PUBLIC ACCOUNTS

Hawera Star, Volume LIII, 10 November 1933, Page 5

PUBLIC ACCOUNTS

REVENUE AND EXPENDITURE SOME ECONOMIES EFFECTED. BUOYANCY OF REVENUE. ABOVE EXPECTATIONS. (By Telegraph—Press Association.) WELLINGTON, Nov. 9. “When the year opened the country was confronted .with a prospective budgetary shortage estimated at £8,300,000,” said the Minister of Finance, the Rt. Hon. J. G. Coates, in his Budget statement to-night. “The remedial measures adopted, mainly the use of reserves and further economies in expenditure, together with an improved outlook for the revenue .by the time the Budget was ibrought down, were calculated to reduce the deficit to within £1,000,000. “For the first time for several years the revenue exceeded expectations (by a substantial amount (£938,000), while as a result of rigorous control of expenditure a net saving of £112,000 was effected, notwithstanding that an unexpected item of £470,00.0 for purchase of surplus exchange was included in the accounts. The net result was a small surplus of £40,000. Having regard to the position when the year opened, it will, I think, be agreed that this result is very satisfactory indeed.

REVENUE EXCEEDS ESTIMATE. “The revenue received during the year amounted to £22,568,521,_ comprising taxation receipts £15,605,206, interest £2,641,710, and other department receipts £1,821,605, whilst £2,500,000 was drawn from reserves,, the Bank of New Zealand and National Bank of New Zealand Ltd. assisting by liquidating reserves invested in discharged soldiers’ settlement mortgages (by advancing against hypothecation of the securities.

■‘“•The total revenue from taxation exceeded 'the Budget estimate by £BOO,OOO, the .principal items in excess being 'Customs duties £431,000, income tax £156,000, stamp and death duties £99,000 and motor vehicles duties, etc., £70,000. In fact, with two minor exceptions every item of taxation exceeded the estimate, and the aggregate amount received was greater than for 1931-32, apart from the yield from the additional taxation imposed during the concluding'" months primarily for the benefit of this year’s Budget.

This appears to indicate fairly conclusively that m general we have at last come to the end of the constant, heavy shrinkages in revenue that have been such a disturbing factor in budgeting since the depression descended upon us.

“Under interest receipts the only important. variation afists out of the improved position of the net railway revenue, which exceeded the estimate tby £110,006. This is concrete evidence of an improving tendency in the finances of this important branch of the Dominion’s transport services. Little variation is evident in respect to other departmental receipts with the exception of registration and other fees, which yielded some £37,000 in excess of what might reasonably have been expected under current economic conditions.

(SAVING IN EXPENDITURE. “The net expenditure for the year totalled £22,528,379, against an estimate of £22,640,952, a net saving of £112,573. As already indicattd, however, the expenditure included £470,000 for purchase of surplus exchange, which was not allowed for when the estimates were prepared. ' TI V IS savings in other items totalled. xOo-i," 573. Having regard to the fact that the estimates were carefmiy pruned and gave effect to most of the recommendations of the National Expenditure Commission, the saving of this additional amount was no mean achievement. 'lt is the result of the whole-hearted co-operation -of all Ministers and their departments to reduce expenditure to an absolute minimum consistent with the maintenance .of efficiency in their respective organisations. ■“The year’s operations may be summarised as follows: —

Expenditure. Permanent appropriations — Debt services . £9,890,015 Other services 2,303,193 Annual appropriations — .Social services *6,797, 213 Other votes .. 3,537,958 ■ £22,025,379 Revenue. Taxation 15,605,206 Interest 2,641,710 Other receipts . 1,821,605 Prom reserves . 2,500,000 Total revenue (Surplus ... £40,142 “The published accounts show that Treasury bills issued under the Public revenues Act to meet cash requirements during the ycan amounted to £22,974,406, including issues in renewal. The total accommodation received, however, was £6,060,000, of which £3,700,000 was obtained from the banks and £2,360,000 from Government accounts and the public. The balance consisted of issues in renewal of these bills and also of the £3,030,000 of bills outstanding on March 31, 1932. The bills issued had a currency not exceeding three months, and were discounted at rates ranging from 3 per cent, to 4 per cent, in the case of bills taken up by Government accounts and the public, and £5 8s 9d and 54 per cent, per annum in the case of bills issued to the banks. “In the aggregate £24,419,406 of revenue bills were paid off, the amount being £1,445,000 in excess of the issues during the year. The result "was that by March 31 last revenue bills outstanding had been reduced to £l,585,000, all of which were held by Government accounts.

BANKS’ INDEMNITY. “In addition to these revenue bills, transactions under the Banks Indemnity (Exchange) Act resulted in the issue of £2,858,034 19s 7d of bills to the banks, of which £477,697 19s 7d was repaid, leaving £2,380,337 outstanding on fMhrch 31. These 'bills, which were discounted at the rate of

£5 Ss 9d per cent, per annum, represented the purchase price of £1,910,000 of surplus London funds taken o\ er under the guarantee arrangements. “As a result, of all these operations, the floating debt as at March 31 last amounted to £3.965,337, as compared with £3,030,000 as at 'March 31, 1932, in increase of £935,337 for the year. “I may add that, although it does not form part of the public debt in the ordinary sense of the term, there is also the liability under the arrangements made for liquidation of reserves by the hypothecation of discharged soldier -settlement securities to two of the banks. This is a self-contained arrangement whereby the liability, incurred to secure immediate liquidation for the Consolidated Fund will be gradually repaid from the capital repayments received under the table mortgages in which the reserves are invested. The amount of the liability in question is £,250,000, the balance (£250,000) of the amount utilised by the Consolidated Fund being drawn directly from repayment of mortgages. “Apart from the operations affeetVng the floating debt which I have just explained, there was a net reduction in the amount of the public debt during the vear of £255,179. Additional long term debt to the amount of £2,506,256 was raised in New Zealand and £0,000,000 in London for the following purposes: — Capital expenditure—- . Public works (including hydroelectric supply) £1,146,661 Land for settle- - merits 250,000 - Native land settlement 191,000 State forests .... 170,000 Redemptions of dent 5,748,598 - —.- £7,506,256 “To provide the funds for carrying on a limited programme of public works and land development during, the current year the. Government .is offering stock and debentures bearing interest at 3£ per cent., .to mature on November 15, 1941.”