THIRD WAR BUDGET
*■-■■■ STUPENDOUS FIGURES . YEAR'S SURPLUS-14,308,777 WAR LOAN-£24,000,000 COMPULSORY' SUBSCRIPTION TO ■ '10AN SUGGESTED ! "TAXES .ON LAND, INCOME AND LUXURIES VERY HEAVY IMPOSTS , > EXCESS PROFITS TAX TO BE DROPPED
•'..The Bight Hon. Sir Joseph Ward -rfe- •' : lirered the Financial Statement in. Ihe Housei of Representatives last evening, as ■. -.follows: '• . ;'':"-'': Since I submitted to honourable mem- .'■■■■" 'bers;the Budget 0f'1916-17. the great war .'" has, .unfortunately,, continued with un- ! abated and, indeed/increased' intensity. • ': It is therefore my duty to review the •'.'■ - financial aspect of the past year's operav tions, covering- a period of unprecedented conditions, and to suggest for the consideration of honourablo .members proposals •to meet the increased financial' r'equire- -.■:.:: men*, for the--year .'1917-18. •■ . Revenue and Expenditure. - The revenue aid expenditure fdr. the .;. year 1916-17 as compared with the previ- ' ous financial.year are as follow-.— Revenue for' the year ended March 31,. • 1917,' compared with the year ended .March 31, 1916. .Year ended Year ended ; March .March- . 31/1917. 81, 1916 Inc. ■ : .',.-..e. r .<£ . '•■ £ Customs ;'..;... 3,819,675 3,366,171 483,504 . Stamp' and. .' .death duties 1,699,035 1,170,307 328,726 Postal . and •: . . telegraph ...1,815,558 1,689,917 125,811 - Land tax 713,118 1,048,356 "335,238 Income tax ... 4,262,126 1,392,119 2,870,007 Beer duty ....:. 187,953 157,892- 30,061 Railways ;, ..,-4,836,276 4,484,337 , 351,938 -•■■-'Registration - ' ■;'.''. •■■• andotherfees 108,014 106,263 T 1,781 'Marine' .:.:/. 13,742 46,228 «2,456 . Miscellaneous' .-518.063 42-1,505 93,558 '".'..Territorial . ',215,787 i' 19,314 ' "3,527 ..-.: --National en-' ■ > ••■■ ■-■■ dowment Tev- ■ '-...; -enue :..... .'85,971 ' 93,655 . "6,681 • ■:., Other receipts,: 32,200, 12,073. 20,127 ■;-'' Totals ...;.... 18,367,547.14;510,137 3,857,410 "Indicates decrease. ;-. j
The particulars', of the £1,209,121 falling ,duo in London during the current financial year are as follow: Date. Authority, Amount. 1917. ' ; .■ £ ■April I—New Zealand. State- ■ guaranteed Advances Acts, 1909-10, Land for Setienients . ~ Branch, 4. per cant. 39,500 1918. -'.',■'' | i Jaiu X— Maori Land Settlement i Act, 1905, i per cent. ....... . 1,200 March 31.*—Public Revenues ' • Amendment Act, 1914, Section 8, and Public Revenues Amendment Act, 1915 (No. 2), Section•9,.Bl per cent. ..: 1,168,421: *Advances from Imperial Government for war purposes.- Treasury bills renewable. '. The Treasury. : r 'As evidence that the work, of this Department has increased both in volume and importance, I may mention that the amount paid into the- credit of the Public Account during the financial year immediately preceding the war aggregated .£17,000,000, while the total lodgments for last year exceeded Duriug the year just ended loan and financial operations of an unprecedented character were undertaken. Over ,£11,000,000. of the Domirr'on War Loan of ,£16,000,000 was raised in New Zealand, at a net cost of 1- per cent, only, which is considerably below theW of raising loans on the London market. The average cost ot raising the last three loans in London prior to the war was 3?j- per cent., and the average cost of raising the two loans in New-Zealand during the war was three-eighths' of one pound per cent. Although practically 50 per cent, ol the regular, Treasury staff has joined the colours, the abnormal increase of - work and responsibility-thrown upon incite', partment in administering ; and controlling such large sums has been efficiently
:• Expenditure-for'the/jeareacled March 31 . ■ .'. ]-:-';.--''i>i'-:r.' , March ; ipermaneut appropriations— Civil,, List ...-—;.. ••••••• •'■. Interest and sinking fund .- Minder, special. Acts. •■••••••.■"" Subsidies paid to local authorities .Territorial revenue ■—.— ...... ' Endowments.:, ...,:.....;.....;..•—•<—••••••• Old-age pensions 1 ••••• •< ■Widows'-pensions ..-.—• ~...»- • ' Mißtary-.'pensions..'.' ....—..—•• „",..War.. pensions. ;—'—- — ; —— 'Annual Appropriations — ; .legislative.Department •••• ; 1 Department df Finance :...... . Post and Telegraph Department . .Working Railways Department ; ... '.. Public buildings,- domains, and inain- ,'" - tenance' of'roads; _• • i Native Department •• Justice Department .. (Mines •••' • Department of: Internal Aftairs ........... Defence Department • ~ „' , Customs, Marine, and Inspectun or <;-' Machinery; Departments ...... - ■' -Depairtment-of Labour ..... •;• ".'.Department'jbf lands and Survey ■ -..£ " "Department'of " Agriculture, Industries and Comn.orce /Bdudation : Dep'ar(ment ;..•. Services Dot. provided for ..;, .; Totals .........— —
:. ".. -.'"Public Works Fund. ::^,;;".,r w "r ;. ■ £ £ Balance brought ; forward on April 1, 1916 1> 293 ' 102 ■'. Receipts— ,'■■'..'' Loan money— Aid to Public, Works and Land Settlement Act, 1914 :....: 500,000 ■ Other receipts ..■„■ 7,3ia ■ 507,340 ■■:.'■;■ .. • .01,800,447 Expenditure— ■ 107s «9o [Under appropriation „ 1,-<»,.)-i Balance at March'3l, 1917 *^521,525 *Note.—Tho balance on March 31, 1917, is made up as follows:— ' . Cash in Public Account . 315,913 Imprests, in hands-of o&cers of the Government .- • J."Invcstment Account ■• 20 P- (IO( ' ,£521,525 , ■ Debts to be Paid. 'Apart from our obligations to the Imperial Government for war.expenses, referred to in another paragraph, tlio total debt falling duo during the year amounted to. JWS9.WO. and-of, his amount JM«6,O-40 was ■ renewed j £m,m was redeemed with funds borrowed from the Post Office, £5500 was provided by tlie Commissioners of the Public Debts Sinking Punds, while ,£587,200 was, con.verted under ,the provisions of Section ioti of the Finance Act, 1915. . The conversion scheme authorised by ;the Finance Act, 1915 (Section 100), was continued during the year, with the Tesuit that a total sum of ,£2,133,000 has been converted into debentures with a ■currency varying to twenty-five . years and bearing interest at V, per cent, free of income tax. The loans falling due during the seven years endiug with the year 192.4 are as follow:— Tear Ending :_,„..• v v ~„, Mar. 31. L'nd'n. Aus. NX 1. "1018''' d 0.700 81,200 3,238,J5G 3,303,356 «" HWI2I •■- - 1.168,421 1919 '"'*"■ 131350 51,000 1,520,515 1,705,865 M'O'.V -12,800 29,400 3,M5,745 3 i67W O ~:, • - -384,200 9,721,257 10.105.4a7 «??""■ 218"00 605,400 5,348,190 6,171,790 «•■' 30 300 665,850 65,500 761,650 1924 '" 1 708 200 29 300 386,800 2.124,300
1917, compared with the year ended [,1916., .... .1 ear ended Year ended March March ' '■ 31,1917. -31,1910. Inc. jJec.
carried out. The staff is at- present slightly below its pre-war strength, but it has been found possible bv close attention to work and the simplificaton of methods in the Treasury to carry out the additional duties without increase of staff. I feel it is their due that I should publicly acknowledge their services. Import Values. Tho values of imports (calculated at invoice, value plus 10 per cent., which is the value entered for ad valorem duties) as compared with tho tonnage landed will give some idea of the increase in tho value of merchandise as compared with the period before the outbreak of war. Tho proportion of value obtaiued from Great Britain and British ports, United States, and other foreign countries is—
Trading With the Enemy. On September 26, 1916, an Order-in-Council was issued prohibiting the importation of goods of enemy origin from any destinaton.. Prior to that time there was nothing to prevent the importation of enemy goods "held in stock in British possessions prior to the war, and'the result was that German and Austrian goods continued to find their way into New Zealand from stocks in Great Britain and Australia. Statements are frequently made that trading with the enemy still continues, and there is little doubt that this -impression is due to the fact just stated.. Many of the allegations as to enemy trade have been investigated, but in not a single case has it been shown that New Zealand importers have been knowingly receiving goods exported from Germany after the commencement of the war. Under arrangement raado by the imperial Government certificates of origin and interest are now necessary for goods exported from Switzerland, Holland, Denmark, Norway,' and Sweden. These certificates are issued by a British Consular officer, and *ro to the cft'ect that it has been proved iq his satisfaction that the goods have not been produced or manufactured in enemy territory, and that no person who is an en-
emyor who is, associated with persons of enemy nationality ha<3 any interest in the- goods.
Stocks on Hand and Orders Expected. Many merchant's have been interviewed ro Ascertain as yearly as possible the stocks of goods on band mid the orders expected during the present financial year. It is found that in most fines stocks are heavy' sis compared ■■with this time last year, in many cases finite 50 per cent, greater, but 35 per cent, is a fair average. This is tlio caso with softgoods, china, fancy goods, tobacco, and cigars. The retail 6hops are also overstocked, and consequently tho wholesale stocks will ho slow to clear. Almost every wholesale merchant visited stated that orders to go forward, and already sent forward, would ho very much less than during the past year. Certain classes of goods can ho procured from Great Britain only, under the certificate of the Honourable Minister of Munitions. These includo many chemical salts much iised in thojndustries and manufactures, pig iron', railway material, steel billots, steel angles,'channels, joists, and other sectional material and structural wort. Saddlery, hardware, tinplates. and other goods are obtained v:ith difficulty. As against tho expected shortage of importations there is the fact that the stocks in tho bonded warehouses are heavy. An all-round drop of revenue as compared' with 1916-17 must he expected.
i Imports and Exports. The comparative figures -howiug, the values of imports and exports for tin} financial years 1915-16 and 1916-17 are:— Financial - Imports. Exports, year. ■ . jB . £ 1915-16 22,917,437 , 33,781,711 191(5-17 •' 26,162,706 30,588,160 Had all the shipping space required been .available it is possible that the value of exports for 1916-17 would have equalled that of the previous year. It is well known that large quantities of cheese, butter, tallow, frozen meat, and other produce have had (o be held oyer through lack of ships. The Taxes, The net ■ receipts for the past year, amounted to ,£4,975,241; made up of land tax .8713,118, income tax .£4,262,126, and compared with the collection for tho pre-, vious year'show an-increase of £2,53i,759. The land tax receipts compared with those of 1915-1916 show a decrease of .£335,238, Which is accounted for by the abolition.of the tax on mortgages. The •comparison is as,follows:— Receipts 1916-17 .'. 713,118 " Receipts 1915-16. .'. 1,(148,356 Decrease ._.....' .£335,238 The income tax receipts compared with those iof ,1915-16 show an increase of .£2,870,007. . The comparison is as follows:- ! : ' ; ■ £ JlEceipte, 1916-17 , 4,262,126 :.'-Receipts, 1915-16 .:... 1,392,119 ■ ■' increase ,£2,870,007
THE RESERVE IN LONDON SURETY FOR POST OFFICE ' TO REPAY INVESTORS I announced in lasi; -year's Budget that a special-reserve had been established in London for the' purpose of meeting possible sudden demands resulting' from the war. I felt that the Reserve Fund of-.£Bflfl,ooo ordinarily maintained-in London was insufficient under the; present unusual conditions,, and I have invested in London out of-surplus revenues a sum 0f,23,917,731 for this purpose. The public has been placing a large amount of its cash at'.call with the Post Office, and I feel 'convinced tsat when peace is declared a very : considerable proportion of these deposits will be claimed. We'have been borrowing these. Post Office deposit moneys for war purposes and other local needs, and it is probable that the.,' Consolidated Fund may after the war have to, repurchase some of the securities it has given to the Post Office to enable the Postal Department to meet its obligations. ' Since the war began we havo borrowed approximately .£10,000,000 from the Post Office. This is apart from the sum rnisecl by.' the Po3t Office on five-year war certificates. After .peace is declared it is probable that increased internal developments and business activities, together with the necessity of repairing the worldwide damage caused by'the war, will create a great demand for money, and it would be cheaper for the Governinsnt to have its own money for use thon than to borrow. It must not be forgotten, however, that the Post Office call-moneys are'still accumulating and must be.invested. At the end of the current year the total borrowed and "invested by the Treasury from the Post Office will, in nil probability, largely exceed .£10,000,000. I trust honourable members and the country will Tecognise bow important it is to have each year's surplus of revenue during the war invested and held for repayment to the depositors in the Post Office, and should .events 6how it is not necessary for that; purpose, then it should be used for paying off war advances from the Imperial Government. The above ,£3,917,731 has been invested in Imperial Government securities, which can, of course,' be realised if the necessity to dp so should arise. The.important fact remains that we have .a strong Reserve Fund in London, which gives a financial advantage to the Dominion during the wnr that cannot bo over-estimated. •
WAR EXPENDITURE £1,900,000 A MONTH ■ BIG SACRIFICES NECESSARY Since the commencement of hostilities tho war expenditure,' of the -Dominion had, up to Juno 30' Inst, reached the large ,811 m of .£28,439,912, and as-this expenditure is increasing in proportion to the increased number .of men we,are dispatching to the 6eatoi war, it is probable that by tho time the House meets again the expenditure will have reached ,£50,000,000, and I need not remind honourable members of the sacrifices whicli the people of the Dominion must be prepared to mako in order to meet this huge expenditure. It is of paramount importance that this should bo recognised by every one in the country.
■ Other British Ports. United States. Foreign Countries. Totals. Value. Tons. Value. To ns. Value. Tons. Value. Tons. Tear. £ £ £ £ 1914 ... 17,649,781 1,300,843 2,282,906 125, 755 1,923,310 52,157 21,856,096 1,538,755 1915 ... 17,727,137 1,172,859 2,000,218 138, 741 1,401,419 55.457 21,728,834 1,370,057 1916 ... 20,833,401 -1,005,900 3,969,925 230, 341 -1,535,897 63,697 20,339,283 1,299,914
I am pleased -to be able to inform honourable members that not only lias a considerable amount of money for war purposes been raised in New Zealand through tho Treasury and Post Office Departments, but funds have been provided for carrying on other necessary services as well. It will bo remembered that during the early stages of tho war the Dominion was dependent upon the Imperial Government for advances to enable it to train and equip ftj soldiers and maintain them at the seat of war. For a time this was necessary, but'as soon as it was possible for New Zealand ■to provide its own funds for defraying the expenditure necessary for the conduct of its share of the war it was done. The current expenditure in connection with the war may be estimated at approximately ,£l, I JUO,OOO a month. Fortunately, however, tho resources of the country are able to bear the heavy strain which is being placed upon them, and though anxious as to tho future I have tho, utmost confidence that, tho people of tho Dominion can bo fully relied upon to provide the necessary moans. In addition to the expenses of training, equipment, transport, etc., of our troops, tTfere are maintenance expenses being continually incurred at tho seat of war, which, for the purposes of convenience,
arc being defrayed by tho Imperial tiovoenmont. Claims are subsequently mado by the War Ohice to cover this expenditure, and tho claims so made up and provided for lo December BJ, 1910, amounted to JE-1,500,000. During last session, of Parliament I asked the House to, grant tho necessary authority to enable' tho Government to raise a sum of .£16,000,000 for tho purpose mentioned, and immediate steps were taken to place the pz-ospeetus beloro tho public for tho notation of a loan of i'MOO.OOO. Tlio response to this appeal was most gratifying, as this sum was largely over-sub-scribed, i wish to thank the banks "and other institutions for. their liberal subscriptions, and also the Press, which as-, sisted materially in making the loan a success. The public also is to bo congratulated updu the liberal manner in which it subscribed. The smaller subscriptions, made chiefly out of the savings of tho people through tho Post Office Department, amounted lo no less a sum than. £l,iluM>> a »d 1 «'<'< Mto thank tho small investors for the great i assistance they have given in providing so large a portion of the loan. I have mentioned above Hint during tho early stages of tlio war the Imperial Government provided all the funds required by tho Dominion for war purposes. The amount so provided 'amounted to ,£H,tlO,000, but in addition to this amount thei'O was a sum of =£3,250,000 advanced -for,the redemption of certain loans which were maturing about tho end of 191J, making a total of- „C17,GG0,000 advanced! sinco the commencement, of the war. The Dominion gave to tho Imperial Govern-j went, as security for these several advances, Treasury bills and memoranda of, agreement which wore renewable year by year. While in London I arranged with the Imperial Government to extend tlio. currency of the greater portion of these loans until 1915 and 1947, By doing so the necessity for.going upon tho London market, during the war was avoided, and it will be recognised that a great saving to the Dominion has ' been • effected. I am sure that the terms obtainable in the open market would have proved most costly to us, and it must bo remembered .that .tho country has saved underwriting, commission, brokerage, and other charges, which are -inwnarable from the floating of a loan on tho London market. Tt is important to remember that by deferring these heavy liabilities for so .many years our financial position after the war will lie given greaterstability. Loan for Public Works. The expenditure on public works during the war,has been greatly• curtail*!, and in consequence it has been possible from time'to time to . boviw sufficient money from tho Post Otaoe_ to enable provision to bo mado for tins expenditure. During the year 11)16-17 amounts totalling .£500,000 . were thus borrowed from the Post-Office, and there yms at March 31 an unexhausted authority for ■6745,100 available for further necessities. 41thonghthe public works expenditure will be kept" as low as possible during the current, yean, it will be necessary during this session to ask the n House foi an additional authority for .£750,000.. Of. his amount .£250,000- wil be required for telegraph extension. No public loan will, however, be required for these purposes. •
SURPLUS-£4,308,777 Bill REQUIREMENTS ENORMOUS
so have a recognised market for it. This cannot be done until after (lie war is over, hut I have represented the mattor in'tho proper quarter, and I can sny (hat no difficulties will ho placed in (ho way of having this done when it is possible to do so.
Investment in Imperial War Loan, T have mentioned that tho ordinary revenue reserve invested in London amounted to ,£3,917,731, but here a e onevs belonging to other funds also mS there. While I was m London tho -n*t Imperial War Loan was being floated? and, after consulting tho Bight the Prime Minister, it was decided hat'i would bo a fitting thing or tins , o tant part of the Bmp.ro to sub-, go-ibo a substantial sum towards to 1 . 1 accordingly arranged icr tho Nation of £.000,000 of Dominion 3 which were then invested in London onlort-datcd securities,, and inverted the amount in tho Imperial loan, llus Investment also ■ possesses the great advantage of providing .an .additional ■So«)"000'<>f gilt-edged securities tor use frnintime to time in Loudon for financ- [„° tho Dominion should such at , any me be necessary. The ordmary revenue 7™,™ referred to'above, contributed Sooo towels this JE5,MD,000.. I may ±„tion that there aro still some other one-s invested in Imperial. Treasury Hs or on deposit in London. A these Lmpnts can, of course, be realised as 2 oson mS. but as tho w;holo of the exception o t],e ordinary revenue reserve represent Portions of certain funds winch are not at Clent being used in the Dominion the money* when realised must necessarily o used for tho purposes of the respective Funds from which they were drown. AFHinr 31 tho'total amount invested m London was .£7,048,00.
SOLDIERS' DEPENDANTS MILITARY AND OTHER PENSIONS TAX ON AMUSEMENTS . —. — ■ i It has been determined to make provision for granting additional allowances to dependants of soldiers, and tho House will be asked to amend the war pensions legislation' this session. , The - necessary expenditure, the amount of .winch-. 1 am not in a position to state at) present, will bo provided for in tho Supplementary Estimates. ■ ',''';.„' ■4 ' ' t Some relief on account ot the extra cost of. living should be given to old-age and military pensioners, widow.*, and miners, and to enable this to be done I propose to provide .£120,000. This will give to old-age and military pensioners, widows, and miners suffering from pneumoconiosis some substantial assistance during the present unusual conditions. I feel sure 'that tho additional sum for these purposes, in the trying times through which those'of small means are passing, will not be grudged by the country as- a whole. ~'.'.. War Bonus for State Servants. There can be-no doubt that those who are in receipt of a fixed income by way of salary feel the pinch due to war conditions 'without having . the opportunity of 'adding to their incomes, and it is necessary that the 'Slate/as.the largest employer of labour, should recognisß.this. A war bonus to make provision similar
Consolidated Fund: Ordinary Kovenuo Account- ■'. ■■■ ■ , iJJL™ Balance brought forward, op April 1, 1916 .IW>,O// Receipts during year- • irtow ' ,■ ' ■ .Other receipts— ...'.. ■ ■ Recoveries on account or A previous years'. 10,847 Sinking I'und set free . , £ , . .• — , 18,367,517 Expenditure during year- / j,„ 58770 Appropriations • •■• •— .. ' ' 4,303,777 .. .■ -Balance on March 31, 1917 ~........: -05,474,854
" -This credit balanco is large. nmV was intended by me to to so. The Dominion e financial war requirements are enormous, but not more than the country can stand. There is a considerable shrinkage m tlie revenue this, year, and it is imperative that the Consolidated Fund should fce in such a position that it can make up any loss of revenue, and. also, if necessary, contribute a portion,of the means required for carrying on. the war.
THE WAR LOAN ' AMOUNT—£2^,OOO,OOO PROPOSALS FOR COMPULSION In view'of the very largo expenditure which is being incurred, it will be necessary at an early date to take steps to raise within the Dominion a fresh loan for war purposes, and the House will be asked to grant authority to enable an amount of jE24iflOO,ooo to bo borrowed. Tho whole of this sum will! not be borrowed at once. I propose to put a loan for .£12,000,000, on tho market with as ■little delay as possible. I hope it will not be necessary to raise a second loan of, more than .CItJOTfIOJ, vsnt authority for a margin of an additional -62,000,000 is desirable. Tho rate 5 of inteiest will be 4i per cent., and will bo free of income tax. I will submit a proposal under which a portion of this loan will bo made available for payment of death duties. It will be specially earmarked for that purpose. I will make a full statement in regard to it when moving the second reading of the Loan Bill. I may here state that I propose to introduce a measure this session which will enable subscribers to tho new loan to accept either' bonds' or iuscrilred stock at their option, and also to convert existing war bonds into stock, while the usual provision for the issue of war certificates through the Post Office will be continued.: In tho event of the voluntary contributions falling short of the amount required, I will ask the House for authority to introduce a system of compulsory contribution, under which persons vho have not done their part in helping to provide" the necessary finance for carryin" on the war, and for .providing adequate payment to soldiers and their dependants, will be assessed with additional heavy taxation, which I will fully, explain when dealing with taxation. I will ask the House tu make the authority applicable to those who neglected to take up their part not only of tho last war loan, but of any future Avar loan. This compulsory system will not 'be enforced against, those whose incomes arc under .£7OO per annum. Those whose earnings are below that amount must bo trusted to contribute voluntarily. This may be regarded as a somowhat drastic measure, but [ regret to say it is necessary, as there are many persons of means, and also companies, who subscribed very little, and in some cases nothing at all, to the last loan, I would [earnestly impress upon the country]the I fact that our part in the..war cannot be carried on without the necessary ways and means, and all who possess means and do not realise what is their clear duly must be compelled to malco the same 'sacrifice as those who do recognise their duty. ] propose to ask inemD«' , s of Parliament, patriotic societies, and tthers throughout the Dominion who have already done such excellent work in connection with the war to assist tho Government as far as possible by advocating the war loan. I feel sure (hat tho deep interest which is being taken in tho welfare of th<> Dominion by members and others mentioned will ensure their loyal and hearty support, and T am confident that their assistance will be greatly appreciated by tho Government and (lie country. Steps will be I liken' to have all war stock (liafc has been taken up locally [ made available for sale in London, and
to that of ' last year will thereforo \>o authorised, and Parliament will be asked to vote a sum of £400,000 for this purpose. '■■ \ Extravagant Living. / . _
Tho National Efficiency, Board lias put forward proposals with'the view of placing a restriction during the war on tho importation of certain articles which may bo considered luxuries, and by .this means checking the extravagance of some of tho people of Now Zealand. The Customs estimate a reduction of revenue of £230,000. if these proposals. are carried out. '•.,•■ : ,
While I entirely sympathise with the objects which the Efficiency Board seeks to attain, I regret to say that after making full inquiries I find that there are so many difficulties in the way that lam not able to give effect to the board's recommendation. If this were done I. should have to obtain the deficiency of revonue by some other means of taxation. At present it is impossible to give up revenue without restoring an equal amount through some other avenue; •. . i About Motor-cars. ■ Regarding the suggestions made from tirno to time, that a, further. duty should be imposed upon motor-cars, I wish to state the position for the information of honourable members. The amount of duty collected'.on motor-cars imported last year was .£148,3(15. This is- un amount of revenue that cannot at present be dispensed with. It is not my province as Minister of -Finance to place such a duty on any articles which bring in revonue as to prevent importation or bring; about a decrease of revenue to any material extent, because the very difficult task would then bo imposed upon me of obtaining' an equal amount of revenue from some other source. Nearly 00 per cent, of the motorcars imported 6ince the war commenced wore for utility purposes, and'can in no sense be classed as pleasure cars. The 'overage price paid per car imported into Now Zealand was ,£l5O. Motors for business purposes have come here to stay, as is the case" all over the world. The time has passed for accepting a general condemnation of their importation en the grounds that they are for pleasure and are not indispensable. Wo want the revenue. The duty at present is 20 per cent., with a preference of 10 per cent, to Great Britain and any part of the Empire that reciprocates with lis. Amusement Tax.
I propose to levy a duty on admissions to places of amusement similar to that imposed in Great Britain by the linance (New Duties) Act, 1916. This duty will commence at Id. whore tho price .of admission exclusive of the duly, does net exceed 6d., proceeding in graduations until it reaches a duty of Is. on Admissions' of 12s. Gd., with an additional Is. for every 10s. or fraction of 10s. over 12s. (M in tho price of admission. lhe amount of revenue that I estimate will bo obtained from this source is JSO.OGO, and will bo dovoted to paying ;ie war bonus to old-age and military pensioners and widows, and to miners suffering ,lrom pneumoconiosis.
EXCESS PROFITS TAX FAILURE ADMITTED MORE MONEY IN OTHER "WAYS With reference to tho excess profits ■duty, it will be remembered that ' last year I asked the House, in response to a generally expressed wish, to levy special taxation on the extra profits that had accrued to taxpayers owing to tho var. On investigation it was found here, cs it had been found in England, and was afterwards found in Canada, France, and tho United States,, that the difficulties of ascertaining exactly tho actual profits •resulting from the war were almost insuperable. Tho machinery needed for the purpose was too elaborate to enable the
revenue to bo collected when it was required. Tho method adopted hero was substantially on the lines of the English excess profits tax, but as the amount realised did not roach iny estimate i propose this year to readjust this form, of taxation, 't may say fcliat if tlio profits tax wore to lie retained and doubled in rate so as to make it 90 per cent, it would not provide tho amount required. I therefore must ask tho House .to authorise such a. change of taxation as will make it tortain that larger sums shall be contributed by those who have not paid iboir just share under the profits- tax. 'l'ho adjustment I propose will not only provide tho amount of revenue I require, but it will eusuro that ©very ono shall contribute in proportion to his means. Experience of the excess profits tax has also shown that it is inequitable. T&o concessions necessary to avoid hardship ni some cases resulted in tho escape of many other taxpayers .wild were in a position to pay and, in ray opinion, should have paid. The main reason for this is that the conditions hero are different from thoso-in tho older countries. In this young country there is a-.larger proportion of concerns in the process of development than is the icase in tho older countries, and the tax presses unduly on them. .The profits made on shipping and munition, contracts in Great Britain are enormous. There are thousaiids of long-established industrial, commercial, <ind general businesses that' can be safely relied on. by the Home Government to ensure a large amount of revenue from ■ a profits tax. It is not so here. On tho contrary, tho purchase -by the British Government of our principal staple products has .largely reduced the profits that,, wider ordinary conditions, would-be earned- by export business houses, and. ' an equivalent amount cannot bo collected spread-over such a large number of producers w-ho are selling their produce lo tho British Government; nor could it. be charged to tho buyers, the British Government. A careful estimate for. this year shows that, owing to the greatly increased price of stocks imported -for sale, the margin of profit will bo materially reduced, and it would, not be safe to rely upon receiving this year a. revenue approaching the amount received last year from this source,and that. amount, as I. have said, was below my estimate, ami was insufficient for requirements. In place, of the excess profits tax I will ask the House for authority to obtain tho, additional'revenue from a progressive land and iiicome tax. Any system of taxation should be.capable of such oxpansion its will meet all legitimate requirements of -the State, , and what I propose will, I feel sure, meet, this requirement. . ■ ,
Tlio proposed taxes, taken, with ouv Customs duties, estate and succession duties, and other taxes, will ''ivo us a system which combines as nearly as possible ability to pay, equality of sacrifice, anil -universality of taxation; it cvoids all unnecessary complexities, is siitticiently simple to bo readily understood by all taxpayers, and is comparatively inexpensive irt collection. CUSTOMS AND EXCISE DUTIES INCREASES FORECASTED ; Tho Customs revenue for -ttj present financial year is most difficult to estimate. I'he difficulties of transport, risks of loss, high freights, and restrictions iipon {So exportation of many classes of goods from Great Britain mako it impossible to measure, ivith any degree of i accuracy tho volume of trade which will reach New Zealand while tho war continues. The oversea shipping companies state that it is quite impossible to give an estimate of the number of. arrivals during the next twelve mouths, as shipping orders, owing to the exigencies of the war, are cancelled from daj' to. day. Still, with the experience of last year; we may expect that despite all difficulties :i fair proportion of the orders placed abroad will come to hand. The estimate for the year 1910-17.. was .£3,300,000. This would have been a good average revenue for any year from 1910 onwards, but owing to the great appreciation of values of goods subject to ad valorem duities, and to the successful import trade generally, the revenue realised was showing an excess overestimate of cS34 1 J,G75. This is the greatest Customs revenue',ever collected, and if' it is added to the excise beer revenuo of. .£187,053 it brings the total 'to over .£4,000,000 for the first- tinu in the history of the Dominion. . • Beer Duty. The beer duty collected (luring tho year was .£187,958,' as against or, sdO.OOI more than was collected for the previous year;, that increase is Vboui ,£7OOO less than I expected to obtain, which is due to anti-shouting regulations, increasing shortage of adult male population through enlistment, .and. reduction in the gravity of the beers brewed.'. The number of gallons of beer brewed during, the-calendar, year 1910 was. 11,347,725, as against 11,1i9,17(i gallons the, previous year, yielding.an average-duty per gallon of 4,05 d. in 1916 and 3.39(1. in ,1915_. The increase in the rate, of .duty dated from December 1, 1915,
TAXATION ' PROGRESSIVE LAND TAX SPECIAL WAR TAX " ~ i From this source we must collect a larger revenue than we did diirinjr the past year. The land tax collected last year was £713,118, out of a total revenuo from land and inconie tax of £4,975,241— roughly, ono-seventh. I propose'that instead of.the pTesent ordinary and graduated land taxes to levy ono progressive land tax; the.tax to ba charged on the unimproved value without deduction of mortgages,' but allowing exemption as fitpresent of .£SOO on the taxable balances up to £1500, and then diminishing so as to disappear at £2500. In order to prevent hardship upon taxpayers whose lands are of comparatively low value and which aro subject to mortgage, I will ask the' House to approve an exemption, of £1000 in all cases.whero tho unimproved value does not exceed MOO. This exemption will then diminish by £1 for every increase of £2 in the unimproved value above- £3000, and will thus disapper when the unimproved value reaches £5000. This exemption 'to taxpayers whose land is mortgaged will represent.a concession of revenue to tho small landowner to about £100,000: The method of dealing with what 19 termed the mortgage tax presents ono of the most difficult, questions- in ' our. taxation system. It is, however, cortain that the system which we. have,,, to depend upon for. tho collection of the re. quisite land tax revenue must lie made effective, otherwise there will bo'a large loss of revenue, and this loss'would assuredly take place under the law as it at present stands. It is therefore necessary to amend it. Tho rate I propose will bo a progressive one, which can be raised or lowered by percentage additions or deductions to meet the requirements of tho time. Tho lowest schedule rate will be Id. in the pounds on' the first £1000 of taxable balance, increased by 1-32000(1. for each/ £1 of the increase over £1000 until it reaches 7d., which rate will • bo reached at £192,000. This gives a'fairer gradation than the present, system, the rate of which is l broken, and is higher on the lower balances and diminishes on the higher balances. To tie schedule rates I propose to make an all-round addition of 50 per cent. The niininnim rate will then be lid., and the maximum lOid. '■' , . 1 : hope to obtain from land tax £1,250,000. Progressive Income Tax.
I propose to retain the principle of the present graduated income tax,, although with a different graduation without any percentage.addition. The extra war revenue required will be raised by special income tax, which I will, explain later. With regard to the ordinary.income tax, tho present graduated rate suffers from the same defect as the graduated rate for land tax. It is a broken rate, and the increaso is severe on'the lower incomes. I 'therefore propose to amend the rate, starting, at the present amount of Gd. in the pound up to £400, and then increasing . by l-2l)0d. for each £1 increase over MW up to 35., which rate is reached, at JEGiOO. In the "method of assessment I propose 1 to make an amendment by abolishing tho present exemption of 5 per : cent, on the capital value of. tho laud used in producing the income, with tho deduction therefrom of the ajnomit of interest paid on. any mortgage of such land, and to substitute an exemption of 5 percent .on the unimproved value of the laud used for producing tho income— i.e., 5 per cent, on the amount on which land tax will be paid. This in actual practice will work out more favourably than the present, exemption in the cases of taxpayers whose lands are encumbered. The original object of the 5 per cent, exemption on the capital value of tho land was to placo freeholders on an equality with, leaseholders and to exempt from income tax income derived from land. Since the passing of the Finance Act of 1015. however, which, brought into operation the assessment for income tax of income derived from land, the exemption as at present constituted is anomalous, and has tho elfect of, exempting from taxation persons letting lands. Tno exemption will be allowed in full on assessable incomes up to JiGOO only, and will then decrease by for every £1 of increase in the assessable income over ,£6OO, so as to disappeur at £SXI. The amount of revenue which I estimate will be obtained from income-tax under these proposals is J!l,800,000.
Special War-Tax. For 'the purposes of a special war-tax I propose to retain tho tax at present assessed under Section a of the I'inance Act of last year on all assessable income in excess of .£300,. but it >',-i)l bo graduated in the same way as the progressive income tax, and will havo an allround addition of 50 per cent: to the schedule rates. Tho minimum of the rates charged for income will be Is. At., and tlie maximum 7s. M. this 1 estimate- will yioM .£3,000,000. . When introducing the taxing Bill J wui circulate for the information of honourable members tables showing, tho effect of the alterations upon taxpayers lor land tax and income nix. What the Taxes will Bring. To summarise, tho amount of tax that I estimate will bo received under tnese proposals is as follows:— Land tax .U • • 1» Ordinary income tax .V„Kn Special war tax ,1,000,000 Tota l ~'„. ,£5,350,000 Minimum. Maximum. foi Ordinary income tax b • J -u Special war tax "J l i>
Additional Customs and Excise Duties. The House will be asked "to agree to an. increase in the Custcms and excise dutties on tea, beer, spirits.' champagne, cigars, cigarettes. si.'ks,- satins, velvets, plushes, and imitation iilks. The additional revenue which in ordinary times, would he realised by the proposed increase is estimated at ,£317,000,. but owing, to tho dislocation of shipping-and the. consequent uncertainty attending ;ll importations at the present time it would bo unsafe for, Me to rely upon obtaining more than £275,000 from this source. Details of tho amount of; additional duty to be levied on each class of article will accompany the resolutions which will bo submitted presently, for consideration of members. REVENUE FOR 1917-18 SHOULD PRODUCE £17,282,800 . SURPLUS ESTIMATE, £1,200,098. I now proceed to give an estimate of revenue for the ,year 1917-1S under .the main heads of each of the important Departments :— . . ;, £ . I' Customs 2,930.100-■ ■ Hallways,, • .4,200,000 " Stamp and- death duties .1,400.000.. " I'oslal and telegraph .... 1,725,000 ' Laud and Income tax ... 5,850,000, Boer duty : 225,000 , ■ Hcsristration and other f ees 100,000 ' Amusement tax .\.» 80,000 . Marine • •■•• W ..Miscellaneous •• .'«?>**■ ' Territorial revenue . J7a,O(W Endowment revenue 't'3,800 Other receipts '■ 10,000 .£•17,282,800
The foregoing estimate is £l,du,iil be-1 low the receipts of last yeav and this, estimate is dependent the. House »ivin? authority to mate the. important iterations in regard to-taxation, to which I have referred. Estimated Surplus. I estimate that there will be .a surplus for tile year of 1917-18 of ,£1,200,098, made up as'follows.— ; . • E^ d ' - : 17,283,800 Estimated expenditure 15,382,703 , Estimate for-supple- ' ■ v . . mentavy estimates rfOO.OW Balance -..-•-— STATE DEPARTMENTS A GENERAL REVIEW •; HOSPITALS AND HEALTH ■ The total expenditure f?r-the yew on mental hospitals was 30, and the receipts for maintenance, sales of pioduce, etc!, amounted to .£68,190, leaving a net expenditure of .£144,549, an increase of .£14,758 over the previous year. This is .accounted for oy the rise in the price of provisions (meat, flour, oatmeal, sugar, etc.), and bedding and clothing on account of the war, and by the large increase in the number of patients during the year-. The vote shows an unexpended balance of A'SSO3 at the end of the financial year. ."- ....... The necessity of conserving child-life to meet the ravages caused by the war has received attention. The birth-rate continues to show a regrettable decline, and though this is partially compensated for by our low death-rate the position cannot be regarded as satisfactory. Possibly economic -causes aiie responsible to some, extent, but I fear the real causes are "to be found elsewhere. The care of our sick and woundd soldiers on their return from the front has been satisfactorily provided for in the general hospitals, as well as nt the Convalescent Homes at Kotorua, Hanmer, Devoaport, Lowry Bay, etc. To meet the cases of tubercular' disease arising out of war servico the Consumptive Sanatorium at Te Waikato, Cambridge, has been enlarged, and the Otaki Sanatorium has been taken over from the Wellington Hospital Board and enlarged. Soldiers suffering from neurasthenia and shell-shock are specially treated at Karitano (Puketeraki), and tlio Wolfe Homo, Avondale. Numbers of discharged soldiers suffering from, a iecurrenco of illuess caused by war service have also been treated in the various institutions. During the year a St. Helens Home was established' at Invercargill. At Napier the Hospital Board has been able to establish a maternity hospital through the gift of a property suit- . able for the purpose by Mr. L. H. M'Hardy. Other boards are considering the establishment of maternity wards in connection with the general hospitals under their control.
Post and Telegraph Department. The amount of revenue collected during the year was ,£1,810,558. It includes the war tax of id. on each article of postal matter excepting newspapers, and the 2d. war tax on telegrams. Notwithstanding the fact that over .£1,415,000 war loan certificates were sold by the Post Office, tho Savings Bank business reached an unprecedented total, tho deposits being ,£15.576,108, and the withdrawals £12,957,420. The balance standing to credit of Post.Office Savings Bank
depositors reached the very considerabW total or .£25,603,209, an increase <* .£'3,430,844. Tho money-order and postalnote business was normal,-the-total issues for tho year amounting to ,£4,269,311, Jtnd the payments to .£3,945,525. Of the total revenue, postages produced .£913,458, telegrams. .£413,854, and telephone exchanges 4:317,275, the difference being made up of miscellaneous items. The principal increases in business. were in. connection with the telephone exchange, and the allied work of bureau communications. The annual roport of the Department give's full details of. the mat. tci-3 here briefly noticed. • ''.."- STAMP DEPARTMENT. The revenuo from this Department still shows an upward tendency. During the la6t seven or eight years it has increased considerably each year; prior to tahfc period tho revenue approximated half a million per annum, whereas this year the. amount collected was ,£1,699,035, as against .£1,470,307 last year, an increase, of .£228,728. The Teveuue from the totalisator, due to the increased duties under the Finance Act and the additional investments by the public during' the year, shows a, marked from .£179,547 in 1915-16 to .£251,436' in 1916-17. Tho bank note tax has, owing to the withdrawal of gold coin from circulation arid the legalising of bank notes, increased by approximately 25 per cent."
The fact must not be,overlooked that if the shipping facilities do not soon return to normal conditions a' considerable fall in the.revenue from 6tamp duties may be expected. . ' .' • '■; AGRICULTURE. The agricultural industry, covering'paßtoral, dairying, and horticultural operations', has continued to maintain its- position as an Important factor in the prosperity of the .Dominion.. .Agricultural products have again- proved the leading feature' of .our .exports, .notwithstanding; the fact that a largo.amount of produce, which would under normal conditions have been exported during the j ear, still remains in store owing to lack of ship-, ping.'facilities. Tho majority of."the items of agricultural exports, it, is true, show decreases wnen compared" with the extraordinarily' large figures for the previous year, although wheat, beef, hemp, arid a few'minor items show advances'in both quantity and value, while butter, cheese; sheep-skins, and tallow show in-, creases -in value notwithstanding the" reduction 'in the amount exported. The principal reasons for . these decreases, which in most cases are not large, are, firstly, the above-mentioned shortage of shipping.' space; and, secondly, the ■ diminution in the demand from Australia: for oats, potatoes, chaff, peas, and beans, which were required in the preceding! year .owing to the drought which affected local production. It is. a Matter of congratulation that tho agricultural exports, do not show, any appreciable decrease that may be fairly attributed to the. strin placed upon, the rural..'districts by the shortage of .labour, owing to the war. ;: The world's demand for cur' wool,, meat, dairy-produce,.hides, skins, tallow, hemp, fruit, and other products seems" certain to be more:, than' maintained, and, provided ships are available for the transport of .our. output;.jncfease'd production may be anticipated.. .'. .STATE FORESTS.'' V, .. To assist.forestry operations power' was given in last year's-linance Act to raise .£50,000, of which XTOiOOO was actually borrowed . during Hie year. - This • sum, togethe rwith ",£4250, contributed out or the Consolidated Fund and royalties, citablecl the lands Department to meet expenditure amounting to V „£27,510, being .£2503 less than the expenditure of the previous' year. . . '.' As all the plantable land'at Hanraer was filled it became necessary to find more "land in Canterbury suitable' for tree-planting. -An area of 0593 acres of the poor part'of the Balmoral Estate was therefore purchased. As the land Is onry" sixty-two miles Trom Ohristch'urch, and is on the railway, it is in a very favourable position for profitable timberproduction, and can readily be riipplied ■witli"young trees from the'nursery at Hammer. '■ . Owing to the continuance of the war, proposals for the expansion of afforestation could not be given effect id'this • However; - when the financial pressure is relieved it is prposed to ex- : tend this important'.work-. :. -'- As' a. result of the conditions, produced by the war \ the v revenue' derived' from timber has'fallen somewhat. .' "
We scheme- of State-assistance ill connection with tree-planting "by farmers has proved very satisfactory, and the demartd for trees ..for' farm "plantations and shelter-belts is increasing. '. ." STATE ADVANCES OFFICE. This' important -Department ..'of. th 9 State is still" continuing its operations, although the lending board-has. since the war began found it necessary to restrict the amounts which can be lent to'anyone local authority or individual. -
A"'considerableiamount.is being lent to local authorities, but nc individual authority is granted a loan in excess of jaOOO in any year. . .The maximum allowed-a settler:for improvements is .£IOOO, while-und-sr the , Workers' Branch' the full limit allowed by lair—.£4so—is being- advanced. . The rate of-interest has remained, unaltered. : I'll e rate..chargeable; to ...local authorities is 4* per cent.,- ad to'rettlers and workers 5 per. cent;, reducible to 4j per cent, for -prompt payment. The total amounts of - advances -paid over from the commencement of scheino to March 31, 1917, were:— . ■ ■
'. '£. ■■' Advances to settlers 17,240,300 Advances to workers ... 3.347,355 Advances to local bodies 2,541,i40 ■Loans- -authorised but- not paid over ai at March 81, 1917, wero:- ■ «£ - - Advances to. settlers ...- 105,105' Advances to workers ... 53,105 ■ Advances to local bodies ' 221,795 ' ■■-•■'•■'.- .5350,005 DEFENCE DEPARTMENT. The necessary details regarding the expenditure of the Defence Department are set out in the annual report of the General, Officer Commanding the New Zealand Military Forces, a reference to which will suow that the work of the Defence staff, both military and civil, has increased enormously. Tho war expenditure for the year ended March 31, 1917, amounted to .£14,344,523, including pay of troops, cost of transport, supplies, equipment, relief moneys and all- maintenance or other charges in connection with the war, as well as the administrative exnenses of the National. Efficiency Munitions and Supplies Board, Soldiers' Financial Assistance Board, and Discharged Soldiers' Information • Department. Tho total war expenditure up to March 31. 1917, with advances outstanding, amounted to .£23,337,475.. If the present rate of reinforcements is maintained it is estimated .that a sum of .£24,000,000 will bo required for the financial year 1917-18. Details ot the expenditure will be laid before', the House in due course by the Hon. the .-Minister- of > Defence it is a matter of congratulation that during-tho year all necessary reinforcement drafts were dispatched from Now Zealand with unfailing regularity, and that they reached their, destination safely. General expressed by the authorities in tlie.JJnited Kingdom and Egypt at the efficiency r.nd JnSity of 'tfe reinforcements wh,ch have arrived during tho year. Uie naming svllabus in New Zealand is kept np to Arte and is systematically'arranged so Tto afford progressive instruction frem the time the recruit arrives in camp until the reinforcement* reach the advanced training depots in England. The training of the home forces has been arranged in such" a manner as to chvui as little as possible with public renuirenionts. To permit of tins power his been granted to local military authorities to grant leave without reference to general headquarters, and, in Urease of men employed in essential industries to -rant exemption from their annual training in the Territorial Force. The supply of clothing,,equipment, and supplies has genorally tory, and'all military -requisitions have been amply filled under direction of the ,Hon the Minister of Munitions and Supplies. Notwithstanding the great pressure occasioned by the war, the organisation of the administrative and iinalioial services -has been proceeding , steadily along the standard lines laid down when
■compulsory military training was determined upon. . ■ . ..The unprecedented conditions which have obtained created difficulties which could not have, been foreseen, but these difficulties have been satisfactorily mot and overcome, while the experience gained during the war is already being applied. In this connection the services of officers who have recently returned from the front are being freely utilised. Ihe control over issues, and die existing independent departmental checks, are Ibeing gradually extended.and improved. The arrangement whereby the Controller and Auditor-General's statutory examination of vouchers and war accounts proceeds concurrently with the payment of claims is proving.satisfactory. Honourable members will, I am sure, be glad to""have.the. assuranco that by this .•means an accumulation of war accounts as prevented, that the requirements of 'law .ato.iiuet as the work of accounting -proceeds; and that all expenditure is ■duly authorised and 'supported by satisfactory receipts. or vpuohers. : MUNITIONS AND SUPPLIES. Owing to an extension of tho activities Of th« Military Supplies purchase Office, it. was early this year found more convenient to transact business connected •with coal supplies, priority pormits, and ;tlio purchase of military supplies under jtho title'of "Munitions: and Supplies DeIpartment," and a Department accordingly* Las,been established. , ,'
The Government became apprehensive in December last of possible shortages in supplies of coal, and six cargoes were, during that month, secured from'tho Admiralty. The supply, so received has been treated in the nature of a reserve stock, and has, during the recent reduction in the New Zealand mines' output, ■ibeen of great-benefit to the Dominion, and has been utilised for tho purpose of maintaining transport both on 'land im'd sea as well as for other national purposes. Tho terms upon which the reserve of coal has been disposed of provide that the users shall return equivalent quantities of Newcastle or New Zealand West Coast coal, so that the reservo shall bo maintained. At the request of the Ministry of Munitions in the United Kingdom the Government established a local . authority in the Dominion for the purpose of advising the Ministry in regard to the position of import orders from the United Kingdom. Tho method of dealing with business of this nature has been productive of satisfactory results to New Zealand importers, who otherwi°e might not have secured . their supplies. The work dbnp.by the High Commissioner in this ■ connection lias been greatly appreciated by commercial community. .The. work of purchasing • stores and Bupplies for New Zealand military purposes has been steadily' pursued. _ Towards the close of last year the military, authorities were requested to as far as possible estimate their, requirements.for the calendar year 1917. On being costed the position was found to be: (a) Stores, .£727,510; (b) supplies, £568,918; (c) drugs, £17,460; total, £1,313,888. ;1o date, orders for' goods to the value of 3612,090 have been placed, leaving goods to the value of approximately £701.7&5't0 be purchased during the balance of .this year. . The policy of concentrating orders and of purchasing ahead,' which was followed during last year, has proved a sound and economical one for the Government. MINING. '... The value' of the minerals Exported for the year was £1,726,659, which is ]es« than the value exported during the previous year, by £375,77 i. This decrease is more apparent than real) as it is due very largely to the stoppage of the export of gold during the latter part ot the year Wit. Owing to this stoppage the eccumulations for the year 1914 were exported during the year 1915, consequently the exports for 1915 were unduly inflated. The output. of coal for. .{ho year 1916 was 2,257,135 tons, an increase of 48,511 tons above that of the previous year. With the exception of the output for, the year 1914, the above figures constitute' a record for'the Dominion. The maintenance of the output, in view of the shortage, of labour and the leek of shipping, is a matter for congratulation. , : ■
'•' ■-/'■ LABOUR. 'As was the caso last year, there has been, practically no unemployment. Trade has* been brisk throughout the Dominion, and thero has been a considerable shortage of men in many branches of industry. The question of meeting the requirements of the. Dominion in- this direction is receiving the attention of the Government. The.shortage of labour and the increase in the cost of living were the causes of a number of industrial disputes during the year under leview. In most cases the disputes were settled without much loss of time or output. 'The year was .important in this connection, inasmuch as th 9 currency of the awards and agreements for seamen and waterside workers and also for most of the coal-miners'of the Dominion had expired. . NATIONAL PROVIDENT FUND. The progress of the fund has been maintained, and the genoral membership at March 81 last numbered 10,143," with accumulated funds amounting to ,£135,000. Maternity benefits during the year 1916 totalled ..£3776. claimed by. 631 contributors.. The contributors on active service at the end of'last yeai." numbered 2117. One-half the contributions of soldier contributors while on active service is being paid by the Government. This grant amounted to .£5739 in the year 191G-17. The branch of the fund's operations relating to local authorities" superannuation has received attention. Several local bodies have become contributors on behalf of their staffs under the special tables adopted by the National Provident >?und Board. The steps 'so far taken in connection with this important reform are such as to encourage the hope that a general scheme of superannuation will before long be in operation for local-authority employees. A system of maternity and annuity benefits for friendly societies under the. amending legislation of last session is i" operation. Owing to the delay incidental to the inauguration of a new system the .claims for maternity allowances chargeable to the vote for the last financial year did not reach the estimated expenditure. The allowances will, however, be carried forward and included in. the current year's vote. For friendly society maternity allowances I will ask tii. House to provide ,£22,000.
FRIENDLY SOCIETIES. A "Keinsurance Fund" has been established, and is being administered by the Minister of Finance, the Minister of I'riendly Societies, and the Registrar. This fund pools the whole of the death war risks ou account of members on military service, the Government paying onehalf the total premiums and the societies the other half, for the purpose of, insuring each member a 9 he joins the Expeditionary Forces. The.amount of premiums, and State subsidy hold on account thereof amounted at March 31 to .£10,035 3s. lid., insuring members for a total sum of' .£200,424. TOURIST AND HEALTH RESORTS. The progress shown by this Departimmt in last year's Financial Statement has been continued. The direct revenue returns disclose an increase of -C2OBB over last year, having risen from .£31,018 to ,833,136. There has been a considerable influx of travellers from America, and the Anstralian traffic has also been satisfactory considering tho existmg conditions. . ■ -■ LIGHTHOUSES AND HARBOUR WORKS. Tho Okurl Point Lighthouse, near the .French Pass, has been completed, and tho light was first oxhibited on June 21, 1916. Owing to the unsatisfactory way Iho Pintsch-gas light on Jackson's Head ?» ten acting it was decided to replace it with an Aga acetone-acetyleno light. This was completed on March 19 last, and so far has given every satisfaction. ■During the year incandescent lights were installed at 'Cape Foulwind and Manukau South Head,lighthouses. An automatic A»a' acetonc-acutyleno light has becu erected on Takataka Eock, at the northern end of the Narrows in the upper part of the Hokianga River. It was first exhibited on December 12 last. An acetone light was installed on the large red buoy about two miles east of-Dog Point in the Northern Wairoa River, KaiparaHarlx.ni; The light .was exhibited from this buoy on October 21 last. Owing to the necessity for economy- dur-
ing'tho war, very little has been dono in regard to harbour works beyond keeping tho existing works in a state of re- . pair. During tho year the beacons mnrking the entrance to the AVnikato River were rc-orected. For some considerable tinio vessels had not used this entrance, ■but of late Bteamers have commenced to again work the port. GOVERNMENT STEAMERS. During the year the Hinemoa has continued to carry out the duty of tendering the various lighthouses, in addition to overhauling ana paiuting all coastal buoys and beacons and buoys in harbours under Die control of this Department. The training ship Amokura, used for training boys tor the sea, has niado three trips to the southern islands in search of castaways, and has examined the provision- depots maintained by the Government for the benefit of persons shipwrecked there. No difficulty has been experienced in maintains the full complement of sixty, boys, and at present there is a large number of boys waiting ■ for admission when vacancies occur. •IMMIGRATION. Owing to the continuance of the war there was a great falling off in tho number of immigrants arriving in tho Dominion during the year ended March 31, 1917>. Tho majority of those brought out under tho Government scheme are the wives and families of persons who are already resident in tho Dominion, and domestic servants. The policy of not granting assisted passages to my persons wiio are eligible for military service lias been adhered to. At tho conclusion* of the war it is proposed to inaugurate a to make provision which will unable a more vigorous immigration policy, and number of widows and orphans of fallen soldfers and sailors to emigrate to New Zealand. PUBLIC TRUSTffIFFICE. • The net profits for the year are, approximately, £59,0C0. This is the highest in the history of the office, and atfords ample evidence o"f tho efficiency of the administration, the growth of the business, and the ever-increasing confidence of the public. The first anuuat bonus to beneficiaries wbb paid during Hie year out of excess profits. 'The amount distributed exceeded £22,000. A similar bonus, amounting to .£27,000, will be distributable this year. The preparation of-the wills of Boldiers at Trentham by - qualified legal officers is still continued) and thousands of >oldiers have appointed tha Public Trustees their executor. Moi sover,' hundreds have also appointed Ihe Public Trustee attorney to supervise and manage their e3Ut.es during their absence at tho war. l'or preparation of wills and powers of attorney no .charge is made. Whore the Public Trustee administers or acts a* attorney the charges are fixed on a specially reduced scale. In this way, as ■ also in the control of enemy property and other matters, the Public Trust Office la rendering very valuable assistance during'the war period.
STATE FIRE INSURANCE. For the past year the volume of business and the profits derived by the State Fire Insurance Office have exceeded all previous records. The net premium for 1916 amounted to £82,694, as compared with £76,299 for.thfe previous year, showing an increase of £6395. The net profits, after placing £1000 to Investment Fluctuation Reserve, and £2577 to Unearned Premium Reserve, amounted, to £35,697. The largest proiit previously recorded amounted to £25,652, for the year .'1915, The loss ratio for 1916 was 28.22 per cent, of premium income, which is an abnormally low ratio. For previous, years the loss ratio has ranged from 38.6 per cent, to 70.9 psu; cent, 'j.'ho total accumulated, funds at the close of 1916 amounted to £155,958, an increase over the previous year of £39,274. PUBLIC SERVICE SUPERANNUATION FUND. During the year ended .December 31, 1916, retiring allowances aggregating £11,693 per annum were granted to sixtyseven contributors by reason of age or length of service; rouriTSn contributors! who retired a3 medically unfit were granted allowances amounting to £751 per annum; forty-four, widows and fiftyfive children wore granted the statutory allowances, totalling £1507 per annum; seventy-three allowances, amounting to £4829 per annum, were discontinued. The total numberof existing allowances at the end of tho year wa5,1233, representing au aggregate annual payment of £85,392. The total amount invested to December 31, 1916, was .£834,341, yielding interest at an average oi 5J per cent. - EDUCATION. The year just closed has been marked by important reforms in the financial and administrative methods and general work ; of-' the Education Departmont. Special consideration has been given lo primary education, and steps have been taken to make instruction more thorough. The natural growth of the population compels an extension ot educational facilities. This extension and the increase due to statutory provisions aocount for most of the additional expenditure included in the estimates for the yeai. The : difference between the amount expended last year and the estimated expenditure -for the year 1917-18 is £76,787, and of this amount £57,000 is due to increases in statutory grants. It should be recognised that the Education vote is not utilised for primary, secondary, teohnical, and university instruction only. Of the total vote a sum of £61,000 was spent for the maintenance of industrial schools, institutions for the deaf, schools for backward children, infant-lifo protection, eduoation of the blind, medical inspection, physical training, subsidies to libraries, and many miscellaneous services of a subsidiary character. The extensive work connected with the industrial and special schools branch has been carefully overhauled, and improved methods have been introduced, which will limit waste and secure butter results for the money expended. The number of children, dealt with in industrial schools at the end of the year was 3283, while the expenditure was £40,000. The system of probation inaugurated at Auckland' some three years ago has proved successful, and is about to be extended to the other three centres of population. As a of a new .classification of inmates, together with a inore extensive system of boarding-oat or licensing out inmates, there will be a considerable saving in both capital'and annual expenditure. The annual saving in maintenance ultimately resulting from the now policy is estimated at £15,000. This economy will be effected not only'.with; out detriment to the .welfare of tbb children concerned, but in some respects with a decided benefit to the present inmates. As :i matter of national wellbeing it is important that the Government should deal comprehensively with the question of the care of all fcobleminded the Education Dominion. At present tho Wucation Department has about a hundred and fifty cases in its care, and the Mental Hospitals Department about a hundred, but it appears that there are at least six hundred other cases of feeble-minded young people who should be taken charge of by tho State.The whole question should bo dealt with before the number of cases has an opportunity ef multiplying. Since thu outbreak of war the increased cost of materiai and labour has seriously affected all school building proposals. Only works which were absoutely essential have been authorised; but as a result of this action the Department will, when normal conditions prevail, bo faced wth heavy demands iih volving large sunm to replace sohool buildings which aro at present unsuitable. Efforts havo been made to standardise school buildings, with a view to greater economy in future. j In tho accounts of education boards tho recent amalgamation of districts has brought into prominence tho position of boards with respect to the annual'allowances mado for the maintenance and replacement of scho >\a, and tho methods of dealing therewith. The position disclosed is more or less unsatisfactory, and proposals have b6en made for the establishment of a better system of providing funds for replacements. Tho income from tho Teachers' Superrannuation Fund during the year onded December 31, 1916, was £90,481, mado up as follows:—Contributions of members, £56,038; interest on outstanding contributions, £255; interest from Public Tnistee, £16,466; contributions transferred from other funds, £722; Government subsidy, £17,000. The expenditure for the year was £49,905. The value of the fund on December 31, 1916, . was £381,158, as against £340,582 on December 31, 1915, an
wcreaso ot =£10,576. The number of contributors increased from 4444 on December 31, 1915, to 4653 at the end of 1316, an mcreaso of 209. The annual allowances payable as at the end of 1916 woro £44,066, as ugamst £39,000 at the end of 1915 Provision has been made for tho payment by the Government of the contributions of members of the fund who havo enlisted with the Expeditionary ]?orce, until the release of the contributors from military duties. The number of contributors who have joined the Porce is approximately 350. BOARD OF TRADE. The Board of Trade, constituted under the Lost of Living Act, 1915, mis carried out important dunes during the year. Its operations have resulted in a considerable saving of expense to the consumers of commodities which are in common use. Where it appeared necessary and the common interest demanded it, maximum prices have been fixed by regulations under the Regulation of Trade and Commerce Act. it will, be seen from the report of the Board, which will be presented to Parliament shortly, that, according to reliable official .statistics, the scale of food-prices iu New Zealand is lower than that obtaining in the other countries mentioned in tho report. Comprehensive information has been obtained by the board for the Government as a result of its investigations' into the prices of butter, wheat, hour, bread, and petrol. ■ The serious rise in meat prices over pre-war rates in several towns in New Zealand was made the subject of special inquiry. Prices were steadied, and in souio towns controlled, by allowing butchers to draw their supplies from stocks of meat which were being held for the Imperial Government. In Auckland, where meat prices were comparatively higher than in other centres, two meat depots were opened under State control. The saving to the consumers effected by the operation of these depots, and the meat question generally, will be fully dealt with in the board's report above referred M.
PENSIONS. The gross payments made under the Pensions Act, 1913, through the Post Office curing the year were as follows:— Old-age pensions, .£480,229; widows' pensions, .£88,016; military pensions (Maori War only), .£45,673; total, ,£563,918. These figures show increases over the figures of last year of £890 for old-age ipensions and ,£1659 for widows' pensions, with a deorease on account of military pensions of £2600, making a net ■ decrease in all of £51.Payments of miners' pensions under the Jlin era Phthisis Act, 1915, totalled .£8065. The numbers of pensions in force under each head and the approximate annual liability in regard thereto at the close of the year were:— Number Annual of liability, pensions. £ Old-age pensions 19,697 '482,000 Widows' ipensions ... ?.,024 39,000 Military pensions ... 1,232 44,000 Miners' pensions ...... 238 10,000 Total 23,191 .£575,000 The numbers of widows' and miners' pensions represent increases of 134 and .118 respectively over the figures of tho previous year, while the bid-age and Maori War pensions have decreased by 107 and 91 respectively. The claims for .war pensions dealt with from the passing of the War Pensions Act in August, 1915, to March 31, 1917, total 7337, made up of 4677 from discharged soldiers and 2660 ■ from dependants of deoeased and disabled soldiers. Theso have been dealt with as follow:— , DopondSoldiors' ants' 1 Claims. Claims. Pensions for 12 months and upwards : . 1,003 2,075 Tomporary pensions 3,194 258 Declined 436 259 Adjourned : 10 10 On hand 3i 58 Totals 4,677 2,660 . The annual values of the pensions granted are as follow:— Average No. of Annual PenPensions Values sion To soldiers (12 months £ £ and upwards) 1,003 53,087 52 To wives and widows (inc. GS6 children) . 437 4i,MG 98 To other dependants 1,638 47,572 29 To soldiers (temporary pensions 3,194) To dependants (tern- ) 198,320 57 porarv pensions, ) inc. 332 children) .. 258) .Totals 6,530X342,195 .£52 Of the total pensions granted, some 1300, ivhich were granted for a period only, have been terminated, and the' annual liability in regard to the remainder at the close of the year stood at £270,000. The gross payments mado by way of pension in New. Zealand during the year amounted to £176,952, to which must be added the amounts paid to dependants of returned soldiers, who subsequently became pensioners, by way of allotment after the.date'of casualty, and also payments mado to pensioners residing in Great Britain and Australia by the High Commissioner and Commonwealth pension authorities respectively, amounting in all to another ,£15,000 at present, of which amount some JC7500 only had been brought to charge at the close of. the year. IMPERIAL GOVERNMENT SUPPLIES. During the past year the operations of the Department controlling Imperial Government supplies have been considerably extended. The handling of frozen meat began on March 3, 1915: the total shipments amounted to 1,313,748 quarters beef, 5,279,408 carcasses mutton, 6,928,023 carcasses jamb; and the payments, £15,800,701. The prices which had been current from the date of the inception of the scheme were increased as from October 20, 1916, as follow:—Mutton and lamb, Jd. per pound increase; beef, }d. per pound incronse. The number of insulated steamers dispatched during the twelve months ended March 31 last was seventy-six, compared •with eighty-one for the previous year. Four steamers provided with insulated space engaged in the New Zealand trade were reported as having been sunk by the enemy during the year. The purchase of sheepskiii3 and hides commenced on February 1, 1917. The number of sheepskins purchased was 213,202, at a cost of £60,833. Hides and calfskins' are being valued, purchased, and shipped for the Imperial Government. No transactions had taken place up to March 31, 1917. Early in November, 1916, the Im. perial Government advised that it was proposed to requisition ail wool comprising the New. Zealand 1916-17 clip, and after consultation with representative growers and other persons connected with the wooi industry a price was agreed upon which represented nn advance of £5 per cent, on pre-war prices. The export of wool was prohibited on November 18, 1916, and oir December 21 following a proclamation was issued requisitioning all wool of the 1916-17 clip. No organisation or machinery existed to give effect to the requisition of the Impciial Government, and the Miuistor of Agriculture appointed an Advisory Committee to deal with all matters affecting tho preliminary de-' tails and assist the Department. The securing of low-grade wool and tho purchase and felliuongering of sheepskins on behalf of the Imperial Government have been undertaken. The results of the operations from December 1, 1916, up to March 31, 1917, were: Total number of bales valued, 321,388; number of bales shipped, 219,030; number of bales paid for, 399,529; total payments made, £9,315,921. Tho arrangement enterod into will the Imperial Government under which oiie-tliird of tho production of cheese for tho season 1915-16 was made available for Army purposes was completed on October 1, 1916. Tho quantity shipped was 189,502 crates, and tho total payments
748. On January 18, 1917, tho cxjiort of cheese was prohibited, and arrangements wore made with the factories for the purchase on behalf of the Imperial Government of all first-grade and second-grade cheese available for export; the price was lixed at !)Jd. per pound for fir.it-grado and 9JJ. per pound, for second-grade cheese. Satisfactory arrangements for payment of the cheese and for storage were mado with the Imperial .bovernDuring the 1916-17 season fc'ho shipments totalled 153,815 crates, and tho payments £\ ,547,408. ■ , ... Owing to the shortage of shipping facilities in the early part of tho snison yory heavy accumulations of cheese ro-
suited, and it became necessary to keep much of the supply in stores wnich were more or. less unsuitable lor tho purpose. To meet this diuicuity special rcpi t-M-nta-tions wero niado to me imperial Uovernnient tltrougn me Kignt iion. the I'riino Alimster, with t'lio result that large sn.pjueuts wore j>ruvided loi during Aluivn and April, l'Jli. As a'means of checking any possible rislc or' deterioration., arrangements have been entered into with Uie overseas shipping companies under wnicn the c'lietoe is mow being carried at a. reduced temperature. 'i'uo purchase of scheelite started on September 20,i'J15; 350 tons wore shipped, lor wliiuh £6i,4b0 was paid. The utat payments mauo to prouuieers on behali of the Imperial Government from AJaron 3, l'Jlo, to ilaroli 31, MY, amounted to JTfl.Sl'J.lUi. CONCLUSION. Honourable nitwuera mil lecoguise by wnat j. navo piaceu Uuiore tUeni mat t"° country, entirely uue to war cunuiwons, nas Uiuicuii. problems to settle. .'t M essential tuat tne basu upon wfiich the luiure wumng out ot riieac nrouiems is largely dependent—namely, uuauuiai Stanley—snoutd receive tne earnest consideration wnicu its importance demands. Our obligations are ijrtac. 'i'hat \v= can bear tiiem and make proper provision tor meeting them is, f am glad to say, beyond all doubt. Our financial position, as will bo recognised from what 1 have placed before tuo House, is remarkably strong.
The proposed readjustment of taxation, which will be piuced in a separate i>Ul, is such as is absolutely ieccasary to enable tho Dominion to carry througu its snare of the war. As soon as tne war has ceased and tho full responsibilties connected with pensions and other liabilities have been ascertained, it -vill become necessary to readjust the country's taxation to meet its requirements in normal times. It would, iu ray. opinion, be impossible, and, indeed, unreasonable to expect the. taxpayers to continue for a day longer than necessary the high taxation that war financial requirements alone justify. The continuance ef this high taxation would in ponco time certainly tell against our industries and employment. Neither tho industrial, commercial, agricultural, nor pastoral communities can produce the best results until a largo measuro of relief is afforded.
I feel that I should be wanting in my. duty were I not to acknowledge here tho magnificent work that'the Now Zealand soldiers have done in upholding the l>est traditions of their race. Tlicy have added a golden page to lite history i the Dominion, and are entitled to all we can do for them upon their return, am. the fullest assistance of the Government will he cheerfully given to enable them to obtain Government employmtnt whenever it is possible and in cases .where it is necessary, to do so. I am sure you will agree with me when I say that, whatever happens and however long tho war may last, wo will leave nothing undone to see it through to a complete and successful termination.
There will assuredly bo world problems to solve in which New Zealaut! raust necessarily take its part. It will, of course, be some timo before they eomo up for settlement, as other portions ui trie Empire as well as ourselves aro directly concoiiied, and we cannot in that respect move alone. Thoro is, however, no reason why we should wait to put our own house in order,- and I sincerely hope that when the timo arrives for the next meeting of Parliament it will be found possible to greatly reduce, tho couiir try's taxation, after making full and proper provision for all tho obligations that have been incurred in connection with the important part New Zealand has taken in the fight for freedom and the protection of the civilsation of the world. THE BEER DUTY MEMBERS SEEK INFORMATION. Mr. G. V. Pearce (Patea) asked if the beer duty was going to produce the amount of revenue estimated. Mr. E..P.'Lee (Oainaru) said the beer duty imposed in 1916 had not produced the revenue that the House had been led to expect. Ho hoped the House was not going to be misled again. Tho Government on two occasions had failed to tax beer to tho extent the Housb had been led to expect. Members felt, and the people of New Zealand felt, that beer could stand substantial taxation, and they would be yery disappointed if the tax failed again. Sir Joseph Ward: I hope the honourable gentleman does not mean to convey that I misled the House. Mr. Lee: I said that we did not get as muoh revenue as was anticipated.. Sir Joseph Ward said he had not misled the House directly or indirectly. There could be no mistake about the estimate this year. The duty was being increased by one-fourth. The extra taxation on beer should amount to i!l<>,000. He had no objection to the reduction of the strength of beer to the lowest point. If the reduction affected revenue it would be the proper thing to consider the iposition again.
■■&'.•< ■■■*.- •£ ■ * 27,473 20,280 . 7,193; — 4,014,702 3,190,798 823,091 - ; 988,301 574,000 414,301 . . ;- ' 52,033 53,16-t - j ; <1 165,237 173.G92 - • > 8,»5 453,085 450,812 ■ .2,243 . - 37,918 30,265 . 1,653 — 45,634 48,278 '.-..- 2.641 •. 180,166 13,744 ■ 166,422 v ~ 6,095,355 4,693,155 1,-115,806 J^COB 31,939 ; > 31.480 „4»9. ~ .; 106,722 "90,004 IG.dS , - . 1,368,490 1,294,712 73,778 -, 2,871,977 2,951,000 ~ . 8 -> o:s 94,939 ' 100,760 . ' — : 5,841 24,191 ■ 24,877 — 686 459,911 452,227 7,687- • - ■28,278 28,552 — 274 , 474,965 408,058 . 1)6,907' — 438,656 432 ; 227 6;129 , ■ - 169,865 161,225 8,610 - 32,725 31,670 1,019 ■ — 192,992 '-235,322 - 42,330 216,897 191,774 25,123 . — 1,406,264 ■ 1,329,166 ■ 77,098 •■ — : 41,601 . 30,866 10,735 — 7,963,415." 7,799,952. 294,623 131,160 1,710,429 - ."144,766 144,766 .. - 14,058,770 12,493,107 1,565,663 —
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Dominion, Volume 10, Issue 3152, 2 August 1917, Page 4
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13,125THIRD WAR BUDGET Dominion, Volume 10, Issue 3152, 2 August 1917, Page 4
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