PITH OF THE BUDGET.

Otago Witness, Issue 3830, 9 August 1927, Page 38

PITH OF THE BUDGET.

PAST YEAR’S OPERATIONS.

SUMMARY OF RESULTS AND PROPOSALS

War debt reduced by £8,280,362, or 10 per cent., in five years. London Loan, 1927— £6.000,000 oversubscribed. Terms, 5 per cent, at £99 10s—better than any other similar issue this year. N Cost, including redemption of discount and expenses, £5 4s 7d per cent. In terms of prospectus proceeds to be expended on public Kerbs. State Advances— xion o-n Loans paid during- year 6,185,9(0 Loans paid over in last four years on urban and suburban securities 12,096,502 On rural securities 11,803,437 23,899,939 Rural Advances Act— Commenced operations on April 1 last. Loans authorised to July 18 - 3,897,965 Legislation being brought down to organise intermediate credit for farmers. Local Government Loans Board— Commenced operations on April 1 last. State Departments on a commercial basis have in the main experienced a successful year. U nemployment— State Departments absorbed large number of additional men. Legislation passed enabling local authorities to raise loans for relief works without a poll. Subsidy on wages and on voluntary contributions for approved relief works. Contribution provided for Singapore naval base. z Taxation— . . Position and recommendations of Taxation Commission reviewed. Income tax one of the most liberal in the world in regard to rate of tax and exemptions. Further substantial reductions not feasible until good progress made in reduction of dead-weight debt. Change in basis of company taxation cannot at present be considered, as it involves large loss of revenue. Correcfion in graduations of income tax this year so that reduction when feasible can be made on equitable and scientific basis. Adjustments to he made in Customs tariff. ESTIMATES FOR 1927-28. Consolidated Fund— £ Ordinary Revenue Account— Estimated revenue. 24,676.900 Estimated expenditure 24,498,549 Available for supplementary estimate® ... £178,351 £ Estimated Customs and excise revenue 8,385.000 Estimated stamp and death duties 3,403,100 Estimated land and income tax 4,630,000

Consolidated Fund— Ordinary Revenue Account— £ Revenue • 24.943,107 Expenditure 24,355,965 Surplus, 1926-27 £537,142 Revenue exceeded estimate bv £676,907 Revenue from taxation— £ £ Direct (land and income tax and death duties) 8.030.299 Indirect (Customs and Excise) 8.874.388 16.904,687 Land and income tax receipts well maintained Comparative decrease in Customs 131,302 Increase in postal and telegraph receipts 148.823 Compared with previous year total increase in expenditure - 785,882 Increases in expenditure under permanent appropriations— Interest and debt-reduction 403.767 Pensions (other than war) 94.033 Fruit-export guarantee 82.619 Other 97,598 — 678,017 Gross interest paid— War debt 3,545.644 Ordinary debt 7,049.011 _ -— 10.594,655 Interest burden on taxpayer for ordinary debt 2,271,150 War debt charges and war pensions absorb more than whole of receipts from land and income tax. Expenditure under annual appropriations— -p. Net expenditure for year 10.091,020 Increase compared with previous year 107,865 Increase under vote “Education” 99,878 Additional cost of naval defence 85,820 Decrease in postal and telegraph working expenses 63,353 Electoral decrease 91.410 Less than appropriations by 437,667 Figures demonstrate that economy and close control exercised during the year. Balance of Ordinary Revenue Account on 31st March, 1927 3.681,466 Use of surpluses for capital purposes and debt-reduction relieves taxpayer and maintains high credit in London. No Treasury bills outstanding on March 31, 1927. Cash balances being kept more closely invested : Increased interest earned 53,213 Capital expenditure on public works— £ £ Railways 2,369.912 Telegraphs and telephones 558,041 Hydro-electric supply 1,130,013 Main highways and roads 1,154,967 Other 1.455.034 —■ 6.667.967 Gross public debt as at March 31, 1927 £245,850,889 Subdivided— £ £ Ordinary 132,421.885 War 73,563,181 State advances 30.191,097 Discharged soldiers 9,674,726 £245,850,889 £ £ Public Debt Redemption Fund and accumulated Sinking Funds provide capital set off against debt amounting to 27,169,185 New loans raised during year— For public works 6,878,270 For State advances 2,400,935 For other purposes 348,176 — 9,627:381 Funds for debt-reduction during year— From statutory payments 1.289,305 From surpluses 515,158 From reparations and miscellaneous war credits ... 735,760 From other sources 91,747 Debt-reductions during vear — War debt 1,770,467 Ordinary /b,293 Discharged soldiers 83,210 2,631,970 Net increase in debt for year 6,995,411 War debt reduced by £8,280,362, or 10 per cent., in five years. London Loan, 1927— £6.000,000 oversubscribed. Terms, 5 per cent, at £99 10s—better than any other similar issue this vear. N Cost, including redemption of discount and expenses, £5 4s 7d per cent. In terms of prospectus proceeds to be expended on public works.