DOMINION’S FINANCE

Hawera Star, Volume XLV, 13 October 1925, Page 5

DOMINION’S FINANCE

A GREAT RECOVERY.

THE COUNTRY PROSPEROUS. PRIME MINISTER’S REVIEW. . (BY -TELEGRAPH: —PRESS ASSOCIATION.) INVERCARGILL, Oct. 12. The Prime Minister, the Hon. J. G. Coates, devoted a portion of his address to-night to the discussion of the Dominion’s financial position. '‘The Dominion has made a great recovery from the post-war conditions,” said Mr. Coates. 1 “Since 1921-22 avo have not only balanced our Budgets by, savings and economies, but surpluses have been available for capital expenditure and debt reduction. As regards trade and banking, in 1920, after a period of prosperity, the bank deposits were very high and exceeded the advances and discounts by approximately £20,000,000. The set-back in 1920-21 rapidly reversed this, as in June, 1921, there Avas an excess of advances and discounts over deposits of nearly £9,000,000. From then on the position has steadily improved, as in 1925 the deposits held were £6,000,000 in excess of the advances and discounts. Thus the. Dominion’s position has steadily improved by about £1,500,000 compared Avith 1921.

“These results have been much assisted by public economies and reductions in taxation. The same change is evidenced in the trade returns.. For 1920 the excess of imports over exports was £19,000,000. For the four following years the exports showed a total excess of £28,000,000. FINANCIAL. “With the passing of the yearg, and! more particularly as the result of the big increase in wages and the cost of material, the expenditure of the Departments of State has practically doubled within the last ten years. It has been alleged against us that much of the increased cost of administration is due to extravagance on the part of the Government. Those bringing, that charge never fairly state the situation, and if the facts are properly analysed it wiH be seen that there is really very little to complain of when the heavy charges necessitated by the war are taken into account. “The facts, briefly stated, are these: In 1905-6 the departmental expenditure amounted - to a little over £4,252,233. In 1914-15 it had increased to £7,874,626, and for the last financial year these annual appropriations totalled £14,760,693. In considering these figures it has to he remembered that they are . accompanied by considerable increases in revenue derived from the earning Departments of State. Thus in 1905-6, Avhen the expenditure on Government raihvays amounted to £1,621,239, the revenue totalled £2,349,604, ' and in 1914-15 the expenditure had advanced to £2,920,455 and the revenue totalled £4,105,456. In 1924-25, with a -revenue of £7,105,106, the expenditure had risen to £5,636,583.- Comparison of the figures for the years stated shows, that revenue and expenditure bear very much the same relationship to one another all through. “Taking the Post and Telegraphs in l the same Avay, the receipts and expenditure, ywhich in the earlier years more nearly balanced one another than! they do to-day and yvere then in the neighbourhood of a little over a million, bear very much the same relationship. Payments in 1914-15 amounted to £1,246>?. 850 and receipts to £1,359,059. Lasfi > year receipts amounted to £2,889,450, and! expenditure tc £2,416,257. .. - THE ACTUAL. POSITION. .V"

Excluding payments in respect of the public debt and those made under permanent appropriations under Acths of Parliament, such as pensions and subsidies, etc., the increased expenditure pn account of the several Deipartmenits-jof Skate “ at March 31 last amounts to £6,886,063. Of that increase railways and post and telegraph account for, £5,354,058, so that the increase over> the other departments only amounts to £1,532,005. If the education vote is taken into account, the total increase is more than accounted for. “Part of the increased cost of 'ad-C ministration is due to increased wages paid throughout the Public Service and increased cast of material, amounting to from 50 to 60 per cent, in the former case and anything from 100 up to 500 per cent in the case of the latter. “Between 1914-15 and 1905-6 the increased expenditure of the departments amounted to approximately 80 .per cent of the expenditure in the latter year. If we make a deduction in respect of increased prices and wages, the actual increase in 1924-25 over 1914-15 only amounts to 10 per cent., allowing one-, third reduction in respect of these increased costs. COMPARISON WITH AUSTRALIA. , “Another, ana probably a better, test may be applied to our increased 1 expenditure by contrasting the increases in several States of Australia and the Commonwealth -with our New Zealand increase. During the last five years available period, that is, between 1919-20 and 1923-24, the Australian increase amounted t0'£38,573,38Q against the New Zealand increase of £2,366,481. The cost of .several departments in Australia is divided up between the States and the Commonwealth. Government, the Commonwealth having charge and bearing .the cost of .post and telegraph, Customs, marine, defence, and external affairs. Taking the Commonwealth’s expenditure into account with that 'of the States on a population increase of 8.5 per cent., the, Australian expenditure has increased by 33 1-3 per cent, in the five years, the per capita increase being £6 12s Bd. New Zealand, with a population increase of 8.8 in expenditure and a per capita increase o f £1 18s 4d.

“Taking the expenditure of the several States apart from that of the Commonwealth, each of the States shows a greater increase per head of population than New Zealand.” IAXATION

Dealing with taxation, Mr. Coates ... said: “Without the application of control oyer expenditure and the check on the soending power created during the war* the Government could nothave carried out the taxation reduction policy, however much it falls short of what some people would like. In 1920-21 direct taxation in New Zea. _ land was £lO 14s ,3d and indirect £7 0s Id per head, a total of £l7 4s 4d. In 1924-25 direct taxation per capita was £5 17s Id and indirect £6 6s 4d, or a total of £l2 3s 5d per head, which represents a reduction of £5 10s lid. It must not be overlooked that 1925 figures for indirect taxation include the amount of the tyre tax and motor - registration fees,, which is applied directly to the maintenance of main highways. Part of this tax, 5s 6d. is a purely nominal incirea|6e 'in' that motor registration fees were formerly collected by local authorities.

“So far as general purposes are concerned the reduction in taxation during the last four y*»r» is £5 Ids 6d.“