DOMINION FINANCE

New Zealand Times, Volume XLI, Issue 9248, 15 January 1916, Page 8

DOMINION FINANCE

THE PRESENT POSITION ARRANGEMENTS FOR WAR EXPENDITURE. RENEWAL OF LOANS. STATEMENT BY SIR JOSEPH •WARD. Yesterday the Minister for Finance (Right Hon. Sir Joseph Ward) gave a representative of the "New Zealand Times" a statement regarding the finances of the Dominion. He explained at the same time what he had done and wjiat he proposed to do in connection with war expenditure and loans maturing during tho period of tho war. Sir Joseph Ward said that the position at tlie completion of the nine months for tho financial year up to Decembor 31st, 1915, was upon the whole exceedingly satisfactory. Tho revenue for tho nino months exceeded that for tho nino months of the previous year by £795,520, and for the month of December, 1915, as against tho month of December, lal4, there waj> an increase of £333,899. The Minister gave the following statement for tho nine months of 1914 and of 1915, covering the position of tho whole of tno revenue branches in full. Statement of Revenue for the Nine Montbs onued Decemoer 31st, 1915, compared with tne Nine iiontha endeil jjecembor 31st, 1914: — 9 Months 9 Months ended enuett Increase. Dec. 01, Dec. 31, . 1915. 1914. £. X £

, Totals 9 341.346 8,545,826 795,520 •Signifies Decrease. "Stamp and Death Duties, Post and Telegraph, Land Tax, Income Tax, and Railways all show a considerable increase, while Customs show for the nine months a slight increase, namely £27,757," said tho Minister. "The principal decreases are in Miscellaneous and in Territorial, the former £37,778 and the latter £24,999. The decrease in Territorial revenue is chiefly accounted for by the fact that a good deal of land has been made freehold, and consequently the rents are not being received. The decrease in Miscellaneous is clue to interest payments in London which last year were credited to ordinary revenue and subsequently were paid out again, so that the drop in this branch is not real. "For the twelve months ended December 31st, 1015, as against the twelve months ended December 31st, 1914, there is a net' increase in the revenue of £786,278, so that both for the twelve monthly period and for the nine monthly period the improvement in revenue is very marked. "The increase of £333,899 for the .nonth of December, 1915, as against the month of December, 1914, is as follows:

Customs 3»,»7<» Stamps and death duties 46,378 Post and Telegraph 61,458 Land tax 55,947 Income tax 38,716 Beer duty 8,745 Railways 100,1312 Miscellaneous ..••• 4.990 General receipts 2,607 That is, a total of increases of £358,942. The decreases are:— £ Registration and other fees 797 Marine I- 696 Territorial 23,650 That is, a total of £25,043, which leaves a net increase for the month of £333,899. "In reference to the net expenditure for the nino months ended December 31st, 1915, it shows an increase of £169,182 over the expenditure for the corresponding period in 1914. and this is due entirely to tho increase in the interest and sinking fund charges, ,vhich amount to £199,660. "The net departmental expenditure 3hows a decrease of £30.000. The decreases in expenditure are: £ Finance Department 41,089 Railways -■-• 48.117 Public buildings 8,856 Mines '• 1,527 Internal Affairs 16.348 Defence 61,827 Lands and Survey 4,234 Agriculture 8,296 A. total of £180.394. The departments which show increases are; £ Legislative 457 Post and Telegraph •• 9,704 Justice Department 6,927 Customs and Marine 5,613 Labour 2,662 Native 164 Education 123,206 Services not provided for 1,283 That is, a total of £150,016, which, added to the increase in the permanent charges of interest and sinking fund. £199,560. gives a total increase under all heads, permanent charges and annual appropriations, of £349,576. Deducting from this the decreases, £180,394, leaves a net increase of £169,182. "Tho cash credit balance" at the end of December, 1915, was £324,843, as against -a debtor balance at the end of December, 1914, of £48,637. The position, therefore, at December 31st last year was better than at December 31st, 1914. by £373,480. "The financial position of tho ordinary revenue aocotmjt on December 31st last was in a satisfactory position, with a credit balance of £1,194,000. TREASURY BILL3. "I am glad to say that £750,000 Treasury bills have been paid off, and there will be a further largo amount of Treasury ■ bills paid off at the end of the present month. "The Public Works Fund on. Decern-

ber 31st was in a strong position. The expenditure for Public Works for the nine months ended December 31st was £1,752,637. all of which has been paid, and there remains a credit for public works expenditure of £1,801,412. The estimated expenditure up to March 31st next, under all headings—railway construction, public buildings, harbour defences, and the construction and maintenance and supervision of roads and bridges and other public works —is £488,400. and the estimated expenditure from the end of March next to December. 31st, 1916, is £l,051,600. lam therefore in a position to be able to state definitely that we shall not require to borrow any further sums for public works expenditure until well on in tho year 1917. This, I think, ought to be gratifying to the ( country generally, and reassuring as' to the position we are likely to occupy after tho conclusion of tho war. I want to Bay, as I have said before, that it is the time after the war for which the country, must now prepare, so that we shall bo able to meet the now conditions that must arise without any great internal dislocation of thrf public finance.

"To enable this position to be further strengthened, all 4 per cent, debentures payablo locally falling duo up to 1924 will, if the holders apply to the Treasury, be converted into 4i tier cent, debentures, with a currency extending to twenty-five years, and the new debentures will be free from income tax. I may say that the object in doing this is to avoid having to make provision by local loans for tho repayment of the debentures current and falling due in the respective years between now and 1924, so that the Minister for Finance may be in a position, if circumstances necessitate local borrowing late in 1917, to raise what* is required for general purposes without having to borrow further for the purpose of making provision for the repayment of these debentures. I think that those who understand the financial responsibilities under the conditions that exist , consequent upon this practically world-wide war will recognise that this is a judicious course to follow, and that it will give added strength to the financial position of the country for whatever may be required of it after the war is ovor. This, of course, applies equally to the conditions that would exist if the war should continue for a longer period than most of us hopo will bo the case. "iSo far as the war loan expenditure for New Zealand is concerned, I am glad to be able to say that this is definitely fixed until the end of December, 1916. Provision has been made for the amount of £8,340,000, spread over monthly payments for this purpose. The whole amount comes from London through the British Government. It is well to know that the financial arrangements for another year have been deiinitoly made, and it should be regarded as highly satisfactory by all those who realise the position of a young country with a limited population. There is little doubt, in my opinion, that if we had to raise such a sum as this locally it would alter the whole local money market to an extent that would bo, to say the least', more than embarrassing for all classes who require the use of borrowed moneys to enable them to carry on their businesses, whether in town or country.

"With the war expenditure provided for; cash in hand for public works until well on in 1917; and the conversion of debentures falling due up' to 1924 for a period of twenty-five yoars, the financial position of this country should inspire confidence in our people, and they should be able to concentrate their energies more whole-heartedly upon the war when they feel that there is no need for general uneasiness as to our future financial position, when enormous additional sums have to be and are being raised to meet war expenditure—much of it of a permanent character—for which this terrible war is responsible. 'Theamounts paid to settlers, workers, and local authorities for the nine months up to December 31st last were £1,055,940, made up as follows:—Settlers £625,000, workers £241,795, local authorities £189,145. I may. mention that the total amount paid since the inception of the department is £21,704,690, of which settlevs received £16,015,015, workers £3,080,120, and local authorities £U,609,555." Sir Joseph Ward said there was no earthly reason why the rate of interest should go up in this country. Anyone attempting to raise it during the present war crisis would not be looked upon as a friend of either the country or the people. There was plenty of money in New Zealand, and the object of every well-wisher of the Dominion in a time when war was raging should be to keep the general finance of the country, both public and private, steady. He had so far refused to give authority to local public bodies to raise moneys at high rates of interest, and it was in their interest as well as in that of the people they served in their respective localities, that rates should not be allowed to run up. The Government had the power under statute of last session to prevent an increase in rates of interest, aiid, though he was averse to exercising powers of the kind, if there were any attempt to force up the value of money at such a time as this, then it would be a question for serious consideration as to whether the power should not be put into operation.

2,455,307 ! 2.42/.550 27,757 Stamp and Death Duties 967,369 850,859 116,480 Postal and Telegraph ... 1.116,309 1,013,489 102,820 980,125 637,732 342,393 Income Tax ... 62,355 19,035 43.3E0 103,511 94,543 8,968 3,083,775 i 2,888,870 194,905 Registration and other fees 69,073 65 069 4 004 33.852 37,396 3,544* Miscellaneous 240,321 278,099 37,778* Territorial ... 124,627 149,626 24,999* National Endowment 92,655 78.770 13.885 Other E-eceipbs 12,067 4,758 7,809