WAR BUDGET.

Timaru Herald, Volume CIII, Issue 15741, 27 August 1915, Page 2

WAR BUDGET.

PROPOSED NEW TAXES, LMD. INCOMES. AND CUSTOMS AFFECTED. RATING AIsD OTHER CHAKlxfclS. *- APPEAL FOR ECONOMY, 1 £2,000,000 EXTRA TO BE RAISED. The Financial Statement was delivered by the Minister ofc" Finance, Sir Josepn Word, last night. Aiter referring to the constitution of tho National Government, tne Bud-; get states: —None of tne proposals I' am compelled to submit for additional ■ taxation and revenuo have been sug- . gested by party considerations; they fc&ve been framed solely with a. view i to the needs of the country and the i ; -welfare of the mass of the people. As a result of the war the conditions of the I country's trade have been subjected to ■great disturbance, the result of which Ess been reflected in the Railway and - Customs revenue, which nave not reached the estimates made last year. The result of the year's operations gives a net surplus of £72,142, whica I think, under the exceptional conditions, very satisfactory. The total credit balance in the Consolidated Fund at the 31st March, 1915, was £149,047; but to accurately judge the result of the year's operations it is necessary to deduct the balance carried forward from the previous year £423,905, less £350.000 transferred to the Public Works Fund —or a net deduction cf £76,005. The Government will have not only_to face the prospect of a falling revenue, but ■wfllhave also to provide for heavy additional charges on the Consolidated Fund to meet the annual interest and sinking fund in connection with the war loans, war pensions, and similar obligations. Nor must we overlook the fact that it will be necessary to provide loan-moneys with which to carry on public works and other cervices in" the Dominion, the interest and sinking fond charges on which will further increase our annual expediture out of the Consolidated Find. In view of these fact* the Government would be failing in its duty if it did not make ample provision for raising sufficient r additional revenne to enable it to meet its increased obligations. LOAN-MONEYS. Loan requirements of the Dominion are set- forth under various headings. Up to 31st Marc'h the war <-osb us, roughly. £2.750,000, including liabilities , outstanding at that date, and the rate ' of expenditure necessarily increases in proportion to the number oF men put ™*o the field. Prices quoted hv the High Commissioner seemed to inrl : cnte -that no pnhlic works loan couTd be floated in London, except on orohibi tWe> terms. The deposits in the Post Office Savings-bank have largolv exceeded withdrawals, thus providing'a eonsiderable amount of monev for local needs. REVENUE AND EXPENDITURE. The revenue for the Tear 191-t-Io iwas estimated at £12.488,370. and the total collections amounted to £12.443 - 52-5, or £44,845 less than the estimate. The chief reductions were Customs £132,717, and Railways £143.32-3 less than the estimate. The expenditure was estimated at £12,564,5-51, and the actual expenditure amounted to £12.379.803. or £184,748 less than the estimate. Transfer io tho Public "Works Fund of £350,0000 left a balance of £149 047 ! «u March 31. PUBLIC WORKS FUND. ', The following is a statement of the receipts and expenditure of the Public .Works Fund for year 1914-15: Balance from last year £1.178,-584 Receipts.—Loan money, £1.742,778, premium on sale of stock ' £8,750| transfer from revenue £350.000, other receipts £9,126; total £3,289,238. Expenditure.—Under appropriations «2-057,295, debentures redeemed £II,BOO, other expenditure £24.381total £2,593-476. Balance at 31st March, 1915, £696.762,*' balance loan monev to receive £1,475,000. Amount available with which to start the current year £2,170.762. THE PUBLIC DEBT. • i. Tlle sross5 ross Pnhlic debt at the end of financial y ear amounted to £100,009,910, ana the net debt to £96,644.455. Loans falling due in the next seven years total £24,321,030. STATE ADVANCES OFFICEThe Government found it necessary to restrict the lending operations of this office during the war, and tho Board has from time to time varied the limits of its advances so as to suit the circumstances of its finances. For the Local Authorities Branch, the limit now stands at £SOOO. The limit in the case of settlers' applications stands at £I,OOO, While in the case of the Workers Branch the Board is lending up to the full amount adowed by the law. In the Settlers Branch we ar-e now lending money for tho repayment of existing mortgages not exceeding £450, and we are also lending under this Branch up to £450 for the purpose of building homes in urban districts. CUSTOMS. The estimated Customs revenue for the financial year ended the 31st March, 1915, was £3,300,000. This would doubtless have been realised Init lor the outbreak of the war, as the returns received up to the 'end of August exceeded the estimate to that- date by £41,000. After August, however, a consistent; decline in revenue took place, and the total for the year wa« £3,167,283, or £132,717 short of the estimate. This condition of affairs was onlv to be expected, as the war cut off" all

trade with Germany, Austria, and ' Turkey, and reduced very greatly the trade with other European countries. The shortage and risk of transport, high and insurance, and difficulty in getting orders promptly fulfilled also, no doubt, have been con- ' tributing factors to the restriction of importation. This restriction is likelv to continue until tho war is concluded, although thero appears to be a tendency to go to new markets for some classes of goods the United j States and Japan, for instance —this can only operate to a limited extent, :is the great bulk of our imports comes | from the United Kingdom. A comparison of the revenue received during the months of January, February, March, April, and May of 1915 with tho same months of 1914 makes it apparent that we must be prepared to face Tery much reduced receipts for the current finan eial year. During the five months mentioned the amount realised is £215,5-59 less than for the same period of last year. The comparative figures showing values of imports and exports for tho calendar years 1913 and 1914 are as follows: 1913. 1914. Imports £22.288.302 £21.856.096 Exports £22,986,722 £26.261.447 The exports for the financial rears 1913-14 and 1914-15 were as follows: — 1913-14. 1914-15. Exports £23,471,131 £27,476.823 This great increase in our exports is due to the exceptional prices obta : ned and to the larger quantities of goods : exported. The "figures are the lu'gliesc ever recorded. Through the agency of the censor it was discovered that attempts were being made by the enemy to keep up a trade with this country through neutral countries, and consequently steps •nero taken by the Government *to prevent this by requiring that all goods imported from Norway, Sweden. Denmark, Holland, Switzerland, and Italy should be supported by a certificate of origin signed by the British Consular Officer for these countries voueliing for their place of production. Since then Italy has joined the Allies in the field, and thus has given the best assurance that her ports will not be used by the enemy to our tageFROZEN MEAT. During the period Ist October, 1914, to 31st March, 1915, forty insulated eteamers 'eft the Dominion, carrying the equivalent cf 2.669,251 freight carcases, as against 2,404,189 fre.ght carcases during tue corresponding period of the previous season. WHEAT AND FLOUR, The Government's measures in regard to wheat and dour are traversed, xterurns of tho area of wheat under cultivation, and the estimates received of the probable yield, indicated that a further shortage was likely to result ■. during the present year, and an option i over 1,000,000 bushels of Canadian ! wheat was obtained. Further, steps i were taken to obtain accurate informa- ! tion as to the wheat-yield of the 1915 harvest by securing monthly returns from thresmng-mill owners. These reawn™* f*\ ? le yie!d am °rats to 6.200.000 bushels (approximately), wnieh will be insufficient tf> providp all requirements until the harvest of 1916 is available. SETTLEMENT OF CROWN LANDS. During the past financial Tear an area, or 1,202,260 acres was offered for public application under the following tenures:— fe For application for cash, for occupation with right of purchase, or for renewable lease H or selection on renewable lease J . - - 80.666 fsmall grazing runs .. 30 93=; Pastoral runs 594 90? Town and suburban lands for cash and other areas for lease TtiLM***?* a, J d a PPl«»tion 13,558 ra.rr-at.onal endowments ... 37 415 l,r£f- re IS - a keen demand for suitable = di *? cto ' **** oeing met by the acquisition and sub division of estates. Crown lands £ £ed 1 L g th >r UtUTe - d i isp ° Sal and ated in the more isolated districts is wherever possible, being survived ami afe er ±sn r SeleCti ° n - ? nd «"" aie given every assistance and encouragement during the first few years of back-block settlement • J wf 1 ?*, to th - e development of the fruit industry m New Zealand a d£ mand has arisen for land for fruit farms, a matter which is kept in view fe the and Survev Department Sment nbdmding blo^s P for sTtApplications by lessees for the nnr under ° f S3dSJ under the Land Laws Amendment Act r MS 3nd durinir - the P-* year 491 settlers, occupving 93 547 S'w C ° from leasehold to t ?L d I- paym - a sum of £174 412 4 P Selectors still hold; a?ea of If™ P a^»ent ;."cense, an area of 54,/62 acres, wliich thev are purchasing on this svstem ? The ; annual instalments amount to £11,344 STATEMENT OF WAR EXPENDITURE. I During the year the war expenditure Cmn t amounted to fh'l *,' b ? 0 ' Whlle the liabilities at that date were estimated at £596 000 in addition. The following are the particulars:— ■■ aj i- ■ . £ s. d. I Advertising, printing, | office equipment, etc. 4,219 5 5 I Canteens 16097 g g Clerical assistance 4,371 4 2 Camps, recruiting and expenses of 116.964 8 9 including boots, clothing, G.S. waggons, ammunition carts, etc 274,080 2 5 Forage 46)596 g 7 ■tlomo defence, forts, harbour patrols, examination of steamers, guarding cables, , wireless stations, pickets, censors 116,945 10 8 jilecnanical transport, including motor-cars, ' bicycles, oil, etc 6,325 4 5 (: iay and allowances .... 490.845 10 4 ' i£? s st, ta S?> telegrams, etc. 2;531 14 7 31.ea.ical equipment, etc. 17,741 0 6 i Purchase of horses and incidental expenses . 105,692 11 5 prisoners of war 10,808 18 5 Rations 134,959 10 G

Transport of troops, including charter of ' steamers, - meals, and fares of men travelling to join, freight, cartage, etc ; 797.13S S 10 Travelling allowances and expenses 2.122 1 2 Administrative Samoa: wliich may bo recovered from tho Samoan Administration 1.727 0 9 Donations transferred to Countess of Liverpool _ Fund 245 9 3 {superannuation 2,423 17 0 2,151,835 15 10 Appropriation Act 1914. sec. 25 (Belgian relief) 20,000 0 0 . £2,171,835 15 10 The actual expenditure for war purposes up to tho 30th June, inclusive of liabilities, is estimated at, roughly, £3,500,000. Immediately after the Government decided to equip and despatch an Expeditionary Force an appeal was made to the pu'lxic of New Zealand for g.fts in money and kind to assist the equipment and other necessary preparations. Tho response was beyond all expectations, and the Government desires to express its appreciation of the patriotism and generosity that were displayed. Up to the 31st March- a sum oi> £159,137 had been subscribed in actual cash to assist tho war expenses, but it must not be supposed that this sum represents the full measure of the subscriptions in money and kind which the people of New Zealand uavo through various channels to assist'our soldiers. Relfef contributions; transmitted to London in money and in kind up to tho 31st March last totilled approximately £237.2G7, apart from contributions for war puruposes. For the New Zealand hospital ship no less than £BO,IOO was contributed, of wh-ch £47,548 is in the hands of the Government, the bal.ince being still retained by local committees. ORDINARY REVENUE ACCOUNT. The ordinary Revenue Account for the first four months of the present fuiaaicial year, ended the 31st July proximo, shows an increase of expenditure as compared with last year in all the annual appropriations except three, the increases amounting to £303,889, and the decreases to £73,696. The effect of the war has had much to do with the position disclosed. It must be apparent that such a heavy increase for the four n.ontlis referred to clearlv demonstrates that the times through which we are passing have ad'verselv affeetod tho various Departments, and that an adjustment must be made to ►nsure that these Departments are placed m such a position that the revenue will exceed the expenditure. It will also bo absolutely necessary for all Departments that are not of a trading nature to be considerably restricted so far as expansion of eervica is concerned in order that a eloper- relation to the financial needs of the countrv may he maintained. I think it only right to sa,v that the result of the four months' ' financial operations of the present year gives :he Government some concern, showing as it dees an increase of expenditure over receipts for that period jf £c07,982, and an increase c..£350.C00 of Treasury bills in coinjwrison with tho corresponding period of hist year. I now submit a Treasury statement, showing approximately the expected petition of the Coii'olidatod Fund for the three months ending tne 31sb October next. It estimates a dific'eucv of £289.000, the accountant—richtlv, in my judgment—stating, however, that it "is difficult to estimate the revenue owing to possible decreases.'' With this I agree; and while I think the balance of available Treasury bills may prove to be adequate to meet any contingencies that may arise, still I am of openion that as a precautionary measure it would ba prudent to have authority to increase proposals to that effect. ESTIMATES FOR THIS YEAR. Tho revenue for the year 1915-16, estimated on the basis of" the existing statutory limitations, is estimated at £11,674,254. The following figures will show the wavs and means of the Consolidated Fund for the year 191516, estimating the revenue on the foregoing basis: — Balance forward from 1914-15 £149,047, estimated revenue, 1915-16 £11,676/2-54; total revenue, £11.825,Estdmated expenditure, 1915-10 £12,603,242. Deficiency (without provision for war pensions, interest and sinking fund on war loans, additions to superannuation funds, and supplementary estimates) £827,941. It is necessary, when estimating the amount which will have to be obtained by fresh taxation, to consider, as well as we are able, the ultimate annual amount to which the t country will he committed in connection with war expenditure and other I special demands in order tlmt suitable provision may be made to meet tho burden. It i s impossible for any one to say with any degree of certainty what amount the Dominion will have to fiud to cover war pensions, but the best estimates which have been pror V r\ PJ3f e J :he amount at aproximatu[ly £1,000,000 per annum, on tho assumption that tho war will last another year. The annual interest and sinking fund payable on war loans of, say, £12,000,000 will amount to roughly, £700,000. The Whole of these amounts will not fall to this year's finance, but in addition to tb o definoSS y n< , vn lor the current vea-r of 0 A- £i IVC must Provide for* say, rir^SS 0 suppLementary estimate's. £34,000 additional for Superannuation Fund, and a considerable proportion of the pension and interest I have referred to. There nnist h c neither delay nor uncertainty in the countrv doin"- its financial duty to those who ° have offered their lives for the protection of every man, woman and child in the Dominion, and who have assisted in tin preservation of the British Erupcra. It is next to iniposeiblo to forecast with any approach to exactness wnat the position will be, even approximately, at the end of the war. 1 have endeavoured to the best of my ability to keep on tho safe side, but much depends on aireumstances beyond the control of the Government or , tho people.