NATIONAL ACCOUNTS

Dominion, Volume 25, Issue 69, 15 December 1931, Page 10

NATIONAL ACCOUNTS

Eight Months’ Figures MINISTER’S REVIEW I•■- ' . A More Economies Essential HARD TO BALANCE BUDGET • ■ * f Revenue and expenditure figures of the Consolidated Fund for the eight months of the present financial year ended on November 30 last have now been completed, and the details were announced by the Minister of Fin- ‘ ance, Hon. VV. Downie Stewart, In a statement he Issued yesterday on the I eve of his departure for Honolulu. ' Revenue for the period amounted to £9,100,018, and expenditure to £15,234,424. Mr. Stewart stated that in spite of the additional provisions of the Supplementary Budget and the heavy extra burdens the people had been asked to carry, the chances of making ends meet for this financial year were rapidly disappearing. Further substantial roduc- . tions in public expenditure would be absolutely necessary. Mr. Stewart said that before leaving the Dominion to-day to meet the Canadian Minister of Industries and Commerce, the Hon. H. H. Stevens, at Honolulu, he would like to take the opportunity of placing the position as he now found it before the people of the Dominion. , The revenue for the eight months, he said, amounted to £9,400,018, com- ‘ pared with £12,233,814 for the corresponding period of the previous year, but a considerable falling-off was allowed for in the Budget for the current year. Receipts from taxation amounted to £7,360,011, including £3,639,000 from customs, £1,691,720 from stamp and death duties, and j £1,284,422 from motor vehicles—duties 1 and licenses. The customs receipts were approximately £470,000 short of the approprl- ; ate proportion of the estimates for the ; f year. The position of this item was nearly £lOO,OOO worse than it was at the end of the seven months, and as two-thirds of the financial year had now gone, the prospects of reaching ‘ ’ even the amended Budget estimate were certainly not promising. In fact, it now appeared to be practically certain that there would be a consider- ; able shortage in customs revenue. Fluctuating Death Duties. j “As I have previously indicated/’ said Mr. Stewart, "the position in regard to stamp and death duties, is also very uncertain. Receipts for the eight months are behind hand to the extent of £210,000 on a proportionate basis. i Death duties fluctuate from month to month, and for .obvious reasons rei v- -ceipts under that heading cannot be ' / estimated with any certainty. There iS little indication of buoyancy in the revenue from racing and amusements, and stamp duties generally.” Land tax was due at the end of November, but the receipts would not be included in the figures until December. Indications were, however, that the revenue would fall a little short of the estimate. Income tax, of course, was not payable until later in the year. Interest receipts for the eight months amounted to £1,274,099, and other receipts to £1,360,734. As these receipts ‘ for the most part were not spread i evenly over the year, they could not be ’ judged on a proportionate basis. Mr. Stewart added that the railways are having a hard struggle to balance shrinkages in revenue by savings in expenditure, in order to be able to pay to the Consolidated Fund the amount of interest budgeted for, but the mani agement was still hopeful of achieving this objective. The Expenditure Side. , On the other side of the account the net expenditure for the eight months, including imprests outstanding, com- : pared with the proportionate part of the estimate for the year, is as follows :— Proportion Bxpen-. Under proof estimate, dlture. portion. £ £ £ Debt services 6,953,111 ' 6,591,213 361,898 Other permanent appropriations . 4,857,363 4,299,509 557,854 Annual votes 4,607,736 4,343,702 264,034 16,418,210 15,234,424 1,183,786 Unfortunately, the expenditure position was not as favourable as these figures indicated. The under-proportion for debt services was on account of the item for repayment of the public debt, where payments were made at irregular ! intervals. It was not anticipated that there would be any saving on debt charges for the financial year. "The position is much the same in regard to the expenditure under other permanent appropriations,” Mr. Stew- , art continued. “Accounting fluctuations account for most of the apparent saving, and by the end of the year the expenditure under these items, which inclwde hospital subsidies, unemployment subsidy, pensions, and disbursements of the earmarked motor taxation will probably reach the Budget estimate. "The position of the vote expenditure is satisfactory, and reflects the Efforts being made to keep expenditure down to an absolute minimum. New External Factors. "As to the outlook for the public, finances generally, new external factors are beginning to operate which will render the position still more difficult and necessitate still more drastic measures to cope with the problem. It is not yet feasible to make a full statement on this aspect of the matter, but at the earliest possible date it will be done. “Recovery of the public finances can only come after a recovery In trade and commerce generally. The chief factor in this is, of course, the prices obtained for our exports. While there have been some signs of improvement, the extent of the upward movement has been disappointing. Many people hoped for a decided change for the better following the abandonment of the gold standard by Great Britain, but though the indirect effects from this may yet be important and far-reaching from the lioint of view of trade, the hopes have not yet materialised. In other directions the financial trouble in London through higher interest and shortage of funds may quite possibly adversely affect the public finances and the interests of the Dominion. Season’s Output Affected. “In regard to local conditions, the long-continued spell of dry weather, which in some districts is becoming increasingly severe, will undoubtedly

have a prejudicial effect on the season’s output, and thus militate against offsetting lower prices by higher quantities. Further, in some districts crops have suffered from hailstorms and cloudbursts.

Altogether, in spite of the additional provisions of the Supplementary Budget and the heavy extra burdens the people have been asked to carry, the chances of making ends meet in the Consolidated Fund for this financial year <are rapidly disappearing. The prospects are that next financial year will be still, more difficult. Under these circumstances, further substantial reductions in public expenditure will be absolutely necessary, and all State services, including what are commonly known as the social services, will again have to be overhauled and reviewed in the light of present-day conditions.

“In drawing attention to these hard facts,” Mr. Stewart concluded, “it is not my intention to discourage people —far from it —but I consider it my duty to keep the country informed, under the present rapidly changing conditions, as to the posituxu”