PUBLIC ACCOUNTS

Greymouth Evening Star, 14 August 1933, Page 3

PUBLIC ACCOUNTS

MR COATES’S STATEMENT. [PEIS PRESS ASSOCIATION-] WELLINGTON, August 13. Details of the Public Accounts for the quarter ended June 30 are announced by the Minister of Finance (Mr Coates). r lhe revenue for the quarter amounted, he said, to £4,215,000. The Minister continues: “An abridged summary of the accounts, given below, indicates that the principal items show remarkably little variation from the receipts for the first quarter of the last financial year so far as taxation is concerned. Particular interest, no doubt, will be taken in the new fems of sales tax and the gold exports duty yield, both of these being well up to expectations.

The taxation and revenue figures are as follow, the increase on the previous year being given in parentheses: —Customs and beer duty: £1,565,646 (£3,446). Sales tax: £448,327. Gold export duty: £29,625. Highways taxation: £577,808 (£331). Stamps duty: £648,499 (£7,328). Land, income and miscellaneous taxation: £235,223 (£51,656). Interest: £491,284 (£116,959). Other receipts: £215,566 (£47). Total: £4,214,987 (£650,071). The substantial increase disclosed under the heading of interest should be explained. This is solely due to accounting fluctuations, and has therefore no budgetary significance.

“Perhaps the most satisfactory aspect of the revenue position is Tts stability, there being no indication of any further falling away,” said the Minister. “This, I consider, is further evidence that the worst troubles are behind us.”

The Minister continued: “Turning to the other side of the account, it will be, seen that the net expenditure for the quarter, amounting approximately to £6,470,000, compares with that for the same period last year, as follows: —Debt services—£ 2.329,138 (£131,190). Exchange £2,060,794 (increase £1,759,815). Other special acts and services—£66,733 (decrease £42,931). Annual appropriations for social services£l,4o3,l4o (£16,355). Other departmental services—-£610,-444 (decrease £9,141).

“The increase of £131,000 under the Debt services, arises substantially cut of recent conversion operations, these necessitating the payment of interest up to March. 31 on all of the securities affected, and also from increased payments made by way of discount Treasury bills issued under the Banks Indemnity (Exchange) Act. The benefit from the conversion operations will not be apparent in the figures until later in the financial year. The operation of that Act is also reflected in the item of exchange, involving an increase in expenditure of £1,760,000.’ The small increase of £16,000, under social services arises substantially by reason of increased expenditure by way of pensions, but this i;; more than offset by restricted expenditure totalling £52,000 under other items of general expenditure. HIGH EXCHANGE COST. “The exchange is really the only item of expenditure that calls for comment, and the transactions under the Banks Indemnity Act will no doubt bo scanned with interest. The accounts show that the London credits purchased from the banks during the past quarter and passed through the

Indemnity Exchange Account amounted to £9,215,000. The exchange paid’ on this amount is included in the expenditure shown above. The transfers to the Public Account amounted to £9,745,000, the difference between the two sets of figures representing London credits that were taken over in

the last financial year. It may be explained that the whole of the London credits purchased does not represent a surplus, for out of it has to be taken

approximately £7,500,000 that is required to meet interest and other normal requirements in London. It would have been necessary to purchase exchange to this extent in any case. The net hurplus to June 30 was thus £1,715,000. The amount of Lon-

don credits taken over during the quarter is large, but it should not be taken as an index of the amount likely to be purchased during the balance of the financial year, for June is really the end of the export season. Imports

are normally light during the period of the year in question, and this year the situation has been accentuated by traders being induced, by recurring unfounded rumours, probably spread by interested parties, to hold back imports in many lines. However, I understand that stocks have reached a low level, and, as firms cannot trade without goods, there must be increased activity in importing before long. Au enterprising firm that has maintained its stock will get business until the general shortage is made good. “The amount of London credits that will hav e to be purchased during the balance of the year is bound up with the trade position, and is as uncertain as is any estimate of trading results for the year. What is certain, however, is that, pending some appreciable recovery of export prices, the general interests of the whole Dominion require a measure of economic adjustment between prices and costs in the basic industries, which is now being effected through the exchange rate; lor anything approaching a

general collapse of the primary industries miist mean ruin for the whole Dominion. As it is, the London exchange requirements of the Government for the financial year have been provided during the first quarter, and, in addition, there is a surplus of £1,715,000. I may add that the position was much the same last year, when the total requirements for the year were obtained before the Exchange Pool was released at th ( > end of June. As regards any additional London credits that will he taken over this year, there will be no difficulty in disposing of them, and one factor to l.e taken into consideration is that Dm Reserve Bank, when it is established, will require large amounts of London assets.”