NET SURPLUS OF £72,142.

New Zealand Herald, Volume LII, Issue 16007, 27 August 1915, Page 4

NET SURPLUS OF £72,142.

DECREASES IN REVENUE.

RAILWAYS AND CUSTOMS.

HEAVY ADDITIONAL DUTIES. [BY TELEGKAFH. — special roitiu.sro.vm.NT ] Wellington*, Thursday. The Financial Statement points out that the Budget delivered by Mr. Allen on August 6 last year w-as prepared and printed before tho outbreak of the war, and at that date it was not possible to forecast the effects which the war was likely to produce upon finances. Since then the conditions which ordinarily regulate the country's trade have been subjected to great disturbance, and the suit has been reflected in the Railway and Customs revenue, from both of which sources the returns for the year 1914 15 did not reach the estimate made in last year's Budget. On tho other hand, certain sources of internal revenue have shown a marked increase over the estimate, and the actual revenue for the year represents an excess of £219,186 over tho previous year's figures, while the total expenditure for the '■ year was less than the estimate by ; £1,84,748. | The result of the year's operations gives a net surplus of £72.142. The total credit balance in the Consolidated Fund at -March 31, 1915, was £149.047 ; but it is necessary to deduct tho balance carried forward from the previous year —£426.905. less £350,000 transferred to the Public Works Fund, or a net deduction of £76.905. The Government lias not only to face the pros[vect of a falling revenue, but has also to provide for heavy additional charges on the Consolidated Fund to meet the annual interest and sinking fund in connection with the war leans, war pensions, and similar obligations. It will be necessary to provide -moneys with which to carry on public works and other services in the Dominion, the interest and sinking-fund charges on which will further increase the annual expenditure out of the Consolidated Fund. Requirements of Dominion. Sir Joseph Ward classifies the requirements of the Dominion under the follow!'ng headings : —(a) Loans for war extenses; (b) loans for works contracted or: (c) loans for works in progress and xtensions ; (d) loans for works other than hose referred to under headings (t>) and <:) ; (e) loans for redemption purposes.

5 Up to March 31, the war cost New Zealand, roughly, £2.750.000, including ! liabilities outstanding at that date, and i the rate of expenditure necessarily in- j creases in proportion to the number of j men wo put into the field. Moneys required under headings (h) and (c) relate i chiefly to public works contracted for or j in progress, and some correspondence ' took place with the High Commissioner ' as to the possibility of raising funds in. j the open market in London for the pur- I poses named. The prices quoted seemed to indicate that no public-works loan could be floated except on terms which were not sufficiently favourable to tine Dominion, and the Government accordingly determined to utilise local funds to meet I present requirements. The amount of the j deposits in the Post Office Savings Rank has largely exceeded the amount of the withdrawals, thus providing a considerable amount of money for local needs. With respect to the heading (d)— loans for works other than those already referred to under headings (b) and (c)— the High j Commissioner advised the Government that ', loans for these works would not meet with | favour if placed on the London market. As. however, the amount required under j this heading was small, no inconvenience j resulted. With regard to heading (elloans necessary for the purpose of redeem- ] ing other loans which were maturing—Hir I Joseph Ward refers to the Budget of last session, in which it -was stated that during ' the period from July 1. 1913. to March 31. ' 1915, loans amounting to £10,129,665 I would mature, ana that no less than £8,727,700 would require to be redeemed by raising fresh loans. It was also men- j tioned that a sum of £5,194,600 had then j been borrowed, which would be sufficient | to redeem loans maturing ud to the end of November. 1914. Bv the end of November. 1914, £5,194,100 had been actually spent j in redemptions, leaving a balance of I £3,533,600. held outside of New Zealand, j fo. 1 which provision had to he made before | March 31, 1915. This balance has been provided for. j

Analysts of Revenue. The revenue for the year 1914-15 was I estimated at £12,488,370, and the total collections amounted to £12,443.525, or £44.845 less than the estimate. Details are as follows : — Receipts. Estimated. Actual. Revenue Account— £ £ Customs 3.300.000 3,167.283 Stump Mid death ch.ties ... ... 1.200. 1.417.207 Postal and telegraph 1,345.000 1.353.413 Land ta-: 795.000 790. Income tax 565.000 510.318 Beer duty 125.000 127,660 Railways ... ... 4.250.000 4,106.675 Registration and other fees ... 101.700 101.020 Marine 52.300 50,387 Miscellaneous ... 455.400 461,498 Territorial revenue 220,000 239.623 National endowment revenue ... ... 78.770 78.770 Totals £12.489.370 £12,4-13.525 Analysis of Expenditure. The expenditure fcr the year 1914-15 was estimated at £12,564.551 and the actual expenditure amounted to £12.379,303, or £184.710 less than the estimate. Details are as follows :— Expenditure- Estimated. Actual. Permanent Appropriate ns— £ £ Civil list 2-1.300 21,954 Interest and Sinking Fund . . 3.039.060 3.071.448 Under special Act? 526.31b 615,311 Subsidies local ant hunt ie<i 124.500 124,821 Territorial revenue 53.500 51,«?;> Endowments ... 183,270 173.9 IT, OUI-asc pensions... 441.3e9 436,765 Widows' per.'ions... 32.000 31.610 Miliary pensions . 40.000 17.607 X 1.181.326 £ 1.505,177 Annual Appropriations - l.einsl:it-.vo Departments ... ... 10.757 37.552 Finance Don! ... 201.851 170.131 lost, and Teleaiaph 1.210.634 1.211,569 Working Railways 3.031.504 2,831.087 Public Building, Domains, etc 122.360 117.676 Native Department 25.211 24,005 .1 iisti.-e Department 451.206 -112.178 Mines Department 36.168 29.170 Inlernnl Affairs . . 1*6.621 I*9 206 Defence Department 512.328 4.(9.137 Customs and Marino 172.277 119.200 Labour Department 28.878 _.k!i i ■' Land* and Survey 251.121 239.013 Agriculture. Industries, and Com- ,. merce 220.102 206 731 Education ... ... 1.255.871 1.207,98,! Services not provided ,or — 108.513 .£8.080.225 £7,874.626 Totals £12,564.551 £12,370,803 Result of Year's Operations. The results of the year's operations are thus summarised :—Receipts during vear: pS\ £12,443,525: other receipts. £8420- total. £12,451.945. Expenditure during year : Appropriations, £12.370.803 ; fiwTao 0t K r Ceip , S w« expenditure. Aw 2.142; balance brought forward April 1. 1914, £426.905: t0,.,,' £499,017: translev to lubhc Works Fund. £350.000: balance. March 31, 1915, £149 047 The cross public debt at the end of the financial year amounted to £100,059,910. and the net debt to £96 644 '55 On April 1 last there was a'cash balance

of £695,762 available for public works, and the balance of loan-money to be raised under then existing authorities amounted to £1.475,000, making a total of £2.170.762 with which to commence the current year.

Decline In Customs Revenue. The estimated Customs revenue for the financial year ended March 31. 1915, was £3,300.000. lnis •would doubtless have been realised but for the outbreak of the war, Sir Joseph Ward says, as the returns received up to the end of August exceeded the estimate to that date by £11,000. After August, however, a consistent de«*lir ■ in revenue took \A&< n . and the total f<>- the j ear was £3.167.255, or £132. <17 short of thi! estimate.

This condition of affairs was only to be fxpe<ted, as the war cut r.tf all trade with Germany. Austria, and Turkey, and reduced very greatly the trade with other Kuropean countries. This restriction is likely to continue until the war is ' - on- ' luile-J, and although there appears to be a tendency to go to new markets for some clissos of goodsthe United States and ■Japan, for example—this can only operate to a limited extent, as the great bulk of imports comes fiom the United Kingdom.

A comparison of the revenue received during the months of January. February, March. April, and May of 1915 with the same months of 1914 makes it, apparent that New Zealand must he prepared to face very much reduced receipts for the current financial vear. During the five 'norths mentioned the amount, realised Is £275.559 less than for the same period of last. year. The comparative figures showing values of imports and exports for the calendar years 1913 and 1914 are as follows :— 1913. • 1911 £ £ Imports ... 22.2F8.302 21 P.M> 006 Eioor'.s ... 22.a86.732 261261,447 The exports for the financial venrs 191314 and ICI4-15 were as follows:*— 1913-14. 1914-15. £ £ Exports ... 23.171.131 27,476,623 This great increase in exports is due to the exceptional prices obtained and to the larger quantities of goods exported. The figures are the highest ever recorded. Land and Income Tax Department. The net receipts for the past year in the Land and Income Tax Department amounted to £1.339.959, made up of : — Lain! tax, £799,641 ; income tax, £540.318; and. compared with the- figures of last year, show an increase of £18,236. Ihe land tax receipts for the financial year 191415 exceeded the estimate by £4640, and, compared with those for 1913- are. as follow :—Receipts, 1914-15, £790,641; receipts, 1913-14, £767.451, an incieaso of £32.190. The income tax receipts for 1914 15, as compared with lal3-14, are as follow :— 1914-15, £540.,318; 1913-14, £554.271, a decrease of £13,953. This decrease can be set down to two causes, the chief one being the strike, which materially disorganised the commercial industries of the Dominion ; while the additional exemption granted in respect of children under the age of 16 years is the other and lesser cause.

Post and Telegraph Department. The Post and Telegraph Department has closed another year with excellent results. The revenue received during the year amounted to £1,353.443, exceeding that of the previous year by £95,906. The savings bank deposits reached a total of £11,904,323, and the withdrawals £10,603,018, while the amount standing to the credit of depositors was £19,048,029, an increase of £1,916,615. The moneyorder and postal note business continues to show a steady increase, the total value of issues and sales respectively during the year reaching over £4,090,000. The telephone exchange business develops rapidly. The expansion of this business and its extension to the remoter country districts have involved an expenditure of £288.105 out of the appropriation for telegraph extension. The receipts from exchanges amounted to £303,856. Increased Expenditure on Education. A substantial increase is shown in the current year's estimates for education, apart from the increase naturally consequent on the expansion of population. This increase is in the main due to the further provisions that have been made for the stafim of the public primary schools and secondary schools, and for the higher rates of salary payable to the teachers employed. In the amount to be provided for the salaries of public school teachers an increase of £90,000, is shown, of which £30.000 may bo set down as the increase that would naturally have been made in the ordinary development under unamended conditions. » 1 he income of the teachers' superannuation fund during the year ended December 31, 1914, was £78,626, made up as follows : — Contributions of members, £49.309 ; interest on outstanding contributions, £519 : interest from Public Trustee, £11,798: Government subsidy, £17,000. The expenditure for the vear was £41.061. The value of the fund on December 31, 1914, was £302.701. as against £265.136 on December 31, 1913. an increase of £37,565. The number of i contributions increased from 4017 on ; December 31, 1913. to 4269 at the end of j 1914, an increase of 252. | The triennial examination of the fund has Keen made by the Government ! Actuary, who reports that, in addition I to the present Government contribution of £17.000 per annum, a further sum of '■ £16,000 will be reouired for each of the years 1916, 1917, and 1918.

Ordinary Revenue Atcount. The position of the ordinary revenue account for the first four months of the present financial year ended July 31 proximo, dhows that there has, by com- ! pari son with the corresponding period for the previous year, been an increase !of expenditure in all the annual appropriations except three, the increases j amounting to £303,839, and the decreases to £73.696- The effect of the war lias ; had much to do with the position disclosed. "'Tt rirst be apparent,'" says Sir I Jos. ph. Ward, "that such a heavy increase, for the four months referred to I clearly demonstrates that the times I through which we are passing have adi verselv affected the various Departments, ;«"nd that an adjustment must be made to ensure that these Departments are placed :in such a position that the revenue will , exceed the expenditure. It will also be I absolutely necessary for all Departments j that are not of a trading nature to bo considerably restricted so far as expanI sion of service is concerned, in order i that a closer relation to the financial needs of the country may be mainj tailed. The result of the four months' , financial operations of the present year ; gives the Government some concern, sin wing as it does an increase of expenditure over receipts for that period of i £307,982, and an increase of £350.000 of Tre.itMij-v bills in comparison with tho corresponding period of last year. A j Treasury statement showing approximately the expected position of the Consolidated Fund for the three months ending October 31 next estimates a de- ! liciency of £289.000 ; the accountant states, however, that it 'is difficult to estimate | the revenue owing to possible decreases.' { Willi this I agree ; and while I think I the balance of available Treasury bills ; may prove to be adequate to meet any 0 ntingencies that may arise, still I am i f opinion that as a. precautionary measure it- would be prudent to have authority to increase the Treasury bills for use either in New Zealand or England, and 1 will suornit proposals to that effect. It is unnecessary for me to inform honourable members tliat until the Empire is at peace again, and before the extra revenue from th© alterations I am' submitting is realised, circumstances may conceivably arise that would call for the temporary use of a larger issue of Treasury bills than the maximum amount now available. In normal I times nothing approaching the present ' amount would be needed. Tho inI creased facilities for inward steam tv>n- ! nago should materially help both the ] Customs and railway revenue, as it will result in increased imports, and, indeed, increased internal trade throughout the Dominion generally." " Wo have authority to issue £2.000.000 Treasury bills and have issued £1,200,000, leaving £800,000.