LOWER EXPENDITURE

Waikato Times, Volume 127, Issue 21151, 28 June 1940, Page 10

LOWER EXPENDITURE

WAR’S EFFECT ON ESTIMATES PUBLIC WORKS VOTE HEAVILY REDUCED £3,200.000 REQUIRED FOR SOCIAL SECURITY (By Teleyrapn.—Press Association) WELLINGTON, Thursday The Estimates, which were presented with the Budget In the House of Representatives tonight, show the marked effect the war is having on New Zealand’s internal life. There are reductions in quite a number of votes in which increases might reasonably have been expected under other circumstances, and where increases are actually recorded, most of them are for small amounts in comparison with past years. Under the heading of permanent appropriations, the amount expended last year was £17,842,603, while the estimate for the present financial year’s expenditure is £15,133,772. The decrease is on account of the transfer last year to the War Expenses Account of the unexpended portion of the Navy, Army and Air Force votes totalling £2,287,826. The amount expended last year under annual appropriations was £19,812,217, while the estimate for this year is £21,650,427.

£15,083,000 REQUIRED £3,450,000 FOR RAILWAYS CURTAILING OF EXPENDITURE INCREASE IN PUBLIC DEBT (By Telegrtpn.—special to Times) WELLINGTON, Thursday. “In addition to meeting all war requirements, some provision has to be made for carrying on national works such as development of more hydroelectric power required for our industries, both primary and secondary,” said the Hon. W. Nash, Minister of Finance, in presenting the Budget tonight, “and land development and irrigation works which have a direct bearing on increasing production, while the curtailment of road transport to conserve petrol makes it all the more important that sufficient rolling-stock is provided for the railways to handle the traffic. In fact useful development work is a necessary preparation for rehabilitation which must start before hostilities cease. “Even so, it is fully recognised by the Government that with so much required for war purposes, borrowing i for public works must be reduced to I the minimum required for essential works. Honourable members will appreciate that it takes time under the proposals for marshalling the man-power of the Dominion to get large numbers of men transferred from public works to other works of greater national importance. Furthermore, the large volume of works in hand has either to be completed or rounded off at a point where it can stand over without losing the money already invested. ' i “A substantial beginning has been made in reducing the expenditure on the whole works programme, and the amount of borrowed capital required this year is approximately £15,000,000 compared with £19,000,000 for last financial year. As men are required for more urgent purposes associated with the war the volume of national works will be progressively reduced. “Concerning the actual works which it is proposed to carry out during the year, an allocation of £3,450,000 has been made to railways construction and improvement,” he added. “Of this total, £700,000 will be devoted to the completion of construction works already in hand, including the Napier to Gisborne and the South Island Trunk lines. The new line from Paeroa to Pokeno, which had just been commenced at the outbreak of war, has been discontinued for the time being. The balance of £2,750,000 under this class is for additions and improvements necessary for meeting existing commitments and to building essential locomotives, cars and wagons, new goods-sheds, etc. From a military point of view alone, an efficient and complete railway organisation is most important in the national interests.

New Hydro-electric Works “The expansion of industry, both primary and secondary, has necessitated a substantial increase in hydroelectric capacity, for which an allocation of £2,750,000 has been made,” said Mr Nash. “This includes new works at the Crow’s Nest on the Waikato River, and near Lake Waikaremoana and in the South Island, all urgently required to provide for the demands of consumers. The Cobb River scheme in the Nelson district has been acquired from the company which commenced its construction, but the price is being paid in long-term securities. “The supply of electricity continues to be a successful State enterprise, and the gross revenue for this year is expected to exceed £2,000,000, which will pay all working expenses including depreciation and provides a substantial residue towards extension of works. “Under the heading of ‘Land Development and Afforestation,’ for which provision of £3,234,000 has been made, the policy is to concentrate more especially on those phases of development which will result in immediate and material increases in production. Under this heading is included irrigation (£425,000), land clearing and improvement (£350,000), small farms development (£550,000), and Native land settlement (£1,000,000). These facilities, too, will be of advantage in connection with a comprehensive scheme for the rehabilitation of the men in our forces which the Government have now under consideration, as it is necessary to provide for such requirements well in advance. A very large extension of linen flax growing in the Dominion, on an economic basis, is being planned, the immediate object being to meet war requirements, but this extension opens an additional avenue of primary production. £4,000,000 for Housing “The public demand for adequate housing facilities still continues, and provision for the expenditure of £4,000,000 has been made during this financial year,” said Mr Nash. “The Government regard this as one of the most important and successful oi their activities, as, apart from providing a better environment in which such a large proportion of our citizens are bom and live their daily lives, the building industry is a key industry in the maintenance of a balanced national economy. Another important factor is that houses are in short supply now, and any • curtailment of construction during the war would result in serious difficulties when the men return home from overseas. “The roads and highways allocation for this year has been reduced to £4,350,000. Expenditure under this heading is being restricted to the completion of works in hand and to metalling work in the more remote areas where such works can be shown to be necessary. Petrol tax and the other forms of highways revenue, of course, provide for the maintenance of our main highways, any residue being utilised for construction and improvement works. “The balance of the year’s allocation for public works is in respect of public buildings, including schools and telegraph and telephone extension ancl other miscellaneous services for which works a total of £2.805,000 is provided. All these activities have been curtailed and are now confined to finishing work in hand or undertaking jobs that are essential. “These allocations make up a grand total of £20,589,000, but, as revenue from hydro - electricity, highways, etc., is estimated to provide a total of £5.506,000, the loan requirements for the year are reduced to a net total of £15,083,000. Approximately half the total allocation concerns the activities of the Public Works Department. the balance being under the control of the Railways. Land, Housing Construction, and other departments. Last Year’s Borrowings , “This loan programme of £15.083,i 000 is. of course, additional to the j amount that will have to be bor- »’ rowed for the War Expenses Acj count, but national works cannot be disassociated from the war effort,” added Mr Nash. “Much of the expenditure is necessary to support that effort or to pave the way for the rehabilitation phase that must follow the war. “Concerning debt transactions for last financial year, the total borrowings amounted to £21,615,965, while redemptions and debt repayments out of revenue totalled £2,G78,701, resulting in a net increase in the nominal amount of the public debt of £18.937,264. “Of this increase. £1,000,000 represents a short-dated sterling loan by New Zealand trading banks, while Treasury notes amounting to £l,080.000 were issued to the United Kingdom Government, representing advances under the exports credits scheme. The balance of the net i ncrea se—n a mely, £16,957,26 4—w a s raised in New Zealand.”