REDUCED DEFICIT

Evening Post, Volume CXV, Issue 144, 21 June 1933, Page 10

REDUCED DEFICIT

MR. COATES HOPEFUL BUDGETARY POSITION CLOSING THE GAP i ' Speaking this afternoon at tho opening of tho annual confcrenco of the Eoyal Agricultural Society of New Zealand, tho Acting-Prime Minister (the Et. Hon. J. G. Coates) said that tho Public Accounts for.the past financial year, recently published, disclosed that the Budget was balanced with a small surplus of ■& 40,000, after ,£2,50.0,000 from reserves had been taken into account. This result could not have been possible had not Britain played her part by foregoing payments totalling & 825,000 upon tho . funded war debt after tho Hoover moratorium had expired. He was sure New Zealand :was deeply.grateful for this great and timelj^as.sistancc from the Mother Country. Budget had provided for reducing the '■ huge prospective shortage of £8,300,000 to not more than £1,010,000, but as a result of revenue exceeding expectations by £938,000, and savings amounting to £112,000 being made), after making provision for additional expenditure on' exchange amounting to £'470,000, the gap was bridged. CURRENT YEAR'S FINANCES. "The problems of the past year have been creditably disposed of, haying regard to the difficulties of the period, and we have now to" face the position for the current financial year," Mr. Coates went on. "The prospective Budgetary position, so far as it could be seen-at that time, was reviewed in a statement which I presented.to" the House in, January' last. The outlook showed that the gap to bo bridged 'this year was even, larger than was'faced at the beginning of last financial year, and amounted to £9,850,000, not: far short of half the revenue of a normal year.' ' • . . ■ . ■ it is pointed .out that this position has to.be faced at a.timo when' our resources. have been' practically strained' to the utmost'in. coping with the budgetary situation in past years. On the ono hand, there are definite limits to increasing ' taxation, arid on the other hand there are limits beyond' which it is nt>t possible to reduce expenditure unless State services are to be ruthlessly abandoned. It can be seen, therefore, that the problem of the budgetary situation within safe limits, with conditions as they are,' is ever before us." SUBSTANTIAL PROGRESS. Nevertheless, said Mr. Coates, substantial progress had been made towards closing the anticipated gap in the current year's finances. In this connection he mentioned . the .conversion operations, which would provide a net' saving of about £570,000. ■ In addition, every other item of expenditure had again been carefully overhauled for further economies, but after what had been achieved in this direction during the past three years, further large-scale savings in this direction :were not practicable if necessary State services were to be carried on; Arrangements had been, -made to liquidate a further £2,p60,Q00,. practically all' that remained,' of the reserves of the Consolidated- Fund. In addition, a' sales tax had been imposed and some increases made in the taxation on petrol and one or two items in the Customs tariff. OPTIMISM IN BUSINESS. Mr. Coates said that in January he indicated that those items would bring the .deficit down to about £4,500,000. The estimates, however, were now being prepared in. detail, arid he was hopeful that they would do better tha!n that. For one thing, the economic outlook had grown considerably brighter since January. Prices of primary products had risen somewhat, arid there appeared to: be a more confident tone in business. Furthermore, the World Economic Conference was sitting at present, arid throughout the world there was a general expectation that considerable benefits would result from its deliberations. ■ • ■