BUDGET STATEMENT

Greymouth Evening Star, 25 July 1930, Page 5

BUDGET STATEMENT

ESTIMATED DEFICIT £3,095,000 NEW TAXATION PROPOSALS Incomes, Tote, & Amusements (Per Ministerial Favour.)

WELLINGTON, July 24. . The Minister of Finance (Hon. G. W. Forbes) delivered his Financial Statement, in the House, this evening, when he showed that the estimated deficit for the year exceeded three million pounds, and he outlined the administrative economies and new taxation proposed to cover this deficiency. . . _ _ tvnn mculn. fm 1

taxation proposals.

Customs duties increased to provide approximately half of- £1,660,000 required, mainly in respedt of goods of foreign origin. , Duty on tobacco increased. Allowance previously made for underproof spirit abolished. Duty’ on New Zealand brewed beer increased. Duty on imported timber increased. Additional duty on cinematograph sound films.K . Land and Income Tax. —Special land-tax abandoned and all farmers owning or occupying land of an unimproved jvalue of £7,500 or over liable to assessment for income-tax on farming as well as other income. Also, adjustments on account of allowances. Rebates of 5 per cent, on land-tax otherwise payable will not be allowed tliis year. Deduction of 5 per cent, on unirjiproved value or taxable balance, with appropriate allowance for depreciation. Income-tax raised by 10 per ceht. Taxation, of life-insurance companies to be adjusted. < Stamp Duties. —Totalisator duty increased from 21 per cent to 5 per cent. Death duties increased by 10 per cent.' on amount by which final balance exceeds £lOO,OOO. Amusement-tax increased; also- sundry other increases in stamp, duties.

ESTIMATED REVENUE.

Customs, £8,530,000. Beer duty, £615,000. Film-hire tax, £30,000. Motor-vehicles—Duties, licenses etc., £1,915,000. Stamp and death duties, £3,780,000. Land-tax, £1,240,000. Income-tax, £3,960,000. Interest on public moneys £805,000. Interest on capital liability—Railways, £1,380,000; Post Office, £510,000. Interest on Public Debt Redemption Fund £985,000. Other receipts, £1,370,000. Total £25,120,000. The position for the financial year estimated to be —Revenue, £25,120,000. Expenditure — £17,289,000. Annual votes, £7,58%,000, leaving £246,000 to provide foi' supplementary estimates and contingencies.

; • FACING THE FACTS. After reviewing the national financial operations for the year 1929-30, Mr Forbes outlined the policy to be adopted to deal with the requirements of the forthcoming twelve months. He said: —■ The' Dominion is once again called upon to face a substantial drop in export prices, which inevitably means a contraction in the national income. Partly on account of the falling-off in the trade position, but mostly due to tho reaction from Australian conditions, the exchange rates are at present very much against the importers. Ir. is estimated that the Customs re-

venue for this year, apart from any changes made in the tariff, will be £1,150,000 less than was received last financial year. The Customs revenue for the first three months of the financial year amounted to £2,006,243, as compared with £1,917,667 for the same period of last year; but an examination of the receipts for this year clearly indicates tho total has been considerably inflated by excessive clearances from bond due to fear of tariff increases. Imports last year showed a comparative increase of £4,000,000 over those of the previous year. This year a comparative decrease of at least £5,000,000 is likely. Furthermore, the falling-off- will assuredly be greatest in the luxury items, on which the duties are highest. The fall in export prices and tho difficult times that have resulted therefrom will also affect the yield from land and income tax, although not to anything like the same extent. For the current financial

year it is estimated that land and income tax, apart from any changes in the law, will bo adversely affected to the extent of about £300,000. A loss of' £1,300,000 in the Railway accounts, coupled with the exhaustion of the liquid reserves, would mean that only about £900,000 could liavo been paid to the Consolidated Fund on account of interest, a decrease of £1,230,000 compared with the amount received last year. In addition, it is expected that the revenue item, “Interest on public moneys,” would in the ordinary course have shown this year a comparative decrease of about £60,000, duo to there being less money available for investment and to the low rates of interest offering on the London market for short-term investments. Then the item for miscellaneous revenue was last year increased by £60,000, derived from the sale of New Zealand’s interests in the Pacific Cable, a certain accumulation of unclaimed moneys from the Public Trust Office received consequent upon legislation passed last session, and other amounts of a non-recurring nature. Consequently a comparative reduction of about £90,000 was likely this year. On the expenditure side, under permanent appropriations there will be unavoidable increases in debt charges, amounting, it is estimated, to £315,000, comprising £225,000 additional interest arising out of the increases in the public debt and approximately £90,000 for debt-repayment charges. A further rigid item is found in pensions, where automatic increases are to be expected. Tho estimated increase for this year compared with last year's expenditure amounts to £62,000, which increase is chiefly under the headings of old-age and war pensions. In addition, increases are normally to be expected in hospital subsidies and various other items based on fixed rates. In reviewing the prospective budgetary

position no allowance was made foi any increase in departmental votes whicn normally increase a little each year as a result of expanding services. To sum up the position the Government was called upon to deal with, the anticipated principal variations from last yetfr’s revenue and expenditure, it operations had been carried out in the ordinary way on the same basis, are as follow: —

Decreases in revenue — & Customs • • • • • • * 'iJon’nnn Interest on railway capital 1,2u0,000 Land and income tax .. JOO.vuu Items other than taxation .. 150,001 Increases in expenditure— Debt charges • • • • Pensions and other fixed items 100,000 Less amount of last year’s surplus • • • 150,000

Prospective Budget shortage for 1930-31 • • ■ • 3,095,000 The amount of last year’s surplus has been deducted not because it can be brought into this year’s Budget, but bccauso comparisons have been made with tho revenue and expenditure tor last year which desuited in <£ suiplus of approximately £150,000. An estimated Budget shortage 'of over £3,000,000, quite apart from any increase under departmental votes—-that is what the Government, this House, and the country generally have to face, till, given the co-operation and suppoit of honourable members and the people, the Government is satisfied that the position can be met ' and the Budget balanced, as, of course, it must be. without imposing undue hardship on any section of the community, for there is no doubt that the general financial position of the Dominion as a whole is quito sound.

REDUCTION IN EXPENDITURE.

Reductions in expenditure are the only alternative oto heavy increases in taxation. Needless to say, the Government' is anxious to avoid increasing taxation as much as possible, and, on becoming apprised of the position, immediately proceeded to review carefully tho expenditure. Steps were taken to obtain the greatest possible economy' in administration, but, as this is a matter that has already received considerable attention, there is no possibility of making very large savings in that way. Accordingly, the Government made a careful review of the services being supplied by the State —and by “services” I mean monetary assistance granted as well as work done by tho Departipents of State. It is proposed to curtail or even suspend services where such action is possible without, upsetting the basic organisation of the Departments or causing undue hardships to the institutions or sections of the community who are directly or indirectly benefiting by particular items of expenditure. In the interests of tho country, reductions must be made, and I would now repeat my appeal to the people to view the matter from a national standpoint and support, the Government in carrying out an unpleasant duty. The net expenditure last year amounted, in round figures, to £25,200,000; but, the total includes £10,697,000' for debt charges and £2,750,000 for pensions and family allowances, in which items increases are to bo expected. Then there was £1,509,000 for the transfer of the petrol-tax and other revenues earmarked for Highways, in connection with which I have already announce! the Government’s proposals to relieve the Consolidated Fund of the charges of £220 000 for subsidies on rates to local authorities, £35,000 annual grant to Highways Revenue Fund, and £61,000 of interest on loan capital for Highways. Apart from these adjustments, however, tho amount of tho Highways revenue paid out is the amount received, so the balance of tho Consolidated Fund is not affected by this item. The four items I have mentioned—debt charges, pensions, highways moneys, and subsidies to local authorities —account for £15,176,000 of tho £17,228,000 of expenditure under the permanent appropriations.

HOSPITAL SUBSIDIES..

Of the remaining £2,052,000, approximately £690,000 went in subsidies to Hospital Boards on rates, £6’00,000 being on account of maintenance and £90,000 on capital levies. So far as maintenance is concerned, curtailment oi’ tlie subsidy,' except in so far as it arises from tho exercise of economy by tho Hospital Boards, is not possible without upsetting tho whole basis of hospital finance, and it is not proposed to do that. With capital expenditure, however, there is more elasticity, and for this year capital expenditure by tho Boards will have to be restricted to urgent essential works. In this way it is estimated that a reduction of £30.000 will result in the subsidies payable out of tho Consolidated Fund, Subsidies on voluntary contributions and bequests to hospitals and various educational institutions amounted last year to approximately £BO,OOO. Generally speaking, Bequests, together with the subsidy normally payable (hereon, are in the nature of “windfalls,” usually additional to the normal finance of the organisation concerned; and the same remarks apply to some of the voluntary contribillions that are received. Obviously, little hardship will bo entailed In restricting the payment of subsidy to cases where voluntary contributions for useful and necesary work in connection with the primary schools Will bo paid a.s heretofore, but, in general, each request for a subsidy will have to be considered on 'l,lio merits of the case, ft is hoped in this way Io save £40,000 this year without inflicting any great hardship on. anybody. ’ Then there arc the subsidies to Slate Superannuation Funds and the- National Provident, Fund, which last year amounted to £382,000, including £43,000 maternity allowances paid through the National Provident Fund and tho friendly societies. The Super-

annuation Funds are in a very unsatisfactory financial state, but, pending the report of the Committee which is investigating the position, only the subsidies usually paid are being budgeted for at present. This means a saving of £175,000, though probably only a temporary one, in comparison with the expenditure last year. Tho Civil List and salaries and honoraria, mostly Legislative and Judicial, accounted for a further £138,000 of the expenditure under permanent appropriations; while grants to University colleges, scholarships, and other education purposes absorbed £101,000; compensation for condemned stock, £30,000; Singaoore Naval Base, under agreement with the British Government, £125,000; maintenance of war graves, £31,000; and exchanges and management charges of New Zealand stock in London, £72,000. Reductions cannot be made in these items. I may add, however, that the Singapore Naval Base will bo a subject for discussion at the forthcoming Imperial Economic Conference. The remaining expenditure under permanent appropriations last, year, amounting to £403,000, included £lBO,OOO on ac count of railway losses, which this year will bo wholly reflected in decreased interest receipts. An amount of £50,000, transfer to Discharged Sodiers’ Depreciation Fund, need not be repeated this year, although the amount of the fund is not yet large enough to offset the dis-charged-soldier-settlement losses written off against loan capital. Tho expenditure under annual appropriations, which comprise the departmental costs, numerous small grants and subsidies, and various miscellaneous items, amounted last year to £7,973,000, nearly half the amount —or £3,219,000— being spent on education.

DEFENCE VOTE. In the case of Defence, the amount allowed, £275,000, will mean a general suspension of the compulsory military training and some reduction in the staff personnel. The dispensing with the services of members of the staff is much regretted, especially in view of the unemployment difficulties, but if there is to be a suspension of operations the work will not be there for them to do. Tho estimates under annual appropriation prepared on the basis that I have indicated total £7,585,000, being a decrease of £388,000 as compared with last year’s expenditure. In addition, a reduction in the Railway estimates, aided by certain increases in revenue, will aid to the extent of £450,000. In addition to these savings in expenditure it is proposed to augment the revenue to the extent of £90,000 .by bringing in the following amounts, (a) £60,000 from the Land Assurance Fund.. This fund was established to meet possible claims for compensation arising out of the bringing of land titles under the Land Transfer Act, and out of the working of the Act generally. The expenses of carrying into effect the provisions of the Land Transfer (Compulsory Registration of Titles) Act, 1924, havo been paid out of the fund, which is also charged with any liability under the Mortgagees’ Indemnity (Workers’ Charges) Act, 1927. About half the work in connection with tho compulsory registration of titles has now been completed. Claims tor compensation have been very small, while experience has shown that, the liability on account of mortgagees indemnity is practically negligible. Under these circumstances it is proposed to close the fund and transfer the £85,000 at present standing to its credit to tho Consolidated Fund. Of the amount £60,000 will go to revenue and tho remaining £25,000 will be held in suspense to meet any claims that may bo made. „ , j (b) £30,000 balance of interest on reparation-moneys at present held in a special reserve by the Public Trustee. During the war the ■ Public 'Trusteewas entrusted with the duty of liquidating ex-enemy property held in New Zealand, the proceeds from which, after tho Treaty of Versailles, became reparation moneys. Interest to the amount, of £50.000 earned on such balances since the Treaty has previously been received, but owing to technical legal difficulties, legislation will bo necessary before interest accruing prior to tho Treaty can be made available. All interest on ex-enemy moneys, however, should be appjjed in relief of taxation, which is carrying the burden of the war pensions and war debt, etc. I may add that the capital moneys, with the exception of about £60,000 held by the Public Trustee against contingent liabilities, have already been applied in repayment of war debt.

ESTIMATED SAVINGS. To sum up, it is proposed that the Budget shortage of £3,095,000 shall be partly met by reductions in expenditure, and adjustments as follow: — Subsidies .to local authorites on rates transferred to Highways Account 220.00 Interest on loan capital transferrod to Highways Account 61,000 Additional superanuation subsidies' not being budgeted fOl . 175,000 Decrease in hospital subsidies 30,000 Decrease in subsidies on voluntary contributions .. ■ • 40,000 Subsidies to Railways (non-re-curring) .. •• 180-000 Elimination of transfer to Discharged Soldiers’ Settlement Account Depreciation Fund 50,000 Reduction in annual votes . . _ 388,000 Railways—reduction in expenditure and increase in revenue 450,000 Transfer from Land Assurance Fund 60,000 Balance of interest on repara-tion-moneys 30,000

Total estimated savings on last year’s expenditure £1,681,000

Allowing, say, £250,000 for supplementary' estimates and contingenices, there remains approximately £1,660,000 to.be provided out of additional taxation.

FRESH TAXATION.

Needless to say, the Government regret very much having to bring forward proposals for fresh taxation, especially at a time like this, when business generally is not as prosperous as it might be. We find ourselves facefl this year with a shrinkage of £2,830,000 in revenue and added liabilities on rigid items of over £400.600, there is no possibility of bridging the gap without some additional taxation.

The Customs tariff resolutions already passed will, it is estimated, produce about half the £1,660,000 additional revenue required.

DUTY ON FILMS.

In connection with the amount oi. additional revenue which it was deemed advisable to obtain from indirect taxation, I may say that in preference to other things it was considered that additional duty should

be placed upon cinematograph soundfilms. As the value of films varies a great deal, to be equitable any increased taxation should be upon an ad valorem and not a footage basis. -The difficulty here, however, is that the value of a film is not known when it comes over the wharf. In this connection it may be explained that films are not sold, but are rented to the theatre proprietors, usually for a percentage of the gross theatre takings. Further, films- are not dealt with singly, but in groups or blocks.” Under these circumstances an ad valorem Customs duty in the ordinary way is hardly practicable, but it is proposed to impose the equivalent of an ad valorem duty in the shape of a film-hire tax. Briefly, the proposal is that the film-distributing firms will be required to make returns monthly to the Commissioner of Taxes of tiie gross rentals received from sound-films and the administration expenses incurred in New Zealand, commencing as from July 1 last. After deducting these expenses, and also the percentage of gross rentals upon which income tax is levied, the residue will represent the value of the films, on which will be levied an ad valorem tax at the rate of 10 per cent, in the case of British films and 25 per cent, in the case of foreign films.

LAND AND INCOME. It is proposed to obtain part of the additional revenue required from land and income tax, but at the.same time the opportunity is being taken to remove certain anomalies and places the taxes on a more equitable basis. The information obtained from last vear’s income-tax returns of farming incomes showed clearly that previously many large incomes had been escaping their fair share of taxation and that the amendments made last session were irt the right direction. Experience has shown, however, that the special land-tax was too rigid in its incidence and was inequitable in some instances. At the same time, information received by the Tax Department shows that the incomes derived from many farms of an unimproved value of considerably less than £14,000 (and thus not at present assessable for income-tax) are not contributing a fair share towards the expenses of the State. Accordingly, to overcome all these difficulties and inequities it is proposed to abandon the special land-tax and make all farmers owning or occupying land of an unimproved value of £7,51)0 or over liable to assessment for income-tax on their farming as well as other income. The provision in last year's legislation whereby the land-tax payable was deductible from the income-tax on farming incomes- will also be repealed, and farmers will henceforth be assessed for' income on the same basis as other classes of the community.

Further, it is found that the present general provision allowing a deduction for income-tax purposes of 5 per cent, on the capital value of property used in production of the income has given rise to serious anomalies and inequities. This allowance is intended as a set-off for land-tax paid, and also to provide for depreciation of buildings, but the method is too rough and ready to be equitable. For instance, a taxpayer deriving income from rents is at present allowed as a deduction the interest on his mortgage and also 5 per cent, on the full capital value, in -which his equity may be relatively small. In manysuch cases the taxpayers practically escape income-tax, and by’ reason of the mortgage exemption may also escape land-tax. Again, •in the cities, owing to the erection in recent years of large and valuable buildings, the 5-percent. allowance has in some cases relieved the business man not. only of the amount of his land-tax, but, in addition, of a considerable part of his income-tax. Further, the taxpayer carrying on his business in a steel-frame structure with a life possibly exceeding 100 years is allowed the same rate of 5 per cent, as the taxpayer using a wooden building with a possible life, of say, 40 years. Even in the latter case 5 per cent, on the capital value is an excessive allowance. Further depreciation is an actual expense and should be allowed as a deduction before arriving at the assessable income. At present it is a special exemption. Accordingly, it is proposed to revert practically to the position obtaining prior to 1923, and reduce the allowance to 5 per cent, 'on the unimproved value or the taxable balance in cases where a mortgage exemption has been allowed in the land-tax assessment, together with appropriate allowance for depreciation of'buildings, varying with the different classes of building, at the discretion of the Commissioner of Taxes. The proposal really amounts to dividing (he present allowance into its two parts —an allowance of 5 per cent, on the unimproved value as a set-off asainst land-tax paid, and depreciation on buildings at appropriate rates as a deduction from profits. The change will apply to all assessable income derived from the use of land, whether in the course of farming or trading. It is also proposed to make some changes in regard to the taxation, of life-insurance companies, the taxation on which has been considerably reduced in recent years. In 1921 it was provided that the income should bo assessed at half the ordinary rate, and the companies have been, able to increase greatly’ the bonuses paid. It is found, however, that the Government Life Insurance Department, the assessable income of which is determined by its actual protits, is paying 32 per cent, of the tola] income-tax paid by life insurance companies, while its income represents less than 22 per cent, of the total income of life-insurance companies. This is a result of the peculiar method of arriving at the assessable income of foreign life-insurance companies. Such companies are assessed, on income derived from investments in New Zealand and investments out of New Zealand held by or on behalf of the New Zealand branch. It is not necessary tor companies to make investments on behalf of any particular branch, consequently they may to a large extent determine their own taxation. It is proposed, therefore, to provide that in the case of foreign life-insurance companies the taxable income Iroin life-insurance business shall equal 2:> per cent, of the premium income and consideration received for annuities. This is approximately the rale shown on an actuarial basis by the Government Lilt* insurance Department. It is estimated that the yield from land and income tax alter these adjustments have been made would be practically the same as under the existing legislation, the only difference being that, the burden would be more equitably distributed. In order to obtain part of the additional revenue to bal-

ance the Budget, it is proposed to withdraw the land-tax concessions granted in 1924, whereby a deduction of 5 percent. has been allowed on the amount ,of land-tax otherwise payable. INCOME AND STAMP DUTIES. In addition, it is proposed to increase the income-tax rates by 10 per cent. , Under the Stamp Duties Act it is roposed to make the following alterations: —•

(a) Increase the banknote-duty from the present rate of 15s to 22s 6d. per cent, on the average amount of notes circulating during each quarter. This increase, which will operate as from July 1, means an increase from 3 per cent to 4i percent. in the banknote-duty.

(b) Increase the totalisator-duty from 2| per cent, to 5 per cent., the State to receive the whole of the increase. At present the State receives 21 per ent. and the racing clubs 7B per cent, of the amount deducted by racing chibs from investments on the totalisator. The proposal is to double the revenue received by the State without interfering with that received by tho clubs. (c) Require insurance companies to pay tho usual 2d duty on receipts. At present they enjoy an exemption from this tax. ” (d) Increase by 19 per cent, the stamp duty on an instruments P''® seated for stamping. Instruments which the parties thereto are permitted or required to affix adhesive stamps or write on stamped paper w i not, however, be affected. (e) Companies’ annual license dutv: Minimum to be £1 and maximum to be increased from £2OO to £3OO. (f) The exemption from conveyance duty of transfers of land from the Crown to be limited to lands within the meaning of the Land Act, 1924, or Land for Settlement Act, 1925, or Education Reserves Act, 1928. This amendment would still leave free of duty transfers of land from the Crown for land settlement and suchlike purposes, but will require purchasers of land from Government trading departments to pay the usual duties thereon. (g) Impose duty at the same rate as is payable on the transfer of shares in Now Zealand companies upon transfers of shares in foreign companies, including foreign mining companies, executed in New Zealand. At present such transfers escape duty in New Zealand.

(h) Increase the flat rate of duty on registration of mortgages and discharges thereof from 2s 6d to ss. (i) Amend the definition of “public authority” so as to exclude the Public Trust Office from benefits in favour of the Crown, and otherwise narrow the definition of the Crown for purposes of stamp duty. (j) Require tho Government Life Insurance and Stpte Fire Insurance Departments to pay an annual license fee and receipt and cheque duties at the usual rates. This proposal means placing these Departments on the same footing in regard to taxation as other insurance companies;

These proposed amendments to the Stamp Duties Act, apart from the increases in tho totalisator duty and the banknote-duty, are individually relatively small from a revenue point of view, but in the aggregate they will bo of some assistance in meeting the Budget shortage. Under the heading of “Death Duties,” it is. proposed to impose an additional 10 per cent, estate duty on tho amount by which the final balance of an estate exceeds £100,0,00. This additional duty will bring in a considerable amount of revenue without imposing hardship on anybody. The exemption from gift, duty is to bo reduced from £l,OOO to £5OO per person per year, and a. duty of 21 per cent, imposed on dutiable gifts of from £5OO to £l,OOO in value. The annual license fee for a sharebroker’s license is to be increased from £2 to £5.

To further assist in providing the additional revenue necessary to balance th© Budget, it is proposed to reimpose the amusement-tax on payments of Is or more for admission to any entertainments. This was the position prior to 1924, when the exemption was raised to the present amount, 2s. On Is admission-price the tax will be Id, from Is to Is 6d, a tax of 2d, and on higher charges Id for every shilling or part of a shilling, plus an additional penny as at present.

APPEAL TO NATION.

That completes my statement of the finances for the current year, and I have to thank honourable members for a patient hearing. The Government’s proposals for meeting the serious financial position with which we are faced may appear to be a formidable list of items, but it is considered that the additional burdens will he more evenly distributed and tho re-> tarding effect upon economic recovery minimised by spreading the increase over a number of items under both direct and indirect taxation. In order that this Dominion should maintain its credit on the world’s moneymarket., the Government would be failing in its duty to the country' if it did not bring down proposals to balance the Budget. Tho principal cause of most of our present troubles—falling prices in tho worlds markets —lies beyond our control. We have surmounted similar difficulties in the past, and it is with confidence that I appeal to members of this House and to all sections of the community resolutely to accord the Govermcnt solid support and co-operation in the necessary solution of tho problem. This Dominion’s natural resources, its favoured climate, and the energy of its people arc such that, given the exercise of reasonable care, it should not be long before, our present difficulties are behind us and the Dominion is again able to enjoy more prosperous times. ) SUMMARY.

Consolidated Fund/. —Ordinary Revenue Account £25,349,861, Expenditure £2f>,200,882. Surplus £ 148,979. Balance- brought forward, Ist April, 1929 £2,153, 541. Add.-—Surplus 19291930 £148,979. Advance io Native Trustee repaid (net) £33,000; £lBl, 979. Total £2.635,520. Less Ad varices to Rural Intermediate Credit Board £162,000. Subsidies to local authorities for unemployment relief £ 1 11,728; Assistance towards restoration of public works damaged by curthq tin!:o- £3,516, Charges and ox pc-nsos of raising loans £1,939; £279,153. Balance 31st March, 1939, £2,356.337. This balance was made up as follows; —Cash £1,510,239, Imprests outstanding £132,132, Investments £713,966. Total £2,356,337, Revenue apart from items earmarked showed comparative increase over previous year of £1,482,972. Customs increase, including, £310,000 from additional primage £942,794.

Special land-tax produced £240,000. Remissions granted by “Hardship” Commission £llB,OOO. Excess of income-tax over land-tax on farming incomes £47,500. Expenditure increases: Interest and debt repayment £586,501; Pensions and family allowances £92,364; Subsidies to Hospital Boards and local authorities £62,390; Petrol-tax and other earmarked revenues for highways £274,394; Subsidies to Superannuation Funds and National Provident Fund £176,832; Departmental votes £40,946. * Public Debt as at 31qt March, 1930 £267,383,343. War Debt during year reduced by £1 097,744, the total reduction over the’ past eight years amounting to £12,462,148, or approximately 15 per cent. Capital Expenditure on Public Works:— Railway construction, additions, and improvements £3,315,612; Main highways and roads £2,288,217; Hydro-electric supply £581.975; Telegraphs and telephones £657,291; Public buildings (including schools) £Bl7, 970; Irrigation, land and river improvements £283,872; Other public works £136,881. Total £8,081,818.

STATE ADVANCES OFFICE. The substantial benefits accruing from the activities of the State Advances Office increasingly availed of. During the year, applicants to the number of 6,754 received loans amounting to £6,923,807. From 10th December, 1928 (when the United Government assumed office), to 31st March, 1930, loans totalling £4,219,895 were granted to 3,495 settlers, £3,851,452 to 4,413 workers, and £5,580 to eight local authorities, making a grand total of £8,076,927 granted to 7,916 applicants.

Rural Intermediate Credit. —Scheme proving a decided success and contains great possibilities of further benefit to the primary industries of the Dominion. At 30th June, 1929, total advances amounted to £165,480 Repayments coming to hand in a very satisfactory manner.

Land Settlement. —Importance of successful land settlement fully realised by the Government. All idle Crown lands suitable for farming are being made productive as soon as possible. During seventeen months ended 30th April last 545,100 acres of all classes of rural and suburban Crown lands were selected under various tenures, the number of subdivisions being 2,549. Anticipated that some 161 additional farmihg sections will be offered for selection by 31st July. Development of Native lands also vigorously* pursued. Intensive work at present being carried on under fourteen separate development schemes, while preliminary operations being undertaken on z eleven other schemes, involving a total area of 54,000 acres. Thirty properties purchased for land-for-Jsettlcment purposes since United Government came into office, comprising an area c-f 55,592 acres, involving total purchase price of £525,000 and providing a total of 149 subdivisions.

AGRICULTURE.

Increased production especially necessary at present time to compensate for reduced national income consequent upon lower prices obtained for Dominion’s primary produce. Whole of resources of Departments of Agriculture and Scientific and Industrial Research made available for man on the land. Special research activities undertaken in connection with destruction of noxious weeds, health and nutrition of animals, etc.

SECONDARY INDUSTRIES

Development of secondary industries complementary to successful land-settlement. Requirements of local market sufficient to justify more extensive secondary industries. Government assisting (in addition to Customs duty on imported goods) by technical investigations by Department of Industries and Commerce.

EDUCATION.

Requires to be developed on more practical lines. Selbct Committee s report on education at present being considered by Government. Country schools being consolidated. Corre spondence School now provides a secondary' course. Special tuition for backward children. Total cost of education now exceeds £4,500,000 per annum.

UNEMPLOYMENT RELIEF.

Additional employment provided on Government, works. Total expenditure by State for last year was £1,415,592. At 31st March, 1930, 16,197 men employed on Government works. Subsidy payable to local authorities on labour costs of relief works undertaken in urban and suburban districts increased from £1 for £1 to £2 foi £l. Legislation now before House giving effect to main recommendations of Unemployment Committee’s report. Trading Departments: —With exception of railways, all trading Departments earned profits for the year.

RAILWAYS.

Gross revenue for year, £8,288,116, and working-expenses £7,358,859. Total net loss for year, £1,211,269, duo basically to competition of motor transport. Advance of £150,000 made from Consolidated Fund to enable expenditure to bo met. Subsidy on branch lines and isolated sections discontinued as from Ist April, 1929. Expenditure being drastically' oyeihauled and unremunerative services curtailed or eliminated. Royal Commission set up to review whole- 'position of Railways.

TRANSPORT.

Coordination esseutial and regulative provision? necessary. Matter cannot he left to be settled by' unrestricted competition, which Dominion cannot, afford. Legislation to be intro duced this session.

HIGHWAYS

Total expenditure on roads and highways now approximately' £3,600,000 per annum. Wasteful duplication of transport system has been facilitated by’ development of highways and roads. Finances of Main Highways Account being adjusted. Petrol-tax to be increased from 4d to 7d. per gallon to provide necessary additional funds.

SUMMARY OF LAST YEAR’S WORK

Tho transactions for tho year 19291930 resulted in a surplus, as follows:

REVENUE. Taxation: —Direct £8,837,335, Indirect £10,636,780. Total £19,474,115. Other receipts £5,875,746. Grand, total £25,349,861. EXPENDITURE. ( \ Permanent appropriations £20,297,824, Less credits in reduction £3,070,21g. —£17,227,605. Annual appropriations £9,226,500, Less credits in aid £1,253,223—£7,973,277. Net expenditure chargeable against revenue £25,200,882. Surplus £148,979. ESTIMATES SUMMARISED. V PRUNING KNIFE ACTIVE. ; [SPECIAL to “stab.”] WELLINGTON, July 24. The Estimates accompanying the financial statement presented in the House to-night show evident signs of the application of the pruning knife. The vote to the High Commissioner for official entertainments is £4OO. Last year the vote was £6OO, but the amount expended was £BO3. There is a reduction of £3ooo’in the amount allowed for the entertainment of visitors from overseas, and for official functions, the vote this year amounting to £3OOO. Last year £4,254 was expended. An amount of £3,450 is allowed for the erection of a memorial to the late Sir John McKenzie, and £3OO for the beautification of the area adjacent to the Massey Memorial. The shm of £245 is for repairs to the Seddbn memorial.

Provision is made for a contribution of £2OOO to the Wellington carillon. There is a vote of £2600 in the State Forests account for the destruction of deer. This is to cover the expenditure on wild life cbiitrbl with State Forests, including a bounty on pig snouts, deer culling, and pig and goat extermination. There is also an item of £1929 for wild life control in general. A grant of £5OOO is made to the Karitane. Homes in various parts of New Zealand.’ Last’ year separate grants were made to each' institution. A sum of £4OOO is provided for the destruction of rabbits on Crown Lands, as against £4,778 expended last year. It is estimated that the cost of byelections during the. year will be £l2BO.

The grant of £l5OO to the Workers’ Educational Association for organising purposes is renewed. Tho expenses of the Select Committee on Education are set. down at £ll5O. Provision is made fdr a grant of £5500 in aid of free Kindergartens.

A grant of £2500 to the Commonwealth Government towards the cost of the Mawsoil Expedition is included. An item of £25 appears in the Legislative Department vote for “baths, and treatment at Rotorua of members of the Legislature?” No provision is made this year for the payment of a bonus to the' employees of the Legislative Department. Last year £1010" was spent in this way. \ , k Considerable reductions have been made in the amounts provided for the maintenance and repairs to roads and bridges. No provision is made for the transfer of £35,000 from the Consolidated Fund to the Main Highways revenue fund, as provided for under the Main Highways Act, 1922.. Tho grant for the administration of Samoa amounts to £29,448 as against £30,000 expended last year. . . For working expenses and wages in connection with the Maui Pomare, the sum of £32,550 is allowed. Last year the amount spent was £32,888. The amount allowed for advertising New Zealand overseas is £21,108, as against £34,576 spent last year. There is no vote this year for the assistance of coal-mining. The amount expended under this head last year was £1465. Ministers’ travelling allowances are set down at £5,228, as against £7,920 expended last year, and those of private secretaries at £4OOO, as against £5,990 expended last year. There.is a’ special allowance of £72 for the Minister of Defence in connection with . his visit to Samoa. WEST COAST ITEMS. Very' few items of West Coast interest appear on the Estimates. The • grant of £450 made last year to the Inangahua Hospital Board has been reduced to £4O. . , The subsidy of £6OO to the South Westland mail steamer is renewed. Grants of £l5, £124, and £5O respectively', are made to the Runanga Croquet Club, the Runanga street lighting, and the Seddon Memo” i fil Institute.

DEFENCE “CUTS.”

[special to “star.”]

WELLINGTON, July 24.

Details of the reduction in the Defence vote are revealed in the Estimates. it is proposed to make a reduction of £216,667 in military defence expenditure, the greatest saving being made by the- elimination of camps. It is proposed to reduce the pay and allowances of Territorials tending camps by' £22,000, and to make a decrease of £17,000 in the expenditure on supplies, catering, and allowances in lieu of rations for camps and courses of instruction. In salaries, a saving of £10,687 is effected, while there are considerable savings under tho headings of _ purchases, maintenance, and training. The vote for the issue of uniforms drops by £14,000, and that for laundering and renovating partly-worn uniforms by' £5500. Expenditure on. field and heavy gun ammunition and other explosives is to be decreased by £17,000, and on miscellaneous stores bv £95,000.

Other reductions include the maintenance of camps, drill, halls, and offices, £6000; grants towards the maintenance ot' units and ■ bands. £4583; horse hire and provision of horses, £2000; lighting, £2000; hire of offices and parade grounds, £1500; prizes for rifle shooting, £1580; rail fares and freights, £8000; shipping charges £5500; steamer fares, £1000;. travelling allowances and expenses, £5000; uniform allowances to members of the permanent and Territorial forces £2OOO.

The appropriation for salaries for. membei s of the Aviation branch is increased by £1689, but the proposed expenditure on the purchase of aircraft, marine craft, spares, and miscellaneous equipment is reduced by £12,220.

The grant to Aero Clubs in respect of pupils qualifying for private .pilots’ certificates is increased by £lOOO.