THE FINANCIAL STATEMENT.

Otago Witness, Issue 3100, 13 August 1913, Page 7

THE FINANCIAL STATEMENT.

WELLINGTON, August 6.

Un the House of Representatives going into committee of ways and means to-night the Hon. J. Allen (Minister of_ Finance) brought down the Financial Statement, the important portions of which follow ; In submitting the annual Statement showing the financial position of the dominion as at March 31, 1913, for the consideration of the committee, it is a pleasure to be able to announce that the-revenue for the the year exceeded the estimate by £785,618. The figures are as follows: — REVENUE. Revenue £11.734,022 Estimated revenue 10,948,404 Excess over .estimate ... £785,618 The following table will show the details of the estimated and actual revenue for

It is also satisfactory to note that the actual revenue for 1912-13 exceeded that for 1911-12 by £701,478. The figures are: Revenue, 1912-13 £11,734,022 Revenue, 1911-12 11,032,544 Excess, 1912-13 £701,473 The subjoined table tri'es the details of this excess: CONSOLIDATED FUND. 1912-15. 1911-12. Increase. Customs ... £3,407,558 £3,279,012 £123,526

* Decrease. EXPENDITURE. Estimated expenditure 1912-13 ... £11,229,004 Expenditure 1912-13 11,032,033 Less than estimate £146,966 The actual expenditure for the year exceeded that for the previous year by £741,670, the figures being: 1912-13 £11.082.033 1911-12 £10,340,368 Excess for 1912-15 ... £741,670 RESULTS OF THE YEAR’S OPERATIONS. Balance brought forward April 1. 1912, £807.276. —Receipts during year : Revenue, £11.734,022; other receipts, £248; —total, £11,734,270. Expenditure during the year: Appropriations, £11,032.038: excess of receipts over expenditure, £652.232; transfer to Public Works Fund. £750,000; balance March 31, 1913, £709,508 TREASURY BILLS. Daring the year Treasury bills to the amount of £775,000 were issued and were repaid. It is satisfactory to note that on March 31, 1913, no Treasury bills were outstanding. PUBLIC WORKS FUND. The position of tiiis fund may bo shown as follows: —Balance from iasi year, £82,530. Receipts: Loan money. £2,505.002 : transfer from revenue, £750,0eC; other receipts, £119,369; —total £3.457,551. Expenditure under appropriations, £2.373,539; other charges. £1271; 'd; benturcs redeemed. £101,000; repayment of-advance obtained in anticipation of £4,50J.CC0 loan of 1911. £350,000 ;—total. £2 830 810 Balance at March 31. 1913 £626.741 (includes £249.776 for redemption of debentures duo April 15. 1915); balance of loan money to bo received, £994,774; amount avai'ablo with which to start the current year, £1.621,515. THE PUBLIC DEBT. Tho gross public debt at the end of the financial year amounted to £90,060,760. The following table shows for what purposes the various amounts were borrowed: — Maori War £ 2,557.000 Defence 3,653,452 Public works (including railways,. roads and bridges, construction and lands improvement, public buildings, telegraph and telephone lines, harbours and lighthouses. immigration, tourist and health resorts, development of water power, development of goldfields and coal mines) ... 45,138,493 New Zealand guaranteed ad-

ENCOURAGING FRUIT-GROWING. AMENDMENT OF THE CUSTOMS LAW. INTENTIONS AS TO BORROWING.

vanoes (includes transferred liability)— Advances to settlers 8,225,644

Advances to workers 2,246,942 Land for settlements 6,871,161 Local authorities (includes £153,785 advanced for opening Crown lands. £85,000 for Hauraki Plains settlement, and £35,000 for Rangitaiki land drainage (by sections 36 and 37 of “ The New Zealand State Guaranteed Advances Act, 1909,” the amount transferred to the Advances Office is £20,132.847) 2,253,000 Native lands settlement branch... 516,100 Guaranteed mining advances branch 15,000 Bank of New Zealand shares ... 500,000 New Zealand Consols 475,891 Purchase of Native lands ... 2,715,217 State coal mines 225,000 Loans to local bodies 3,507.000 State Fire Insurance 2,000 Reserve fund securities 300,000 Scenery preservation 60,000 Deficiencies in revenue charges and expenses of raising loans, incrcose by conversion, etc., provincial liabilities, and miscellaneous 8,250,953 Total £90,060,763 Of the above £90,060,763, approximately £55.000,000 has been utilised in such works as construction of railways, telegraphs and telephone's, advances to settlers, workers, and local authorities, purchase of land for settlement purposes, etc., winch are directly reproductive investments. The net debt amounted to £87,457.121. arrived at as follows :—Gross debt, £90,050,763 ; less sinking funds (Government Loans to Local Bodies Acts. £799.601; “ Naval Defence Act, 1909,” £102,028; New Zealand State Guaranteed Advances Debt, £932,978: “ Public Debt Extinction Act, 1910,” £300,936; War and Defence Loans. £192.691; “ Cantcrbury'Lcan Ordinance, 1862,” £23,838; “New Zealand Loans Act, 1863,” £251.570). £2,605,641. Net debt on March 31. £87.457,121. INCREASE IN OUR INDEBTEDNESS. Owing to the borrowing of the four and a-half million and the three million loans during the past year our public debt lias increased by £5J06,850 since March 31, 1912. The increases were State guaranteed advances debt... £2,572,294 Public works 2,648,680 Miscellaneous 485,876 Total increase for 1912-13 £5,706,850 FINANCE. It is proposed .to amend the Public Revenues Act in order that Treasury bills may be Issued in London. This will facilitate the raising of temporary bans for the purposes of the Consolidated I und in anticipation of revenue. During the financial wear the sum of £750,000 was transferred from the Consolidated to the Public Works Fund, making the total amount of revenue transferred to the Public Works Fund since 1891, £9,280.000. In accordance with the recommendations contained in the report of the commissioners appointed to report on the unclassified departments of the public service a simplification In the publication of the public accounts of the dominion has been introduced. The principal adopted for the first time last year of referring the Estimates for the consideration of the Public Accounts Committee will bo continued. Full details of all expenditure for the year ended March 31, 1912, have been prepared at some expense to the country. It will be remembered that tlio commissioners above referred to raised the question of the necessity for the publication of the details, and I propose therefore that the continuance of the printing of this information in future years shall be referred to the Public Accounts Committee for consideration It is estimated that the cost of the preparation of the return for the year ended March 31, 1912, was apnroximately £4OOO. The cost of raising ilio £3.000,000 loan in London will bo laid before honourable members so soon ns the final accounts are received from the High Commissioner. Th c proceeds of this loan have been to a very large extent devoted to the current needs of the dominion, whereas circumstances made it imnerativo that the previous loan should be largely utilised for the purpose of redeeming existing loans then maturing or repaying advances LOANS FALLING DCE. The loans falling duo during the next seven years are as follow: — Aus- Yew Year pml- London. trnlia. Zealand. Total, injj Mar 1)!. £ £ £ £

Totals £3,662,750 1,738.650 10,308,853 21,800,250 . *Frnm July 1. The £9,830,865 duo in 1915 includes the whole of the £4,500,000 loan of 1911, and £3,142,600 of the £5,000.000 loan of 1910 not converted. It will bo seen that a very large amount of loan money has to be met during the year ending March 15. 1915. This matter largely occupied my attention during my recent visit to London, and 1 fully anticipate that satisfactory arrangements will bo made when the proper time arrives for raising the money. The reserve securities held by the Government in London amount to £800.009, and these are at the present time earning interest, and are unpledged. CHARGES FOR INSCRIPTION OF STOCK. The ''barges mado by the Rank of England for the management and inscription of car slock in London amount to close on £20,000 per annum. Prior to May 1, 1908. a sliding scale of charges had been agreed upon with the bank under which tho

chargee diminished as the quantity of the inscribed stock increased. On the date mentioned, however, a new arrangement was entered into, and a fixed rate per million of stock was agreed upon. The change brought about savings in the charges which were temporary only, and by 1914, assuming that the two loans coming due in that year are replaced by stock, the annual saving will be converted into an annual loss, which will progress at a yearly increasing amount as our national debt increases. I approached the Bank of England when in London with a view of obtaining a reconsideration of the charges, but so far no definite conclusion has been arrived at. PROCEEDS OF LAND SALES. It will be remembered that section 5 of “The Land Laws Amendment Act, 1912,” provided, amongst other things, that from April 1, 1913, all proceeds of sales of land should be credited to the land for settlements account instead of the Consolidated Fund. These monevs will for the future, therefore, bo devoted to the purchase and settlement of other lands. POST OFFICE SAVINGS BANK. With a view of bringing the rates of interest payable to depositors in the Post Office Savings Bank more into line with the current market rates it was decided to increase the amount of interest to depositors from 3i to 3j{ per cent, from May 1, 1915, in respect of sums not exceeding £3OO. In consequence of this increased rate payable to depositors by the Jl’ost Office, it became necessary for the Treasury to increase the rate payable in respect of debentures issued to the Post Office for the investment of its funds. The rate payable by the Treasury was accordingly raised from 3J per cent, to 4 per cent, from May--14, 1913. PUBLIC DEBT EXTINCTION. The sum paid out of the Consolidated Fund towards the extinction of our loans amounted to £149,343 for the year. Lor the year previous a sum of £144,885 was similarly paid to the superintendent of the Advances Office, and for the two years during which the Public Debt Extinction Act has been in operation a total sum of £300,936 (including interest) has been invested by the superintendent in loans to settlers, workers, or local authorities in accordance with the provisions of the Act. PUBLIC SERVICE REFORM. The commissioner and assistant commissioners appointed under The Public Soivice Act, 1912,” commenced duty at the beginning of the year, and have since been engaged in investigating the condition of the public service. One of the first duties of the commissioner was to classify the service, and it is hoped that the classification will’ be ready for publishing at an early date. As a result of the work already done by the commissioners it is evident that considerable economies can bo effected in many departments, while at the same time efficiency can bo increased. A preliminary report by fcbo commissioner will be presented to Parliament in due course PUBLIC SERVICE SUPERANNUATION. The income during the year ended December 51, 1912, amounted to £146,990, including £23,000 annual subsidy from the Government. The amount contributed oy members of the fund during the year was £107,409. the balance of the income being made up of interest (£16,258) and fines (£325). The total outgo of the year was £65,169. This includes allowances to members’ and to widows and children of deceased members (£50.781), as against £44,173 for the previous year. The contributions refunded wore £10.752, compensation £2495. and expenses £1144. The total value of the fund at the end of the year was £423,556 an increase of £81.820 on the total at the close of the year 1911. The number of contributors at the beginning of the year was 9140, and 1471 new contributors have since joined. The number of officers who ceased to contribute during the year by reason of having left the service, retired on pension, or died was 584, leaving a total of 10,027 effective members of the fund at the end of the year. There were 385 members in receipt of retiring allowances by reason of ago or length of service, and 104 by reason of medical unfitness or of injuries received while on duty. The number of widows ami children on the fund was 104 and 90 respectively. An amendment of the law under which the fund is admin-stored was passed during last session abolishing the provision for reduction or postponement of allowances to widows and children in cases where compensation is paid under the Workers’ Compensation Act for the death of a contributor by accident. 'The new law came into operation from the date of its passage. At the same time parliamentary sanction was given te an increase in the annual subsidy from £23,000 to £48,000, as recommended by the Government actuary in bis report on the fund for the trienninm ended December 31. 1910. The first increased subsidy of £48.000 was paid over in accordance with the Act in January, 1913, after the close of the year’s accounts in December.

TEACIIER.S’ SUPERANNUATION FUND.

The income during the year ended December 31, 1912, was £55,265, made up as follows: Contributions of members, £40,130; interest on outstanding contributions, £25; interest from public trustee £8111 : Government subsidy, £7OOO. The expenditure for the year was £26,317, trio items being:—Allowances to members and to widows and children of deceased members, £21.323; contributions refunded. £4911; Public Trustee commission, £B2. The value of the fund on December 31, 1912, was £214,298. as against £185,026 on December 31, 1911 —an increase of £27.272. The number of contributors increased from 3387 on December 51. 1911. to 3853 at the end of 1912 —an increase of 465- The number of persons who ceased to contribute to the fund during the year by reason of having left the service, retired on pension, or died was 213, so that the number of contributing members at the end of the year was 3640. There were 24-0 members in receipt of retiring allowances by reason of age or length- of service, and 39 by reason of medical unfitness. The number of widows and children on the fund was 52 and 45 respectively By section 3 of “The Public Service Classification and Supcrnnuatioi Amendment Act, 1912," persons in the employ of the University of Xew Zealand and affiliated -nstitutions on December 31, 1912. were given the r-ght of joining the fund, the right of election to bo exercised on or before June 30, 1913. Persons permanently employed by the*- above institutions suboetpiant to December 31. 1912, were also given the right of joining the fund by section 5 of the amendment Act above referred to. Those persons who, being

eligible, failed to join the fund on its inception in 1906, were given the right to become members on paying up back contributions, together with compound interest thereon at the rate of 5 per cent. The last day on which the right of election could be exercised was June 30. 1913. A number of elections have been made under these provisions. In accordance with the actuaries’ recommendation, tin’s fund, in addition to the annual subsidy of £7OOO, was during the past financial year supplemented by an extra grant of £IO,OOO. Both this fund and the Public Service Superannuation Fund arc subject to triennial investigation by the actuary. The increased annual subsidies will not be Luther increased during the next throe yeans. RAILWAYS SUPERANNUATION FUND. As promised in last year’s Budget the Government is obtaining an acturial report on the condition of the Railways Superannuation Fund. The report is not yet to hand, but on its receipt careful consideration will bo given to this fund so us to place it if need be on a sound basis. LEGISLATIVE COUNCIL REFORM. Further consideration was given to An's important matter by the Government during the recess, and fresh legislation has been introduced with the object of bringing the constitution of the Council more into accordance with popular feeling. ELECTORAL REFORM. An Electoral Bill will be produced during the present session. STATE ADVANCES OFFICE. The amounts lent during the year were as follows : Settlers (including loans from Public Debt Sinking Fund) £937,435 Workers 449.360 Local authorities 547,295 The report and balance sheet of the Advances to Settlors’ branch shows a profit for the year of £73,864, and that of the Advances to Workers’ branch a profit of £11,263 These profits are more than absorbed by the sinking fund contributions. LOCAL BODIES LOANS ACT. An Amending and Consolidating Act relating to the raising of loans by local bodies will be introduced. This measure will contain provisions which will remove certain restrictions now imposed on local authorities in connection with the raising of loans. It will also make provision fer local authorities to borrow money under the guarantee of the Government. LOCAL GOVERNMENT REFORM. Further information has been obtained concerning local government in some of the States of the Commonwealth. This has been considered by the Government, but in view of the heavy programme of legislation provided for this year it is doubtful if Parliament will have time this session adequately to consider this important subject. It is intended, however, that proposals dealing with local government reform will, if possible, bo circulated this session for the consideration of members of Parliament and local bodies. POST AND TELEGRAPH DEPARTMENT. ‘ The business of the Post and Telegraph Department continues to show a steady and gratifying improvement. The receipts during the year amounted to £1,167,977 — an increase 'of £78,159 over the previous year. The expenditure amounted to £1,066,772—an excess of £5871 beyond the amount voted, and £80,245 over the previous year. It will be realised, however, that the expenditure of this department must necessarily increase with the expansion of business and consequent increase in revenue. The savings bank business shows that the public confidence in the department is unabated. The deposits amounted to £11,725.183—a higher amount than ever previously received in one year. The deposits wore in excess of the withdrawals, and the amount standing at the credit of depositors on December 31, 1912, was £16,350 257 an increase of £787,070 over the amount at credit on the corresponding date in 1911. Owing lo the increase in the ruling rate of interest obtainable for ordinary investments the withdrawals from the Post Office Savings Bank were unusually heavy during the year. The money order and postal note business also shows a very considerable increase, the orders and notes issued exceeding in value those of the previous year by well over half a million. Tito inauguration of the party-line system has helped very largely to increase the number of telephone exchange subscriptions, and this has necessitated a heavier expenditure on the construction of lines than was anticipated. The revenue derived from this class of business is. however, very sat’sfaetory, and is sufficient to meet all interest charges on the capital borrowed as well as the working expenses. It amounted to no less than £201,237. During the year the net expenditure out of the Public Works Fund for telegraph extension was £251,575. RAILWAYS. Mr Hi ley. late of the North-Eastern and Great Northern Railways of Great Britain, has hee'n appointed general manager of the New Zealand railways. He will take up his duties on his arrival in New Zealand. I am pleased to he able to announce that the interest earned by the New Zealand railways on the cost of construction during the vear ended March 31, 1913, is the second highest on record —namely, £4 0s 9d per cent,—and that notwithstanding largo increases in the wages of (he staff, in accordance with the provisions of section 22 of “The Appropriation Act, 1912.’ STAMP DEPARTMENT. For the first time in the history of the Stamp Department, which has been in existence since 1867, the revenue for the financial year has exceeded £I,OOO 000. Tne revenue of the department, which was formerly shown in conjunction with tne Post and Telegraph Department, revenue, has during the last three years been shown separate! v. the gross reee-qts being “ s follows;—1910-11. £372,862; 1911-12, £952.999; 1912-13, £1.062.487. LAND TAX.

The land tax receipts for the financial year 1912-13. as compared with the ye a; > 1911-12. are : --’Receipts: 1912-13, £728.636; 1911-12. £647.016 —an increase of £81,620. The following figures ?.how the increases in the net assessed taxable value of land and mortgages, the yield of land tax. and t.he number of taxpayers : n the last four years: —

Taxable Number of Year. value. Tax. taxpayers. 1908-9 .. .£106.198.550 £604.900 30 P 55 1912-15 ... 130,675.945 728,636 33,232

Increases £24,477.399 £123.736 7.377 As it has been frcelv stated that the subdivision of tlie large estates of the dominion was not being sufficiently accelerated I may

hors refer to the alteration v'liio-h has tako* place iu recent years in the areas held bj certain landowners. A reference to table No. 3 published under B 17a. 1911, will show that on March 31, 1910, there were 171 owners of freehold lands hi the dominion, whose individual holdings reached 10,000 acres or more. The aggregate area held by these 171 owners was at that date 3,509,471 acres. An examination of tho assessments of three same owners on March 31, 1912, showed chat no less an area than 811.1:02 acres had been disposed of during that period. For the .> oar ended March 51, 1913, details of all subdivisions which have taken place are not yet to hand, but from present indications I think I am warranted in saying that the process of subdivision has of late been considerably accelerated. INCOME TAX. The receipts for 1912-15, as compared with 1911- wore: 1912-13, £462,994; 1911-12 £448,935—-an increase of £14,059. No alteration was made in the rates of tax charged, so the above figures arc ajt indication of the increased prosperity of tho dominion. The following figures give the increases in the net assessed income, the yield of income tax, and the number of taxpayers in tho last, four years : Net Number Assessed of TaxYear. income. Tax. pavers. 1908-09 ... £19,225.346 £321,044 10,839 1912- ... £12,939,538 £462,994 13,167 Increases £2,713,992 £141,950 2,323 The rates of income lax were increased in 1910-11. 1 estimate the receipts tor tho current year as: Land tax £ i £>0,000; income tax, £4/0,000; total. £1,220,000. 1c is intended during the present session to submit to hon. members a proposal for graduating the income tax on a moro equitable basis than the present system. The new scale will be prepared on the same principle as tho graduated land tax of last session, which provides that tho increase iu tho rate will be uniform with tho increase in value, so that for each pound of increase in taxable income there shall be a corresponding increase in the rate. The smaller incomes will pay slightly less, but this loss will be made up by an increase in the tax charged on tho larger incomes. Legislation has already been iutrod iced with the object of granting additional exemption from i&come tax to parents who have children under 16 years of ago dependent upon them. This legislation will, 1 hope, meet the objections so frequently inane—viz., that tho present system of taxation presses moro severely on taxpayers who pre bringing up families than it does on those with few or no children. AGRICULTURE. The rural industries and the preparation of their products for export are among the most important luctors in the material prosperity of Now Zealand, and it is consequently a matter of satisfaction that the past year has been one ot prosperity tor Uicse industries. Iho wool clip has been good, dairying has continued to expand, especially ;n the manufacture of cncese, commercial fruit growing is now beginning to take its true place as a means of utilising much land that is of comparatively small value for other purposes, the hemp industry has owing largely to a. period of high prices shown a remarkable revival, and poultry raising and bee-keeping are exhibiting signs of a lorward movement.. The Government has under consideration a proposal to introduce legislation this session which will enable financial assistance to be granted to associations of fruit growers for the purpose of erecting canning factories and providing cold storage. AGRICULTURAL COLLEGES AND E XPERI MENTAL FA KM S. It has been decided that the question of establishing an agricultural college and experimental farms shall be referred to the proposed advisory board of agriculture as soon as the board is established, and it is hoped that its recommendations will be available in lime to permit of provision being made in tho Supplementary Estimates toi giving effect to the proposals. INDUSTRIAL MATTERS.

It is pleasing to note that no industrial troubles ot any magnitude have arisen sineo the minors’ strikes at Waihi and Reckon took place. It is believed that during tao past year there has been engendered a more earnest desire amongst tuo workers as well as amongst all otner classes of the community to find some method by which industrial disputes may oo settled in a manner equitable to the parties concerned. With this object in view ihn Government has given careful consideration to the Conciliation and Arbitration Act. It is proposed to cfleet a number of amendments ;n the machinery provisions of the Act and to embody these amendments in n consolidating measure. As the present Act cannot, however, be regarded as complete inasmuch us it applies to only those disputes that affect registered unions of workers, it i., proposed to include in t lie measure some provisions which it is hoped will enable the parties to all industrial disputes to arrive

at a peaceful settlement of their difficulties, and in this way to so far as possible prevent strikes and lockouts from taking place. A Bill has already been submitted for the_ consideration of hon. members to consolidate the Shops and Offices Acts. WORKERS’ DWELLINGS. There has been considerable activity in the purchase of suitable land for the erection of workers’ dwell ngs. Land has been purchased and set apart during the oast year, and 81 houses have been erected, while arrangements are well advanced for the erection of 34 additional dwellings. A total of 235 acres is now available for the purposes of this Act, and applications for the erection of dwellings thereon are being dealt with as rapidly as possible. It is hoped shortly to complete the necessary negotiations on the lines indicated last yeai for the purchase of a number of blocks of suitable land in the country districts for agricultural labourers’ dwellings. Legislation will be introduced this year extending the powers of local bodies in the direction of enabling-them to acquire land and erect homes for workers. NATIONAL PROVIDENT FUND. The National Provident Fund during the year lias made a distinct forward movement as a result of an active lecturing campaign. At the present date the membership numbers over 3800, while the fund amounts to approximately £15,000. A recent analysis of the occupations of contributors gives the following result centage. Clerical Domestic Industrial, farming, labouring, and kindred occupations 59 Shops (retail) Miscellaneous * , Total ’OO Experience shows that there exists a Icsire on the part of the employers that She functions of the fund should be extended in the direction of enabling them effectively to co-operate with the State. In England the co-operation of employer and State is an essential feature of the national scheme. PENSIONS In accordance with the proposal foreshadowed in the Financial Statement of last year the Pensions Department has been re-created and placed under the control of a commissioner, who old-age widows, and military pensions. The gross amount paid by way of pensions under these Acts during the year ended March 31, 1913, was as follows: Old-age pensions, £415,749; widows’ pensions, £22,113; military pensions, £3678. Whereas the figures relating to old-age and widows’ pensions represent a full year’s working; the amount paid by “way of military pensions is the payment for the last quarter of the year only. The liability, however, m regard to military pensioners on the roll ’t the present time exceeds £22,000, and it is anticipated that the estimate of £25,000 per annum as the probable cost of the Military Pension Act will be realised before the first twelve months have passed. Applications for New Zealand war medals are still being received, and in cases where satisfactory proof is shown medals arc being awarded. Amongst those to whom medals have boon granted are a number of members of the Maori race. The number of pensions in force at the close of the year under each head was as follows:—Okl-age, 16,509 (a decrease of 140 on the figures of 1911-12); widows, 1313 (an increase since last year of 525); military, 568, or up to the present date 675. The decrease in the number of old-age pensions is due to the fact that some 380 have been converted into military pensions. Two Bills dealing with pensions have already been introduced—one to consolidate the whole of the law relating to pensions of the three classes enumerated above, and the other inviting Parliament to ratify the Sgreement relating to reciprocal old-age pensions signed by the Prime .Minister of the Commonwealth of Australia and the Minister for Pensions for New Zealand. In tile Pensions Consolidation Rill a proposal is contained which will grant an oldage pension to women at the age of 60. The estimated cost of this proposal is about £70.000. Further proposals relating to the residence qualifications under the Old-age Pensions Act will also be contained in the consolidating measure. The Bid also extends the operations of the Military Pensions Act, which was passed last * " dl ' SHIPPING AND SEAMEN AMENDMENT ACT. The Act of 1912, having been assented to by his Majesty the King, was by proclamation brought into force on May i, 1913. The Act deals principally with matters relating to collis'ons and salvage, and brings the law into accord with the Imperial Maritime Conventions Act and the, International Maritime Conventions. The Imperial Government has boon requested to arrange for the adherence of New Zealand to those conventions. LIGHTHOUSES. During the past year automatic Acetone Acetylene lights were ordered for erection on one of the Chickens Islands, on the Channel Island, near Capo Colville, and on Karon Rock, in Cook Strait. The necessary tower for Chicken Islands was procured, and it was erected in April of this year. The tower for Channel Island is ordered. The public will be gratified to know that a final decision has been come to in reference to tile matter of lighting Cook Strait in the vicinity of Cape Tcrawhiti. The site finally adoptee) has met with the general approbation of all concerned, and the work of erection is being proceeded with. RECIPROCAL TRADE. Will) a view to stimulating trad© between Australia and New Zealand, tlie Minister of Customs recently visited Australia, and successfully negotiated a reciprocal trade treaty with the Government of the Commonwealth. Since this treaty was concluded the position of political parties in the Commonwealth has materially changed, and it is not possible for the new Zealand Government to take any further action in the matter until the policy of the new Commonwealth Administration in reference thereto is disclosed. CUSTOMS TARIFF. For the reason just given the usual practice of bringing down the proposed new Customs tariff witli the Financial Statement will not be followed upon this occasion. The piecemeal introduetten of measures affecting the tariff woulfl iiave a most disturbing and unsettling eH'sct vpon trade generally, and as the general tariff proposals and the reciprocal trade treatyare complimentary to one aitother. the Government deems it advisable to hold over

the proposed legislation dealing with this subject Until later in the session. CUSTOMS LAW.

There has been comparatively little or no alteration in the principles of the Customs Law Act since 1882. This most important Act has become largely obsolete and out of date. The anomalies which are inseparable from such a measure have created a great deal” of hardship, and the difficulties of administering the Act have been largely due to the hard and fast conditions imposed upon the administrative officers of the department by the inelasticity of the existing law. With a view to effecting a remedy for this condition of affairs a consolidating Customs Law Bill will be introduced this session. This measure will contain many now proposals, which it is hoped will make our Customs law more modern, more equitable, and in its administration more clastic. The proposed measure should enable our commercial community to bo freed of many of the harassing restrictions under whiedi they have boon labouring for so long. MINING. Owing to the laltour troubles which existed for many months at Wa.ihi and Reefton. and which stopped the mines, the output of gold for the past year dors not compare favourably with that of the previous year, but despite these difficulties it is encouraging to note that the output amounted to £3,035.510. as against £3,492.352 for 1911-12, and there seems to be little doubt that the output for tho current year will be quite up to the average. The coal mining industry continues to pi osper. Tho output of coal for 1912-13 amounted to 2,177,615 tons, as against 2.066,073 tons in 1911-12. being an increase of 111,542 tons. STATE COAL MINES. Mention was made in last year’s Financial Statement of the revaluation of the assets of the State coal mines account which was then in progress. The revaluation showed, ns was expected, that' tho assets were nc>t in all cases worth their book value, and the Uixler-secretary of the Mines 'Department in his report on the matter recommended additional writings off, as under:—Point Elizabeth No. 1 colliery, £25,000; Soeldonvillc, £10,000; briquette works, £6000; Wellington depot, £600; Dunedin depot, £400; Charming Creek prospecting, £2966; total, £44,966. lie also advised that 10 per cent, instead of 5 i>er cent, should annually be written off for depreciation in future in respect of both the old collieries and the briquette works, and that such amounis should be computed on the gross total capital expenditure in each case, and not merely on the balance not written off, as hitherto. IRON AND STEEL INDUSTRY. Hon. members will recollect that during last session certain proposals relative to establishing the iron and steel industry in the dominion were made by the Ethelburga Syndicate. On the motion of the Prime Minister a special Select Committee was appointed to go : nto tho matter, and after an exhaustive inquiry the committee reported that it could not recommend the acceptance of the proposals in their then form. The proposals, of the syndicate involved an expenditure by it of about £650,090, spread over five years, in buying out the rights of the present lessees of iron mining property near Parapara (Collingwood), and in putting down a modern plant for the production of iron and steel on a fairly large scale. They also involved lie payment < t a Government subsidy at the rale <f f per cent, annually. This subsidy would have amounted to £32,500 per annum, and was to continue for a period of 40 years, at tho end of which term the syndicate was to hand over the whole enterprise to the Government without further payment. During my recent visit to England the matter was brought before me again, but on an entirely new basis. Tho Government has decided to submit the various proposals to a committee of exports for examination and report. STATE FIRE INSURANCE. The year ended December 31. 1912. has proved the most profitable in the existence of the State Fire Office Tho profits amounted to £14,024, as against £5391 for the previous year, and the total profits at the close of the year amounted to £26,461. Tho net income of the office for tho year advanced from £48,931 to £56 315, showing an increase of £7384 The reserved funds increased from £31.535 in 1911 to £48.213 in 1912. and the percentages of working expenses wore 26.7 for 1912 and 27.5 for 1911. MENTAL HOSPITALS. The expenditure on mental hospitals for the year was £148,979. and tho not expenditure £100,451. Owing to the largo increase in the number of patients, to the high price of provisions, and to the carrying out of extensive works in developing the estate in connection with the new mental hospital at Tokanui, near To Awamutu, there was a considerable increase in expenditure last year, but the receipts from maintenance and from salts of produce were very satisfactory. « PUBLIC HEALTH. The Native medical service is being re oiganiscd, with a view to obtaining the cooperation of the hospital boards in this most important branch of tho public health service. The appointment of nurses for special work among the Natives has been fruitful of such good results that further appointments are contemplated. It is evident that it is necessary to increase the accommodation at our Bt. Helens hospitals and to make arrangements to provide our chief centres with modern and well-equipped buildings. It will also be advisable for tho hospital boards to erect maternity wards in connection with our country hospitals, and thus provide for tho .requirements of country maternity patients. It is proposed to continue the practice of subsidising country medical and nursing associations. A great deal has been done in that direction during tho past year, and also in the direction of co-operation between public and private charitable organisations. The ever-increasing demands for accommodation in our public hospitals is a matter for serious consideration, and makes it clear that considerable expenditure will be necessary during tho next and succeeding years on hospital buildings. At no distant dale many of the hospitals will have to be replaced by modern structures of a more lasting nature. SETTLEMENT OF CROWN LANDS.

As indicated in my Statement last session, instructions were given to expedite the survey ami subdivision of our Crown lands, and this work is being accelerated. Tho officers of the Land and Survey Department are endeavouring to give effect to our desire that all available lands shall be placed on the market at aa early a date as

possible. During the past year the area of Crown land made available for settlement totalled 337,500 acres in 2230 subdivisions or allotments (Since the close of the year there has boon advertised for selection a further area of 141,500 acres in 540 allotments. It was considered advisable that the leases of pastoral runs expiring next February should be extended for a period of 12 months in order that the dealing with these areas might bo postponed until after the passing of further land legislation during the- present session. The area involved amounted to 217,743 acres, comprising 30 runs. FREEHOLD. The provisions in the Act of last session giving Crown tenants holding ordinary Crown lands under lease-in-porpctuity and settlement lands under renewable lease the option of purchase either for cash or deferred payment were heartily welcomed by settlers generally, and since the issue of regulations under the Act some hundreds of app’ieations have been received from settlers desirous of making their tenure as secure as a freehold title can make it. A Land Bill will be introduced during the present session, and Parliament will bo asked to agree to a further extension of the freehold policy which was approved by tiie country at the last general election, and which undoubtedly makes for the confidence of the settlers and the prosperity of the dominion. NATIONAL ENDOWMENT. Tile area of national endowment land occupied under lease or license at the end of the year was 6.324,603 acres at an annual rental of £89,559. The gross revenue received from this source for the past year amounted to £97,031. This sum has been dealt with in accordance with the statutoryprovisions. The total area at present within the endowment is 3,551,250 acres. The unlet area will be prepared for settlement ns early as possible, and the same vigorous measures are being adopted in regard to the endowment as in the case of ordinary Crown land. The total area of Crown lands of all classes held under lease or license at the close of the past financial year was 19,544,394 acres, held by 29,532 selectors, and paying an annual rental of £698,831. In addition to this educational and other endowment lands administered by the Lands and Survey Department represent a further area of 1,175,664 acres, divided into 4280 holdings, paying an annual rental of £87,460. The gross land revenue received during the past financial year was £912.029. The following are the various heads from which the amounts were derived Cashysales and purchase of freeholds, £87.235; deferred payment instalments, £603: perpetual lease rente, £2348; occupation with .right of purchase rents, £84,497 ; lease in perpetuity rents, £241,090 ; renewable lease rents, £108,069; small grazing run rents, £80.655; pastoral run rents, £79,223; educational and other endowments, £102,597; other leases and licenses and miscellaneous receipts, £125,712; total, £912 029 SETTLEMENT OF KAURI GUM • LANDS. Regulations to give full effect to the settlement of Crown lands within gum districts as provided for in the Land Laws Amendment Act passed last session have been gazetted, and surveyors are now busily engaged in subdividing suitable blocks for settlement. This system of land disposition should prove a great boon to the gum digger, who wilh.be able to acquire a fair holding to settle on with his family and become a permanent settler. LAND FOR SETTLEMENT. The operations under the Land for Settlements Act have been larger than in the previous year, an area of 50,819 acres having been purchased at a value of £428,045. There is a good demand for grazing lands, but for mixed farming it is not so keen. LAND SETTLEMENT FINANCE ACT. Ton associations have been completed dining the year with a membership of 87, and an area -of 11,354 acres, valued at £185,899S Several others are in course of formation. It is proposed materially to amend the Act this session to facilitate settlement, and to make better provision for finance. NATIVE LAND SETTLEMENT. The settlement of Native land during the last year has been up to the average. Since the coming into operation of tiie Act of 1909, the average of Native land alienated either by purchase or lease has been about 500,000 acres a year. A Bill extensively amending the 1909 Act in the direction of giving increased facilities for settlement of 1 lie remaining surplus Native lands, while duly conserving the interests of the Natives, will" ho introduced shortly. The important question of rating Native lands is under consideration, and a Bill is in preparation which will make the collection of rates by local bodies easier. COOK AND OTHER ISLANDS. The appointment of a new Resident Commissioner for the Cook Islands was necessary owing to the services of the late Resident Commissioner being retained in New Zealand. Mr H. W. Northcroft. late stipendiary magistrate, accepted the position. The care of the health of both Natives and Europeans is one of the chief considerations of the Administration, ami when opportunity occurs one of the two medical officers stationed at Rarotonga visits the outlying islands to attend to the health of the people. The -hospital at Rarotonga is under the special care of the chief medical officer, and is one of the best equipped in any of the Pacific islands. Its value is recognised by the inhabitants, and everything is being done to encourage the Natives to continue to avail themselves of the benefits of the institution. A duly qualified nurse lias been appointed, and her services are greatly appreciated by both natives and Europeans. As an indication of the manner in which the hospital lias benefited the community of the Cook Islands, the following figures for the past 12 months are quoted; Visits of out-patients to hospital, 3700; in-patients admitted, 75 Strict measures are being taken by tiie newly appointed Resident Commissioner for the suppression of bush boor drinking A Bill validating the constitution of the Federal Council of the Cook Islands, and containing other provisions for the improvement of the general conditions in the islands will bo submitted this session. INSURANCE OF PUBLIC BUILDINGS. In my last Statement mention whs made ot the fact that it had been the custom to rebuild out of loan money buildings destroyed by fire, and that the Government had decided to discontinue this unsatisfactory pro codure. A scheme was outlined for the establishment of a special sinking fund to meet fire insurance losses, and lion, members approved of life scheme by Pushing a vote of £10,009 from the Consolidated Fund as the first yearly contribution to the fund.

This amount, together with a subsequent contribution of £IO.OOO, has been invested with the Public Trustee. RAILWAY CONSTRUCTION.

When the Government took office in July. 1912, new construction work on main and branch railways was in progress at 21 different points, and provision was made on last year’s public works estimates for continuing the work on practically all these lines. The total expenditure on new construction, apart from additions to open lines, amounted during the year to £684,196. In August" last Messrs M'Lcan and Sons, contractors for the Arthur’s Pass tunnel between Bcaley and Otira. on the Midland railway, approached Parliament by petition praying to bo relieved of their contract on the ground that they had exhausted their resources, ami were unable to carry the work to completion. The petition was considered by a Special Committee, which recommended that the contractors should be relieved of the contract, and that the tunnel should bo carried to completion under a fresh contract, or by labour employed directly under the Government’s own engineers. In pursuance of this recommendation the contract was formally determined on December 23, 1912, and the work has since then been continued by the Public Works Department. It is proposed, however, to invite tenders at an early date for the completion of the tunnel.

In the Public Works Statement of last year it was suggested that wherever branch lines ot railway were deemed to be necessary a lighter and cheaper form of construction should be adopted. In pursuance of this view several new branch linos were authorised during last session. As it is impossible for the dominion to borrow in any one year a sum sufficient to provide for all those branch lines, as well as for the construction of the main lines, it is the intention of the Government to permit private enterprise to undertake such work, subject to conditions which will carefully safeguard the public interest. Legislation giving effect to this proposal will be introduced this session. ROADS AND BRIDGES.

Tlio total expenditure under this heading for the last .financial year, including the national endowment and land for settlements roads, amounted to £429,253. DEVELOPMENT OF WATER-POWER. Satisfactory progress is being made with the tunnel (which is now being carried out directly by the Public Works Department) and all other works connected with the Lake Coleridge hydro-electric power scheme. Plant and material for the generating station, transmission line, etc., are also corning to hand in large consignments, and it is still anticipated that the Government will be in a position to supply electric current to the City of Christchurch by May 1, 1914. An agreement has been entered into with tire Christchurch City Council for the sale of current to that body for distribution to consumers within the municipality, and negotiations are now proceeding for the supply of electricity to other towns in Canterbury.

IRRIGATION IN CENTRAL OTAGOIn pursuance of he programme outlined in hrst year’s Budget it w.is decided to proceed with the irrigation of a part of Ida Valley. The construction of the necessary works has been put in hand, but progress has been very much hampered through delays in receiving certain articles of plant and fittings required owing to strikes in England and the difficulty in obtaining shipping accommodation. Irs view of this delay it is unlikely that the works will be completed in time for the current year’s irrigation season, but they should certainly be available for the season of 1914. Full information has been obtained by* survey and investigation with regard to the works required for irrigating land in the Mariaherikia Valley and between Clyde and Alexandra. DEFENCE. Owing to the amendment last year in the defence legislation, detention in military custody has been substituted for imprisonment. The Act of last year needs further amendment, and the Government has submitted this question, with others affecting the national defence scheme, to a joint committee of both Houses of the Legislature for consideration and report. A full statement of the position of the military forces of this dominion will he found in the defence report. The officers, noncommissioned officers, and men comprising our citizen army have, with few exceptions, proved amenable to discipline, and the spirit in which they have entered into their respective duties is a matter for congratulation. NAVAL POLICY. The second meeting of the Committee of Imperial Defence which 1 had the privilege to attend was held seven days before my leaving London. Prior to this several conferences had taken place with the Admiralty, the results of which were considered at the above-mentioned meeting of the Committee of Imperial Defence. Some important details remained to be considered, and these, owing to my departure for New Zealand, became matters of correspondence. So soon as these details are settled the Government will submit to Parliament a policy which will recognise to the full the necessity for one control for Imperial purposes, will create a more direct responsibility in naval defence for members of the New Zealand Legislature, and will give the people of this dominion a more definite interest in defence matters and afford them a better opportunity for service. EXPEDITIONARY FORCE. In organising the defence of the Empire, the War Office found it necessary to ascertain the probable number and nature of the forces which the oversea dominions might be able to supply. To enable this question of the War Office to be answered by New Zealand, it is proposed to provide the machinery for an expeditionary force. It is not intended to being into existence a force for service outside Now Zealand. This can only he done by the men, when the time comes, volunteering to eorvo. It is necessary, however, in order to give an answer to the War Office, to decide upon the number of men and the nature of the force, also to provide the arms and equipment and to have everything ready for those in the Territorial force who may offer their services. From past experience there can bo no doubt that if tire necessity arises there will be no lack of volunteers to respond to the call. AVIATION. It is with pleasure that I have to announce that the Imperial Air Fleet Committee h.a.s presented the New Zealand Go-

vernmcnt with a Bleriot monoplane. Mr Gustav Hamel ma<le a successful flight from London to Cologne in the machine. An officer of the Now Zealand Staff Corps is in England undergoing a course of aviation, while in the dominion there are several officers, non-commissioned officers, and men of the Defence Department ■ with a knowledge of mechanics who are qualifying to undergo a course of training under proper supervision with a view to becoming proficient in the art of aviation. THE BATTLESHIP NEW ZEALAND.

I am now in a- position to announce that the actual cost of the battleship presented to the Imperial navy amounted to £1,501,000, and that the final payment has been made in London. In accordance with the provisions of “ The Naval Defence Act, 1909,” the sum of £50,000, being Sinking Fund at the rate of 4 per cent., was paid over during the year, making a total of £102,028 now in the hands of the Public Trustee towards the repayment of the loan. The Sinking Fund will be sufficient to repay the loan in about 17 year's. EDUCATION.

The increase in the amount to be provided for this year as compared with last year’s expenditure is due almost entirely to the increased attendance at the ordinary public schoo's (elementary), at the manual and technical schools and classes, and at high schools, and also to the additional number of new school buildings which have to be provided for and maintained. It is the intention during this session to go carefully into the report of the Education Commission of last year. Although it will not bo ]soesible to give full consideration to university education, the most urgent needs of the university colleges will be provided for.

Staffs and Salaries. —I do not think it will bo possible to bring down this session a scheme for the improvement of the staffs and of the salaries of teachers in public schools, but proposals dealing with these two questions will be submitted to Parliament next year. Meanwhile, to give some increase of salary where it is most needed, the Government intends, ns from January 1 next, to raise the amount of the yearly increments of salary in the several grades from £5 to £lO, so that, for instance, a teacher of Grade 4, whose salary under the present law begins at £IBO, and rises in. six years by £5 increments to £2lO, will receive £l9O after one year, £2OO after two years, and £2lO after three years, and similarly for u-11 other grades. The cost of this for the first year will probably be about £12,000. In addition, it is proposed to make better provision for the pay of some of the staff of the training colleges and to increase the salaries of the secondary assistants in district high schools. FREE UNIVERSITY EDUCATION.

The opportunities for free university education have been further extended during the year by a modification of the conditions for obtaining university bursaries, ec that it may be said that the university is now open tree to any person who has shown himself qualified ttr take a university course. Special bursaries have also been established to enable teachers to become well trained in home science. The number now receiving free university education in New Zealand is about 750. SPECIAL SCHOOLS.

The system outlined in the last Financial Statement of placing young offenders with their relatives on probation instead of sending them to industrial schools has been, successfully inaugurated. There is abundant evidence that the training given in our industrial schools is praiseworthy, and that the results fully justify the public expenditure necessary in the upbringing of the children. Yet the officers engaged in this work are unanimously of opinion that, as far ns possible, aggregation should bo avoided, and that for a child of normal tendencies, who cannot be provided for with hie relatives, the system of boarding out with foster parents, which has been in operation for 50 years, is the nearest approach to the ideal of family life. The extension of facilities for the care of feebleminded and epileptic children is a matter of the most urgent importance. It is necessary to make provision for girls, as well aa to increase the present limited tion for boys. Works are to be set in hand at Otckaike immediately to enable girls to ho received there for the present, and the buildings will be erected in such a manner as to be equally available for boys, should it he necessary in the near future to make a separate establishment for girls of this class. SCHOOL BUILDINGS. The demands of the vote for school buildings are very great, and, with all the earo for economy that can be exercised by the department, the need for new schools as settlement proceeds and the extension of schools in tile settled districts to provide for increasing school attendance, together with the increasing demand for facilities for secondary, technical, higher, and special education, make it useless to expect any diminution in the amount of this vote. At the present time the commitment* on this account (including, of course, the expenditure since march 31) amount to very littlo short of £150.C00. THE MAGISTRATES. A Bill has been introduced this session fixing the salaries to bo paid to magistrates. Under this measure the three jurisdictions at present existing under the Magistrate’s Courts Act will be abolished, and only one jurisdiction will be provided for, which will he exercised by all magistrates, except in. the case of the Chatham Islands, which are specially provided for. Magistrates are thus put on an equality as regards jurisdiction, and status, hut, as it is recognised that tho magisterial work in the four chief cities is heavier than in the oilier districts; a slightly larger salary is provided for the principal magistrates in these centres. TOWN PLANNING. The contrast between cities laid out with some regard to tho future and those built up without forethought' and intelligent design impressed itself upon me even more forcibly than on previous visits to xhita.n and Canada. Some time spent in the East End of London and East Ham, with their narrow streets and very few air spaces and reserves, made apparent the urgent necessity for legislation 'to deal with ihc proper planning and hiving out of areas winch may become in (lie future towns and cities. Ample provision for school grounds and other necessary reserves in the interests of public health and the development of tho best type of citizen is of great importance. The Government' will, either tlrs session or in the ensuing one, introduce a bill to deal with the question. IMMIGRATION. Before the present Government assumed

office it had become obvious that the methods adopted to procure immigrants to supply the demand for domestic servants in both town and country and for farm labourers in the country districts were inadequate, and that efforts must be made to direct the stream of these classes of immigrants ro New Zealand in greater numbers. The control of immigration had for years past been with the Lands and Survey Department, most of the officers of which were occupied with other and more urgent work. The Government determined to establish a distinct Department of Immigration whose officers should be employed only upon the special duties of that department, and the change has resulted in a more systematic and regular administration. lint the work of finding emigrants and testing their capability, health, and character must necessarily be carried out by officers in England, and during the past year correspondence on the subject between the Government and the High Commissioner has resulted in modifications' of the conditions which formally obtained, the result of which, it is hoped, will be to provide a satisfactory increase in the flow of suitable immigrants. It is not possible within the compass of this Statement to explain fully the changes which have been made or to "do more than briefly refer to one or two of the more important modifications. The requirement for payment by each immigrant in cash of a certain proportion of his or her passage money has been canceller] in the case of persons who are without the means necessary to provide the required sum. In such cases the Government advances the whole of the passage money, but requires a contract from the immigrant to make the necessary refund within a limited time after arrival in New Zealand so as to place him on an equality with the immigrant who is able to provide the required cash. The requirement of one year’s actual service as a domestic servant has been altered so that women who have had practical domestic experience in their own homes may be accepted, though their services have not boon for wage. Efforts have been made to arrange for a supply of boys from country districts in England to be employed by service in New Zealand upon terms to be approved by the Government on somewhat similar lines to those previously arranged with Mr Scdgewick. The Government has considered various proposals for altering the present system adopted in our English office, which relies on advertisements in newspapers to induce applications for emigrants, and it is suggested that a process of seeking immigrants in the country districts of Great Britain and Ireland, as our competitors do, would be beneficial. The difference between a method of inviting applications by advertisements and a method of bringing before tho people in their own countries the advantages offered by New Zealand is manifest, but under tho former plan the expenditure can be accurately estimated, whereas under the latter tho procedure must be limited by the cost of working. The Government has reason to believe that it will be able, without an excessive increase of cost, to employ both methods in the future. The establishment of a new system, to be controlled by the High Commissioner, is, however, a matter which can only ’ l>o finally determined after full consideration of every suggestion made bv him. A comparson between the number of assisted immigrants arriving in the year ended March 31. 1913. and tho number of the previous year proves that an increase has already been effected. The number for 1911-12 was 3300, and for tho year 1912-13, 3928. OFFICES OF THE HIGH COMMISSIONER IN LONDON.

Shortly after his arrival in London last year the High Commissioner reported to tho Government, in confirmation of similar representations by his predecessors, that the present .offices in Victoria street, Westminster, were insufficient for the accommodation of the staff, and that the location of the offices was unsuitable for various reasons. Several alternative sites were submitted and considered, and finally a site in the Strand, next to the Aclolphi Theatre, was selected, and has been reported upon by competent land surveyors nominated by tho Government, It is believed that negotiations for a lease will shortly be completed. Tho site lias a frontage to the Strand of about 50ft, the ground area being 4567 superficial feet. The owners of the land will erect a building of six storeys in height on plans to be approved by the Government, at a cost estimated at between £15,000 and £20,000. The term of tho lease will bo 80 years. BANK OF NEW ZEALAND.

The one million loan guaranteed by the Government on account of the Hank of New Zealand becomes due in 1914. The directors of the bank have advised the Government that it would be in the interest of the bank to renew this loan, and that legislation should be passed this session to permit of an increase in the capital of the bank. Some difference of opinion exists between the directors and some of the shareholders. The latter have made their representation to the Government. These, with the board’s n commendations, have been carefully considered, and the Government has decided that legislation will be, introduced this session which, it is believed, will bo satisfactory to Parliament, to the directors and shareholders, and in the interests of the people of the dominion. ESTIMATES OF REVENUE AND EXPENDITURE. It is estimated that the revenue for 191314 will be £11,789,602, made up as follows: — Customs, £3.250,000; railways, £4,200,000; stamps. £1.000,000; post and telegraphs, £1,230.000; land tax, £750,000; income tax, £470.000; boor duty. £124.000; registration, £92,000; marine, £51.200; miscellaneous. £360,000; Territorial revenue, £190.000; national endowment revenue, £72.402 — £11,789,602. TRANSFERS FROM THE CONSOLIDATED FUNDS. Authority was obtained in the Appropriation Act of 1912 for payments out of the Consolidated. Fund of the losses made in connection with the business on the Advances to Local Authorities branch of the State Advances Office as previously referred to. As the amount was not paid over during the year. I propose- to transfer a similar sum from the balance remaining in the

Consolidated Fund at March 31 last. The balance in the Consolidated Fund at March 31, 1913, was £709,508. and it is proposed to deal with this as follows: —Transfer to Public Works Fund, £675.000; transfer to Advances to Local Authorities branch (being loss incurred in 1910-11 and 1911-12), £22.557 ;—total. £697.557. The position of the Consolidated Fund for the current year may thus be summarised: Balanc-c after transfer to Public Works Fund and to advances

to Local Authorities branch ... £11,951 Estimated revenue 11,789,602

Total £11.801,553 Estimated expenditure 11.679,674 Balance available for Supplementary Estimates 121,879 LOAN FOR PUBLIC WORKS.

1 have shown that at the beginning of tho current year a sum of £1,621,515, less £249,776 for redemption of debentures, was available for public works, and to this must bo added £675,000. the contribution from the Consolidated Fund. I have also shown that at the same date there were liabilities to tho extent of £673,933. From these figures it is obvious that the Public Works Fund will require to be replenished during the current financial year, and I propose to ask Parliament to authorise a loan of £1,750.000 to be raised in London. Last year 1 considered it my duty to call attention to tho necessity for more self-reliance. The huge demands for public works and State aid have made it necessary for Governments of late years to raise much larger loans annually than was the custom some years ago. Those demands up to last year were to a considerable extent supplied from our own resources, but tho activity in trade, and the high interest obtainable have for the time being tapped tho local available capital. I am not saying that this rise of our own resources in aid of the rapid development which is going on is an evil, but it has curtailed the power of the Government to borrow locally, and this act, coupled with the heavy liabilities and commitments left to tho Government on taking office, rendered it necessary to rely to a considerable extent on loans secured in London during the next 18 months. In addition to the ordinary requirements for the year shortdated loans amounting to over £BOO,OOO must bo repaid, and to do this an equivalent amount will have to bo borrowed in London. It seems to me that botli sides of the House should assist in inculcating into the minds of our people, especially at a time like the present, tho virtue of selfreliance. Tho Government has determined on a policy of progressive development of the dominion’s resources, and will not fail to make provision for the necessities of settlers, workers, local authorities, and public works generally, but even London with the increasingly heavy demands for loans from so many woukl-be borrowers must not be looked upon as a source of supply without limitations, and too great a reliance on London may prove unsatisfactory. The improved condition of the dominion’s finances during the time the Government has been in office is strikingly indicated by tho table I have already read, showing the improvement in the general financial position. It is the duty of the Government — and may I not add" of members of Parliament, whatever may be their politics—to assist to maintain and even to better this improved condition. Tho record of land settlement during the year has been exceptionally good. The Government hopes to add to thiffj; good record by increasing the opportunities for close settlement, and by attracting the worker to make his homo in the healthy surroundings of country life, where work is available for him, and where, if lie uses his opportunities, ho can undoubtedly better his position, and to a large extent gratify his ambition. By such means the product!vencss of New Zealand will bo increased, the happiness of our people will he fostered, and tho prosperity of this country will bo assured. OPPOSITION ALLEGATIONS. “ NO POLICY AT ALL.” (From Our Own Correspondent.) WELLINGTON, August 5. The Financial Budget is, of course, too solid an intellectual meal for digestion to be hurried, so that the comment of mem hers in the lobby this evening, after the exposition by the Minister of Finance of his second Budget, was necessarily scrappy and imperfect. Opposition members, however, who listened carefully to the reading of the Statement had little hesitation in condemning tho Budget on tho grounds that it contained “no policy at all.” “Nothing to discuss ; not worth discussing,” was the abrupt way in which the first prominent Liberal approached expressed himself when asked for his opinion. “There is no oolicy,” he continued, “it is all consolidation. There is no new pronouncement about anything. The education provision is only a dole, and would not have been given except for the Opposition keeping hammering away ct the Government.” This member expressed the opinion that the debate on tho Budget would be a very long one. All those who had not spoken on tiro Address-in-Reply debate would speak on this, and many of those who had spoken would have another speech ready. Another prominent Liberal endorsed the charge of “no policy.” 'lhe financial reforms, he commented, evidently had not come off, for borrowing was still to be pursued as in the past. From his point of view the. Budget was a good one, for it showed the country that the Government had no policy. There were in it no striking measures and no new proposals at all. but from the country’s point of view tho Budget must he unsatisfactory, for it showed little that would help the progress of the country or facilitate its expansion. The debate, bo expected, would be fairly full, the main lino of attack, of course, being that the Government showed no policy at all.

“It seems to me that the Government is hedging and waiting to see which way the cat will jump,” said another Oppositionist. Some of the proposals sounded all right, but the best of them were in the air and still verv vague.

Still another Opposition member considered that the Government had erred on the side of moderation in its borrowing proposals. “ A million and threequarters is not enough,” he said. “I am in favour of borrowing whatever may he

necessary to push on rapidly with the construction of railways.”

The proposals regarding increases in school teachers’ salaries were viewed by Oppositionists as “trifling improvements” only, which would not go far. Government members, on the other hand, were unanimous in approving of the leading features of the Budget. “It is not so packed with promises as some statements we have heard,” one Government supporter remarked, “but this Government keeps its promises, and bearing that in mind this year’s Statement is a verv satisfactory one.

A similar opinion was expressed by an Independent member who usually votes with the Government. Altogether the Government members expressed themselves as being well pleased and satisfied. Mr G. W. Russell, in an interview regarding the Budget, said : “It is characterised by timidity, and it shows an utter want of appreciation of the potentialities of this great country. Apparently the members of the Ministry are absolutely destitute of initiative, and the only thing that can be said is that they propose to follow in the lines of their predecessors with the exception of a few minor details. Their promises of non-borrowing or reduction of borrowing are completely negatived by the admission that during their first year of office they have increased the public debt by £5,700,000, an amount that is absolutely appalling when one bears in mind their professions and what they proposed to do when they secured office.

“Great queslioss,” continued ]SIr Russell, “ like electoral reform, alteration of the Customs tariff, so as to reduce the cost of living to the poor, local government development, the iron and steel industry of the dominion are reserved for the immediate or distant future. Apparently even at this stage the Government has no policy, and has come to no decision. Whilst on the most important question of naval defence, notwithstanding the fact that we were assured that the Hon. Mr Allen had brought back a scheme for ready submission to Parliament, the Government now, on the plea that it has still to settle .by correspondence certain details with the Admiralty, is afraid to submit its policy to the country. Evidently it hopes the discussion in Parliament will give a lead to ascertain how far it can safely go, bearing in mind the feelings of its own party.”

1912-13 r3 o . ■r. y J'S o g d c <1 s* rS Customs ... £3,200,000 £3.407,533 £207,533 Railways ... 3.745.000 3.968.350 223.350 Stamps 898,300 1,052,347 153,547 Post and Telegraph 1,141,500 1,167.977 26.977 Land tax 650.000 728.636 78.636 Income tax 350,000 462.994 12.994 Beer duty ... 119,000 124,223 5.223 Rcgisteration and other fees 95.165 95,930 *1.235 Marine 47,800 52.765 5,765 Miscellaneous 369,530 361,339 *8,191 Territorial revenue 173.495 254,509 81,014 National ondowment 59.414 59.414 — Totals... £10.943.404 £11,734,022 £795,044 * Less.

Stamps (S t a in p Departmcnt) 1,052,347 943,138 109,159 Postal and Telegraph 1,167,977 1,039,808 78.169 Land tax ... 728.636 647,016 81.620 Income tax ... 462,994 448,935 14,059 Beer duty ... 124,223 119,151 5,092 Railways 3,963,350 3,665,615 302,737 Registration and other fees 93,930 103.495 *14,565 Marine 52.765 48,322 4.443 Miscellaneous 361.339 371,868 *10,529 Territorial revenue 254.509 248,791 5,713 National end ow ment revenue 59,414 62.365 *2,951 Totals £11,734,022 £11,032,544 £701,473

mu* 230,100 — 68,400 208,800 1015 ... 8,146.200 352,100 1,333,565 0.830,865 1016 848,000 127.550 3,283,252 4,250,702 11117 225,200 1,087.800 572,240 1,885,240 1018 40.700 84.40*1 3,266,456 3,301,556 mm 134,350 60,000 1,302,465 1,406,815 1020 38,000 26,800 572.480 637,280