DOMINION FINANCES.

Sun (Christchurch), Volume VI, Issue 2013, 28 July 1920, Page 7

DOMINION FINANCES.

BUDGET INTRODUCED. NO REDUCTION IN TAXATION.

NEW LOANS TOTAL £14,800,000.

[From Our Own Parliamentary Reporter.) WELLINOTON, July 27. The Dominion's "reconstruction Budget" was brought down In the House of Representatives to-nigtt. The reading of the bulky document by the Bt. Hon. W. P. Massey (Minister of Finance) occupied just over two hours. The debate on the Financial Statement, which is expected to last over a week, will be opened on Tuesday next. The total revenues of the Consolidated Fund for the financial year 191920 amounted to £26,081,340, whilst the expenditure for the same period totalled £23,781,924, the excess of revenue over expenditure thus being £2,299,416. This result of the year's operations is eminently satisfactory, and furnishes ample evidence of a sound financial position. The effect of the disturbing influences of the War has not been felt so severely, in New Zealand as in other countries. There is no lack of employment, trade is generally good, and prices for our staple products are satisfactory. Although sea transport,. was restricted, the Government succeeded in making arrangements which permitted the export during the year of large quantities of our meat and other produce at remunerative rates, thus enabling the country to meet, without any great inconvenience, the additional taxation necessitated by the War. REVENUE. The revenue for the year was estimated at £22,919,165, but the amount collected was £26,081,340, being £3,162,175 in excess of the estimate, or £3,728,968 over the revenue of the previous financial year, as indicated hereunder:— Year ended Year ended I Mar. 31, Mar. 31, 1920. 1919., £ £ Customs 4,830,324 3,830,681 Stamp & death duties 3,344,933 2,124,772 Post and telegraph .. 2,096,757 1,964,812 Land tax 1,557,903 1,512,693 Income tax .... .. 6,369,765 6,219,336 Beer duty 355,403 273,334 Railways 5,766,016 4,975,445 Registration and other fees .. .... 175,756 111,993 Marine 42,646 35,151 Miscellaneous .. \. 1,204,866 946,609 Territorial 218,757 . 202,734 National endowment revenue .. .. 112,840 108,824 Other receipts .. .. ■ 5,374 45,928 Totals 26,081,340 22,352,372 Increase, £3,728,968. EXPENDITURE. The expenditure of the year, which was estimated at £22,441,057, reached £23,781,924, or £5,108,325 in excess of the expenditure of the financial year 1918-19. The details of this excess are as follow:— ■. 'Year ended Year ended Mar. 31. Mar. 31. . .1920. 1919. £ £ Permanent Appropriations— Civil List .. .. 26,519 28,069 Interest and Sinking Fund .. .. 7,249,426 6,086,769 Under Special Acts 1,101,289 726,947 Subsidies paid to Local Authorities 161,085 140.309 Territorial Revenue, 24,275 46,570 Endowments .. .. 134,991 150.419 Old Age Pensions .. 698,570 709,336 Widows' Pensions 130,730 80,670 Military Pensions .. 45,000 50,511 War Pensions .. 1,811,116 1,199,544 £11,389,061 £9,218,850 Annual Appropriations — Legislative Departments 44,500 36,729 Departm c nt so f Finance .. .. 189,061 167,237 Post and Telegraph Department 1,941,494 1,699,701 Working Railways Department .. 4,305,965 3,415,595 Public Buildings, Domains, and Maintenance of Roads 101,142 121,384 Native Department 28,457 25,694 Justice Department 587,990 549,794 Mines Department 36,637 40,638 Department of Internal Affairs .. 336,356 271,218 Mental Hospitals, ' Public Health, a n d Hospitals and Charitable Aid Departments , 550,899 318,808 Tourists Department 68,858 53,656 De'fence Department 502,465 416,427 Customs, Marine, and Inspection or Machinery Departments .. .. 227,474 180,561 Department of Labour 40,016 32,954 Department of Lands and Survey 238,365 809,403 Valuation and Electoral Departments 190,242 53,070 Department of Agriculture, Ind'ust riles and Commerce .. .. 818,567 240,165 Education • Department 2,031,825 1,602.995 Services not provided for .. .. 77,150 12,120 Transfer to Loans Redemption Account of Sink--1 ing Funds set free to redeem Debentures .. 400 £12,392,863 £9,454,749 Totals .. .. £23,781.924 £18,673,599 Total increase, £5,108,325. SURPLUS. The surplus for the year amounted to £2,299,416, a-nd is 'arrived at as follow: £ £ Bevenue 26,081,340 Expenditure .. .. 23,781,924 Add accumulated surplus at the end of the financial year 1918-19 15,239.561 Total accumulated surplus £17,538,977 FINANCE. . warToans. At the end of the financial year the loans arranged by the Treasury on account Of War expenditure amounted to £80,089.025, of which £33,748,780 was raised in New Zealand, and £25,840,000 was advanced by the Mother Country, mainly for the maintenance of troops in the field. The annual charge for interest and sinking fund on these loans amounts to £1,489,770. PUBLIC DEBT. At March 31, 1914, the gross public debt stood at £99,730,427, or a gross [indebtedness per head of the European population of £9l 10/2. At the end of the financial year 1919-20 the gross debt amounted to £201,170,755, against which sinking funds amounting to £7,257,564 were held, leaving a net indebtedness per head of £165 3/-. It is proposed that the surplus for 1919-20 be carried forward to assist the Consolidated Fund during that portion of the year when the expenditure largely exceeds the revenue. The issue by the Post Office of loan certificates having proved highly successful, it is proposed to sanction the continuous issue of Post Office investment certificates. £2,000,000 PUBLIC WORKS LOAN. I Tn response to a fairly constant demand for investment at 5 per ceut. of sums in excess of the limit of £SOO imposed in connection with the issue of

Post Office 5 per cent, inscribed stock, It has been decided to make available to the public securities of £2,000,000, with a currency of 10 years, bearing interest at 5 per cent., which is not free of income-tax. The money so raised is to be applied for public works purposes, including railways improvements and hydro-electric supply. The following table generally indicates the amounts required to be raised by way of loan during the 12 months commenced July 1, 1920; also the unexhausted authorities for borrowing already provided or to 'he provided, and the available cash balances:— Requirements. „ Amount. £ Discharged Soldiers Settlement Account 5,000,000 Land for. Settlements Account (on account of discharged soldiers) 2,500,000 Puhlic Works Fund 3,000,000 Electric Supply Account 650,000 Education Loans Account .. .. 500,000 Housing Account 1,000,000 Hallways Improvement Authorisation Act Account 450,000 Nauru and Ocean Islands Account 600,000 Total .. 13,700,000 Unexhausted Authority and New Authority at June 30, 1920» Discharged Soldiers Settlement Loans Act, 1919," section 3 .. 2,109,750 Discharged Soldiers Settlement Loans Act, 1916 and 1919 .. 1,550,000 Finance Act, 1919, section 5" .. .. 550,200 Aid to Water-power Act, 1910 .. 31,000 Electric-power Works Loan Act, 1919 i section 6,815,900 Education Loans Act, 1919 .. .. 1,250,000 Housing Act, 1919 1,000,000, Railways Improvement Authorisasation Act, 1914 2,535,000 Nauru and Ocean Islands Act, 1920 600,000 In addition to the above the Treasury will be required to provide approximately £1,000,000 for other developmental services and State activities, and, as previously pointed out; £10,105,457 for loans falling due. COMPULSORY LEVY. In view of the necessity of'providing money for such urgent public -requirements as housing, discharged soldiers' settlement, and loans i redemption, you will be asked-to'grant authority for a compulsory levy should tho appeal for voluntary subscriptions at fair and reasonable rates, of interest result in a deficiency. BANKING. Important legislation in connection with the banking business of the Dominion, and. the intimate relationship of the Government thereto, will be submitted this Session. It is proposed to continue that portion of the War Legislation enabling the Government to control and regulate the note-issue of the banks, which, although larger than it has been at any time in the history of the Dominion, is not- excessive, and is amply secured by ah equally large metallic reserve, as well as readily realisable securities of unquestionable value. CUSTOMS TARIFF REVISION.. In accordance with past practice, proposals regarding the revision of the Customs tariff will be deferred until next Session. During the recess the necessary data' will be prepared by officers of the department to enable the

House to give this most important question that full consideration for which the opportunity is not afforded during the first Session of a new Parliament. SHIPPING AND MAIL SERVICES. An accelerated shipping and mail service between New Zealand' and Great Britain is essential. Now that the Panama Canal is available, a 30-days' service is not too much to expect, and the Government •is endeavouring to bring this about; also to secure improved transport conditions generally. NO REDUCTION OF TAXES. ! "I regret that I am unable to hold out any immediate prospect of an appreciable reduction in taxation," stated the Minister. ' : Indeed, it may have to continue on the higher basis for some time. The expenditure arising out of the "War and the increasing demands of every branch of the Public Service render it necessary to conserve our revenues. For the last two financial years the expenditure of the Consolidated Fund shows increases of £3,553,311 and. £5,108,325 over the expenditure of the financial year immediately preceding, but the revenue ii\aj,ses were only £2,146,150* and £3, (-8,968 respectively. The Government has given serious consideration to the problems of taxation, and-measures of reform will be introduced having for their object the distribution of taxation equitably and in accordance with the rapidly-changing conditions of life and industry. ESTIMATED REVENUE. \ "For the year 1920-21, under the main heads of each of the important departments, I estimate the. revenue at: Customs .. (i,000,000 Railways 6,000,000 Stamp and death duties 8,097,000 Post and telegraph .. .. 2,630,000 Land and income tax .. 7,905,000'Beer duty .. .. .. .. - 300,000 Registration and other fees 180,000 Amusement tax .... 68,000 Marine •■ .. 68,500' Miscellaneous .. .. .. 1,070,700 Territorial revenue .. .. 179,300 Endowment revenue .. 124,200 Other receipts .. .. .. 10,000 - £27,712,700 SURPLUS OF £819,203. , I estimate a surplus for the year 1920-21 of £819,203, which is available for the Supplementary Estimates, and is made up as follow: — £ Estimated revenue. 1920-21 ~ 27,712,700 Estimated expenditure .. 20,893,497 Available for Supplementary . Estimates £819,203 CONCLUSION. In conclusion, Mr Massey strongly stressed the need for prudence and economy, both in State and private transactions. "The happiness and prosperity <sf the people of this Dominion," he said, "can best be secured by furthering that spirit of self-relianee, industry and thrift which has been characteristic of our people, who, notwithstanding any differences of opinion that niay exist, are proud of their British citizenship, and are prepared to do their duty at all times in maintaining and supporting the principles of justice and freedom upon which it is based."