FINANCIAL STOCK-TAKING

Gisborne Times, Volume XLIX, Issue 4846, 18 April 1918, Page 3

FINANCIAL STOCK-TAKING

FINANCE MINISTER REVIEWS PAST YET.

POLICY OF BIG SURPLUSES REFENDED.

“A SAFEGUARD AGAINST ANY EVENTUALITY.”

| By Telegraph— Parliamentary Correa ! pondent. j ' Wellington, April 16- ] Dealing with his financial statement for the year ended March 31 last, Sir Joseph Wardl in the House yesterday said: “The total accumulated surplus at the end of the year 1916-17 amounted t0'£6,474,854, whilst the total accumulated surplus at the end. of 1917-18 is approximately 10! million sterling. Out of this accumulation of profits we have invested in London in Imperial Government securities at the present moment a sum of £8,728,817. This investment of our surplus moneys with the Imperial Government is, in my opinion, a sound and desirable thing to do. They have made advances in the Old Country from time to time, and they have accepted the stock of this country in payment, ..because we could not go on the market. There to the amount of something-like 19 millions. When the Motherland is under such a heavy financial strain, it is our duty to give in this way- while retaining the money for our own requirements at the end of war. I repeat that it is desirable that we should give the Mother Country relief by investing this surplus. It certainly helps the Mother 'Country in connection with the gigantic finances* which she requires for carrying on the genera purposes of the war. An Hon. Member: Carrying on fo* one dav? <■ The " JRt. Hon Sir J. G. Ward: Yes; for one day, but it is a help, and a considerable help, and the principle involved is a good one. It is the proper spirit in that respect. We have done probably what no other country has done, and it is right that we should, do it. Members will see that in having accumulated a surplus of Id! millions sterling, we had l a very strong reserve. We will at least hold that reserve at the end of the war, and I hope it will be increased still further as the war goes on, leaving: it available for any purpose that the Government may decide. My own opinion is that it should l be for the reduction of the expenditure which we have incurred for war purposes or in connection with the permanent sinking fund, so as to allow tips reserve to accumulate- . There is great strength in having 10| million sterling of reserves out of our surpluses in this country. If there was any great alteration in the financial and industrial —or what I call the internal —condition of this country, we should be in the position of having securities in London which would be of very material assistance in helping to maintain a strong position after the war was over. So I think I am right in saying that the result of the year’s operations is most satisfactory, though I feel it to be my dut- to warn the House and the people that the charges for interest and sinking fund will eventually assume very large proportions by comparison with the increase I am now indicating to the House. These charges will now commence to increase rapidly. Up to now. the increase has been fragmentary, if I may use the term. There has been but a slow process of addition, because after all the war is blit three and a-half years old, and only a proj:>ortion of the permanent annual ohligation has been brought to account. But as the years come round it will he large, and we shall appreciably ■feel the increased burden of interest and sinking fund for the war loans. I want to say one word now in connection with the war expenses account, and here I would remark that my colleague, the Minister for Defence, will make, I understand, a statement before the House rises, and it will necessarily be one in more detail. I will deal with the question only of the total war expenditure as it affects the finances of the country. The accounts show that, since the war commenced up to the Bth of- April, the total amount actually raised for war purposes, but not yet wholly expended, amounted to £46,304,860. Of" that amount, £172,476 was subscribed gratuitously by the people of New Zealand. The total amount of expenditure-for war purposes during the same periodr.mclusive of imprest advances in the hands of imprestees, amounts to £40,930,697. There are some arrears of payment due to the Imperial Government for the maintenance of our troops, but they will soon be cleared, up out of the authority that has been given by the House for raising -another £20.000,000 loan. They will in all probability be cleared) by the acceptance of New Zealand stock by the British Government for the amount which the Government has incurred in England. Mr Witty: Could you give the approximate amount? The lit. Hon. Sir J. G. Ward: I could not give that at the moment, because I do not know it exactly, and. it is better not to give figures that may prove evejfl not approximately correct. It depends on things not under'the control of the Government at this end at all. Now I want to give the position of the Public Works Fund. The policy of the Government has necessarily required to be a cautious one in regard to Public Works expenditure; but, notwithstanding the reduced activities of the Department, owing to war conditions, there has been a total expenditure during the twelve months, amounting: to £1,244,942. including sums in the hands of imprestees. I do not intend to say anything more about the Public Works Department, because the Minister for Public Works can and will, I understand, inform the House how he proposes to deal with the extensions of the Public Works authorities without new votes being taken as provided for-in the Finance Bill just now, nor do I want to say anything more about the financial position except this.: that members will see if they refer to the Budget that the surplus is a larger one than I estimated when submitting the Budget. It will be found that the revenue receipts are approximately 2 millions greater than indicated! we were likely to receive, and. it will be found that the expenditure is not far away from the amount indicated. • I want to emphasise again now, that during the times through which we are passing, I consider it" is my duty, as Finance Minister, to keep the estimates in this country down to as low an amount as is prudent as to provide for any fluctuation which may take place during the course of the financial year. That will be done again for the succeeding year, because circumstances, which are stronger than men and -stronger than Parliaments, mighi occur, vnicn might greatlv affect receipts in the Treasury during the war . period through which we are passing, call attention to it only to say that I am not making any excuse or anoiogv for the estimate being considerably beyond niv forecast, as l A' r as deliberately cutting the amount down for fear of eventualities ifelt it was the only cause fov me to follow in the circumstances. fwould call attention to the fact'that a surplus o£S4I- millions at this juncture is encouraging. to + the whole. o us, and to the country. It s a murco of satisfaction to .us to know ive are not in the position of other

countries, which I need not name, which have not been so fortunate as to be i,u such a strong financial position, at the end of the financial year, as we are. The outline of the position, which I have given, is intended to take the place of the Budget, which woud come down in the ordinary session. It is an interim statement made, as I have already said, approximately, but is a fair account of what the position is I sincerely hope that the circumstances of this country, during the coming financial year, may be as satisfactory from the point of view of enabling the country to pay its way, and maintain a strong position to the end of the way.