THE FINANCIAL STATEMENT.

Hawera Star, Volume XLVIII, 24 July 1924, Page 3

THE FINANCIAL STATEMENT.

ANN m STATEMENT OF ACCOUNTS.

The Minister of Finance (the lift. Hon. W. F. Massey) delivered his Financial Statement in the House last evening. Following are extracts:— I have again the pleasure to submit for the consideration of honourable members annual statements of account which furnish a record of progress and unmistakable evidence' of a continued return to prosperity. The revenue has been equal to expectations, and the expenditure has been kept down wliereever possible to do so without, loss of efficiency, with the result that there is a substantial surplus of revenue' over expenditure. REVENUE, 1923-24. I estimated to receive during the year a. total ordinary revenue of £27,969,000; the actual . amount received was £27,960,370, or £S63O short, of the estimate, but £380,927 in excess, of the amount, collected during the previous financial year. EXPENDITURE. The amount appropriated to meet the expenditure of the year was £27,483,378, but. the expenditure was £26,145,-005,-which, when compared with the expenditure of the previous year, shows a net decrease of £115,755. The permanent charges on account of interest and sinking fund payments, including the Imperial funded debt contribution, have - slightly decreased. The expenditure under special Acts is less by £505,347, but the previous year's expenditure included £250,000 paid to the Electric Supply Account under special enactment.

The result of the year’s operations, 1923-24, showed: Balance brought forward April 1, 1923, £5,637,000; revenue, £27,960,370; expenditure, £26,148,005; surplus of revenue over expenditure, £1,812,365 —£7,449,455; plus repayment of native land settlement account (Finance Act, 1923, sec. 7 (3) ) (transferred to Loans Redemption Account), £22,600; £7,472,055. Less transfers to Discharged Soldiers ’ Depreciation Fund Account £50;000, Loans Redemption Account £1,367,341, Public Works Fund £1,000,000, Education Loans Account £100,000—£2,517,341, leaving a balance at March 31, 1924, of £4,954,714. ’ The balance was held as follows:: Cash, £1,727,74*6; . Imprests, £152,631; Investments, £3,074,337—£4,954,714. Included in the investments are debentures issued for State Advances purposes amounting to no less than £2,326,150. This satisfactory result .-justifies the opinion expressed in last year's Financial Statement that the Dominion had reached the end of the period of unrest and uncertainty, and that natural causes, if supported by economical and careful administration, would ensure a speedy recovery. The trade returns disclose steady progress, and prosperous conditions, and indicate that all this country produces can be sold or exchanged. For the financial year ended March 31, 1924, the value of the exports exceeded the value of 'the imports by £7,250,000, there being. increase both in volume and value. After making due allowance for the interest payable in the-United Kingdom on Government and local bodies' loans, there remained a balance in favour of the Dominion. It will, of course, be understood that any debit balance must ultimately be transferred to the permanent or semipermanent debt; therefore, having regard to borrowing in the United Kingdom by the Government and local bodies, it is incumbent on me to point, out. that a credit balance can only be sustained by increased production. Borrowing abroad must therefore be kept within relative limits, and care taken that imported capital is strictly applied to productive purposes. ECONOMIES. The expenditure of the Consolidated Fund for 1923-24 continues to reflect the policy of systematic economy inaugurated iii 1921, the expenditure for the past three years being: 1921-22, £28,466,835; 1922-23, £26,263,760; 192324, £26,148,005. T The reduction in expenditure in 192223 over that, of the previous year totalled £2,203,078, and this contraction has. not only been sustained but a still further reduction of £115,755 is recorded. N.Z. INSCRIBED STOCK IN LONDON AND LOAN CHARGES. I referred last year to a reduction in the Bank of England charges for the management of New Zealand inscribed stock in London dating as from 1913, and that a refund of £30,676 would be made, but. subject to Imperial taxation paid by the bank amounting to £14,383. Representations were made as to a. remission of this taxation, and I have since been adViscd that £23,293 lias been refunded. As regards loan expenses, further minor reductions in charges should result in a saving of £3750 on the lastloan. PURCHASE OF NEW ZEALAND STOCK. I was able recently to effect a purchase at a profitable discount of our 4 per cent, stock maturing in 1929. An amount of £250,000 was secured for cancellation in terms of section 24 of the Finance Act, 1921-22. The transaction will represent, a saving over the period of five years of about £60,000 in premium and interest. 1924 LOAN. Although I was able to satisfactorily finance the last .year and provide additional large sums for the Advances Office without outside borrowing, I decided in Mav to place a loan of £5,000,000 in London, £3,000,000 of which was for public works! £1,000,000 for advances to settlors, and £1,000,000 for advanees to workers. The issue was 44 per cent, at £95, and I am pleased to state that the loan was subscribed fourfold, and, moreover, immediately went to a small premium. The interest yield of the loan to investors is £4 ]4s 9d per eont. per annum. To assist in meeting -the heavy demands that have been made T have arranged to obtain some additional capital on the same terms for State advances purposes. The expenditure under appropriation on development of hydro-electric schemes amounted to £812,975, as compared with the sum of £472,874 expended during the previous year, an increase of £3-10.101. It is expected that current from Mongolian will be available during the present year. Provision has been made for the finnnee of the Main Highways Board as constituted wi terms of the Act of 1922. The Consolidated Fund estimates provide l'or the payment of £35,000 to

EVIDENCE OF RETURNING PROSPERITY.

the Main Highways Revenue Account, which has also at credit £249,681’ the proceeds .of the duty on motor vehicle tires. Iri addition the Main Highways Construction , Fund is. to receive £200,000 from the Public Works Fund and £300,000 from loan money. Legislation empowering local bodies to borrow fcr. main highways purposes is in course of preparation'. IMMIGRATION. The immigration policy adopted by the Government has been the means of-securing a steady flow of new arrivals into the Dominion during the past financial year. The .following .extract from the remarks of the Rt. Hon. L. S. Amery, formerly chairman of the Overseas Settlement Committee, at 'the Imperial Economic Conference of last year, is of special interest; “Migration of Families.—More particularly J should like to lay stress oii what I referred to .just now in connection with the" ex-service free passages —the desirability of making it possible for the man who has a family to go across, because, from the point of view ot future citizenship, that is the most valuable element we can send to you. It is true from the point of view of the individual employer a single man is preferred, but from the point of view of development the man who goes with a family of growing children—the citizens, the creators of the wealth of the future—-is the most welcome settler. I should like to draw attention to this fact, that New Zealand, in this respect, has agreed with us on assisted-passage schemes very substantially ahead of any other Dominion in the very liberal assistance they give to the man with a family—that "is to say, that children up to a certain age go entirely free and the older sons and daughters at a very reduced rate. I think today a man with .quite a large familycan get to New Zealand on practically no more than it takes a man and his wife alone to go to Australia. I should like to press very strongly the importance of that.” CUSTOMS AND EXCISE. For the past financial year the Dominion’s general prosperity consequent upon the buoyancy.of our export trade was reflected in the Customs revenue. Including £123,568 tire tax credited to Main High-ways Account, the Customs and excise duties totalled £7,361,783, or £361,783 over the estimate. The values of imports and exports for the past six financial years arc as under:

Customs and excise duties (other than beer duty) for the current financial year are estimated to produce £7,350,000. The Customs tariff of 1921, since modified to some extent, is, on the whole, working smoothly. The operation of the preference provisions docs not work out as favourably to British manufacturers as was anticipated, owing to the fact.that if only 25 per cent, of the factory or works cost of an article is due to expenditure on British material and labour, it, qualifies for preference, even though 75 per cent, of the cost, may be of foreign origin. A proposal increasing the preference from 25 to 50 per cent, is under con sideration.

The embargo against, the importation of goods from Germany has been removed, In the year 1923 such imports were valued at £68,915, being 0.16 per cent, of total imports. During the first three months of 1924, German goods imported were valued rtf £47,009, equal to .4 per cent, of total imports during that, period. INLAND REVENUE DEPARTMENT. Compared with 1922-23 land tax receipts decreased by £115,040, viz., 192223 £1,541,502, 1923-24 £1,426,462; decrease £115,040. This decrease represents a portion of the anticipated reduction in revenue following the removal of the super tax, the balance being compensated for by the increased value of land in some of the districts revised under the provisions of the Valuation of Laud Act and the collection of a considerable amount of arrears of tax.

The income tax receipts compared y e:u ' show a decrease of £50,400, the figures for fhe respective years being: 1922-23 £3 831 1923-24, £3,781,532; decrease, £50,400. Tins decrease is due to the reduction of 20 per cent, made in the rates of tax. It was expected, however, that the decrease would have been much greater, but the augmented incomes of taxpayers generally as a result of improved conditions furnished a compensating factor. The net revenue collected under the Stamp Duties, Death Duties, and Amusement Tax Acts hvas £3,343.781. ihe estimated receipts for the current year are £3,310,800. ■.RAILWAYS. Tiie gross receipts from the working railways amounted to £6.984.211. an moieasc oi £256,409 on the previous year s figures. The working expenses amounted to £'5,403,766. The net revenue is therefore £1,580.445, which amount represents a return of .£3 16s 6d per cent on the capital cost. The amount tell short of .the estimate by £15,<89, due principally to the miners’ strike at Westpo-rt during the period September to January. The improvement in the financial ifositioii is the outcome of the savings effected during t?ie yea.r, but the. need for exorcising rigid economy still remains. It is still necessary io he conservative in the matter of estimating the revenue for the ensuing year, which I place at £<,100,000, and the expenditure at £6,050,000. POST AND TELEGRAPH DEPARTMENT. The revenue of the Department during the. year was £2.681.240. The principal items were : Postages, £1,032.347: telegrams, £700.329; and ’ telephone exchange receipts. £825,178. Excluding interest charges on capital, the expenditure totalled £2,117.952' Deposits in the Post Office Savings Bank amounted to £29,598,372. and withdrawals to £29.510.321—an excess of deposits over withdrawals aorminting to £88.051. The amount m the credit of 710,157 depositors al March 31. excluding interest for the* year, was £41,448,444. Money-orders' and postal notes to the total value of £5,230,485 were issued, and the payment on the same account amounted to £4,853,224.

| War loan certificates redeemed during the year amounted to £1,293,705, making total redemptions to date of £4,642,779. Apart from the provision for statutory, increases in salaries to lower-paid officers, the estimated expenditure for 1924-25. is practically the same as that voted last year. The following table shows the staff employed at the end of the financial year ns compared with that employed twelve months earlier -.—-

Totals 8.574 9.003 The increased total is accounted for by the uriusiuu development in lelephon’eJins' construction, which necessitated the engagement of over six hundred additional men during the year. Jt material is available it is liKely that this casual staff will have to he further augmented to meet the many calls lor additional telephonic communication. W hen it is remembered that- the cost of concessions in postage brought about by the reductions effected .in February and October, 1923. was £600,000 per annum, there is a, cause for congratulation that the revenue from postages last year was only £257,149 less than that derived from the same source in the previous year. With a continuance oi prosperity this loss should.shortly disappear. An amended scale of charges in telephone rates was brought into operation on October 1 last, and the former method of collecting six months’ rental iii advance was reverted to. This alteration in the method of collection had the effect of inflating the revenue for the financial year, a sum of £825.178 being received, as compared with £595,967 during the previous twelve months, hut of this amount £149.000 has. to be earned in the current year. Although the present charges are moderate, they are designed to earn interest on the capital outlay- , ~

During the year it was decided to abolish, as from April 1, 1924, the tax of 2d imposed since 1915 on all cable messages forwarded from New Zealand. The concession to the public in this instance amounts to approximately £220() per annum. ' EDUCATION. The total expenditure has grown from £1,233,328 in 1911-12 to £3,271,781 in 1923-24, or an increase of 166 per cent., whilst the total cost of education for the current year is estimated at £3,351,000. In 1911 the average salary for an adult primary school teacher was only £l6O, but the salaries were increased by the 1914 Act, and ";ere subsequently further increased until the average now is £268, or 67 per cent, higher. In the secondary scale the average salary of principals in 1911 was £464, an dthat of assistants only £204. First by increasing the capitation grant, and afterwards by providing a Dominion scale of salaries, these averages were increased to £636 and £315. while similar provision has been made for improving the salaries of technical teachers. "While it is a matter for satisfaction that the number of children taking post-primary courses in Pur high schools is thus increasing, it is a question whether the present system does not tend rather to induce young people to follow a .line of education and training that hafc a bias towards the professional and clerical, to the disadvantage of practical agricultural and industrial pursuits; and the Department is giving its attention to this oroblem with the view of evolving a provision which should give a sound post-primary education to the pupils who.do not go on to the university or the professions. The largo sum of £1,993,985 has been expended since 1918-19 in meeting the pressing demand for school -buildings, and suitable provision is being made for continued progress in this important connection. DEFENCE. The expenditure our of the Consolidated bund for defence, including ordnance services, aviation, ail'd the maintenance and training of the. Territorial Force, lor the year ended March 31, 1924, amounted to £348,632, qr £27,722 less than the amount appropriated. The expenditure on naval defence for the financial year ended March 31, 1924, amounted to £374,966. The estimates for the current year have* been framed with a view to continuing as far as possible the policy embarked on by the ’Dominion. The total net expenditure for the naval defence vote. 1924-25, is estimated at £330,465. The gross expenditure lirom vote “War expenses” during the venn- ended March .31. 1924, was £370,496. The balance of claims from the Imperial Shipping Liquidation for troop transport charges against New Zealand, amounting to £BOO,OOO net, was recently received. As the result of close examination, these were reduced to approximately £200,000, and a progress payment of £IOO,OOO was made iu March last. The balance is provided for in this year’s estimates. The War Expenses Account will be closed at the end of the present financial year.

Since December 31, 1922. the benefits under the Repatriation Act have been restricted to tubercular or other seriously disabled .soldiers. Financial assistance paid out to such men during the twelve month* ended March 31, 1924, amounted co £17,379. making the total moneys advanced to soldiers by the Repatriation Department £2,371 ,- 831, of which sum £1,956.674 was by way of loan. The collection of loans outstanding was transferred to the State Advances Office as from April 1, 1923, and the total repayments now amount to £1.412.973. being over 72 per cent, of the total loan advances. The complete transfer of this branch to the State Advances Office will he effected this year. . NATIVE TEE ST OFFICE, Last year 138 applications were dealt with, and 685.516 was advanced, making a total of £157.900 to date. It was found possible (hiring the year just ended to increase hv l nor cent, the rate of interest on moneys held on behalf of beneficiaries, and this has given general satisfaction. DISCHARGED SOLDIERS’ SETTLEMENT. From the inception of 5 the scheme of thet discharged soldiers settlement in 1915 to the end of the financial, year advances have boon made to 22.213 returne dsoldiors of £21,863,500. The receipts for the year amounted to £1,513,544. being the largest amount received to date in anv one year. Of this sum £792.268 represents repayment of advances, while receipts in respect of interest and sundries total £721,276. Arrears outstanding on interest and principal amount to £751,524, while the sum of £30.550 is outstanding as postponed instalments. The arrears of rent amount to £847.100. In 1923-24 loans were granted to 629 soldiers, amounting to v £585.300, of whie’n £391.100 was granted fa 507 soldiers lor the ereetion of dwellings. The amount of £194,200 was advanced, principally for new loans on Current Account, to 122 settlers to assist them in improving and stocking thei,- lands. The total expenditure for housing, including liabilities from 1922-23, was £571,000. A total of £1.196,400 was advanced to soldier r.ettlers during the year.

STATE A DYANCES OFFICE. The total capital of the Department is £24,483,525. . 7292 applicants received loans amounting to £6,205,686 in 1923-24. This constitutes a ieeord since the State Advances Act- was passed in 1894, and affords amide evidence of the assistance rendoied to settlers and workers. Tlio Amendment .net or last session nuxTiori.scd loans to workers on io £1250. and to settlers up to £.3500. The new business for tin* year was as follows: — Loans grunted to settlers, number 6194, amount .£5,416,987: loans granted to workers 3260. amount £2,204.410; loans granted io loeal authorities 194. mnouni £444,805; totals, 9648 loans granted, aboard £8,066.202. lor the purpose of assisting; borrowers to re-pay mortgages a considerable sum has been advanced. Since the month of October. 1922, loans have been granted to 3549 applicants, amounting to £3.584,205. The following advances were made for the three months ended June 37). 1924: —Settlers £561,350. workers £475,360. local authorities £69.925; total,' £1,106.635. GOVERNMENT INSURANCE DEPARTMENT. Life branch new business amounted to £1.581,7 22, and the number of policies in force at December 31, 1923, wa> 60,545. representing a total insurance with bonus additions of £17,906,612. The total income was £814.638, and the excess of income, over expenditure is the largest in the history of the Department, amounting to £223,872. At the end of the-year the Life Fund stood at £6.222,484. A good year was also expei ieneed by the Accident Branch. 3no premium income was £35,267. being an increase of £1920 over the previous year, and the net income £6207, afteir deducting taxes, establishes a record. Notwithstanding the fact that the claims have been heavier than usual, the funds itavci increased by £BO2O. 'Lite Statutory Reserve' Fund is now £115,020, and the Accident Funds amount to £29,039. ‘ NATIVE. During- the year 29,560 acres of Native land were purchased for the Crown at a cost of £206,385. The gross area of Native land acquired by Crown purchase since 1910 is 1,328,283 acres, for which £3,218,576 was paid. The receipts by the Native Land Courts and Maori Land Boards for fees and commission totalled £16,009, as against £13,913 for the previous year. PUBLIC TRUST OFFICE.

The value of estates and funds actually under the control of the PublicTrustee on March 31, 1924, was £32,404,724. This represents ail increase of £3,499.926 for the financial year. The new estates accepted for administration during the year numbered 2739, with assets of a total value of £3,781,155. The administration of 478 of these new estates was completed before March 31, 1924, while 1574 others were also closed —the total value being £1,108,254. The investments held on March 31. 1924, on behalf of the Common Fund and on behalf of estates and funds, the moneys, of which are speciallyjnveisted, amounted to £19,895,285. Of idiis amount the total advances made during the vear amounted to £2,198,185; AGRICULTURE. The dry summer to some extent reduced the" production of grass, cereals, and fodder crops, and as a consequence the output was somewhat afiected, but nevertheless the, total value of the dairy produce of all kinds exported during the year was well ahead of that for the previous year, the respective figures being £18,576,474 and +; 16,207,053. The importance to the country of the dairy industry is well illustrated bv the fact of its exportable surplus being valued at over 18V millions sterling. The declared value of the wool exported was £15.265,264, art compared with £11,955,567 for the juevious period. It is very satisfactory to record a substantial increase in the number of cattle and shiesi in the Dominion, and also an addition to the nnrnbec- o’f pigs. In eatlle the increase is almost wholly in the dairy classes, and in sheep largely in the breeding ewes, and in both these directions a further increase may be expected. Lamb and mutton have realised very

'satisfactory prices"during the year, especially lamb, and the prospects for a continuance of good returns a.ve encouraging. The need of maintaining xir exr.ort meat at the best standard of quality must, never he lost sight of. Giving to a. reduction in the a.ieas sown, and to unfavourable weather conditions during the glowing |>orio(l. it will, be necessary to import wheat and oats to l lie; value of £1,250,(100 before next season’s harvest is ready. The prospects of the pastoral, agricultural, and horticultural industries oi' the Dominion were never better than at present, and this, in conjunction with the high degree of intelligence and industry for which our rural population is noted, give very substantial ground for confidence in the future ot the Dominion.

For the purpose of providing young men who intend to follow agricultural and pastoral pursuits with better opportunities for acquiring up-to-date and scientific knowledge, by which production may be increased, it is intended to give Government support and assistance to the establishment of at least one and later on possibly two agricultural colleges under trained competent instructors. The necessary equipment will be provided to enable onir farmers to compete successfully with other countries which arc apparently endeavouring even now to capture the markets of the world so far as agricultural and pastoral products are concerned. AVAR 'PENSIONS. The total of the actual payments made in respect of war pensions to lie 31st March. 1921. is £ 10,139.990. SURER ANN FAT lON. The subsidies and coninbui ions ol the three funds lor the year were afollows : ('..niiiti. I.y Suijsiili.-.-s ••iiij>l..y!M'.~. £ £

Since the inauguration of the three funds the State has paid in subsidies £2,100,000, while the-employees’ contributions during the same period amounted * to £5.000.000. The roOuirements for the current year are: Public Service fund. £136,000; railways, £170.000; teachers’. £69,000; total. £371,000. COST OF LIVING BONUS TO ANNUITANTS. The on>t of living bonus to public service annuitants in receipt of less than £IOO per annum involved an expenditure in 1923-24 of £40,019, and you will be asked to make --imilnr provision this year. The present bonus payment, of £l3 to widows in addition to the annuity of £lB per annum, and also the additional £l3 for each child, is being made permanent. national provident fund. The membership of the fund at the 31 st December was 2.3.200, the contribution income £143,000. the State subsidy on contributions £36,430, and

the accumulated fund £980.000 an increase of £190,000. LAND SETTLEMENT.

Approximately 350,636 ac-re.s, subdivided in 977 holdings, and comprising practically every class of land, were opened ior selection during the pa_st year; whilst, excluding miscellaneous leases, approximately 459.'289 acres of (.Town, settlement, and national endowment lands and reserves, subdivided into 942 sections, were laken up during the same period. The miscellaneous leases issued during the -.same period numbered 1148 holdings, comprising an area of 59.190 acres. At the present time there is an area of some 508,000 acres available for settlement. Some 1*2.087 acres were set apart for selection by discharged soldiers during the year. The policy is now, however, to open practically all lands for general application. Proclamations were issued during the year revoking the setting apart for discharged soldiers of an area of 64.044 acres in order that the lands could lib so reofferod. DEPARTMENT OF HEALTH. The subsidies payable to hospital boards for 1923-24 were £415.126, the actual amount paid being £412.945. It is estimated that an appropriation of •6510.000 will be required for the vear 1924-25. MINING. The value of the minerals, other than kauri gum and coal, produced during 1923 was £1,118,412, as against £903,259 for the previous year, an ineiease of £215,153, principally due to the increase of £162,182 in the production of gold and silver bullion. The quantity ol coal produced during 1923 was _L969,834 tons, an advance of 112.0L5 tons over the production of the previous year. In the past year 8678 persons were employed in "the metal mines, coal mines, and stone quarries of the Dominion, an increase of 648 over the number employed during the year 1922. The output of coal from the State collieries for 1923 was 151.403 tons, as against 123,531 tons for 1922, an increase of 27,872 tons. The greater paid of this increase is from the James State Mine, which has now reached the p.oductive stage. The indications are that the State coal mines accounts will show a satisfactory profit. PUBLIC DEBT. In 1922-23 the net debt showed a decrease of £1,324,923, .notwithstanding the fact that £5,234,818 had been borrowed and expended for public works and other purposes. I have pleasure in recording that the operations of the year 1923-24 disclose a somewhat similar result. The sum of £2.679,450 was loaned out of thp accumulated surpluses and other accounts to the State Advances Office, and as the securities issued by that office are charged against the debt a nominal increase is therefore disclosed by the accounts. If, however, this amount is excluded the gross debt shows a. decrease of £16,413, added to which sinking fund contributions and accretions amounting to £1,094,772 reduce the net debt by £1.111,185./ although £4,600,000 was borrowed for works and settlement purposes. The debt operations for the year 1923-24 may be summarised thus; Gross debt, 31st March, 1924, £221,616.361; accrued sinking fund, £12,974.028; net debt at 31st March, 1924, £208.642,333; less amount borrowed for State advances, £2,679.450; net debt at 3lst March, 1924, £205.962,883; net debt ■at aiist -Mar/ch, '1923, £207„.074,068'; decrease in net debt for 1923-24, excluding amount borrowed for State advances purposes, £1.111,185.

The amount raised for all purposes, including redemptions, totalled £15.264.502, loans aggregating £12,601,465 being redeemed, £4,656.055 being provided hv cash and £7.944,510 by the i.ssim of fresh debentures.

The loans which matured during the year amounted to £13.570,015? to which must he. added £5560 matured loans for which debentures had not been presented up to 31-t March, 1923. making a total of £13,575.575. Of *his sum, securities amounting to £7. 1 73.675 were redeemed (not ineluding redemption of funded Imperial debt), and £6.397,965 renewed at ’“itcs of interest varying from 4 to 5 per cent., leaving £3035 unpresmited. In addition to the redemption of securities at maturity £7,173.075, other securities totalling £5,427,Tf *o vf>rp redeemed, making a total of £12.601.465 paid off from the loans redemption account and surplus revenue.

The e-mss annual charge at March 31 19 y !, was £8.557.197. By the purchase of free of incometax securities, the application of capital repayments to redemption purposes. and Imperial del 4: repayments t-.v,0 phi, ivar debt thus shows a retluot’en du>iug tlm past, three years of 66 279.673. The reductions represent a- de-rea'-e in the annuel interest and sinking fund charges of £160.276. PUBLIC,' DEBT EXTINCTION.

The cost of the public debt is an outstanding problem in every country, especially in those that have war debts, the charges and repayment of which must he met out of revenue. A reduction in the charges of the debt lightens the annual burden and should he coincident with a reduction in taxation. In Great Britain since the Armistice there have been some very substantial surpluses—,vi v. . £ls 700 - 000 in 1921-22. ' £101.500.000 in 1922-23. and £ 1X.000.000 in 1923-24. The British Government: has steadily ••idheieil to the application vl' surpluses for debt reduction. 7\Cw Zealand being in process of development., and therefore a borrowing country, the G'overmi.eui I bought it heller to use tlie surpluses lor revenue earning purposes in the wav of development rather Ilian for reduction of debt. It is intended to proceed will) the Public Delil Extinction Bill introduced last session, lint, which was. in view of the great importance of (lie proposals it contained, licit! over in afford honourable members ample* opportunity to make themselves thoroughly familiar with-- its provisions. The' Bill proposes to substitute a regular and definite programme for reducing the public debt instead of continuing to pile up an asset of funds which is not readily available, and which eventually may occasion financial embarrassment. The safe keeping of the* accrued sinking funds is adequately provided for. They will he preserved intact, hut the interest thov earn is to he added to other funds available for nuhiie iHp reduction, and will he applied to that purpose and uo other. LOANS FALLING DT E. Loans falling due during the seven years ending with the year 1931, ex. eluding Imperial debt repayments total: 1925, £11.891.567;' 1946 £11.213.296; 1927. £1.617.186: 1928’ £6.271.91 6- £1929. £9.318.485 • 1930 £35.639,633; 1931. £7 7 £) B 370 £39,716,687. ' ' BANK OF NEW ZEALAND. Tne following dividends were re. eoived from the Bank of New Zealand

during the year 1923-24: Preference “A” shares (£500,000), £50.000; Preference “B” shares (£625,000) £02.500—£112,500. PUBLIC SERVICE. For some time oast the question of generally extending the fortnightly payment of salaries and wages of State employees- to the whole or the Public Service has been under consideration. T.t. has now been decided to generally adopt the bi-monthly system, a concession which will doubtless be appreciated by the lower-salaried employees. STORES CONTROL .BOARD. The total expenditure on stores for the year was, in round figures, £4,080,000. EXCHANGES.

The present cost of transferring money from the United Kingdom to New Zealand is tending to create social and economic difficulties, particularly affecting our producers, who are subject to a heavy impost by the high ‘‘selling” rate in London. The set-off in the shape of an easy “buying” rate is of doubtful utility, as it tends to' encourage over-importing and to have a detrimental effect unou our secondary industries. The matter of exchange was considered at the recent Imperial Conference, when the highest experts examined proposals for surmounting the difficulties. The danger of adopting palliatives that, however advantageous they may he temporarily, might lead to other anomalies, was recognised-, and the conference adopted the suggestion that the respective* countries ** should establish central or federal banks. and by clearing and co-oneration bring about an easing of the* position. The traders in Great Britain have recently taken the matter up again, and I shail he glad to assist in any step that will lead to an exploration by the Governments concerned a-s to' the actual causes of the abnormal position now obtaining, upon which experts do not seem to agree. The Imperial Economic Conference adopted and endorsed the following resolution submitted to them hv the committee on inter-imperial exchanges; “That, arising as thev do from the suspension of an effective gold standard, the difficulties of interllmperial exchanges will disappear when the currencies o.f Great Britain and the Dominions affected are again made eonvertihle into gold.” THE MORATORIUM.

The effects of the post-war boom have not entirely disappeared. A number of people who bought land at prices beyond its .value and left a very large proportion of the purchase money on mortgage find, now that prices of'most of the primary products have fallen somewhat serious difficulties in paying their way and making ends meet. The problem of enabling such people to regain their financial stability is one not easy of solution though in many deserving cases where the mortgagor is an indus“ trious and energetic man, mortgagees have met the difficulty by accenting a share of the responsibility .and writing off part of the indebtedness. This is the proper thing to do. Unfortunately there are sometimes faults ‘on both sides, and it becomes impossible to make any arrangement to‘which both parties will agree. The Government has as' .;. tee. and will assist struggling settlers wherever it is possible to do so. but it cannot encourage breaches of agreements lawfully entered into, there is some satisfaction, however in knowing that these difficulties 'are gradually adjusting themselves, and that on the whole production is heino 'veil maintained. The legislation just introduced mH, if passed, have the effect that the mortgagor may go to the Supieme Court, and, where he is able to move to the satisfaction of,the Judge in Chambers that actual hardship will otherwise ensue, the Court will be empowered to grant a limited extension. Otherwise the moratorium will be lifted as from January 1, 1925. REDUCTION IN TAXATION.

r W hc question of taxation has continued to receive careful and detailed consideration. In pursuance of the policy the Government has adopted of gradually reducing taxation as conditions permitted., you will again he asked to approve of further remissions Jhese will be adjusted in such a manner as to give the greatest relief to all classes of the community, and, at'the same time, to stimulate the productive powers of the Dominion. On the present basis of taxation the revenue for the current year would probably produce =£28,807,620. whilst the expenditure is estimated at £27,1)05.060, leaving a credit balance of £1,352,560 The remissions granted last year are valued at £1,200.000, and this (ear. after providing for interest and debt reduction charges, as well as for the efficient and economical administration of departments and services, I hone to he able to ask Parliament to reduce the burden of taxation by about £1,000.000, particulars of which will be supplied in the legislation dealing with the subject. I must, however, again remind those who. mdiherent as to cost and unable to say Avhere the money is to come from, clamour in one voice for increased expenditure and a reduction in taxation that they cannot have both. 1 Quite recognise that, as the population grows and the national wealth * increases the expenses of Government, no matter how economically administered, must expand, but that expansion must not be greater than the increase in income, ihere should lie a sufficient margin to ensure safe finance and to provide s some contribution towards reducing the dead weight of our Avar debt—one of the host means of easing the taxpayer. PROGRESS OF TFIF DOMINION. It is now opportune to .review the decade that has just passed, and note the progress made by the Dominion. The period covers the Groat War, <m account of Avhich, both during 5 its continuance and since, the Dominion has passed through greater economic difficulties than ever before hi its history. During the period the population has increased by 18 per cent. The total trade, which per head of population is L'iie highest in the world, increased by £50,271,277, or 110 per cent. The total exports for the vear ended March 31 19bl, wore £23.471.246. but for the year ended March 3], 1924. they were no less than £51,652,606 —an increase of £28,181,360, or 120 per cent. These figures are a tribute to the productivity of Now Zealand, and also an indication of the increasing prosperity of its people. The .solicitude of the Government is borne out by the greatly increased social services afforded, as evidenced by the expenditure for education and public health, and in free pensions. The salaries and Avngos of public employees have increased'" from an average of £162.40 to £245.744. New Zealand has led in the reintrotiuciion of the penny post, and increased facilities are being provided for every section through the Post and Telegraph Department. There are uoav 4174 more miles of telegraph and telephone lilies than in 1914, being an increase of 27 per cent during the period, and telegraph and telephone wire used increased by 156.990 miles, or 127 per cent. In 1914 there Avere 37,486 telephone subscribers, as compared Avith 85.031 in 1924, an increase of 47.545. or 127 per cent.

Toe progressive policy pursued in opening up the country and improving the means of communication is confirmed bv the expenditure on roads and bridges, which in 1914 was £353.836, iihile in 1924 it was £749.737, beino- an increase of £395,901, or 112 per cent. During the decade 229 miles of water-races for irrigation purposes have been constructed, representing an increase of 276 per pent on that’in existence in 1914. The area of swamp land diamed through the Government drain- ~" as illf 'i'based from 4_,—o to 180,335 acres, represent! lie an addition during the period of 138,115 acres, or 327 per cent.

BRITISH EMPIRE EXHIBITION. The British Empire Exhibition at Wembley which was opened in May last by His Majesty the King, affords sti iking proof of the Empire’s capacity to become self-supporting without recourse to foreign countries. Some disappointment has been expressed with the exhibits in the New Zealand court: apparently the exhibition was opened lief ore the buildings were completed and before all the Dominion’s exhibits had arrived. Great improvements have since been effected in our court, and recent visitors have expressed themselves very favourably. especially with regard to the excellence of the display of refrigerated products. The New Zealand court is now thoroughly representative of our most important industries, and honourable members can rest assured that no effort is being spared to see that the New Zealand display is u oi-thy of the Dominion.” CONCLUSION.

Many suggestions have been made with regard to borrowing a large sum of money for mortgage purposes. It is my duty to point out that this is a matter about which we require to be ieiy caieiul if we are to maintain our credit in London. The credit of New Zealand stands high at present but any appearance of recklessness of extravagance in finance would have a- very bad effect, and must he avoided bv every means possible. Development is going on steadily, and otir producers have done wonders during the last two years. Their industry anti energy have made New Zealand the most prosperous country in the British Empire, Imt there are still enormous possibilities in tiont of us new land to be brought into cultivation, and that which is alieady cultivated to be made more productive still. Science has done much for the primary industries, but I believe it will do a great deal more in the future. I want particularly to strike a warning note about overborrowing, and in doing so I admit that we cannot go oil developing without a certain amount of loan money. But it. has to be remembered that every million borrowed increases the annual charges upon the country, and in most cases the burdens' upon'the taxpayers. This is the case whether the monev is borrowed by the general Government or the local bodies; the effect is the same. Care should be taken, therefore, to see that borrowed monev should as far a s possible, be used only for’re-venue-earning purposes. Thi' s i s the policy which the Government has folowed since the end of the war—that of budding up against the public debt a collection of assets which will go a loiig way towards providing the interest and sinking fund on the borrowed millions • an “ J ■ am glad to be able to say that ooth the values and the earning power of these assets are steadily increasing. I hat the operations of countries borrowing are very closely watched by the financial authorities in London is quite evident from what took place quite recently, when a British country asked for a fairly large loan at what seemed a reasonable rate of interest, and the underwriters were left with per cent, of the proposed amount' °n their hands. Our credit is a most valuable asset, and it requires to be safeguarded accordingly. This year’s operations are a proof of die industry and energy of the people of New Zealand, especially of it s produceis. Economy and seli -reliance are qualities that should be encouraged and must be observed if the character of the people is to be maintained and the country is to prosper as wo hope and oelieve it. will. We are now in a fairly good position. With proper management we should be able to retain our piosperitv and keep develonment «omg tor a long time to come. What we have to avoid is an era of extravagnnee, ol which there are already indications ; hut I hope the good sense of the great mass of the people will he used to prevent any possibility of the earnings of the community being squa ll dored for umiecessary purposes.

Imports Exports £ £ 1918-19 26,437,284 32,263,792 1919-20 .. 32,162,029 50,776,650 1920-21 67,463,269 48,219,672 1921-22 35,986,060 43,794,883 1922-2?. 37,112,779 45,548,700 1923-24 44,401,756 51,652,606

1923. 192-1. Permanent staff 7,512 7,310 Temporary start 395 117 Casual staff 637 1.246

Public Service .. ... 13(5.000 228.000 Teachers ... 68.000 102.000 Pnilwavs ... V2o,000 133.000 £320.000 £463.000