Total .. .. .. 29,617,061 Less surplus in Consolidated Fund .. .. .. 4,307,741 Grand total .., .. 25,309,320 In a detailed examination of the Capital Account. Mr Holland said that this account comprised: (a) Payment on account of capital works .. 34.399,450 (b) Repayment of maturing loan financed from Reserve Bank .. .. .. 11.000,000 Total payments .. 45,399,460 (c) Borrowings from public for capital works .. .. 19.399,460 Deficiency (met by borrowing from Reserve Bank) .. 26.000.000 REVENUE ACCOUNT Taxation (Consolidated Fund. Social Security Fund, and War Expenses Account combined): £ Credited to Consolidated Fund 103,853.464 Credited to Social Security Fund .. .. .. 31,702,570 Total taxation .. .. 135.556,034 To which was added the following revenue:— Interest from trading activities 5,386,354 Profits from trading undertak- „ in f s x •• 2.162,111 Departmental receipts and miscellaneous .. .. 16,414.623 Total receipts in the three accounts .. 160.019,122 Payments were as follows: From Consolidated Fund (excluding transfer tc. Social Security Fund of £12.000.000) 108.683,892 From Social Security Fund (including £12.000,000 transfer) 46.360 426 From War Expenses Account 4,279.124 Total payments from the three accounts . . 159,328.442 Surplus on year’s operations in the three accounts com- • 690,680 in the past it has been customary to y fi S“ r ? s in the Consolidated ''’hen arriving at the year’s surplus.” 1 " oi^a . nd - "®° that people mav examine the four accounts separately I the transactions in each account b oth separately and then altogether ” figures ?? land then S ave the following CAPITAL ACCOUNTS n=°H, k ™S ayment . S •• 3«.3§>.460 Debt repayments .. .. 11.000.0G0 Less borrowings from the pub- 45 ' 399 - 460 lie for capital works . . 19,399,460 Deficiency .. 26,000,000 SOCIAL SECURITY FUND &T :: :: Deflciency 2,587.253 WAR EXPENSES p™* :: :: :: Deficiency 1,029.303 CONSOLIDATED FUND " '• '• 12 4.996.633 Payments .. .. .. 120.688.892 Surplus .. .. .. 4.307,741 The combination of the four accounts Showed:— Capital account shortage .. K,ocial Security Fund shortage 2 587 253 War Expenses Account shortage ■ • - - .. 1,029,898 Total shortage _ .. 29,617,061 Less Consolidated Fund surplus -- •• .. 4,307,741 Net shortage .. .. .. 25,309,32 ) In conclusion, Mr Holland said that a much more detailed statement of the operations of the various accounts would be gazetted and also laid before the House in Parliamentary papers.