REVENUE INCREASE

Wanganui Chronicle, Volume 77, Issue 263, 6 November 1934, Page 6

REVENUE INCREASE

DOMINION FINANCES HALF-YEAR REVIEWED MORTGAGE CORPORATION COMMENT BY MINISTER * Per Pie** Association. 1 WELLINGTON, Nov. 5. Ou the Appropriation Bill in the House of Representatives to night, the Minister of I’inance, Hon. J. G. Coates, reviewed the budgetary finances tor the half-year ended September 30. He said: As the Bill is the final stage of the budgetary programme, members will no doubt be interested to know what pro gtess has been recorded in terms of con soli'dated Fund finances for the first six months of the current financial year. The Budget was based on the expects lion of a substantial increase in revenue compared with that received for the las»t financial year, and the results for the half year ended September 30 last are in accord with these expectations. Accounts for the period, which will be gazetted shortly, will show that the revenue for the period amounted to £9,900,125, compared with £8,254,098, an increase of £1.646.027. Of this in crease £1,390.009 represents buoyancy in taxation receipts, the principal items concerned being: — Customs£soo,ooo Sales Tax 160,000 Highways -- IOO,OO«» Stamp and Death Duties 310,000 The remaining £256.000 of the increase came from interest and other receipts. Practically every item contributing revenue is normally higher in the second half of the year, and last financial year only 35 per cent, of the total revenue, for the year was received dur ing the first, half of the year, for the current period receipts for the half \par represent 40 per cent, of the Budget. estimates, thus indictaing I*hat so far receipts are well up to Budget ex pectations. Expenditure. On the other side of the picture, ex penditure for rhe six months amounted to £12.860.571. In round figures the main classes of expenditure involved Fere as follows: - Debt Services£s,B26,ooo Exchange 1,417,000 Other Permanent Appropriations 94 <,OOO Social Services 3,114.000 Other Votes 1,656,000 T0ta1£12,860,000 This total is approximately £1,000,HM) ahead of the proportionate part ot the Budget estimate, but 1 may ex plain that substantially the full amount allowed for debt repayment for the rear has already been paid out and l‘his item accounts for £750,000 of the apparent excess expenditure. Similarly, expenditure on exchange. included, covers the requirements for the whole vear. In fact there are some credits still to come, so that the net expendi lure for the year will be slightly less than is shown for the half year. Ihis item accounts for a further £750.000 of ihe excess over the proportionate part of the estimates. This means that the other items were proportionately under spent to the extent of £500,000, but I do not hope to maintain that position until the end of the financial year, as it is largely due to seasonal or accounting fluctuations. An analysis of the figures will show, however, that expenditure generally is being held within the aggregate al lowed in the estimates. This is a satis factory state of affairs, and combined with the fact that the revenue is well up to expectations, supports the Budget forecast that the year will close with a small surplus. Many factors are involved, and not the least is the psychological reaction ami interaction from the steps already taken and the proposals made for economic rehabilitation generally. Trade and industry art*, of course, the basis upon which the Budget rests, and as Finance Minister J am always on the look out for indications of continued improvement. Up to the present the trend of affairs shows that rhe budgeting was not over optimistic. National Mortgage Corporation. While on the subject of finance, I here is one other matte* that I would like to mention, an i that- is the National Mortgage Corporation proposal referred to in the Budget. The time did not permit of it being dealt with this session, but 1 propose to concentrate on it during the recess, with a view io having legislation ready when Parliament resume?. So far. the proposal has only been de.n with in broad outline, and a general direnssion of the matter would be pre; ;i: •rp until definite proposals can Ec submitted. At the same time, I would like to take this opportunity of removing one or two misconceptions that appear to exist. The. permanent objective that, the Government has in mini. i c a soud’y oiganised system of i.-ng-term mortgages. Finance based on {’re well-known mortgage bond system ic extensively use*.! in other countries. Thar will create a standard agricultural investment through which capital can confident ly- flow into the farming industry by largely obviating the risks normally involved in individual mortgage investments, and providing a se entity which is practically as liquid as Government stock. The capital will be obtained at cheaper rates. That is the essence of the idea. Other Measures. Concurrently. and in conjunction with the Mortgage Corporation, other measures will be proopsed for dealing with the pressing problem of the financial rehabilitation of farmers and others whose position has been rendered untenable as a result of the heavy fall in the prices of primary products. 1 cannot, give any details in regard to this aspect of the matter at present, as the methods by which rehabilitation i< to be achieved are still under consideration. I can say quite definitely, however, that each case will be dealt with on its merits, and there will be nothing in the nature of a general writing down nr other reductions by legislation. Given suitable machinery, I have no doubt that the bulk of the cases can be dealt with my mutual arrangement betwen the parties coneernd, and 7

could stress this aspect or tne matter. The remainder will be dealt with by appropriate judicial machinery. So far as the National Mortgage Corporationis concerned, various proposals have been suggested, but people should not jump to conclusions that any particular features of these proposals art* going to be adopted. Judgment. should be suspended until the Government is able to bring down a considered scheme. It is fully realised that the success of the project depends upon obtaining the confidence of investors in mortgage bonds, and the House and people can rest, assured that I the corporation will be organised on (sound lines. Furthermore, there, is no i ntention of establishing anything in J the nature of a monopoly of the morti gage business, and if the parties concerned prefer it. they will be able to continue making contracts for individual mortgages. We do feel, however, that proper organisation can narrow the margin that exists between the market rate for mortgages and for good Stock Exchange securities, and in the interests of the whole Dominion, we proopse to set up an organisation. This organisation will, it is hoped, stabilise lower rates of interest, hut provided the concerns at present doing mortgage business are willing to do that business at the market rates of interest, having regard to the nature of the security offered, there is no warrant for the statements made that their business is to be taken away from them. Last Major Item. As was indicated in the Budget, the mortgage problem is the last major item remaining to be dealt with in the financial rehabilitation of the Dominion. 'l'he difficulties to overcome are recognised, but we cannot hold back on that account, as the job must be done. When it is done, however, our financial stability will be greatly increased to the lasting benefit of investors and the community generally.