REVENUE DECLINES

Southland Times, Issue 21577, 15 December 1931, Page 7

REVENUE DECLINES

PUBLIC FINANCES REVIEW BY MINISTER DIFFICULT YEAH AHEAD THE BUDGETARY POSITION (Per United Press Association.) Wellington, December 14. The Minister of Finance (the Hon. W. Downie Stewart to-day issued the following statement on the position of the public finances: The revenue and expenditure figures of the Consolidated Fund for the eight months ended on November 30 have just been completed and before leaving the Dominion to meet the Canadian Minister of Industries and Commerce at Honolulu, I would like to take this opportunity of placing the position as I now find it before the people of the Dominion. The revenue fot the eight months amounted to £9,400,018, compared with £12,233,814 for the corresponding period of the previous year, but a considerable falling off was allowed for in the Budget for the current year. Receipts from taxation amounted to £7,360,011, including £3,639,000 from Customs, £1,691,720 from stamp and death duties and £1,284,422 from motor vehicles duties and licenses. The Customs receipts were approximately £470,000 short of the appropriate proportion of the Estimates for the year. The position of tliis item is nearly £lOO,OOO worse than it was at the end of the seven months and as two-thirds of the financial year has now gone, the prospects of reaching even the amended Budget estimate is certainly not promising, in fact it now appears to me practically certain that there will be a considerable shortage in customs revenue.

As I have previously indicated, the position in regard to stamp and death duties is also very uncertain. The receipts for the eight months are behind hand to the extent of £210,000. On a proportionate basis, death duties fluctuate from month to month and for obvious reasons receipts under that heading cannot be estimated with any certainty. There is little indication of buoyancy in the revenue from racing and amusements and stamp duties generally. The land tax was due at the end of November but the receipts will not be included in the figures until December. The indications are, however, that the revenue will fall a little short of the Estimate. Income tax of course is not payable until later in the year. Interests receipts for the eight months amounted to £1,274,099 and other receipts to £1,360,734. As these receipts for the most part are not spread evenly over the year, they cannot be judged on a proportionate basis. The Railways. I may say that the railways are having a hard struggle to balance the shrinkages in revenue by savings in expenditure in order to be able to pay to the Consolidated Fund the amount of interest Budgeted for, but the management is still hopeful of achieving this objective. On the other side of the account the net expenditure for the eight months, including imprests outstanding, compared with the proportionate part of the Estimate for the year is as follows: Proportion Expendi- Under of estimate ture proportion £ £ £ Debt Services 6,953,111 6,591,213 361,898 Other permanent appropriations 4,857,363 . 4,299,509 557,854 Annual votes 4,607,736 4,343,702 264,034 Totals £16,416,210 £15,234,424 £1,183,776 Unfortunately the expenditure position is not as favourable as these figures indicate. The under proportion for debt services is on account of the item for repayment of the public debt where payments are made at irregular intervals. It is not anticipated that there will be any saving on debt charges for the financial year. The position is much the same in regard to the expenditure under other permanent appropriations. Accounting fluctuations account for most of the apparent saving, and by the end of the year the expenditure under these items, which include hospital subsidies, unemployment subsidy, pensions and disbursements of the earmarked motor taxation, will probably reach the Budget Estimate. The position of the vote expenditure is satisfactory and reflects the efforts being made to keep expenditure down to an absolute minimum. A Disturbing Note. As to the outlook for the public finances generally, new external factors are beginning to operate which will render the position still more difficult and necessitate still more drastic measures to cope with the problem. It is not yet feasible to make a full statement on this aspect of the matter, but at the earliest passible date it will be done. Recovery' of the public finances can only come after a recovery in trade and commerce generally. The chief factor in this, is, of course, the prices obtained for our exports. While there have been some signs of improvement, the extent of the upward movement has been disappointing. Many people hoped for a decided ckange for the better following the abandonment of the gold standard bp Great Britain, but though the indirect effects from this may yet be important and farreaching from the point of view of trade, the hopes have not yet materialized in other directions. The financial trouble in London through higher interest and shortage of funds may quite possibly adversely affect the public finances and the interests of the Dominion. In regard to local conditions, the long continued spell of dry weather which in some districts is becoming increasingly severe will undoubtedly have a prejudicial effect on the season’s output, and thus militate against offsetting lower prices by higher quantities. Further, in some districts crops have suffered from hailstorms and cloudbursts.

Altogether, in spite of the additional provisions of the Supplementary Budget and the heavy extra burdens the people have been asked to carry, the chances of making ends meet in the Consolidated Fund for this financial year are rapidly disappearing. The prospects are that next financial year will be still more difficult. Under these circumstances further substantial reductions in public expenditure will be absolutely necessary and all State services, including what are commonly known as the social services, will again have to be overhauled and reviewed in the light of present day conditions. In drawing attention to these hard facts, it is not my intention to discourage people—far from it —but I consider it my duty to keep the country informed under the present rapidly changing conditions as to the position.