DOMINION FINANCE

New Zealand Times, Volume XLIX, Issue 11251, 1 July 1922, Page 5

DOMINION FINANCE

PREMIER GIVES DETAILS EXPENDITURE 16 MILLIONS MORE THAN IN 1914. BIG DECREASE IN REVENUE. In the course of his speech (reported under the Parliamentary heading) in the House of Representatives oil the amendment to the Address-in-Reply, moved bv Mr Holland, the Prime Minister (lion. W. F. Massey) made reference to the financial position of the Dominion. Mr Massev said he wanted to put the position to the House from the financial point of view. He had received from the Treasury an official document showing that the expenditure of 1921-22 had increased over that of 1913-14 by upwards of 16 millions sterling. The bulk of the increase was directly due to the war and to circumstances w hich no Government could control, and far this increase provision must be made in the country was to honourably meet its obligations. Mr H." Atmore (Nelson): It is oliiefly inflation. INTEREST AND WAR PENSIONS. Interest and Binicing fund charges on the war loans amounted annually to £4,657,000; stated AlrtMassey; and the war pensions to £1,723,000. Mr Holland: There •le a difference there—between interest and war pensions. Mr Massey: Of course, there is. I didn’t suggest anything else. The salaries and wages bonus, he added, amounted to four millions. This bonus had. amounted to 4( millions prior to January last, but with tho cut it was now reduced to approximately four millions. The increased cost of coal, material, etc., was two millions a year. He was quite willing to lay the details on the table. Mr Wilford: What are yon behind now altogether ? Mr Massey: I will say later. The benefits to pensioners had cost £400,000 —tho increase from 10s /to 15s per week, etc. Air Wilford: They can’t live on that. Mr Massey retorted that they never intended to live on it. He was in the House when the first bill was passed. A Labour member: You opposed it. That sum, stated the Prune Minister, included tho benefits to superannuitants—about £50,000. v The increased subsidies to hospitals and local bodies amounted to £350.000; the/butter bonus, to reduce the cost of butter locally, totalled £240,000; and the total increase due to tho war was £13,371,000 a year. REDUCED REVENUE. It was quite impossible to carry on, unless they made proper provision for the payment of that sum. And it was not only the enormous increase in expenditure that had to be faced, but also the drop in the national income, owing to the drop of something like 60 per cent, in the values of many of our exports. Meat had dropped 80 per cent. Then there was the increased cost of handling and freights. Everything had been against us, and yet things were looking ever so much brighter than when the House last met. But, unfortunately, the improvement had not yet reached the Treasury. In order to "keep abreast of the Treasury position, he had arranged with the officers to supply him with all the returns possible. At this pmnt the Prime Minister’s time was extended, on the motion of Mr Wilford. Mr Massey said that he could not go on to deal with the proposed cut to-day. He had expected to he able to do so, but was not yet in possession of the necessary information. Mr Wilford: That report? Mr Massey said he understood that it had reached his office sinoe he came into the chamber, but he could not deal with it to-day. Nothing, however, would be lost by putting it off till next week. DEPARTMENTAL DROPS. One of the Treasury returns he had referred to showed for the twelve months ending May 31st last a decrease in Customs revenue of £3.272,904: a decrease in stamp and death duties of £273/290; post and telegraphs, £101,319; land tax £26,297, which was not serious; income tax, which, was serious, £2,283,829; railways, £420,584; registration fees, £60,616; marine, £7248; miscellaneous, £73,069; territorial revenue, £27.285; national endowment revenue, £102,481; other receipts, miscellaneous, £40,928; total decrease for the year was £6,604,848. AWKWARD POSITION TO FACE. “NEED FOR EXTENSIVE CAUTION AND OARE.” On top of that, again, he had already been officially informed by the permanent heads of the Land and Income Tax Department that we must expect a drop of not less than two millions for the current year in income tax. That wa3 an awkward position to face; and he thought it would be admitted by everyone that it showed the need for extreme caution afid care in handling the finances of the Dominion. If we did not go slowly and carefully :yo would get into very serious trouble. Personally, he was going to do his duty. He had put It to, the Treasury officials tho other day that we were passing through the very worst period of tho aftermath of the war, and if we got through this year we should be all right; and ho was optimistic enough to believe that we could get through the present year and be ablq to show—not a surplus—he would not promise anything like that, but a very creditable record for the country ’as a whole, and a good financial record for tho Government up to March 31st next.