FINANCIAL STATEMENT.

Otago Witness, Issue 3419, 26 September 1919, Page 17

FINANCIAL STATEMENT.

TEAR'S OPERATIONS REVIEWED. SURPLUS OF £3,078,773. FUTURE OBLIGATIONS HEAVY. NATIONAL THRIFT IMPERATIVE.

The Financial Statement was brought down by Sir James Allen, Minister of Finance, on the night of the 23rd mst. In the course of it the Minister said: I have the honour to place before you the financial position of the dominion, and to offer for consideration by honourable members proposals for meeting the normal requirements of government as well as the heavy financial responsibility which has devolved upon this dominion owing to the war, now happily brought to a victorious conclusion. It is a, matter of great satisfaction to be able to inform honourable membars that the anticipations for the financial year 1918-19 were more than realised, and that the year's operations resulted in a considerable surplus of revenue over expenditure. Contrary to expectations, revenue from practically all sources substantially increased during the year, notwithstanding the interruption to trade and the difficulties of overseas transport. , From the statements submitted it will be observed that the total revenue for the year endino- 31st March, 1919, amounted to £22,352,372—an increase of £2,146,150 over the previous year, or £2,167,172 in excess of the estimate. The expenditure for 1918-19 showed an increase of £3,553,311 over that of 1917-18, or £1,119,478 below the amount appropriated, a fact which indicates the prudence and economy exercised by those entrusted with the administration of _ State services during the most difficult period in our history. Th 3 main items of increased expenditure were on account of interest and sinking fund on war loans, war and other pensions, and charges arising out of the recent epidemic, and the expenses of the trading departments, which were largely increased owing to the advance in the cost ot materials and in wages.

TREASURY DEPARTMENT. Revenue and Expenditure. The revenue and expenditure for the year 1918-19 as obmpared with the previous financial year ars as follow: — COMPARISON OF REVENUE.

PUBLIC WORKS FUND. Although expenditure upon public works has necessarily been very much curtailed, essential services have been provided for, and a total amount of £1,207,921 has been expended. ' The position of the Public Works Fund as at March 31; 1919, was: Balance brought f orvrard on April 1, 1918 £295,540 Receipts— Loan money— Finance Act, 1918 (No. 2), Section- 29 (Aid to Publio Works) £360,000 Finance Act, 1917, Section 77 725,000 Other receipts 13,580 £1,394,120 Expenditure— Under appropriation 1,207,482 Other expenditure 439 Balance at-. March 31, 1919 £186j199* * Note. —The balance on March 31, 1919, is made up as follovrs : Cash in Publio Account ... 157,360 Imprests in the hands of officers of the Government 28,839 . ' £186,199 REDEMPTIONS AND RENEWALS. Excluding our liability to the Imperial Government for war expenditure, which will be dealt with elsewhere, the total debt falling due during the year amounted to £1,705,865, and of this amount £1,448,850 was renewed. £169,165 was redeemed with funds borrowed from the Post Office, and £87,250 was provided by departmental funds, leaving a balance of £6OO representing unpresented debentures. CONVERSIONS. During the year 105 investors took advantage of the conversion scheme authorised by the New Zealand Inscribed Stock Act, 1917. The total sum of £301,050 was converted into inscribed stock with 20 years' 'currency and bearing interest at 4| per cent, free of income tax. LOANS FALLING DUE.

The loans falling due during the seven vears ending with the year 1926 are as follow :

COST OF RAISING LOANS. The percental cost of raising the respective loans issued in New Zealand is shown in the following table : i tJ ' | t a B 8 I ■e ” « 9! § so Authority, 9 .§ so g .9 rt 92 rf ft "g .35 ° S S <§ o I Finance Act, 1915 (Aid £ £ s. d, to Publio Works) ... 2,005,030 6,030 5 0J Finance Act, 191 G ... 11,572,450 54,667 9 5J War Purposes Loan Act, 1917 23,273,500 103,540 8 10J Finance Act, 1913 ... 5,215,400 293 COMPULSORY CONTRIBUTIONS TO WAR LOANS. The legislation passed to enable the Government to compel 'persons to subscribe to the war loans in cases where they had not voluntarily contributed their fair proportion has been prominently before the publio. The list of subscribers has been carefully examined and compared with the list of taxpayers, and every means has been taken to compel the financial shirker to shoulder his fair proportion of the responsibilities. TREASURY PAYMENTS AND LODGMENTS. The number of payment vouchors which passed through the Treasury during the year 1918-19 was 295,813, whereas during the year 1913-14 (the year before the war) the number was 196,455. The total lodgments to the credit of the Public Account were £72,440,211 and £17,120,240 for the above two years respectively, and total payments out of Publio Account £74,184,737 and £17,106,489 respectively. CUSTOMS DEPARTMENT. Before proceeding to estimate the revenue for 1819-20 it may be as well to state the amount realised in 1918-19. This was estimated at £3,500,000, and the amount collected was £3,830,681, being well above the average revenue received during tho past 10 years. As a matter of fact, it has only once been exceeded—namely, in 191617, when £3,849,675 was collected. Tho excise beer duty was £273,334. as against the esimate of £225,000. The number of gallons of beer brewed totalled 11,169,920. This gives an average duty per gallon of 5.875 d. Tiro quantity browed for tho previous financial year t0ta11edT1,039,053 gallons. In estimating the revenue for the financial year 1919-30, the usual inquiries have been made from the principal commercial houses importing soft goods, hardware, drugs and chemicals, electrical goods, glass

and chinaware, wines and spirits, tobacco, cigars, etc., and the general opinion expressed leads to tlio belief that we may look for quite as much revenue as in any previous year The returns already to hand for April, May, and June, 1919, are considerably in excess of those for the corresponding months of 1918, the figures being—April, May, June, 1919, £1,077,602, as against £860,907 for the same months of 19.18. Shipping facilities are bound to bo better than during the war period, and should there be no serious industrial trouble, or interference with shipping, thero appears to be no srood reason why the revenue for the present financial year should not reach £4,400,000. The values of imports and exports for the past three financial years are as follow: Imports. Exports. 1916-17 £26,162,706 £30,538,466 1917-18 20,983,612 31,298 270 1918-19 26,437,284 32,263',792 It should be carefully borne in mind that the import values are based upon the fair market value in the country of exportation plus 10 per cent. This is the value for ad valorem and primage duties. The true landed cost is probably 20 per cent, in advance of the figures shown for imports owing to the high freights. RECAPITULATION OF ESTIMATED REVENUE TO BE COLLECTED BY THE CUSTOMS DEPARTMENT FOR , 1919-20. Customs revenue £4,400,000 Beer duty 270,000 Bonded warehouse duty, timber export duty, and other receipts 7,000 £4,677,000 LAND AND INCOME TAX DEPARTMENT. The net receipts in this department for the past year amounted to £7,732,029; land tax, £1,512,693; income tax, £6,219,006; and, compared with the collection for the previous year, show an increase of £726,760. The land tax receipts compared with those of 1917-18 show an increase of £126,985. The comparison is as follows: Receipts, 1918-19 £1,512,693 Receipts, 1917-18 1,385,708 Increase ... £ 126,985 This increase is attributable to the _ increased value of land in districts revised under the provisions of the Valuation of I/and Act. The income tax receipts compared with those of 1917-18 show an increase .of £599,775. The comparison is as follows: Receipts, 1918-19 £6,219,336 Receipts, 1917-18 5,619,561 Increase £ 599,775 The increase is due to the increased incomes of taxpayers, and in part to the review of previous years' assessments made by the department. DEPARTMENT OF PUBLIC HEALTH, lIuSPITALS, AND CHARITABLE AID. A heavy increase in expenditure under the vote "Public health, hospitals, and charitable aid" will bo necessitated this year, the principal items of which are those relating to the influenza epidemic. It is anticipated that the total cost of the epidemic will be about' £220.000, which should be reduced by recoveries from the sale of equipment and the use thereof at mnt's own institutions and quarantine stations, to a net expenditure of £197 003. -d. sum of £60,000 will bo required to meet the allowances to epidemic widows and widowers. The Government decided to authorise Hospital Boards to pay "on its behalf to widows with children amounts not exceeding £1 5s a week for the widow and 'los 6d a week for each child, and to widowers with children in poor circumstances a sum not exceeding £1 5s a week in order that they may engage a housekeeper to keep their homes together and look after the children. The annual cost of these allowances will bo possibly about £90,000, of which £60,000 is required this year.

A further item in connection with the influenza epidemic is the cost of the Epidemic Commission, estimated to be £I2OO. In addition to these increases in the expenditure, there has been a general increase in the administrative expenditure of the department; additional staff has been necessitated, and the splitting-up of the present Large health districts into smaller districts means the appointment of additional health officers and consequent office and administrative expenses, including increased activities necessitated in the prevention of infectious diseases.

There will also be considerable increase in quarantine expenses during the year. Other items of increase are those under the heading "Bacteriological Laboratory" and wages at the department's institutions, which have increased in accordance with the general increase in wages. SffATE ADVANCES OFFICE, This essential and ever-growing department was never in a better position to assist and help deserving settlers and workers, and its usefulness in the future will, I feel sure, be more than ever appreciated by those who seek to obtain cheap money from the State. During the year the department has, through accumulations of capital, been able to increase the limits of advances and to advance considerable sums of money to settlers, workers, and local authorities. The amount that can bo borrowed by a local authority in any year has been increased from £SOOO to £IO,OOO. To those in search of a homo the sum of £IOOO can bo lent by the Settlers Branch. To settlers for' improvements on rural lands tho sum of £IOOO can still be borrowed, whilst for the repayment of mortgages on real estate £450 is available. To the workers £4§o, the maximum sum allowed by law, is obtainable, provided the security is sufficient and satisfactory. During the period of the war the rate of interest chargeable to borrowers on loans remained unchanged: 4£ per cent. Is payable by local authorities, and 5 per cent, by settlers and workers. The latter rate is, however, reducible to 4A per cent, when payment is made promptly.

The total amounts of advances paid over from the commencement of the scheme to March 31, 1919, were: Advances to settlers ... -...£17,957,600 Advances to workers ... M . 3,560,840 Advances to local authorities ~, 3,099,865

Total ,„ ra ..« M -...£24,618,305

The amounts current as at March 31, 1919, were: Advances to settlers £7,985,276 Advances to workers 2,576,579 Advances to local authorities ... 2,846,836 Total £13,408 : c The loans authorised but not paid over as at March 31, 1919, were : Advances to settlers £125,340 Advances to workers 29,275 Advances to locil .authorities 313,150 Total £467,765 WAR EXPENDITURE At the end of the financial year 1918-19 the war expenditure of this dominion, including imprest advances outstanding, had reached the sum of £62,636,720; whilst towards meeting commitments connected with the New Zealand Expeditionary Force, including charges for the maintenance of our troops in the field, equipment, supplies, pay, allowances, and other incidental charges, there was a cash balance and temporary investments amounting to £6,084,469. _ These sums do not include provision for interest and sinking fund charges on war loans raised, nor for war, pensions, which are a charge upon the ordinary revenue of the dominion. It will be necessary to continue, to make generous provision for the expert medical treatment and skilled nursing of our sick and wounded, for whom special hospitals and sanatoria have been provided.

The payment of retrospective married allowances to soldiers' wives, for which approximately £500,000 was authorised, has absorbed £230,000 to date, but large numbers of applications are still coming m. Heavy charges for the sea transport of the returning troops, their pay, maintenance, etc.. have to be rnct. I submit hereunder a statement showing the receipts and expenditure of the war expenses account as disclosed by the Treasury books for the quarter ended June 30, 1919 : Balance brought forward on April 1, 1919 ... £7,979,826 Receipts— ~.. Loan money £1,645,610 Other receipts 34,943 - 1,680,553 £9,660,379 Expenditure 1,500,826 Balance at June 30, 1919 ..- ... *£8,359,553 *The balance on June 30 is made up as follows:—Cash in public account, £443,424; investments, £3,820,218; imprests outstanding 1 , £4,095,911;—-total, £8,359,553. MUNITIONS AND SUPPLIES. Owing to the cessation of hostilities with Germany the activities of the Munitions and Supplies Department were duly brought to a close on March 31, 1919. Up to this time the total expenditure by the department in procuring stores for military purposes amounted to approximately four and a-half millions sterling, the whole of thi3. sum, representing an annual expenditure of £1,300,000, being handled without a single case of fraud, although at the beginning of the department's activities it had been found necessary to inflict fines where specifications had not-been faithfully carried out, amounting in one case to £2OOO. When the armistice was sighed the department was committed to incomplete contracts to the value of £145,000. Owing to the fact that a clause had been inserted in the contracts giving the' department the right to terminate by taking over materials, these commitments were cancelled, at a total cost by way of compensation amounting to £U2, and' by taking over from the contractors goods useful to the military authorities to the value of £32,000. A surplus stock of consumable goods to the value of £9,588 was disposed of at a net loss on cost of £2772.

It is satisfactory to record that the cost of administering the Munitions and Supplies Department amounted in round figAirea to £IB,OOO, being an average annual cost of £SOOO. In this connection it is well to remember that the economy in expenditure has been due largely to valuable servio33 rendered gratuitously by the advisers and experts who patriotically placed their eei> vices at the disposal of the Minister in charge. IMMIGRATION. The facilities of shipping have not become normal, and for that reason the only immigrants arriving at the present time are the wives and families of the members of the Expeditionary Force. The Imperial Government has invited this Government to indicate to what extent we can arrange that soldiers of the Imperial army may ,be assured of immediate employment and opportunity of settlement if they emigrate to New Zealand. The Imperial Government has been informed that until our own returning soldiers have been provided for we are unable to offer such facilities, but that we hope later to be in a position to request employers to give preference to immigrants who have served in the cause of the Empire over any other class coming to our shores. It is intended, as soon as shipping accommodation can be secured, to resume with vigour the work of the Immigration Department in England, and to endeavour to secure for New Zealand at least its full share of the best class of those who leave the Mother Country to settle in the distant parts of the Empire. Arrangements have been made to grant assistance to members of the Now Zealand Expeditionary Force to enable them to nominate their fiancees for passages to the dominion. The Immigration Department is co-operating with the Defence Department, each paying one-half of the Government contribution. The Imperial Government is despatching to New Zealand two women delegates to make inquiries regarding openings for women settlers from the United Kingdom. Arrangements are being made to give the delegates every assistance during their visit to New Zealand. RAILWAYS SUPERANNUATION FUND.

In my last Budget, presented on August 6, 1914, the committee was. informed that, as a result of an investigation, the actuary reported it wus necessary to provide an additional £25,000 per annum for the next three years to make the Railways Superannuation Fund sound, and that at the expiration of three years a further investigation should be made. In accordance with the recommendation of the actuary, an extra £25,000, malting in all £50,000. was provided on the Estimates for the year 1914-15, and this sum was duly paid. Shortly after taking over the duty of Finance Minister, on September 1 last, the

General Manager of Railways reported that the accumulated funds had declined from £377,5£5 in 1917 to £363,804 at March 31, 1919, a decrease of £14,000 in two years, and that during tho same period the liability of the fund to the contributors had increased by £54,800 in respect of cash contributed, lie further stated that "it wa£ imperatively necessary that, stops he ab once taken to stabilise tho Railway Fund without further delay," and lie strongly recommended "the sum of £150,000 be paid to the credit of the fund this year, and "thai future payments by way of subsidy should be £50,000 per annum." The General Manager's communication was at once referred to the actuai-y, who has reported that it will take some time td collect thS necessary data and make tha valuation, and he recommends an immediate increase in the subsidy of £50,000," mak« ing an annual contribution of £75,000 in* stead of £25,000, and that the matter be reviewed and adjusted when the result of the actuarial investigation is available. The sufficiency of tho fund is guaranteed by the State, but in order to remove any possible feeling amongst the railway employees as to the stability' of the Superannuation Fund, and to assure them of the readiness of the Government to keep iti sound, the extra £50,000 will be provided on this year's Estimates, and instructions will be issued for an actuarial investigation as early as possible. PUBLIC SERVICE AND TEACHERS* SUPERANNUATION FUNDS. The annual contributions to the Publio Service Superannuation Fund in accordance with the actuary's report of the 25th May, 1918, for the triennial period ended 31st December, 1916, was increased from, £48,000 to £86,000 under tho .authority of section 26 of "Tho Appropriation Act, 1918." By section 2o of the same Aot the subsidy to the Teachers' Superannuation Fund waa increased from £17,000 to £43,000 in accord with tho actuary's report of the 22nd September, 1917, for the triennial period ended 31st December, 1916. It was clear from the reports that tha actuary intended the increased subsidy should bo made for the years 1917, 1918, ka well as for 1919.

The amount of subsidy short-paid for the two years is £76,000 for the Public Service Superannuation and £52,000 for the teachers* —or a total of £128,000.

I am making further inquiry with regard to this shortage, and, if found necessary, will make provision by appropriation before the session closes. SAMOAN ADMINISTRATION.

On the return to New Zealand of thff 'Expeditionary Force the military establishment in occupation at Samoa was fixed at a total of 393 officers and other ranks. At the present time the normal establishment 1 is 259 officers and other ranks, but the actual number of troops, including the Com-mander-in-Chief and his staff, is 129 of all ranks, or 110 below strength. The maintenance of this force has been necessary for the preservation of order, but this military force will be demobilised and will be replaced by civil police as soon as civil con* trol ia. established. The future control of Samoa is now definitely vested in New Zealand as the mandatory power approved by the League of Nations. The dominion will be given full jurisdiction and authority to govern Samoa as if it were an integral part of New Zealand, subject only to conditions and i restrictions that may be expressed in the mandate, and legislation to enable the Government to provide for the peace, order, and good government of Samoa will be placed before Parliament this session. _. "."•"''.. As. sobn as the mandate is received the Administration will bo empowered to dispose of the land and estates of enemy nationals in the. ceded territory. Hitherto the Administration has only been authorised to dispose of businesses. The method of disposal has not yet been decided, but there are three alternatives:

(a) Sale to a company strong enough to purchase ana work them;:; (b) Subdivision and sale to individuals} (c) Purchase by the Crown for lease either as a whole or in subdivisions. Already inquiries have been made on behalf of syndicates in New Zealand, Australia, and the : United Kingdom. The Administrator has reported that certain public utilities and works are urgently required. The Government has been unable to deal with these matters up to the present owing to the uncertainty a 3 to the control of the islands, but now that our future! jurisdiction is assured it ie intended to proceed forthwith with the most urgent of these works, and authority has been granted for the expenditure of £30,000 on waterworks and sanitary drainage. Immediate' provision should be made for these two essential services. The money for this purpose is being provided by the liquidator, from the accumulated profits arising from the administration of enemy estates held by him in Samoa, and is being advanced aa a loan at 4£ per cent, interest with 1 per cent, sinking fund. During the period of occupation the Administration has also allocated an average of £15,000 per annum out of the revenue account for capital expenditure on development and other works. PUBLIC SERVICE.

Honourable members are aware that lasti session provision was made for a complete revision of the salaries and wages of public! servants. During the recess this important and necessary work has been carefully undertaken. As a, result the departmental votes for salaries disclose such substantial increases as to dispense with the necessity of providing for the payment of a special wan bonus to meet the increased cost of living. This increase in the pay of public servants is not only in keeping with the general advance in the ruling rates paid for all classes of labour, but is a just recognition of the excellence of the work carried out by all departments and branches of the pubho service during the heavy strain of the past five years; and I am sure honourable members will be pleased to note that the status of those public servants who went on active service has been carefully preserved, and that in almost every instance the State employee on his return from the front will take up his duties under improved conditions as regards pay. FUTURE OBLIGATIONS. The attention of honourable members has already been called to the pressure brought to bear upon the Government to provide for an expenditure beyond the capacity of the country to meet. I desire to repeat that warning, ar*d, further,' to state that there was never a time when the necessity fop national thrift was greater than at present* Our future obligations are particularlj

heavy, especially the permanent charges established against the revenue of the dominion as a result of the war. Interest and sinking fund charges and war pensions are also very heavy, and have not yet reached their maximum. The requirements for public works, and the expenditure necessary to promote the development of education and of agricultural and industrial pursuits, must not be lost sight of. Our finance must be established on a solid basis, for without sound finance national progress is impossible. HYDRO-ELECTRIC SUPPLY. Tho continued success of the Lake Coleridge hydro-electric supply system has been of the greatest significance (particularly during the recent coal shortage] in maintaining the industries and domestic conveniences of the district supplied and in reducing the demand for coal. The plant is now overloaded, and it is proposed to complete the installation up to the capacity of the existing- headworks (16,000 horse-power) as soon as the necessary materials can be obtained, and to push on with the extensions to South Canterbury, as well as the necessary surveys for other power services in the South Island. For these works a sum of £IOO,OOO will be provided. In the North Island the Mangahao works (24,000 horse-power), for the supply of the Wellington province, are in hand, and will be pushed on energetically. For the Auckland province investigations are being carried out at Arapuni Rapids, on the Waikato River, where it is proposed to develop up to a capacity of 86,000 horse-power, with transmission lines extending northwards to Auckland, and ultimately joining up with Wairua .Fails power station at Whangarei, eastward to Rotorua, Whakatane, and Gisborne, ultimately joining up to the Waikaremoana power system, and southward, via. the Main Trunk railway line, to join up with the Manrj-ahao system at Palmerston. and via the Stratford-Ongarue railway to New Plymouth. For these works a sum of £500,000 will bo provided during the current year. Proposals by certain local bodies t-re under consideration for the development of hydro-electric pow-er in several parts of the dominion, but no decision has yet been arrived at, except in tho case of Southland, where the local scheme has been taken in hand vigorously. The hydro-electric works at Horahora have been acquired by the Government from the Waihi Gold Mining Company, thus enabling electric power to be supplied very shortly throughout the Waikato and surrounding districts^ FINANCIAL RESPONSIBILITIES, The following table indicates generallytho loan moneys required during the 12 months commencing September 1, 1919, also the unexhausted authorities for borrowing already provided, or to be provided this session, the cash balances available at that date, and the sources from which it will be necessary to secure the loans: —

received during the- five months of the financial year it is gratifying to note that tho estimated for the year will be larger than was at first anticipated. For tho year 1919-20, under the main heads of each of tho important departments, I estimate the revenue at: Customs £4,400,000 Railways 5,000,000 Stamp .and death duties 2,450,000 Post and telegraph : ... 1,910,000 Land and income tax 7,360,000 Boer duty 270,000 Registration and other fees ... 110,000 Amusements tax ... 40.000 Marino ... 58,925 Miscellaneous 962,600 Territorial revenue 194,300 Endowment revenue 108,340 Other receipts 45,000 £22,919,165 HOSPITALS, AND -CHARITABLE AID. I estimate a. surplus for the year 191920 of £478,108, which is available for the supplementary estimates, and is made up as follows: Estimated revenue, 1919-20 ... £22,919,165 Estimated expenditure 22,441,057 Available for supplementary estimates £ 478,103 CONCLUSION.

Twice in the last five years it has fallen to my lot to deliver the Financial Statement —namely, on August 6, 1914. and to-day. Many anxious moments have passed during tho interval, but we never lost confidence in the justice of our cause and the ultimate success of our arms. The statement made tliis day is the first delivered since the signing of peace, and the occasion seems opportune to place on record the fact that this country fulfilled all its obligations to the Motherland, and never failed to supply its own Expeditionary Force with adequate support right up to the signing of the armistice. Tt may fairly be claimed that the assurance of this practical sympathy and support did much to assist our soldiers in securing the splendid reputation which they havo earned, and which we may rightly look upon as one of the most valuable assets this country possesses. But this has not been achieved without serious loss. serious not alone on account of the sad hearts of relatives and friends who mourn the dead, but also because it will be very difficult to replace the loss of those who had they been spared to return to their homes, would hava been associated with us now, and later on would have taken our placo in ■ endeavouring to solve the many complex problems which the country is being called upon to deal with. But we can and ought to do something to perpetuate the memory of the men and women who gave their lives for the benefit of those of us who remain to share in the blessings

For Year ending 31st August, 1920. Cash in Hand and Requirements. Amount. Unexhausted Imprest, Ist Authority, etc., and new Sepfcamber, Authority. 1919. For cost N.Z. Expeditionary Force f Finance Acts (1918) £7,914,788* " and treatment of sick and wounded \ £15,695,215, of which repatriation, etc. £ 8.775,000./ £IOOOO,OOO is now Gratuities ami allowances ... ,6.050,000] being raised in New \ Zealand. Discharged soldiers settlement ... 12,500,000 Discharged Soldiers Settlement lx>an Act, 1919, £2,000,000 Land for settlements on account of soldiers ~- ... 2,000,000 Total for soldiers ... 2Ej,325,000 £2,090,000 £ 435,889 Publio worts ... 500,000 To be provided 1919 Nil. (£500,000 for current year and £750.000 for subsequent years) Education buildings, etc J ... 500,000 • A considerable portion of this has already been ■ spent, but vouchers have not yet reached the Total £30,325,000 Treasury.

In addition to the- above new requirements the Treasury will als ohave to raise money to carry on the development works and other State activities now in progress throughout the Dominion. ACCUMULATED SURPLUS.

It is not, •in my opinion, wise to raise the £12,500,000 required for discharged soldiers settlement by publio subscription in New Zealand, nor is it feasible to float a loan for the purpose outside New Zealand. I purpose, therefore, to provide this amount from the accumulated surplus, which it is hoped will bo restored to the full amount, £15,239,561, by March 31, 1920, leaving a balance after making this provision of accumulated surplus £2,739,561. The Reserve Fund securities, which at present amount to £300,000, have proved of great assistance during war-time, and it is, in my opinion, advisable to strengthen these securities by utilising £1,200,000 of the remaining accumulated surplus in order to bring the total Reserve Fund securities up to £2,000,000. I propose that the balance of the accumulated surplus, £1.539,561. be carried forward either to strengthen the Consolidated Fund during the early months of the_ financial year when the revenue is insufficient to meet the expenditure, or to be available for investment in loans required for land settlement for soldiers and authorised by the Discharged Soldiers Settlement Loan Act, 1919, or other purposes in connection with the war, should any difficulty present itself in raising money in New Zealand or elsewhere. TAXATION. It would have been a great pleasure to mo to have been in a position to announce this year some reduction in the heavy burden of taxation; the estimates of revenue and expenditure, however, make it clear that this must be postponed, nor has there been time for me since I took over the portofolio of Finance to consider anomalies which exist and make readjustments. _ I trust, however, that the time is not far distant when by the increase in population and a return to the more normal rate -of expenditure softie relief may be afforded to the taxpayers of the country. ESTIMATES OF REVENUE.

When the draft Budget was placed in my hands on September 1 last the estimated expenditure exceeded the revenue by £934,000 "with the supplementary estimates yet to come. Heads of departments were asked to meet me, and as a result of their loyal co-operation I am pleased to report that the estimated expenditure was reduced by approximately ,£400,000. Provision for increased expenditure on account of tho Education Department, which would have been postponed for the supplementary estimates but which is now included in the main estimates, reduced tho £400,000 to £200,000. As a result of experience of the revenue

to be enjoyed from what we hope may prove to. bo a lasting peace. For this purpose* it is proposed to set aside this session not less than £IOO,OOO to erect a national memorial, designed and carried out by the best talent available, which will perpetuate for all time the memory of those who with self-sacrificing devotion gave their lives to save the Empire, and be a constant reminder that there is no nobler duty than to sacrifice self in the service of all. __________ THE ESTIMATES. PRINCIPAL VOTES. (Fsnu Or/B Ow- Coeesbpok6kkt.) WELLINGTON, September 23. The Estimates presented with the Budget contain the following votes of general interest:— Assistance to the sick and funeral funds of friendly societies on account of the Avar, £20,000. Payment of the cost of reinsuring the funeral benefits of members of friendly societies serving with the Expeditionary Forces, £13,000. Decoration and illumination of public buildings for peace, £4500. Contribution to the monument to the Hon. Wi Pere, £320. Contribution towards the erection of a hospital at Niue, £IOOO. _ . " Expenses of police inquiry, £773. Contribution to the Imperial Mineral Resources Bureau, £IOOO. Expenses of New Zealand representatives on the Imperial Mineral Resources Bureau, £l2O. Inquiry regarding mining methods and appliances outside New Zealand, £SOO. Preservation of bird life, £3OO. Official war correspondent, £I6OO. Board of Science and Art, including publications, £SOO. Scientific and industrial research, £750.. Grant to the New Zealand Institute for research work, £2500. Investigation of mosquitoes, £IOO. Peace celebrations, £IO,OOO. Preservation of aboriginal rock paintings, £250. Dental treatment and bursaries, Publio Health Department, £ISOO. Separation, children's, and subsistence allowances for home service men, £3OOO. Preparation and printing of new electoral rolls, £20,000. Expenses of general election, £50,000. Expenses of licensing poll, £15,000. Subsidy on flour, £213,000. Expenses of Coal Trade Committee, £4000.. Purchase of land for addition to State forests, £50,000. Purchase and working of plant for State forests, £20,000. Purchase of coal mining properties, £35,000.

Stranded New Zcalanders, expenses and advances, £IOOO. Relief to epidemic widows and widowers and dependents, £60,000. Expenses of Royal Commission on the influenza epidemic, £ISOO. Free treatment of soldiers' wives and dopendents, £IOOO. Grants to hospital boards in special districts to supplement subsidies, £SOOO. Infectious diseases, £SOO. Influenza, epidemic expenses, gratuities, etc., £165,000. The Estimates include the following items: —Experimental areas in Central Otago, wages, £100; other expenses, £3OO. Milton Post Office (renovations), £300; grant to Karitano Home, Dunedin, £750; Mossburn-Te Anau road, erection of bridge (subsidy £175 £1 for £1 and grant £100), £275. Otago University: Grant towards analytical laboratory, £100; grant towards bacteriological laboratory for special services, £1000; medical bursaries, £BOO. Erection of stop-banks and groynes, Hakataramea Salmon Station, £350; grant for costs and maintenance of fish hatcheries at salmon hatchery at Hakataramea, £150; grant for maintenance of Portobello Fish Hatcheries, £500; Fox and Franz Jo.«ef Glaciers tracks and huts, £SO; Glado House and Te Anau-Wakatipu-Milford track maintenance, including furniture and repairs, £llOO. Mount Cook Hermitage: Hostel, tracks and huts, maintenance, including guiding equipment, furniture, and repairs, £SOOO. Queenstown Reserves: Maintenance, improvements, music, etc., £IOO.

Tear ended Year ended March 31, March 31. 1910. 1918. £3,830.GS1 £3,364,308 Stamp and death duties 2,124,773 1,892,014 Postal and telegraph ... 1,984,811 1 836,256 R385,708 1,512,693 Income tax 6,219,336 5,619,561 Beer dutr 273,334 237,075 Railways 4,975,445 ' 4,668,223 Registration and other 101,249 111,993 35,151 38,053 Miscellaneous 946,669 <18,437 Territorial 202,734 205,643 Rational endowment 100,493 revenue 108,824 Other receipts 45,928 39,202 Totals £22,852,372 £20,206,222 COMPARISON OF EXPENDITURE. Year ended Year ended March 31, March 31. 1019. 1918. Permanent Appropriations— Civil list £ 28,669 & 2<,b74 Interest and Sinking 4,430,779 6,086,769 Tinder special Acts 726,047 621,258 Subsidies paid to local 139,213 authorities 140,309 Territorial revenue ... 46,576 48,831 Endowments 150,410 164,543 Old-age pensions . 709,336 612,464 Widows’ pensions 80,670 67,931 Military pensions 50,511 50,733 War pension 1,199,541 615,384 £9,218,850 £6,668,810 Annual Appropriations— £ 41,797 Legislative Departments £ 36,729 Departments of Finance 167,237 132.896 Post and Telegraph Department 1.699,701 1,487,145 Working Railways 3,415,595 3,067,658 Department Public buildings, domains, and maintenance of roads 121,384 99,393 Native Department ... 25,694 24,242 Justice Department ... 549,794 485 428 Mines Department 40,638 26,613 Department ol Internal 271,218 249,747 Affairs Mental Hospitals, Pub lie Health, and Hos- • pitals and Charitable 225,701 Aid Departments 318,808 Tourists Department ... 53,658 48,733 428,112 Defence Department ... 416,427 Customs, Marine, and Inspection of Machinery Departments 186,561 163 395 Department of Labour 32,954 30,746 Department of Lands and Survey 209,403 159,831 Valuation and Electoral Departments 53,070 38,425 Department of Agriculture, Industries, and Commerce 240,465 224,565 Education Department 1,602,995 1 511,256 Services not provided for 12,420 5,795 £9,454,749 £8,451,478 Totals ... ».< 618,673,599 £16,120,288 SURPLUS. It is my pleasing duty to announce that the surplus for the year amounted to $3,678,773. It is arrived at as follows:—* Revenue ... ... ... £22,352,372 Expenditure 18,673.599 £ 3,678,773 surplus at the end of the financial year, 1917-8 £11,560,783 Total flccunmlc^A •wrnlus ... £15,239,561

Tear ending March 31 London. Australia N.Z. Total. 1920 £42,800 £29,400 £3,695,743 £3,767,945 1921 3,000 551,200 9,551,257 10,105,457 1922 10,000 914,100 5,437 790 6,361,890 1923 30,300 666,850 8,141,406 8,833,556 1924 1,721,100 29,700 6,758,465 8,509,265 I.92S 188,100 200,000 743.392 1,131,49? 1926 1,400 — 382,010 383,410