FINANCIAL STATEMENT. (In Committee of Supply, 4th August, 1936.) BY THE HON. WALTER NASH, MINISTER OF FINANCE.

Appendix to the Journals of the House of Representatives, 1936 Session I, B-06

B. —6.

INDEX.

PAGE Banking and credit .. .. .. .. . . .. 2 Budgetary proposals .. .. .. . . . . I'} Buildings, public . . . . . . ~ . . . . 11 Capital works, expenditure . . .. .. . . IS Christmas payments, unemployed . . .. .. . , . . 6 Coastal surveys .. .. .. .. .. .. 12' Consolidated Fund expenditure .. . . .. , . 13 Customs .. .. . . . . .. . . 17 Dairy Industry . . . . . . . . . , . . . 2 Debt operations . . .. . , . . . . . . . . 9 Debt redemption . . . . . . . . . . . . 9 Deed of hypothecation .. .. . . . . .. . . 8 Defence .. .. .. .. .. . . 5, 13 Departmental votes . . .... . . 13 Domicile of debt .. . . .. .. . . . 9 Education .. .. .. .. . . .. 1, 14 Employment administration costs .. .. . . .. . . 13 Employment Fund . . . , . , . . . . , . 6 Employment Fund expenditure . . ... . . . . . . 7 Employment Fund estimated resources ... . . . . 7 Employment Fund revenue .. . . . . .. . . 7 Estimated revenue ... .. ... .. .. .. 15 Expenditure, Consolidated Fund .. .. . . . . 13 Expenditure, Employment Promotion Fund . . . . . , 7 Expenditure on capital works .. .. . . . . . . 13 Family Allowances .. .. .. .. .. , , 15 Fishing industry, reorganization and research . . . . . . 13 Gold prospecting .. .. .. ~ . . . . 6 Greymouth Harbour Board debt .. .. . . .. . . 9 Guaranteed prices .. .. .. .. .. .. 3 Guaranteed prices for future years .. . . .. . . 3 Highways and roads .. .. .. . . . . . ... 11 Hospital Boards, subsidies . . .. . . . . 14 Housing . . . . . . . . . . . . 2, 11 Hydro-electric development .. . . . . . . 12 Income-tax .. .. .. . , , . . 15 Income-tax, Rates of .. .. . . . . . . 16 Income-tax: Simplification of system . . . . . . . . 16 Increased taxation yield .. .. . . . . .:. . . 8 Increased wages . . .. .. . . . . . . 1 Interest receipts .. .. .. . . .. .. 18 Internal trade and manufacturing .. . . .. .. 5 Invalid pensions . . .. . . . . . . 15 Kindergartens .. .. .. .. . . , . . . 1.4 Land-development, costs . . ..- .. . . .. . . 13 Lands improvement .. .. .. .. 12 Land-tax . . . . .. ~ , . . . 17 League of Nations .. .. .. . . .. . . 5 Lighthouses, &c. *' .: .' .. .. .. . . 13 London Conversion Loan, 1935 .' .. . . .. .. 8 London Conversion' Loan, 1936 .. .... .. .. 9

i—B. 6.

8.—6.

Manufacturing development .. .. .. .. .. 5 Maori hygiene .. . . . . . . . . . . 14 Marketing and production . . .. .. .. ~ 1 Marketing Department .. . . .. .. .. .. 4 Mental hospitals .. .. .. .. .. . . 11 Milk for school-children . . . . . . .. .. 14 Miners' pensions .. .. .. .. .. .15 Miscellaneous works .. .. .. .. .. .. 12 Mortgages, readjustment of .. .. .. .. . . 5 National health and superannuation .. .. .. . , 2 Nature of public works .. .. .. .. .. 10 New industries .. , . .. .. .. . , . 6 Old-age pensions increased .. .. .. .. 15 Other receipts .. .. .. .. ~ . . 18 Pensions .. .. , . .. .. .. 14 Permanent Appropriations .. .. .. .. 13 Placement Scheme .. . . .. .. .. .. 6 Plunket Society grants restored .. .. .. .. 14 Policy .. .. . . .. ~ .. . . 1 Policy fulfilled .. .. .. .. .. .. 18 Production and marketing .. .. .. .. ... 1 Promotion of full-time employment .. .. .. .. 6 Public Accounts .. .. .. .. .. , . 7 Public buildings .. .. .. .. .. .. 11 Public debt .. .. .. ~ .. .. ~ 8 Public health .. .. .. .. .. .. 2, 14 Public Works .. .. .. .. .. .. 10 Public Works aggregate programme .. .. .. 12 Radio beacons .. .. .. .. .. .. 12 Railways .. .. .. .. . , .. 10 Rates of income-tax .. .. , . .. .. .. 16 Readjustment of mortgages .. .. . .. .. 5 Reciprocal trade .. .. . . .. .. .. 4 Restoration of " cuts " in salaries and wages .. .. .. 13 Revenue, Employment Promotion Fund .. .. .. .. 7 Revenue, 1936-37, estimated .. .. .. .. .. 15, 18 Roads and highways .. .. . . ~ .. 11 Sale of produce .. .. .. , . 4 Sales tax, &c. .. .. . . .. . . .. 17 School buildings, &c. . . . . .. .. .. .. 14 Sources of additional revenue .. .. . . 15 Stamp and death duties .. . . .. .. .. 18 State Advances Corporation , , .. .. . . .. 2 Subsidies to Hospital Boards . . .. .. .. 14 Summary of expenditure .. . , .. .. .. 18 Summary of revenue . . , . . . . . . . . . 18 Summary of transactions .. .. .. .. .. 7 Surplus, 1935-36 .. .. ~ .. .. .. 7 Surplus, 1936-37, estimated .. .. .. .. 18 Treasury bills .. .. ~ .. . , .. ~ 8 Unemployed, Christmas payments to .. .. .. .. 6 Unemployed: Increased rates of pay .. ~ .. .. 6 Wages, increased , , .. .. .. .. ~ 1 Widows' x'ensions .. .. .. .. .. .. 15 Workers' Educational Association .. .. .. 14

II

8.—6.

1936. NEW ZEALAND.

FINANCIAL STATEMENT. (In Committee of Supply, 4th August, 1936.) BY THE HON. WALTER NASH, MINISTER OF FINANCE.

Mr. Chairman,' — The election campaign which concluded on 27th of last year followed extraordinary difficulties to primary producers owing to fall in prices, and consequential over-mortgaged land. This was associated with cuts in salaries and pensions, and reduced votes for education, health, and other social seivices, and unprecedented unemployment. The election policy of the present Government affirmed that New Zealand s trade and marketing policies would best serve the people of the Dominion, the nations in the British Commonwealth, and other countries, by putting our own production and marketing system in order. The election manifesto said that the essential procedure to give the best results to exporters, importers, producers, and consumers would be to allow production to expand so long as any important human wants remained unsatisfied, and to take the necessary steps to ensure that the expansion of production did not ruin the producer by catastrophic price-falls. This implied the relation of expanded production to sound marketing machinery with means to ensure simultaneous expansion of demand and exploration of new markets to extend sales of immediate and future production. The aim of the Government as expressed in a paragraph was and is To organize an internal economy that will distribute the production and services of the Dominion in a way that will guarantee to every pei son able and willing to work an income sufficient to provide him and his dependants with everything necessary to make a " home " and " home life " in the best sense of the meaning of those terms. To this end the Government have raised the allowances to those who are unemployed, have provided for increased rates of pay on Public Works, aie instituting the forty-hour week for industry, and have raised the wages of young people on a graduated scale so that when reaching adulthood they will automatically secure a basic wage. This basic wage is a minimum which must be paid throughout industry, and will be based on the sum required to give an adequate standard of living for a man, his wife, and three children. The amount will be fixed by the Arbitration Court, and altered from time to time to suit changing circumstances. On the side of Education it is the Government's intention to reorganize our school, college, and university systems to provide the maximum facilities for all children from the kindergarten to the university. This, however, will not be worth while unless we can also ensure that the physical needs of the child and the adult are fully provided for on the same basis as are the needs of the mind. Health services should be made as freely available as educational service.

Policy.

- • Production and marketing.

Increased wages.

Education

I—B. 6.

8.—6.

That is why the Government intends to organize a system of public health services, including full medical, maternity, and dental care, which will stress the prevention rather than the cure of illness. This system will be extended to all our people in both rural and urban areas. The Government has already taken the initial steps for the organization of a complete health insurance, invalidity, and old-age superannuation scheme. The objective is to provide superannuation by right during sickness or old age, without a means test. The preliminary organization has been established under which negotiations will be inaugurated with all bodies associated with the care of the aged and the sick. The organization of the Friendly Societies, the National Provident Fund, the Public Service Superannuation Schemes, the Pensions System, the Government Life Insurance Office, and the Health Department will all be used to determine the most efficient financial and service procedure necessary to provide for accident, invalidity, sickness, and old age. In the intervening period whilst the constructive work is proceeding, steps are being taken to introduce pensions for invalids and to raise the general standard of all pensioners. Unless a Government controls its banking and credit system it will be materially hindered in the planning and carrying out of its policy. That is why .the first major policy measure of the Government was the Reserve Bank of New Zealand Amendment Act, which gave it full control of the foreign exchanges and of credit within the country, making the Reserve Bank entirely a State Bank. In a developing agricultural economy, the question of farming finance is all important, and New Zealand is no exception. Over forty years ago the State initiated a policy whereby settlers were provided with finance at particularly low interest rates, and for long periods. This system has been the greatest single factor in developing New Zealand's farm lands. Last year the Government then in office established a Mortgage Corporation, changed the old procedure, limited the scope of the legislation for social service, and introduced private shareholders and share capital and bonds not guaranteed by the State. As with the Reserve Bank, the Government has bought out the shareholders of the Mortgage Corporation and the institution has again come under direct Government control and responsibility as the State Advances Corporation. Bonds will be State-guaranteed so that money may be raised at the lowest possible rates. Where it is necessary to assist a farmer in financial difficulties, or for purposes of providing homes for wage-earners, a high percentage of the security will be lent. There are safeguards so that the loans cannot be used for speculation. The intention is to provide homes and farms for the people at low cost. Provision is made in the Housing Act for the erection of houses, and plans are in course of preparation to provide for the construction of some 5,000 houses at a cost of approximately three million pounds. It is hoped to erect some 900 houses before the end of the financial year. Finance will be available to local authorities for house building and full details of procedure will be sent to inquiring local bodies within the next few weeks. Those who save to buy land upon which to erect their own homes may borrow a large proportion of the total cost at special low rates of interest —the interest and principal being repaid by small quarterly instalments spread over a period up to forty years. An interesting innovation in the Act is a provision under which the addition of a small sum to the principal of the mortgage to cover the life of the borrower enables the property on his death to be handed over to his widow free from all further payments. The passing of the Primary Products Marketing Act inaugurated one of the most important features in the history of the Dominion's primary production. All butter and cheese made after Ist August of the present year becomes the property of the Government when placed on board the overseas steamer for export. At that point the dairy factory will be paid in full the guaranteed price for the dairy-produce by means of a cheque drawn on the Dairy Industry Account at the Reserve Bank —the Government Bank.

Public health.

National health and superannuation.

Banking and credit.

State Advances Corporation.

Housing.

Dairy industry,

2

B. —6.

The basic f.o.b. guaranteed prices for the current season —that is, for butter and cheese made between 31st July, 1936, and Ist August of 1937 —have been fixed as follows — Per Cwt. Per Lb. s. d. d. (a) Finest grade creamery butter scoring 93 or 93| points . . . . . . .. 117 3 or 12ft (b) First grade whey butter scoring 88 points and over .. ■ • 107 11 or lift (c) First grade cheese scoring 92 or 92| points . . 63 7 or 6# These prices will remain constant throughout the season and the differential price-margins previously announced will apply in respect of produce to which higher or lower grading points are allotted. It is known that there is a wide variation in the costs of butter and cheese making at the various dairy factories throughout the Dominion, so that a fixed f.o.b. purchase price for all butter and cheese will yield a varying butterfat price to suppliers, as the pay-out is dependant on manufacturing results and factory costs, which in turn are dependant on the circumstances, location, standard of efficiency, nature and quality of raw material, and extent of output of individual factories. The guaranteed price will be paid in full as soon as the produce is delivered to the overseas steamer. If the proceeds of the sale of this produce do not cover the guaranteed price paid out, then the deficit is not the responsibility of the dairy-farmer but of the Government. If on the other hand the proceeds of sale in the first year are greater than the amount guaranteed, this surplus will be used for the benefit of the dairy-farmer and the industry after consultation with its representatives. The intention of the Government in regard to guaranteed prices to dairyfarmers was expressed by the Prime Minister in his statement, that " guaranteed prices should commence at an average of, say, the last eight or ten years' prices ". In reply to a question put to me when I attended the National Dairy Association Conference at Hastings in ,lune last I said, " that the price was positively fixed on the butterfat basis of eight to ten years, and the most generous interpretation of that promise ". Prices have been fixed in fulfilment of those promises to ensure that dairy-farmers supplying factories working under average factory conditions will receive the average butterfat return of the past eight to ten years. In addition, an allowance has been made for increased costs in the industry. The basic f.o.b. purchase prices of cheese and whey butter have been fixed to yield, under average factory conditions, a margin of Ud. per pound of butterfat processed into cheese above the average price of butterfat processed into butter. In ascertaining the average prices the most complete statistical information from the industry and Government Departments was made available to the Dairy Advisory Committee. For future years the cost of production, the standard of living of the farmer as compared with other sections of the community, and the stability of the industry will be taken into account in fixing the guaranteed price. The actual wording of the Act determining the procedure is as follows: — "(4) In fixing prices under this section in respect of dairy-produce exported after the thirty-first day of July, nineteen hundred and thirtyseven, regard shall be had to the prices fixed under this section in respect of dairy-produce exported before that date, and to the following additional considerations, namely:— "(a) The necessity in the public interest of maintaining the stability and efficiency of the dairy industry: "(b) The costs involved in the efficient production of dairy-produce: " (c) The general standard of living of persons engaged in the dairy industry in comparison with the general standard of living throughout New Zealand: "(d) The estimated cost to the Department of marketing the dairyproduce concerned, and also the cost of the general administration of this Act: "(e) Any other matters deemed to be relevant.

Guaranteed prices.

Price for future years.

3

8.—6.

"(5) Due regard having been paid to the several matters mentioned in subsection four hereof, the prices fixed in respect of any dairy-produce exported after the thirty-first day of July, nineteen hundred and thirtyseven, shall be such that any efficient producer engaged in the dairy industry under usual conditions and in normal circumstances should be assured of a sufficient net return from his business to enable him to maintain himself and his family in a reasonable state of comfort." For the purpose of giving effect to these principles the Government has asked Messrs. J. Dunlop, representative of the Southern Ward on the New Zealand Dairy Board, W. E. Hale, representative of the New Zealand Co-operative Dairy Co., Ltd., on the New Zealand Dairy Board, A. Morton, President of the National Dairy Association, N. H. Moss, Barrister and Solicitor, Stratford, B. Roberts, M.P., Director of Parkvale Co-operative Dairy Co., Ltd., A. J. Sinclair, Secretary-Manager of the Te Awamutu Co-operative Dairy Co., Ltd., and D. 0. Williams, Economist, Massey Agricultural College, Palmerston North, to confer with the Executive Commission of Agriculture and report to the Minister of Marketing as to the price to be paid next year. The relation of farming costs to guaranteed prices is largely affected by interest and other land costs, and I propose later to set out the policy of the Government for adjusting the mortgage liabilities of the farmer to the guaranteed price. The Government's Marketing Department will market the dairy-produce to the best advantage, and the proceeds will be paid into the Dairy Industry Account at the Reserve Bank. In some years there may be a deficit in the account after the year's operations; in other years there may be a surplus to be offset against any deficit. New Zealand dairy-produce is mainly sold through importing houses in Tooley Street, London, most of which have regular connections with the distributors oi butter to the British consumer, and the Government has made arrangements to continue to use the efficient genuine distributor and to pay him an adequate commission for the service he performs. The more general question arises, however, of trade between the United Kingdom and New Zealand. New Zealand fully appreciates the right of and the necessity for Great Britain to safeguard the interests of her own producers and to increase her output of farm-produce. We, too, are faced with the same necessity, and farming plays a large part in New Zealand's economy. We fully recognize also the economic grounds and the reasons of national security in time of war which British policy must take into account. But such a policy vitally affects the whole fabric upon which our trade with Britain is based and upon which our economy operates. Our natural advantages make for an efficient and economic agricultural industry. On the other hand, we could produce motor-cars and other goods, but at a very much greater cost than Britain. If, however, our efficient agricultural industry is deprived of an overseas market and we cannot purchase overseas, the efficient British manufacturing industry loses' its market, and trade between the two countries suffers. On the other hand, the more we can sell abroad at an economic price the more we can buy. Our efforts will, therefore, be directed to making reciprocal trade agreements. When these agreements are completed New Zealand will have available the proceeds from an increased volume of exports. These proceeds will be used in the first place to meet our debt commitments, and secondly for imports. There is no doubt that the

Marketing Department.

Sale of produce.

Reciprocal trade.

4

8.—6.

trade between the United Kingdom and New Zealand could be materially expanded; and it will be our aim, not merely to stabilize the existing trading relations, but to expand them. This procedure will be mutually beneficial. Reciprocal Trade Agreements with the United Kingdom and other countries i do not conflict with the natural development of the Dominion and the right ot our J youth to creative work. This development and right renders it imperative that we should extend our manufacturing and other industries. The Government realizes the difficulties of the task in establishing new industries, but sees no other immediate way of extending the production of commodities that could improve our living standards. The procedure for the rehabilitation of the farmer by removing the burden of over-mortgaged land has been drafted and will be introduced shortly after the debate on this Statement. Its main provisions will conserve to the mortgagee the values which are now sustained by his security, whilst allowing the woiking farmer to devote his time to production freed from the menace of possible foreclosure or eviction. Competent farmers will in future be assured of a reasonable income for the work they do on their farms and, so far as the dairy industry is concerned, the guaranteed price is inextricably linked up with the adjustment of_ the dairyfarmer's debts. The mortgage legislation will provide that his liabilities will be adjusted so that he may receive a decent standard of living for himself and his wife and family. With stability of farm income will come an assessment of charges against that income, and the mortgage legislation will ensure to every leasonably efficient farmer that the charges will be so adjusted as to give sufficient return to maintain the standard of living referred to. A procedure has also been worked out for the adjustment of urban mortgages. The atmosphere of Europe and international politics is giving the Government much concern. As has been wisely said, " Nations do not necessaiily go to war, war now comes to the nation.'' The Government is taking such steps as will provide for the effective defence of the Dominion, and is investigating procedure to this end. The estimates which will be submitted will show a substantial increase in Naval expenditure. This is to meet commitments that have already been made to the United Kingdom. The ordinary Defence estimates show a slight increase over last year, and it is proposed to overhaul completely the expenditure to ensure the most effective utilization of the money provided. Whilst making provision for the defence of the Dominion and the maximum cooperation with the British Commonwealth in its policy for this purpose, the Government is of opinion that the progress of the world can only be achieved through a properly organized League of Nations. If conflict comes it can end only in domination by powerful nations for a time or (if progressive development is to continue) in the constitution of another League of Nations. If a League of Nations is essential to the development of the human race, then our choice is between the present League to work out the possibilities of avoiding war before war comes, or another League after war with its destruction of all that is worth while in material and human values. As suggested by the Prime Minister of Great Britain, if those who died could come again, with the knowledge of experience, their presence would prevent the conflict which may come unless the League of Nations is reconstituted now. The Government affirms its faith in the League, and has sent delegations to the International Labour Conference held in June last and to the League Assembly, which is scheduled to open on 21st September next. By agreement with the other countries, the Government will do its part to maintain the peace of the world.

Internal trade and manufacturing development

Readjustment of mortgages.

Defence.

■ League of , Nations.

5

8.—6.

UNEMPLOYMENT. Progress towards full employment must be made through the extension of our secondary industries and development of new industries and services. To this end the Minister of Industries and Commerce has set up a Bureau of Industry to investigate and develop new industries, and provision for financial assistance for this purpose has already been made. In the interim period the first essential was to remove the immediate distress prevailing throughout the Dominion, and shortly after assumption of office £270,000 was distributed to the unemployed to enable them to enjoy some pleasure during the Christmas period. Two months later, on 2nd March, all relief rates were reviewed, the unemployed in the provincial towns being placed on the same basis as those in the cities. On Ist June, after a comprehensive review of conditions and finances, it was decided to increase all rates of pay, the increases varying from 4s. per week in the case of single men up to 19s. 6d. per week for married men with large families. The sustenance rates were also increased by from 3s. to 13s. per week. Conditions were improved and income scales raised. The increases as compared with last year involved £800,000. These were inevitably temporary measures. The difficulties of the task are recognized, but on its successful achievement depends the health and happiness of our people. It is realized that the reorganization of the industrial activities of the whole community and the obtaining of a proper balance between industries are matters requiring sustained effort. Every one must recognize that under any rational economic order every person willing to work is entitled to the things necessary for a reasonable standard of living. If science, power, and the machine displace human labour, then social economic and financial procedure must be adjusted to the new conditions. While engaged in these plans, the Government is promoting as much full-time employment as possible. One of the means adopted to this end is the acceleration of a sound Public Works policy under which a large number of men are engaged in creating assets of national benefit. I will have more to say in regard to Public Works presently. Local bodies, also, recognize their responsibilities to the people within their areas and generally, with the aid of subsidies from the Employment Fund, are making efforts to assist the Government by expanding their programmes of work. The resources of the Fund are also being used to promote full-time work in other directions. One such avenue is the gold-prospecting schemes which have provided considerable employment, and in some districts particularly the results obtained have been distinctly encouraging. The policy in this connection is now being directed more towards the organization of large parties to explore thoroughly likely areas for gold-bearing reefs with a view to the opening-up of new fields and the restoration of the industry on a more permanent basis. A general activity of the Labour Department that has proved very successful in obtaining full-time work for unemployed is what is known as the Placement Scheme. In the past the Department has operated small labour exchanges, but recently these activities have been entirely reorganized and plans drawn up to cover fully the employment field. During the ten weeks of effective life of the new plan, no less than 1,462 men have been placed in permanent employment and 1,185 in temporary positions. Concerning the finances of the Employment Fund: reference to the Public Accounts will show that the total amount available last financial year was £5,289,563, made up of — £ Balance carried forward .. .. .. .. 1,332,946 Revenue from taxation .. .. . . .. 3,920,026 Interest and other miscellaneous receipts . . . . 36,591

New industries.

Additional Christmas payments.

Increased rates of pay.

Promotion of full time employment.

Gold prospecting.

Placement Scheme.

Employment Fund.

6

8.—6.

Of the revenue of £3,920,026, the sum of £416,335 was received from the general unemployment levy, £2,468,019 was received from the wages-tax, and £1,035,672 from the special charge on " other income Allowing for the reduction in the tax to Bd. in the £1 for the second half of the year, the revenue proved to be buoyant and well up to expectations. In fact, the actual collections of wages-tax indicate that the aggregate amount of wages and salaries paid in the Dominion during the year was increased by at least £5,000,000. Disbursements from the Fund for last year totalled £4,882,852, made up as follows: — £ Relief payments under various schemes . . . . 3,464,104 Food, clothing, and other necessities . . . . 98,445 Sustenance payments . . . . . . . . 807,095 Sundry loans and grants . . . . . . . . 145,761 Christmas bonus and other miscellaneous payments 166,603 Administration expenses . . . . . . . . 200,844 £4,882,852 The year closed with a credit balance of £406,711 in the Fund, against which there were considerable commitments. For the current financial year it is estimated, on the present basis of taxation, that the revenue will amount to £4,210,000, and this, with the balance carried forward, will provide a total of £4,616,711. With the acceleration of full-time employment at standard rates of pay by the Government, local bodies, and in industry generally, it is now estimated that this sum will be sufficient to meet the estimated expenditure for work-relief, sustenance, and other charges on the Employment Promotion Fund. At one stage it appeared likely that there would be a temporary shortage in the Employment Fund, and provision was made in the Imprest Supply Act to transfer up to £300,000 from the Consolidated Fund. As it turned out it was not necessary to make use of this provision. PUBLIC ACCOUNTS. As the Public Accounts for last financial year have already been published, it is hardly necessary for me to do more than make passing reference to them. Honourable members will find attached hereto comparative statements of the revenue and the expenditure both with the Budget figures and with the figures for the previous financial year. The outcome of the year's transactions may be summarized as follows: — Revenue. £ £ Taxation . . . . . . . . .. 21,556,415 Interest receipts . . . . . . . . . . 2,721,446 Other receipts . . . . . . . . . . 1,894,506 26,172,367 Expenditure. Permanent appropriations— Debt services .. .. .. .. 9,345,954 Exchange . . . . . . . . . . 1,593,536 Highways . . . . . . . . . . 2,107,406 Other services . . .. . . .. 701,552 Annual appropriations— Social services . . . . . . . . 7,756,212 Other services . . . . . . . . 4,385,907 —25,890,567 Surplus , . ~ ~ ~ . , £281,800

Revenue.

Expenditure.

Estimated resources.

Public Accounts,

Summary of transactions.

Surplus, 1935-36.

7

8.—6.

The main feature in the year's operations, and the only one that is important from the point of view of the current year's Budget, was the buoyancy of the revenue. The surplus of £281,800 realized was entirely due to this factor. The total revenue received exceeded the Budget estimates by £430,000, but subsequent to the Budget being brought down a further review of the revenue estimates was made, and on the basis of that review the increase in salaries and wages and restoration in pensions was back-dated to Ist August instead of commencing on Ist October as was contemplated. The additional amount involved was approximately £140,000, and, if allowance is made for this, the revenue for the year exceeded expectations by some £290,000. The extent to which the revenues have recovered is better illustrated by a comparison of the yield from taxation for last financial year with that of the previous year. With the exception of stamp and death duties and land-tax, every item of taxation shows a substantial increase amounting in the aggregate to £2,092,000. This increase was offset by a decrease of £679,000 in the yield from stamp and death duties, due to abnormal amounts of death duties having been paid during 1934-35, and a decrease of £34,000 in land-tax due to lower valuations. Consequent on the surplus of revenue over expenditure, no Treasury bills were outstanding on the 31st March. In this connection I would mention that it is customary to arrange temporary finance from other Government accounts on the security of Treasury bills in anticipation of revenue receipts, and in the financial year under revieAV recourse to bills was necessary to the extent of £3,650,000. All such bills, however, were redeemed by the 31st March. The bills had a currency not exceeding three months, and interest ranging from rates of If per cent, to 2| per cent, was paid on them. In addition to repaying all Treasury bills, the amount outstanding under a deed of hypothecation entered into for liquidating reserves invested in discharged soldiers settlement securities was reduced during the year by £950,000, leaving the amount outstanding* as at the 31st March last at £2,900,000. This amount is held departmentally, and is not part of the public debt in the ordinary sense of the term. PUBLIC DEBT. The long-term public debt showed an increase of £1,979,881 as a result of operations during the year. Additional debt to the amount of £3,836,591 was incurred for the following purposes: — £ Expenditure on public works . . . . . . 2,400,000 Cost, charges, and expenses of dealing with £10,135,800 of London debt last year . . . . . . 836,015 Premiums on conversions in New Zealand . . . . 340,576 Greymouth Harbour Board guaranteed debt taken over . . . . . • • • • • 260,000 £3,836,591 Concerning the item for cost, charges, and expenses of the London 1935 conversion, the particulars of this operation are contained in last year's Budget. The conversion issue was at a discount of per cent., but the largest item in these expenses was £523,270 for exchange on remitting £2,135,800 to London for redemption purposes, the amount converted in London being £8,000,000 only. I may add that the £836,000 referred to did not represent a net increase in the public debt, as approximately £1,250,000 out of the Public Debt Repayment Account was used for redemptions. Concerning the next item —premiums on conversion in New Zealand £340,576 — this is the result of conversion to a lower rate of interest at par of 4-per-cent. securities purchased by Government Departments from time to time at market prices above par. No increase in debt charges was involved.

Increased taxation yielc Treasury bills.

Part liquidation of deed of hypothecation.

Purposes for which debt raised during the year.

London Conversion Loan, 1935.

8

8.—6.

The Greymouth Harbour Board debt of £260,000 was guaranteed by the State, but was taken over and became part of the public debt as the result of the passing of the Greymouth Harbour Board Amendment Act, 1935, which provided for a readjustment of the finances of the Board pursuant to an agreement entered into with the Government, whereby the subsidy formerly payable to the Board ceased and the Crown became entitled to the revenue from the special coal rate applicable to coal shipped from the Port of Greymouth. Against the gross increase of £3,836,591 referred to must be set redemptions to the amount of £1,856,710, funds for the purpose being derived from the following sources: — £ Public Debt Repayment Account . . . . . . 1,440,215 Reparations and war credits . . . . • • 3,330 Repayments of capital by other accounts . . . . 413,165 £1,856,710 Of the debt redeemed, £187,900 was held in Australia, £1,261,615 in London, and £407,195 in New Zealand. As already indicated, the net effect of the year's operations was an increase in the debt of £1,979,881, bringing the debt as at 31st March, 1936, to £282,561,098. There were, however, other movements in the debt which are worthy of note. The debt held in London decreased by £2,260,300, and in Australia by £590,900. This means that the external debt of the Dominion to be provided for out of our exports has fallen by £2,851,200. The debt domiciled in New Zealand increased by £4,831,081, but behind this is a decrease of £2,995,770 in the debt held by the public, and an increase of £7,826,851 in the debt held by Government Departments. These movements represent a considerable improvement in the debt position as a whole. Any particular reduction in the debt held abroad represents a lightening of the debt burden upon the Dominion. While it involves a redistribution of income, the debt held internally involves no net burden on the Dominion as a whole, but the charges on the debt held abroad mean so much less available for the purchase of goods for consumption in New Zealand. I may add that it is the Government's policy not only to refrain from further borrowing abroad apart from conversion operations designed to lighten the interest burden on the existing debt, but to endeavour to reduce steadily the amount of overseas indebtedness. The position in regard to the domicile of the total public debt of the Dominion as at the 31st March, 1936, is as under: — £ London . . . . ■ • • • • • 158,711,930 Australia .. .. • • • • • • 1,592,650 New Zealand .. .. .. • • • • 122,256,518 Total .. .. • ■ • • £282,561,098 As far as conversion operations are concerned, honourable members are already aware that arrangements have been made for dealing with £5,869,989 of 6-per-eent. stock in respect of which there was a right to repay on or after the Ist August. Notice was given of the Government's intention to on this date, and applications for conversion and cash subscriptions were invited in London for a total of £4,000,000 3-per-cent. stock at an issue price of £98 10s. per cent. Applications received were, for conversion £1,558,000, cash subscriptions £1,238,000, leaving £1,204,000 to be subscribed by the underwriters. The complete success of the issue was unfortunately marred by the reaction from the world affairs at the time, but, allowing for this, the issue was a satisfactory one, and the Dominion was congratulated upon it by leading financial opinion in London. The return to investors over the term of the new loan is £3 2s. Id., while the cost to the Government, after allowing for the redemption of the discount on issue and other expenses, will be £3 4s. lOd. per cent. The balance of the 6-per-cent. stock,

Greymouth Harbour Board debt taken over.

Debt redeemed.

Effect of debt operations.

Domicile of debt.

London Conversion Loan, 1936.

2—B. 6.

9

8.—6.

£1,869,989, is to be redeemed from funds to be provided from New Zealand. The amount in question, together with the cost of remitting the same to London, £458,147, will be provided to the extent of £1,690,000 from the Public Debt Repayment Account, and the balance borrowed internally. No public issue in New Zealand will be necessary. The net result of the conversion to a lower rate of interest and the debt repaid is a saving in interest of £208,000 per annum. PUBLIC WORKS. Expenditure on public works out of loan-money was drastically curtailed in 1932 and 1933, falling from over £8,000,000 to less than £2,000,000 in the space of two years. This sudden curtailment of Public Works activities undoubtedly accentuated the effects of the fall in prices, and was a material factor in the increase in unemployment throughout the Dominion. Practically all financial authorities agree that times of depression, when interest rates are low, is the time when Public Works should be expanded to relieve the economic pressure, and as soon as the Government assumed office it took immediate steps to resume the orderly development of the resources of the Dominion, thereby providing full employment on useful works for a large number of men. As part of the deflationary policy which accentuated the depression the Public Works wage-rates were reduced to the low level of Bs. a day for single men and 10s. a day for married men. Under the Agreement recently concluded with the Public Works men the Government has not only restored the wage-rates but has raised them to the level of 16s. a day for both married and single men with a five-day week, and in addition is providing various facilities which will substantially improve the standard of comfort of the men engaged upon Public Works. The fact that the moneys required for this financial year for an expanded programme of Public Works are available without any loan issue to the public is in itself evidence that the financial resources of the Dominion have not been utilized to the fullest extent. The distribution of moneys following expenditure on Public Works not only increases the purchasing-power of the people directly, but supplies a stimulus to secondary employment, which is most desirable and necessary to the process of recovery. Many of the works which have been or will be placed in hand are of such a nature as to ensure a full and immediate return of the annual costs attaching to the loan funds utilized. Into this category fall such works as hydro-electric extensions, erection of postal and other office buildings, railway improvements and additions in the more heavily trafficked localities. Other works represent an immediate and probably full return of costs to the community, but not necessarily to Government accounts; I refer here to works of improvement to main highways, new schools, various schemes of land-development, and the completion of certain main lines of railway. A third class of works is that which is undertaken now in the knowledge that a full return, direct or indirect, is not obtainable immediately but in full anticipation that the continuance of recovery and the normal development of the country will bring such a return within a reasonable term. Such works comprise tourist roads and the development of tourist resorts, harbour works, and afforestation. There is a final type of work, however, which provides a great deal of employment, but for which a full return, direct or indirect, seems so little likely of realization within a reasonable number of years that it is considered desirable to finance it in the main from current revenue. The works of this type are grading and constructional work on aerodromes and landing-grounds and the settlement on farm lands of unemployed workers, and a substantial contribution for these works is being made out of the Consolidated Fund. Mainly for this reason, vote " Maintenance of Works and Services " has increased from £145,000 for last year to £1,182,000 for this year. In the programme of substantial works to be executed by economical methods, using local plant and equipment to the full and even importing a small proportion of plant where necessary, railway-construction occupies an important place. A commencement was made some months ago on the connection between Napier and Gisborne. Operations on the incomplete length between Westport and Inangahua

Public Works.

Public borrowing not necessary this year.

Nature of works.

Railways.

10

8.—6.

were started recently. The connection of the Marlborough and Canterbury districts by means of the South Island Main Trunk Railway has also been taken in hand. A total of £600,000 for all such works for the current year will be provided in the Public Works Estimates which will be presented later in the session. The intended provision of £610,700 for additions and improvements to opened railway-lines compares with a net expenditure of £292,909 last year, and will be applied in completion of the new station and yards at Wellington, the provision of additional rolling-stock and equipment, the electrification of the line between Wellington and Paekakariki, including the length to Johnsonville, and other works. In addition, expenditure out of renewal funds of the railways upon new rollingstock, bridge-renewals, and other works will amount this year to £1,000,000. The initiation of a greater volume of useful building work is a policy in which the Government is particularly interested, by reason of the great number of subsidiary industries and businesses which are affected by the increase of such activity. Furthermore, there is need and ample scope for expansion for our schools, mental hospitals, and public buildings generally, which at present leave much to be desired. Accordingly, the building programme has been considerably expanded, the loan allocation for this year being £1,200,000 as against a net expenditure last year of £346,880. There is a continuous demand for new post-office buildings and works, and the new loan-money provision for these purposes for this year will be £300,000, which will be supplemented to the extent of £100,000 from the post-office depreciation reserve, established for the purpose of renewals. Additions and extensions to schools and erection of new buildings have been provided for to the extent of £500,000, and £400,000 has been allocated for general buildings, including large office buildings in Auckland and Wellington, which, when completed, will save the payment of rentals in various private buildings scattered through both of these cities. Concerning mental hospitals, there are at the present time in our hospitals 935 patients in excess of what is considered to be proper accommodation, a state of overcrowding that calls for immediate action. In addition, provision has to be made for an annual increase of about 250 patients. Definite steps are being taken by the Government to improve the position, and at the present time there is under construction accommodation for approximately 600 patients. These works include four villas for 100 men and 100 women at Kingseat, Auckland; two villas for 100 men at Tokanui in the Waikato; three villas for 150 women at Ngawhatu, Nelson; one villa for 50 women at Hokitika; and two villas for 100 men at Templeton Farm, Christcliurch. The latter institution was started in 1930, and two of the villas at present under construction are set apart for children. There is now at this home an adult section as well as the children's section, and when the present villas are completed there will be proper accommodation for 400 feeble-minded persons. Apart from accommodation for patients, many of the administrative buildings, such as stores, kitchens, and bakehouses, have become inadequate to deal with present requirements. Furthermore, some of the buildings (particularly at Seacliff and Nelson) have reached a stage where replacement is becoming necessary. Thus, if overcrowding is to be avoided and a proper standard of accommodation maintained, we must have an extensive building programme for some time to come. In addition to these building activities, the Government is planning an extensive programme for the construction of houses to meet the present inadequate accommodation. The only limit to the erection of useful and necessary buildings is the number of tradesmen and the materials available. The improvement of transport routes, in both densely and sparsely populated areas, is one of the most important services which can be provided for the community. Reading expenditure is divided between two main accounts —the Main Highways Account providing for about 12,000 miles of roads of primary and secondary importance, and the " Roads " vote providing for a certain number of new " tourist " roads and numerous small metalling, formation, and bridge works in outlying areas. The provision for the " Roads " vote has been set down at £765,000 out of capital funds, together with some little assistance from current

Public buildings.

Mental hospitals.

Housing.

Highways and roads.

11

8.—6.

revenue; £444,377 was the net expenditure last year. The main highways expenditure is estimated to reach approximately £3,050,000 for the current year, inclusive of certain permanent charges for interest and subsidies. The major portion of this sum will be found from the petrol-tax, tire-tax, and other taxation revenue earmarked for the purpose. Drainage of swamp and other lands, irrigation works, flood prevention and protection, and reclamation of land from the sea in suitable localities, are the principal types of activity under this heading, whereon the net capital expenditure last year was £136,245, and for which the current year's allocation is £320,000, augmented by a substantial provision from the Consolidated Fund for such works as are not considered justifiable projects for the expenditure of loanmoney only. The extension of irrigation works in Canterbury is being pursued steadily, and care is being taken to ensure that the revenue from this work for the benefit of private lands will repay the interest and other annual costs. The supply of electricity by the State is one of the most important of public services, and it is pleasing to state that a strong financial position is being attained, a net profit for last year of approximately £122,000 over the whole of the Government's undertaking's having been gained. This profit automatically goes in reduction of past losses, which have now been reduced to £224,000. Last year's revenue at £1,041,000 passed the million mark for the first time. It is considered that the substantial reductions in the price of electricity to the consumer which have taken place during recent years as - a result of the bulk supply of power by the Government warrant the extension of Government operations in this sphere. Substantial provision will also be made for general land-development and for the settlement of unemployed workers on the land, and also for continuance of the policy of establishing Natives on suitable land. Greater activity in afforestation will be met from an increased vote for the State Forests Account. Sundry other works include the extension of telegraph and telephone systems, for which £360,000 will be allocated in the capital expenditure programme, and also lighthouses, harbour works in more remote localities, and additions to tourist resorts. The Government has decided to install radio beacons at suitable lighthouses on the New Zealand coast for the use of ships fitted with wireless direction-finding apparatus. Two equipments will be ordered immediately for erection at Baring Head and Cape Campbell on the eastern end of Cook Strait, to be followed by a third for the western end of the Strait, and two more for outlying islands marking the approach to Auckland. The programme will go on continuously until all stations where radio beacons are necessary are equipped. An arrangement has been concluded with the British Admiralty whereby a fully-equipped survey ship—H.M.S. " Endeavour " —will arrive in New Zealand next April to commence a re-survey of the New Zealand coast-line. The existing charts contain many inaccuracies, and the information as to soundings at sea is quite inadequate for the present-day methods of navigation. All the New Zealand Government is asked to find towards the cost of this work is the provision of coal and the cost of the ship's annual survey and refit. The works and development programme dealt with above, including maintenance of highways, amounts in the aggregate to approximately £10,450,000, made up as follows: — £ Railway construction and improvement . . . . 2,350,000 Buildings . . . . . . . . . . 1,300,000 Roads and highways . . . . . . . . 3,760,000 Land development and improvements . . . . 1,550,000 Hydro-electric supply . . . . . . . . 510,000 Other works . . . . . . . . .. 980,000 £10,450,000 Of this total, £5,940,000 will be provided out of borrowed moneys and the balance of £4,510,000 from revenue, the Consolidated Fund, the Highways Acdount, and the Employment Promotion Fund being drawn upon for the purpose.

Lands improvement.

Hydro-electric development.

Miscellaneous works.

Radio beacons.

Coastal survey.

Aggregate programme.

12

8.—6.

BUDGETARY PROPOSALS. I come now to proposals embodied in the estimates of the Consolidated Fund for the current financial year. Dealing firstly with the expenditure, the estimates show a net increase of £95,000 over last year's expenditure under Permanent Appropriations. There is an increase of £405,000 in the amount for highways, but this merely reflects the estimated increase in the corresponding revenue item. Against this increase there is a saving of £87,000 in debt charges, £138,000 in exchange, and £87,000 under Other Special Acts, the latter being due mostly to the fact that the final payment to complete New Zealand's contribution of £1,000,000 towards the Singapore base was made last financial year. Concerning debt charges, I may say that as a result of conversion operations there is a net decrease of £189,000 in interest, partly offset by increases for debt repayment. Under the departmental votes provision is made for expending this year £4,817,000 more than was spent last year. When honourable members receive the estimates shortly they will be able to see for themselves the items for which additional money is to be provided. I will, however, indicate the votes principally concerned. The cost to the Consolidated Fund of the restoration of salaries and wages in the Public Service as from Ist July last is approximately £470,000, of which £197,000 is reflected in the lower estimate of the revenue item for railway interest, the balance, £278,000, being included in the Consolidated Fund votes. In dealing with the Public Works programme, I indicated that the vote for Maintenance of Works and Services is to be increased by £1,037,000. This large increase is mainly due to provision of £308,000 for aerodromes and £400,000 for other works that will be financed partly out of revenue and partly out of loanmoney, In addition, there is £97,000 for restoration of flood damage and £170,000 for plant, material, and services, an item hitherto provided for out of the Public Works Fund. An extra £204,000 is to be provided under vote " Lands and Survey," mostly for the purpose of paying standard wages to the men engaged in land-development work under the Small Farms Scheme. Following this course will obviate overloading the properties with capital charges. For similar reasons the wage cost of the Native land development schemes is to be provided out of vote '' Native," with the result that a comparative increase of £233,000 is shown for this vote. It will also be seen that an additional £250,000 has been provided for Defence. Of this amount £190,000 is on account of Naval Defence, due to the fact that larger cruisers are to be taken over, while £60,000 additional is for strengthening our Land and Air Defences, particularly the latter. The additional amount for Naval Defence is offset to the extent of £100,000 by the fact that no contribution toward the Singapore base is required this year. Concerning marine affairs, I have already mentioned the installation of radio beacons and a re-survey of the coast-line. In addition a number of lighthouses where transport arrangements are now rather primitive will be fitted with oil-engined winches and rope haulage to lessen the present arduous labour of handling stores. Another matter for which provision is made is a reorganization of the Fisheries Branch of the Marine Department. Henceforth a continuous statistical record of the industry is to be kept, as it is not possible to regulate the industry intelligently without knowing the amount of fishing that is going on and the quantities and kinds of fish that are landed. Improved equipment for the control of fishinggrounds is also contemplated. The Government also proposes to take over fresh-water fish research work now in the hands of a Committee of the Acclimatization Societies, and this research work will later be extended to salt-water fish. Under the Employment Promotion Act the administration of unemployment taxation is vested in the Commissioner of Taxes. Largely on this account vote " Land and Income Tax " shows an increase of £68,000. It is not proposed to recoup vote " Labour " for the cost of administering the Employment Promotion Fund. Thus, the whole of the revenue of the Fund will be

Consolidated Fund expenditure.

Permanent Appropriations.

Departmental votes.

Restoration of cuts in salaries and wages.

Expenditure on capital works.

Land development costs.

Defence.

Lighthouses, &c.

Reorganization of fishing industry and research work.

Employment administration.

13

8.—6.

expended in assisting the unemployed. Under vote " Labour " provision is also made for the appointment of additional Inspectors of Factories and for the purposes of the Fair Rents Act. The increase in the amount of the vote is £193,000. In the view of the Government, among the most urgent matters requiring attention are more adequate provision for safeguarding the health of the people, better facilities for education, and greater assistance to the aged and infirm. In the field of health activities, provision is made in the estimates for the appointment of additional officers for the school medical service and a considerable expansion of the dental service. To permit of these services being made available in all districts, approximately double the present number of trained dental nurses are needed, but by taking immediate steps to increase the number of trainees it is anticipated that staff requirements will be fully met within a few years. A properly equipped training-school for the training of students is to be established in Wellington. A daily supply of milk for children at school is another matter receiving attention, and provision is made on the estimates for the inauguration of this important service. Owing to the varying circumstances it will probably be necessary to deal with each centre separately, but by next year the service should be fairly general throughout the Dominion. Grants to the Plunket Society have been restored to the former level. The Government is also concerned to raise the standard of health of the Maori, and for this purpose seven additional nurses and six additional Inspectors are being appointed to the Maori hygiene service. Increased requirements of Hospital Boards are reflected in an increase of approximately £78,000 in subsidies payable under the Hospitals and Charitable Institutions Act. The chief factors in the increase, apart from restoration of salary and wage cuts, are improvements in the staff conditions and hours of duty and better and more extensive facilities for treatment on the institutional side. These and other items have increased the vote for " Health " by £146,000. For education, as previously indicated, an extensive building programme aimed at improving the standard of accommodation in our schools has been arranged. Provision is made in the estimates for an additional £655,000 to cover teachers' salaries and other expenses arising out of the admission of five-year-old children to the schools, larger allowances for school committees, and transport and board of post-primary school-children living at a distance from a school. Free conveyance of school-children to technical and other secondary schools has in the past been confined to those who were able to take advantage of railway services. It is now proposed that assistance should be given towards the cost of transport by road for those for whom rail facilities are lacking, a conveyance allowance being paid as in the case of primary-school children. The maintenance of school buildings has fallen into arrears, and provision is made for a considerable increase in most of the items under this subdivision of the vote. An amount is also included for the improvement of school-grounds. Full restoration of the capitation payments to free kindergarten schools is provided for, and the grant to the Workers' Educational Association is restored. The vote proposed for pensions is £5,480,000, compared with an expenditure of £3,770,000 for last year. As a community we have a definite responsibility to ensure that those who- are not able to fend for themselves, because of infirmities or old age, are able to enjoy a reasonable . standard of comfort. As already indicated, it is the intention of the Government to establish a national health and superannuation scheme that will provide or insure every one against these contingencies. In the meantime we must, as a matter of urgent necessity, do something to increase the inadequate pensions at present paid. As a commencement it is proposed, as from Ist July last, to do the following:— War pensions:— (1) Increase the rate of economic pensions payable to war pensioners to 255. a week: (2) Fully restore economic pensions payable to war widows and widowed mothers:

Public health.

Milk for schoolchildren.

Plunket Society grants restored.

Maori hygiene.

Subsidies to Hospital Boards.

Education.

School buildings, grounds, &c.

Kindergartens, and W.E.A.

Pensions.

Increased pensions.

14

8.—6.

(3) Restore the allowances payable to wives and other dependents of deceased and disabled soldiers: (4) Remove the present marriage restriction on the granting of pensions to the wives and widows of ex-soldiers in the case of all women who were married on or before 31st July last. This applies also to the wives of ex-soldiers applying for war-veteran's allowances: (5) Increase the Maori War pension to £1 a week. Old-age pensions:— (1) Raise the old-age pension to £1 a week: (2) Provide for women if otherwise qualified to receive it, the lull old-age pension at sixty years of age: (3) Reduce the residential qualification for old-age pensions to twenty years: (4) Provide for income and not property owned to be the decisive factor in determining the amount of pension payable: (5) Provide for all naturalized aliens otherwise qualified to be eligible for the old-age pension. Miners' pensions:— (1) Miners incapacitated through occupational diseases to be eligible for miner's pension: (2) Miners' widows' pensions to be restored. Widows' pensions:— (1) Increase the pension of widows with dependent children from 10s. to £1 a week, the pension in respect of children to remain at 10s. a week: (2) Enable deserted wives with dependent children to qualify for pensions on the same basis as widows. Invalid pensions:— Provide a pension for invalids, being persons permanently incapacitated for employment, at the rate of £1 a week plus 10s. for a wife and 10s. for each child under sixteen years of age, the income qualification to be the same as for an old-age pension. Family allowances: — Maximum income qualification to be restored to £4 per week. To provide for these increases for nine months of the current year and also the normal expansion, vote " Pensions " has been increased by £1,710,000. ESTIMATED REVENUE. The current year's revenue for the first four months indicates a rising tendency, and I am satisfied that no increase in the rates of tax would be necessary to provide for all the additional ordinary expenditure. However, to provide the £1,710,000 required for pensions, I propose to obtain a further £1,000,000 from income-tax and slightly more than £800,000 additional from land-tax. The small increases in the rates of pensions together with the wider field covered will remove incalculable hardship and trials whilst the raising of the necessary money will, on the closest reasoning, cause a minimum of inconvenience to those who have to pay. Whilst it is often invidious to make comparisons with other countries, I would like, before setting out the rates of income-tax, to quote some figures comparing the effective rate —being the amount of tax payable on every pound of the total income—paid in Grreat Britain with that proposed for New Zealand. The comparison is based on the tax payable by a man with a wife and two children and the last two columns set out the net income of the taxpayer after the tax has been paid. I may add that owing to the recent increase of 3d.

Sources of additional revenue.

Income-tax.

15

R.—6.

in the standard rate the amounts for United Kingdom are slightly higher in some cases than is shown.

The principle guiding the Government when making its decision is that a first charge on the national income should be the care of the aged and the ailing. The alterations in pensions and the taxation systems have been made accordingly. Whilst increasing the yield from income-tax, the Government intends to simplify the tax system and make it more equitable as between taxpayers. Since 1930 considerable alterations have been made in the rates of tax and of exemptions therefrom, but such alterations have generally been made on a " patchwork " basis, with the result that the system to-day is very complicated and not as equitable as it might be. Accordingly it is intended to remodel the whole system. The general exemption of £210 will be retained, and this amount — being a minimum that should be available to every one —it is proposed to deduct from all income before tax is levied. On this principle the general exemption and also the £50 exemption for a dependent husband or wife will be at a flat rate as for dependent children at present. Thus a man with a wife and two children will pay tax on his income in excess of £360. Other existing exemptions for insurance premiums, &c., will be maintained, but henceforth no exemption will be allowed for employment-tax paid. On the taxable balance —i.e., income less exemptions—tax will be payable this year at the following rates: For earned incomes of individuals (but not companies) a basic rate of Is. Bd. in the pound increased by l/100th of a penny for every pound of taxable balance up to £5,500 and thereafter l/150th of a penny for every pound up to a maximum of Bs. 2d. in the pound reached at a taxable balance of £8,950. The basic rate may seem high compared with the lowest rate charged last year but, owing to the fact that exemptions are to be allowed at a flat rate, the rates of tax on the taxable balance are not comparable with those imposed last year. What is comparable is the effective rate—i.e., the tax payable per pound of total income. For instance, a man with a wife and two dependent children and a total income of £400 paid If pence in the pound in income-tax last year and under the system proposed he will pay pence in the pound. The maximum effective rate in the pound will be 7s. 11 fd. on a total income of £9,160 in the case of a single man without dependents, being the lowest income at which the maximum rate is reached compared with ss. llfd. paid last financial year. On unearned income the rates as for earned income will be increased by per cent, as at present. The considerations that warrant giving a general exemption of £210 to individuals do not apply to companies; consequently no such exemption will be allowed in assessing companies, but this is compensated for by fixing the basic rate for companies at Is. as against Is. Bd. for individuals. The graduations for companies will be the same as for individuals, but the maximum rate for companies will be 7s. 6d. in the pound reached at £8,950. To illustrate how the rates for individuals and for companies compare, 1 may mention that a single man without dependents with a total income of £1,000 will pay £91 16s. 9d. in tax while a company with the same income will pay £91 13s. 4d.

Simplification of tax system.

Rates of income-tax.

16

I ! Total Income. Effective Rate of Tax in the £. Balance after paying Tax. New Zealand. United Kingdom. New Zealand. United Kingdom. £ s. d. s. d. £ s. d. £ s. d. 300 .. Nil Nil 300 0 0 300 0 0 400 ..0 2-04 0 2-25 396 12 0 396 5 0 600 0 8-96 0 10-8 577 12 0 573 0 0 800 .. 1 1-42 1 6-9 755 5 4 737 0 0 1,000 .. 1 4-89 1 11-76 929 12 0 901 0 0 5,500 .. 5 6-72 5 6-42 3,970 17 0 3,977 17 6 10,000 7 10-47 7 2-9 6,063 13 4 6,379 2 6

8.—6.

Business and economic conditions generally were better last year than in the previous one. Accordingly, apart from higher rates of tax, there would have been an increase in revenue. Allowing for this and the additional taxation imposed, I have estimated the yield from income-tax at £6,000,000, a total increase of £1,419,000 over last year's receipts. Concerning land-tax: It is proposed to re-introduce the graduated land-tax, from which an estimated revenue of £1,300,000 is expected, or approximately three times the present revenue. The tax removed by the Coalition Government in 1931 had, for fifteen years previously, yielded revenue between £1,000,000 and £1,500,000 per annum, and sometimes slightly in excess of the latter sum. The principle of land-tax has been the subject of debate and controversy throughout the centuries. It must be accepted that a charge on land of any kind reduces its selling-value, such selling-value being based on the net return which can be obtained from the land after all charges have been paid, which means that, given stability in prices and costs of production, a reduction in land-tax is a gift to the immediate land-owner. Conversely, an increase in the tax must be met by the immediate owner. To ensure taxation in some measure according to ability to pay, the existing flat tax will be continued at a penny in the pound of taxable balance of unimproved value up to £5,000, after the ordinary exemption or mortgage deductions have been made, which means that the farmer owning land of an unimproved value of £5,000, with mortgages of £3,000, will be assessed on £2,000, the tax payable being £8 6s. Bd. as at present. The working farmer should be the first to be helped, after which the ability to pay should be considered. When the unimproved value reaches higher levels the tax will be increased accordingly on all land, whether it be city, suburban, or rural. The existing ordinary and mortgage exemptions will be continued. The rates of tax to be paid on the restored procedure of graduated tax will be as follows: — Taxable balances up to £5,000-one penny in £1, increasing by l/8000ths of a penny for every £1 in excess of £5,000, reaching a rate of twopence in the pound at £13,000, threepence at £21,000, fourpence at £29,000, fivepence at £37,000, and sixpence at £45,000, from which point the tax continues at the flat rate of sixpence to the maximum value owned by any individual, trust estate, or company. The purpose of land-tax is, in principle, to obtain for the community the values created by it. The principle behind the policy of the Government is to ensure to those who utilize land the maximum payment for their labour. In other words — the farmer's eyes should be on the return for his products rather than on the acquisitive possibilities of profit derived from land sales. Applied to city, suburban, or rural land, values that accrue through public activities and increased population should automatically come to the State, and the policy of the Government will be directed to this end. Summed up, the procedure will mean the minimum taxation on the working farmer and home-owner, with increasing rates on abnormally large holdings and other areas held in many cases for speculative profit instead of for use in production. Concerning the Customs revenue, this is dependent upon imports, and our ability to buy goods from other countries is, of course, governed by our exports. For the export year ended on 30th June last the value of exports in New Zealand currency was £53,660,000, compared with £42,954,000 for the previous year. Thus there is scope for a considerable expansion of imports, and the figures for recent months indicate that it is taking place. After a careful review of the position I have placed the estimate for Customs revenue for this year at £9,100,000, which is £939,000 in excess of the amount received last year. The increasing turnover in goods will proportionately increase the yield from the sales tax, the estimate for which shows a comparative increase of £437,000. Then the general improvement in economic conditions will, it is anticipated, be reflected in an increase of £55,000 in beer duty and £388,000 in highways revenue. The latter consists mainly of the proceeds from the petrol-tax and motor license fees, and, as the people generally will have more leisure and more earnings, both these items are expected to show a substantial increase.

Land-tax.

Customs revenue.

Sales tax, &s.

3—B. 6.

17

8.—6.

Stamp and death duties revenue.

The remaining large item of taxation, stamp and death duties, is expected to yield £368,000 more than was received last year. Death duties may return a somewhat greater sum this year, and the indications are that duty on instruments, impressed stamps, racing revenue, and amusement-tax will all contribute to the increase in revenue. ls - The estimate for receipts from interest is £200,000 below the amount received last year, mainly due to the fact that an anticipated increase in railway revenue will be more than offset by the cost of restoring the salaries and wages to the 1931 level and reducing the working-hours of the staff. Consequently it is estimated that interest payable to the Consolidated Fund by the Railways will this year be lower by £151,000. " Other Receipts " for this year are expected to be £635,000 in excess of the amount received under this heading last year. This is mostly due to the fact that the estimates allow for the transfer to the Consolidated Fund of £575,000, profits on the change over to our own silver coin. The net result of all the items reviewed is an estimated revenue of £31,067,000, which is £4,894,633 more than was received during last financial year. The estimates of revenue are as follows:— Taxation— £ £ Customs . . . . . . . . 9,100,000 Beer duty . . . . . . . . 770,000 Sales tax . . . . . . . . 2,900,000 Film-hire tax . . . . . . . . 70,000 Gold export duty .. . . . . . . 110,000 Highways . . . . . . . . 2,512,000 Stamp and death duties . . . . . . 3,210,000 Land-tax . . . . . . . . 1,300,000 Income-tax . . . . . . . . 6,000,000 Miscellaneous . . . . .. . , 45,000 Total taxation .. .. .. .. . . 26,017,000 Interest receipts . . . . . . . . . . 2,520,000 Other receipts . . . . . . . . . . 2,530,000 £31,067,000 The Budget estimate of expenditure may be summarized as follows:— £ £ Debt services . . . . . . . . . . 9,259,000 Exchange . . . . . . . . . . 1,455,000 Transfer of highways revenue . . . . . . 2,512,000 Other Permanent Appropriations . . . . 618,000 Annual votes — Social services . . . . . . . . 10,302,000 Other votes . . . . . . . . 6,658,000 Total, Main Estimates . . . . . . . . . . 30,804,000 Cost of reducing working-hours in various State Services . . . . . . . . . . . . 150,000 Other Supplementary Estimates .. . . . . 100,000 Total estimated expenditure . . . . £31,054,000 It will be observed that these figures provide for a small surplus of £13,000 as a margin against contingencies. I have given some details of the Government's procedure and legislation and the financial position of the Dominion. May I, in conclusion, recite the eleven final paragraphs of the policy which the Government placed before the electors with a statement of achievement after eight months of office.

Interest receipts

Other receipts.

Summary of revenue.

Summary of expenditure.

Budget surplus.

Policy fulfilled.

18

8.~ 6.

We first promised to— (1) Guarantee prices to farmers and abolish the present speculative nature of their income. This has been applied to the dairy industry; and the fruit, eggs, and honey producers desire to obtain the benefits of the procedure. (2) Legislate a statutory minimum wage and salary to provide an adequate standard of living for all workers. The 1931 rates of pay have been restored, in and out of the Public Service, and the Arbitration Court is charged with determining a basic wage. (3) Reorganize the education system to provide the maximum possibilities of advancement for all our children. The five-year-old children are back in the schools. The training colleges at Wellington and Dunedin have been reopened. School Committees are being provided with adequate funds. An extensive schoolbuilding programme is under way. Attendance of the children of the rural areas at secondary schools has been facilitated. The grants are being restored to the Free Kindergarten and the Workers' Educational Association. (4) Institute a National Health Insurance Service to provide every facility for the maintenance and restoration of health. Plans are being prepared for the erection of a dental training school, and procedure necessary to establish a National Health Service is being investigated. (5) Provide a superannuation and pensions system that will supply an adequate income to the aged, the ailing, the widow, and all those unable to earn their own living. Old-age pensions and pensions for widows with children have been increased to £1 per week. Miners' pensions have been restored. Deserted wives and invalids are to receive £1 per week with 10s. for each dependent. Women are to receive the full old-age pension at sixty years. Widows of soldiers otherwise unqualified are to receive a pension. Economic pensions have been increased and pensions for soldiers' dependents restored. (6) Organize productive development employment through Public Works assistance to local authorities, and the fostering of secondary industries. Fifteen thousand men are working on Public Works under reasonable rates of pay and good conditions. Negotiations are proceeding with local authorities for facilitating the commencement of necessary work. The Bureau of Industry has plans under way for new industries. (7) Assume control of the central credit system of the Dominion to ensure the maximum utilization and distribution of the resources of the Dominion. The Reserve Bank has been taken over; credit facilities for the dairy industry and housing projects are available. (8) Support the covenant of the League of Nations for the avoidance of war and the maintenance of peace and the closest relations with the nations of the British Commonwealth. A full delegation has been sent to the International Labour Conference, and another delegation is on its way to the League of Nations Assembly at Geneva. The Minister of Marketing leaves for the United Kingdom after the close of the session to extend trade with the Old Country, with subsequent negotiations with other members of the British Commonwealth of Nations.

19

8.—6.

(9) Reorganize the Mortgage Corporation on lines similar to the State Advances Department. The Corporation has been purchased by the State. The new regulations and extended loan procedure have been inaugurated. (10) Maintain the guarantees of the Public Service Superannuation System. The system is still operating and it is proposed to remove the anomalies next year. Steps will be taken later in the session to remove some of the injustices suffered by members of the Public Service who were compulsorily retired on actuarial pensions. (11) Restore the " cuts " made in wages and salaries. They have been restored. A record, Mr. Chairman, worthy of some of our earlier statesmen, but it is not enough—legislation is insufficient —much work has still to be done. The accomplishments will not be recognized until later. We may succeed, we may fail —I think we will succeed. Ido know that in the words of a great Church leader, " Hard indeed is the task set before us, and well we know that from this side and that, from the higher social classes and from the lower very many difficulties and obstacles will present themselves to be overcome; but we will not for all that lose heart, nor allow ourselves to be turned from our resolutions."

20

8.—6.

TABLES TO ACCOMPANY THE FOREGOING STATEMENT.

Page Table No. I.—Abstract of Receipts and Expenditure of the Financial Year ended 31st March, 1936. See Parliamentary Paper 8.-l [Part I]. IVble No. 2,—The Public Debt on 31st March, 1936. See Parliamentary Paper 8.-l [Part lII]. Table No. 3. —Revenue for the Year ended 31st March, 1936, compared with the Year ended 31ST March, 1935 .. .. .. •• •• •• •• " Fable No. 4. —Comparative Statement of the Estimated and Actual Revenue of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936 .. .. .. .. •• •• •• •• .. iii Table No. 5. —Estimated Revenue for 1936-37, compared with the Actual Revenue foe 1935-36 .. iv Table No. 6. —Stamp and Death Duty Revenue for the Year ended 31st March, 1936, compared with the Year ended 31st March, 1935 .. .. .. .. .. .. iv Table No. 7. —Statement of the Customs Duties collected for 1935-36, compared with 1934-35 .. v Table No. 8. —Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936, compared with the Year ended 31st March, 1935 .. .. .. •• •• v Table No. 9. —Comparative Statement of the Appropriated and Actual Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936 .. .. .. .. .. • ■ • • .. vii Table No. 10. —Estimated Net Expenditure for 1936-37, compared with the Actual Net Expenditure for 1935-36 .. .. .. .. .. .. •• •• .. ix Table No. 11. —Public Works Fund —Statement showing Net Expenditure under Appropriations for the Year ended 31st March, 1936, compared with the Year ended 31st March, 1935 x Table No. 12. —Statement showing the Total Ways and Means of the Public Works Fund, General Purposes Account, and the Total Net Expenditure to 31st March, 1936 .. xi Table No. 13. —Statement showing the Amount charged to " Unauthorized " in each Financial Year from Ist April, 1925, to 31st March, 1936 .. .. .. .. xii Table No. 14. —Statement showing the available Financial Resources of the various Accounts on the 31st March, 1936, as compared with the 31st March, 1935 .. .. .. xiii Table No. 15. —Statement of Amounts paid on account of Pensions for the Financial Years ended 31st March, from 1932 to 1936 .. .. .. .. .. .. . • xiii Table No 16.—Education Expenditure—Total Expenditure on Education out of Public Funds since 1913-14 .. .. .. •• •• •• •• .. xiv Table No. 17. —State Balance-sheet as at 31st March, 1935 .. .. .. .. xv Table No. 18.—Statement of Half-yearly Instalments of Principal and Interest for Repayment of Debt funded with Imperial Government .. .. .. .. .. xvi Table No. 19. —Statement showing Maturity Dates and Domicile of Debt outstanding as at 31st March, 1936 .. .. .. .. .. .. .. •• xvii Table No. 20. —Statement showing Values of Imports and Exports of the Dominion in each Financial Year ended 31st March, from 1931 to 1936 .. .. .. .. .. xvii Prospectus of 1935 London Conversion Loan .. .. • ■ .. • • • • • • xviii Prospectus of 1936 London Conversion Loan .. •. ■. . • ■ • ■ • • • xx

i—B. 6.

8.—6,

Table No. 3. Revenue for the Year ended 31st March, 1936, compared with the Year ended 31st March, 1935.

II

Year ended I Year ended 31st March, [ 31st March, Increase. Decrease. 1936. | 1935. Taxation— £ £ £ f Customs .. .. .. .. 8,161,161 7,423,597 737 564 Beerduty 715,042 671,008 44,034 Sales tax .. .. .. .. 2,462.601 2,170,504 292,097 Film-hire tax .. .. .. .. 60) 657 44 491 16 166 Gold-export duty 106,976 4'359 Highways 2,124,130 1,910,452 213'ô78 btamp and death duties .. .. .. 2,841,766 3,520,723 .. 678'957 Land-tax .. .. .. .. 458,873 " 33'653 Income-tax 4,581,328 3,796,477 784 851 Miscellaneous 43j881 45;212 _ Total—Taxation .. .. .. 21,556,415 20,177,607 2,092,749 713,941 Interest— On capital liability— Working railways 1,051,477 1,088,050 .. 36 573 Postal and telegraph .. .. .. 541,000 546,000 5'000 On Public Debt Redemption Fund .. .. 615,020 632 065 17'o45 On other public moneys .. .. .. 513,949 664 J 30 150 J81 Total—Interest 2,721,446 2,930,245 ~ 208/799~ Other receipts— Registration and other fees .. .. 235,761 228,563 7 198 National-endowment revenue .. .. 146 126 147 761 ' 1 6S5 Territorial revenue 289 ,'478 2911415 " l' 93 7 External affairs .. .. .. .. 128,562 97,110 31 452 Justice •• •• .. .. .. 149,366 144J97 5! 169 Marine •• •' •• •• •• 138,189 139,168 . 979 £ atl J e ■ 5,372 5,204 168 Printing and Stationery 189,581 175,656 13 925 Stamp duties 54)886 45;048 9 ' 83g lourist and Health Resorts .. .. 85,652 77 308 8 344 Miscellaneous 463!o72 1,641,' 777 .! 1 178'705 .Recoveries on account of expenditure of 8,461 25 035 ' 16'574 previous years Total-Other receipts .. .. 1,894,506 3,018,242 76,094 l7l9^83C)~ 2,168,843 2,122,570 2,122,570 Totals 26,172,367 26,126,094 46,273

13,— 6.

Table No. 4. Comparative Statement of the Estimated and Actual Revenue of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936.

III

Difference. Estimate for Actual for ;—. " 1935-36. 1935-36. More . Less. Taxation— £ £ £ £ Customs .. .. .. .. 7,900,000 8,161,161 261,161 Beer duty .. .. .. .. 675,000 715,042 40,042 Sales tax .. .. .. .. 2,475,000 2,462,601 .. 12,399 Film-hire tax .. .. .. .. 55,000 60,657 5,657 Gold-export duty .. .. .. 100,000 106,976 6,976 Highways " .. .. .. .. 2,040,000 2,124; 130 84,130 Stamp and death duties .. .. .. 2,710,000 2,841,766 131,766 Land-tax .. .. .. .. 470,000 458,873 .. 11,127 Income-tax .. .. .. .. 4,250,000 4,581,328 331,328 Miscellaneous .. .. .. .. 45,000 43,881 .. 1,119 Total—Taxation .. .. .. 20,720,000 21,556,415 861,060 24,645 Interest— On capital liability— Working railways .. .. .. 980,000 1,051,477 71,477 Postal and telegraph .. .. .. 556,000 541,000 .. 15,000 On Public Debt Redemption Fund .. 560,000 615,020 55,020 On other public moneys .. .. .. 518,000 513,949 .. 4,051 Total—Interest .. .. .. 2,614,000 2,721,446 126,497 19,051 Other receipts— Registration and other fees .. .. 230,000 235,761 5,761 National-endowment revenue .. .. 135,000 146,126 11,126 Territorial revenue .. .. .. 260,000 289,478 29,478 External Affairs .. .. .. .. 140,000 128,562 .. 11,438 Justice .. .. .. .. .. 146,000 149,366 3,366 Marine .. .. .. .. .. 134,000 138,189 4,189 Native .. .. .. .. .. 5,000 5,372 372 Printing and Stationery .. .. .. 175,000 189,581 14,581 Stamp duties .. .. .. .. 45,000 54,886 9,886 Tourist and Health Resorts .. .. 85,000 85,652 652 Miscellaneous .. .. .. .. 1,048,000 463,072 .. 584,928 Recoveries on account of expenditure of 5,000 8,461 3,461 previous years Total —Other receipts .. .. 2,408,000 1,894,506 82,872 596,366 1,070,429 640,062 640,062 Total revenue .. .. .. 25,742,000 26,172,367 430,367

8.—6.

Table No. 5. Estimated Revenue of the Consolidated Fund (Ordinary Revenue Account) for the Year ending 31st March, 1937, compared with the Actual Revenue received for the Year ended 31st March, 1936.

Table No. 6. Stamp and Death Duty Revenue for the Year ended 31st March, 1936, compared with the Year ended 31st March, 1935.

IV

Estimate Actual Differences. for for ■— 1936-37. 1935-36. T _ Increase. Decrease. ! I Taxation— £ £ £ £ Customs .. .. .. .. .. .. 9,100,000 8,161,161 938,839 Beer duty .. .. .. .. .. 770,000 715,042 54,958 Sales tax .. .. .. .. .. .. 2,900,000 2,462,601 437,399 Film-hire tax .. .. .. .. 70,000 60,657 9,343 Gold-export duty .. .. .. .. 110,000 106,976 3,024 Highways .. .. .. .. .. 2,512,000 2,124,130 387,870 Stamp and death duties .. .. .. 3,210,000 2,841,766 368,234 Land-tax .. .. .. 1,300,000 458,873 841,127 Income-tax .. .. .. .. .. 6,000,000 4,581,328 1,418,672 Miscellaneous .. .. .. .. .. 43,881 1,119 Total—Taxation .. .. 26,017,000 21,556,415 4,460,585 Interest—• On capital liability— Working Railways .. .. .. .. 900,000 1,051,477 .. 151,477 Postal and Telegraph .. .. .. .. 560,000 541,000 19,000 On the Public Debt Redemption Fund .. .. 580,000 615,020 .. 35,020 On other public moneys .. .. .. 480,000 513,949 .. 33*949 Total—Interest .. .. 2,520,000 2,721,446 19,000 220,446 Other receipts— Registration and other fees .. .. .. .. 235,000 235,761 .. 761 National-endowment revenue .. .. .. 145,000 146,126 .. 1,126 Territorial revenue .. .. 290,000 289,478 522 External Affairs .. .. .. .. 154,000 128,562 25,438 Justice .. .. .. .. .. .. 148,000 149,366 .. 1,366 Marine .. .. .. .. .. 138,000 138,189 .. 189 Native .. .. .. .. .. .. 5,000 5,372 .. 372 Printing and Stationery .. .. .. 195,000 189,581 5,419 Stamp duties .. .. .. .. .. 55,000 54,886 114 Tourist and Health Resorts.. .. .. .. 90,000 85,652 4,348 Miscellaneous .. .. .. .. .. 1,070,000 463,072 606^928 Recoveries on account of expenditure of previous years.. 5,000 8,461 .. 3,461 Total—Other receipts 2,530,000 1,894,506 642,769 7,275 5,122,354 227,721 227,721 Totals .. .. .. .. 31,067,000 26,172,367 4,894,633

Year Ended 31st March, Item- Increase. Decrease. 1936. 1935. £ £ £ £ Adhesive stamps .. .. 149,575 125,954 23,621 Duty oil instruments.. .. 277,441 238,093 39,348 Estate and succession duty .. 1,510,873 2,159,990 .. 649,117 Gift duty .. .. .. 104,606 45,404 59,202 Impressed stamps, and duty on 197,637 186,741 10,896 cheques Stamp duty on interest .. 53 68 .. 15 Company licenses .. .. 87,781 83,856 3,925 Sharebrokers' licenses .. 1,980 2,051 .. 71 Bank-note duty .. .. 34,389 218,017 .. 183,628 Totalizator revenue .. .. 378,851 371,985 6,866 Amusements-tax .. .. 56,507 49,526 6,981 Lottery duty .. .. 17,762 18,000 .. 238 Overseas-passenger duty .. 20,685 18,455 2,230 Rates, fines, and miscellaneous 3,626 2,583 1,043 154,112 833,069 154,112 Totals .. .. 2,841,766 3,520,723 .. 678,957

8.—6.

Table No. 7. Statement showing Customs Duties collected for Year 1935-36 compared with the Year 1934-35.

Table No. 8. Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936, compared with the Financial Year ended 31st March, 1935.

V

1935-36. 1934-35. Increase. Decrease. £ £ £ £ Tobacco, cigars, and cigarettes .. 1,709,252 1,665,726 43,526 Spirits, wine, and beer .. . 733,791 679,930 53,861 Motor-vehicles and parts* .. •• • 677,634 487,240 190,394 Motor-spirit* 1,176,260 1,057,598 118,662 Tea .. .. .. 133,505 120,600 12,905 Sugar .. .. ■■ 673,206 653,909 19,297 Other goods 2,222,989 2,028,521 194,468 Primage duty .. •• 324,717 289,808 34,909 Surtax j 509,807 440,265 69,542 Totals | 8,161,161 7,423,597 737,564 * Excluding tire-tax and petrol-tax earmarked to Main Highways.

Year ended Tear ended 1 31st March, 31st March, Increase. Decrease. 1936. 1935. Permanent Appropriations:— £ £ £ £ Under special Acts of Legislature,— Civil List .. .. .. .. .. 26,516 23,100 3,416 Debt Services — Interest .. .. .. .. .. 7,730,194 8,023,812 .. 293,618 Amortization of debt — Sinking fund .. .. .. .. 10,859 10,859 Repayment of Public Debt Act, 1925 . . 1,543,086 1,578,293 .. 35,207 Transfers to Loans Redemption Account .. 13,987 7,326 6,661 Administration and management .. .. 29,285 117,733 .. 88,448 Payments on guaranteed loans .. .. 18,543 42,605 .. 24,062 Total—Debt Services .. .. .. 9,345,954 9,780,628 6,661 441,335 Other Services — Education.. .. .. .. .. 95,967 87,207 8,760 Contribution towards Singapore Naval Base .. 100,000 100,000 Other grants and subsidies .. .. .. 251,447 242,949 8,498 Salaries and honoraria .. .. .. 65,350 60,224 5,126 Pensions .. .. .. .. .. 44,351 40,057 4,294 Highways —• Transfers to Main Highways Account .. 1,975,945 1,455,143 520,802 Paid to boroughs .. .. .. .. 109,427 110,748 .. 1,321 Expenses of collecting, &c... .. .. 22,034 21,074 960 Advances .. .. .. .. .. 3,342 Cr. 6,123 9,465 Other special Acts— Cost of exchange on the purchase from banks of .. 1,190,265 .. 1,190,265 surplus sterling in London Exchange on remittances of public moneys to 1,593,536 268,894 1,324,642 or from countries overseas Miscellaneous .. .. .. .. 114,579 67,596 46,983 Total—Other Services .. .. 4,375,978 3,638,034 1,929,530 1,191,586 Total—Permanent Appropriations .. 13,748,448 13,441,762 1,939,607 1,632,921

B.—o.

Table No. 8 —continued. Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936, compared with the Financial Year ended 31st March, 1935 —continued.

VI

Year ended Year ended 31st March, 31st March, Increase. Decrease 1936. 1935. Annual Appropriations:— £ £ £ £ Vote, — Legislative.. .. .. .. .. j 79,238 88,273 .. 9,035 Prime Minister's Department .. .. 23,521 22,596 925 Finance — Treasury .. .. .. .. .. 41,834 37,722 4,112 Customs .. .. .. .. .. 96,034 87,627 8,407 Land and Income Tax .. .. .. 74,829 64,604 10^225 Stamp Duties .. .. .. .. 87,515 81,902 5*613 Audit .. .. .. ... .. 29,468 26,738 2,730 Total—Finance .. .. .. 329,680 298,593 31,087 General Administration— Public Service Commissioner's Office .. .. 4,334 4,377 .. 43 Internal Affairs .. .. .. .. 363,658 367,802 " 4 144 External Affairs .. .. .. .. 136,667 95,353 41,314 Printing and Stationery .. .. .. 176,098 155,015 21,083 Marine .. .. .. .. .. 112,710 109,182 3,528 Labour .. .. .. .. .. 44,971 39,961 5,010 Native .. .. .. .. .. 48,918 61,584 .. 12 666 Valuation .. .. .. .. .. 48,178 38,953 9,225 Electoral .. .. .. .. .. 85,833 5,148 80,685 Total—General Administration .. 1,021,367 877,375 160,845 16 853 Law and Order — Justice and Prisons .. .. .. 251,111 239,239 11,872 Crown Law Office .. .. .. .. 6,273 5,625 648 Police .. .. .. .. .. 453,890 435,545 18,345 Total—Law and Order .. .. 711,274 680,409 30,865 Defence — Naval Defence .. .. .. .. 462,245 437,840 24,405 Defence .. .. .. .. .. 552,125 465,232 86,893 Total—Defence .. .. .. 1,014,370 903,072 111,298 Maintenance of Public Works and Services .. 145,492 91,845 53 647 Development of Primary and Secondary Industries— Lands and Survey .. .. .. .. 189,652 160,215 29,437 Agriculture .. .. .. .. 591,802 539,247 52,555 .! Industries and Commerce, Tourist, and Publicity 161,872 133,996 27,876 Scientific and Industrial Research .. .. 59,848 53 127 6 721 Mines .. .. .. .. .. 19,240 ' ."327 Transport .. .. .. .. .. 25,205 27,469 .. 2,264 Total — Development of Primary and 1,047,619 933,621 116,589 2.591 Secondary Industries __ ' Social Services— Health .. .. .. .. .. 808,966 779,216 29,750 Mental Hospitals .. .. .. .. 279,670 252,442 27,228 Education .. .. .. .. 2,795,098 2,595,661 199,437 Pensions .. .. .. .. .. 3,769,612 3,439,879 329,733 National Provident and Friendly Societies .. 102,866 77,538 25,328 Total—Social Services.. .. .. 7,756,212 7,144,736 611,476 Unauthorized Expenditure,— Services not provided for .. .. .. 13,346 17,314 .. 3,968 Total—Annual Appropriations .. .. 12,142,119 11,057,834 1,116,732 32,447 3,056,339 1,665,368 1,665,368 Total Expenditure .. .. .. 25,890,567 24,499,596 1,390,971

B—6.

Table No. 9. NET EXPENDITURE. Comparative Statement of the Appropriated and Actual Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936.

VII

Net Actual Net Difference. Appropriations, Expenditure, 1935-36. 1935-36. More _ Permanent Appropriations :— £ £ £ £ Under Special Acts of the Legislature,— Civil List .. .. .. .. .. 25,920 26,516 596 Debt servicesInterest .. .. .. .. .. 7,810,010 7,730,194 .. 79,816 Amortization of Debt— Sinking Fund .. .. .. .. 10,859 10,859 Repayment of Public Debt Act, 1925 .. 1,546,280 1,543,086 .. 3,194 Transfers to Loans Redemption Account .. 9,500 ; 13,987 4,487 Securities redeemed .. . . .. 1,000 . . . , 1 000 Administration and Management .. .. 35,500 29,285 .. 6,215 Payments on Guaranteed Loans .. .. 27,800 18,543 .. 9,257 Total—Debt services .. .. 9,440,949 9,345,954 4,487 99,482 Other services— Education .. .. .. .. 95,968 95,967 .. 1 Other Grants and Subsidies .. .. .. 338,200 351,447 13,247 Salaries and Honoraria .. .. .. 65,749 65,350 .. 399 Pensions .. .. .. .. .. 44,352 44,351 .. 1 Highways .. .. .. .. .. 2,041,000 2,107,406 66,406 Exchange .. .. .. .. .. 1,636,000 1,593,536 .. 42,464 Other Special Acts .. .. .. .. 65,700 117,921 52,221 Total —Other services .. .. 4,286,969 4,375,978 131,874 42,865 Total —Permanent Appropriations.. 13,753,838 13,748,448 136,957 142,347 Annual Appropriations :— Vote, — Legislative .. .. .. .. ., 81,932 79,238 .. 2,694 Prime Minister's Department .. .. .. 23,113 23,521 408 Finance — Treasury .. .. ,. .. .. 43,025 41,834 .. 1,191 Customs .. .. .. .. .. 96,909 96,034 .. 875 Land and Income Tax .. .. .. 75,576 74,829 .. 747 Stamp Duties .. .. .. .. 86,309 87,515 1,206 Audit .. .. .. .. .. 32,219 29,468 .. 2,751 Total—Finance .. .. .. 334,038 329,680 1,206 5,564 General Administration— Public Service Commissioner's Office .. .. 5,210 4,334 .. 876 Internal Affairs .. .. .. .. 374,323 363,658 .. 10,665 External Affairs .. .. .. .. 144,892 136,667 .. 8^225 Printing and Stationery .. .. .. 168,832 176,098 7,266 Marine .. .. .. .. .. 123,921 112,710 .. 11,211 Labour .. .. .. .. ,. 45,838 44,971 .. 867 Native .. .. .. .. .. 49,342 48,918 .. 424 Valuation .. .. .. .. .. 48,040 48,178 138 Electoral .. .. .. .. .. 78,179 85,833 7,654 !. Total—General Administration .. 1,038,577 1,021,367 15,058 32,268 Law and Order— Justice and Prisons .. .. .. 254,029 251,111 .. 2 918 Crown Law Office .. .. .. .. 6,633 6,273 .. '36O Police .. .. .. .. .. 452,256 453,890 1,634 Total—Law and Order .. .. 712,918 711,274 1,634 3,278 Defence — Naval Defence .. .. .. .. 462,540 462,245 .. 295 Defence .. .. .. .. .. 549,455 552,125 2,670 Total—Defence .. .. .. 1,011,995 1,014,370 2,670 295 Maintenance of Public Works and Services .. 165,981 145,492 .. 20 489

8.—6.

Table No. 9 —continued. NET EXPENDITURE—continued. Comparative Statement of the Appropriated and Actual Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1936 —cntd.

VIII

Net Actual Net Difference. i Appropriations, Expenditure, — 1935-36. 1935-36. More _ Less . Annual Appropriations—continued. £ £ £ £ Vote —continued. Development of Primary and Secondary Industries — Lands and Survey .. .. •• •• 183,098 189,652 6,554 Agriculture ' .. .. 599,059 591,802 .. _ 7,257 Industries and Commerce, Tourist, and Publicity 161.190 161,872 682 Scientific and Industrial Research .. .. 61,094 59,848 ■■ 1,246 Mines . •• •• 22,921 19,240 .. 3,681 Transport 27,331 25,205 .. 2,126 Total —Development of Primary and 1,054,693 1,047,619 7,236 14,310 Secondary Industries Social Services — Health .. .. .. .. .. 797,603 808,966 11,363 Mental Hospitals .. .. •• 272,641 279,670 7,029 Education .. .. . • 2,759,652 2,795,098 35,446 Pensions .. .. .. . • ... 3,725,226 3,769,612 44,386 National Provident and Friendly Societies .. 106,231 102,866 .. 3,365 Total —Social Services .. ■■ 7,661,353 7,756,212 98,224 3,365 Unauthorized Expenditure,— Services not provided for .. .. •• 13,346 13,346 Total —Annual Appropriations .. 12,084,600 12,142,119 139,782 82,263 276,739 224,610 224,610 Total Expenditure .. 25,838,438 25,890,567 52,129

8.—6.

Table No. 10. Estimated Net Expenditure of the Ordinary Revenue Account for 1936-37, compared with Actual Net Expenditure for 1935-36.

ii—B. 6.

IX

T-, i.- i I ■ Difference. 1 Estimate J Actual for for I 1936-37. ; 1935-36. | Increase . Decrease. P ~Sst APPr ° Priat . 29,800 26,516 3,284 . £ D Inter^° eS- ~ WaT Sinking Fund !! •• 10,859 10,859 Repayment of Public Debt .. .. •• 1,624,700 1,543,086 81,614 Administration and Management .. .. •• 59,500 29,285 30,215 .. Payments of Guaranteed Loans, Redemptions, and 32,530 .. 10,230 TVo nsfers Total —Debt services .. .. •• 9,258,726 9,345,954 111,829 199,057 Under Special Acts of the Legislature— "Education . - -. • • • • • • > 95,967 . 441 Salaries and Honoraria .. .. •• •• 83,979 65,350 PpT . aiorls .. .. 44,523 44,351 172 Highways I! 2,512,000 2,107,406 404,594 Fxchanse .. .. .. •• 1,455,000 1,593,536 .. 138,536 Other Special Acts .. .. •• •• 364,206 469,368 .. 105,162 4,555,234 4,375,978 423,395 244,139 Total—Permanent appropriations 13,843,760 13,748,448 538,508 443,196 Annual Appropriations,— Legislative .. "M08 79,238 32,470 Prime Minister's Department .. •• 27,256 23,521 3,735 T?\ -J-l QT100 Treasury • • • • 42,696 41,834 862 Customs !! !! .. .. .. 113,540 96,034 17,506 Land and Income Tax .. .. •• •• 143,244 74,829 68,415 Stamp Duties .. .. ■■ •• •• 91,551 87,51o 4,036 Audit .. .. .. •• •• 38,469 29,468 9,001 429,500 329,680 99,820 General Administration — — ~ , Public Service Commissioner's Office .. •• 5,200 4,334 866 Internal Affairs .. .. •• •• 357,777 362,896 .. 5,119 External Affairs .. .. •• •• 145,080 136,667 8,413 Printing and Stationery .. .. .. 200,183 176,098 24,085 Marine ... 125,838 112,710 13,128 Labour" " •• ■■ 238,066 44,971 193,095 Native .. 281,473 48,918 232,555 Valuation " /! !. .. •• 58,990 48,179 10,811 Electoral 12,270 85,833 .. 73,563 Census and Statistics .. .. . • •. 66,642 26,205 40,437 1,491,519 1,046,811 523,390 78,682 Law and Order — Justice and Prisons .. .. .. •• 269,946 251,111 18,835 Crown Law .. .. .. •• •• 7,797 6,273 1,524 Police .. .. •• •• ■■ 498,019 453,890 44,129 775,762 711,274 64,488 Defence —• ' 1 Naval Defence .. .. .. •• •• 651,630 462,245 189,385 Defence .. .. .. .. •• 612,900 552,125 60,775 1,264,530 1,014,370 250,160 Maintenance of Public Works and Services .. .. 1,182,500 145,492 1,037,008 Development of Primary and Secondary Industries — Lands and Survey 393,778 189,652 204,126 Agriculture 635,172 591,802 43,370 Industries and Commerce, Tourist, and Publicity .. 175,005 135,668 39,337 Scientific and Industrial Research .. .. .. 98,308 59,848 38,460 Mītihh .. .. .. .. .. .. 45,664 19,240 26,424 Transport .. .. .. •• •• 27,125 25,205 1,920 1,375,052 1,021,415 353,637 Social Services — —■— Health.. .. .. .. •• •• 955,431 808,966 146,465 Mental Hospitals .. .. •• 306,509 279,670 26,839 Education .. .. .. .. .. 3,449,689 2,795,098 654,591 Pensions .. .. .. .. .. 5,479,992 3,769,612 1,710,380 National Provident and Friendly Societies .. .. 110,604 103,626 6,978 10,302,225 7,756,972 2,545,253 Services not provided for .. .. .. .. 13,346 .. 13,346 Total —Annual appropriations .. .. 16,960,052 12,142,119 4,909,961 92,028 5,448,469 535,224 535,224 Totals .. .. .. .. 30,803,812 25,890,567 4,913,245

8.—6.

Table No. 11. PUBLIC WORKS FUND. Statement showing the Net Expenditure under Appropriations for the Year ended 31st March, 1936, compared with the Year ended 31st March, 1935.

X

Vote Year ™ ded Year ended ! T _ 31st March, 1936. 31st March, 1935. j Increase. Decrease. ! £ £ £ £ Public Works, Departmental .. .. 99,385 76,486 22 899 ! Railway-construction .. Gr. 34,898 Cr. 29,313 '. | g'g 25 Railways Improvement and Additions to 292,909 154,973 137 936 Open Lines Public Buildings— General .. .. .. .. 39,532 30,801 8,731 Courthouses .. .. .. 8,701 533 8 168 Education Buildings .. .. 122,357 51,506 7o'851 Prison Buildings and Works .. 2,123 1,605 '5I8 Police-stations .. .. .. 6,710 3 956 Postal and Telegraph .. .. 97,800 100'484 ' 2 684 Mental Hospital Buildings .. .. 67,465 98,630 " 3l'l65 Health and Hospital Institutions .. 2,191 656 1 535 Lighthouses .. .. .. 3,320 4,020 ' '700 Harbour-works .. .. Gr. 399 2,581 2 980 Development of Tourist Resorts .. 13,683 12,880 803 Roads, &c. .. .. .. .. 444,377 37l'ō73 72,804 Telegraph Extension .. .. .. 195,380 135,933 59 447 Lands, Miscellaneous .. 37,909 82,092 44'i83 Irrigation, Water-supply, and Drainage.. 85,414 91,241 " 5'827 Swamp Land Drainage .. .. 12,922 15'oi9 . 2 097 Plant, Material, and Services .. 22,438 Gr. 32*951 Settlement of Unemployed Workers .. 146,480 ' 75 829 Native Land Settlement .. .. 71,887 12ō'668 " 53'781 Dairy Industry Loans .. .. 10,750 .10^750 Totals, annual appropriations 1,748,436 1,541,858 Unauthorized— Services not provided for .. .. 14 122 108 Totals .. .. 1,748,450 1,541,980 431,349 224,879 224,879 206,470 1

B.— 6.

Table No. 12. Statement showing the Total Ways and Means of the Public Works Fund, General Purposes Account, and the Total Net Expenditure to the 31st March, 1936.

XI

WAYS AND MEANS. Loans : — £ s - **. £ a - d. Immigration and Public Worka Loan, 1870 .. .. •• 4,000,000 0 0 Immigration and Public Works Loan, 1873 .. .. »• 2,000,000 0 0 Immigration and Public Works Loan, 1874 .. •• 4,000,000 0 0 General Purposes Loan Act, 1873 .. •• •• •• 750,000 0 0 New Zealand Loan Act, 1876 .. .. •• •• 750,000 0 0 New Zealand Loan Act, 1877 .. .. •• •• 2,200,000 0 0 New Zealand Loan Act, 1879 .. .. •• 5,000,000 0 0 New Zealand Loan Act, 1882 .. .. .. •• 3,000,000 0 0 New Zealand Colonial Inscribed Stock Loan Act, 1882 .. .. 250,000 0 0 North Island Main Trunk Railway Loan Act, 1882 .. .. 1,000,000 0 0 New Zealand Loan Act, 1864 .. .. •• •• 1,500,000 0 0 New Zealand Loan Act, 1886 .. .. •• •• 1,325,000 0 0 District Railways Purchasing Acts, 1885 and 1886 .. .. 479,487 7 11 New Zealand Loan Act, 1888 .. .. •• •• 1,000,000 0 0 Native Land Purchase Act, 1892 .. •• •- 149,700 0 0 Lands Improvement and Native Lands Acquisition Act, 1894 .. 500,000 0 0 Aid to Public Works and Land Settlement Act, 1896 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Amendment Act, 1897.. 250,000 0 0 Aid to Public Works and Land Settlement Amendment Act, 1898.. 500,000 0 0 Aid to Public Works and Land Settlement Act, 1899 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Act, 1900 .. .. 1,011,600 0 0 Aid to Public Works and Land Settlement Act, 1901 .. .. 1,250,000 0 0 Aid to Public Works and Land Settlement Act, 1902 .. .. 1,750,000 0 0 Aid to Public Works and Laud Settlement Act, 1903 .. 997,690 0 0 Aid to Public Works and Land Settlement Act, 1904 .. .. 750,000 0 0 Aid to Public Works and Land Settlement Act, 1905 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Act, 1906 .. .. 989,700 0 0 Aid to Public Works and Land Settlement Act, 1907 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Act, 1908 .. .. 1,250,000 0 0 Aid to Public Works and Land Settlement Act, 1909 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Act, 1910 .. .. 1,750,000 0 0 Aid to Public Works and Land Settlement Act, 1911 .. .. 1,500,000 0 0 Aid to Public Works and Land Settlement Act, 1912 .. .. 1,748,900 0 0 Aid to Public Works and Land Settlement Act, 1913 .. .. 1,750,000 0 0 Aid to Public Works and Land Settlement Act, 1914 .. .. 3,000,000 0 0 Aid to Public Works and Land Settlement Act, 1921 .. •• 5,060,613 0 3 Aid to Public Works and Land Settlement Act, 1922 .. .. 4,408,860 12 3 Finance Act, 1909 .. .. .. •• •• -• 1,250,000 0 0 Finance Act, 1915, and New Zealand Loans Act, 1915 .. .. 2,000,000 0 0 Finance Act, 1916 .. .. .. • • •• 1,000,000 0 0 Finance Act, 1917 .. .. .. •• •• 850,000 0 0 Finance Act, 1918 (No. 2) .. .. .. .. •• 2,500,000 0 0 Finance Act, 1919, Section 5 .. 750,000 0 0 Finance Act, 1920, Section 15 . .. .. •• 2,500,000 0 0 Finance Act, 1921, Section 10 .. •• ■■ 2,673,111 10 11 Finance Act, 1923, Section 2 .. .. .. •• 4,306,608 17 6 Finance Act, 1924, Section 2 .. .. .. •• 2,126,009 6 11 Finance Act, 1925, Section 2 .. .. .. •• 4,151,450 10 2 Finance Act, 1926, Section 2 .. .. ». 5,220,134 10 7 Finance Act, 1927 (No. 2), Section 2 .. .. .. .. 4,319,594 10 3 Finance Act, 1928, Section 2 .. .. .. •• 3,185,132 14 8 Finance Act, 1929, Section 2.. .. .. .. .. 4,097,119 4 6 Finance Act, 1930 (No. 2), Section 2 .. .. .. .. 5,000,000 0 0 Finance Act, 1931 (No. 4), Section 2 .. .. .. .. 2,995,290 0 0 Stock issued for Expenses of Conversion, 1930-31 .. .. 360,835 18 0 Post and Telegraph Act, 1908 .. -. .. •• 200,000 0 0 Midland Railway Petitions Settlement Acts, 1902 and 1903 .. 150,000 0 0 Paeroa-Waihi Railways Act, 1903 .. .. .. •• 75,000 0 0 Waikaka Branch Railway Act, 1905 .. .. .. •• 50,000 0 0 Appropriation Act, 1912 .. .. .. .. •• 15,000 0 0 Irrigation and Water-supply Act, 1912 .. .. ■■ 100,000 0 0 Balances transferred from Separate Accounts, 1931-32 — £ s. d. Waihou and Ohinemuri Rivers Improvement 5,518 10 10 Account Education Loans Account .. .. .. 12,867 3 9 Railways Improvement Authorization Act 1914 420,783 17 4 Account Native Land Settlement Account .. .. 3,445 4 10 £ s. d. Hauraki Plains Settlement Account 44 10 4 Rangitaiki Land Drainage Account 10,797 5 0 Swamp Land Drainage Account .. 9,008 19 1 19,850 14 5 Utilized for redemptions .. 19,850 14 5 ' 442,614 16 9 111,189,453 0 8 Receipts in Aid :— ■ Amount transferred from Consolidated Fund .. .. ... 14,555,000 0 0 Contributions of Canterbury Province for Railways .. .. 56,000 0 0 Proceeds of Railway Material handed over to Cook County Council 4,963 7 4 ! Stamp Duties to 31st December, 1876 .. .. .. 264,657 16 4 Transfer from Confiscated Lands Liabilities Account .. .. 19,963 1 3 Receipts under Section 16 of the Reserves and other Lands Disposal 21,890 4 5 and Public Bodies Empowering Act, 1912 Carried forward .. .. .. 14,922,474 9 4 j 111,189,453 0 8

8.—6.

Table No. 12—continued. Statement showing the Total Ways and Means of the Public Works Fund, General Purposes Account, and the Total Net Expenditure to the 31st March, 1936—continued.

Table No. 13. Statement showing the Amount charged to "Unauthorized" in each Financial Year from 1st April, 1925, to 31st March, 1936.

XII

VVASS AND MEANS—continued. £ s. d. £ s. d. Brought forward .. .. .. 14,922,474 9 4 111,189,453 0 8 Receipts in Aid—continued. Special Receipts under Section 9 of the Railways Construction Act, 60,616 3 0 1878 Special Receipts under the Ellesmere Lake Lands Acts, 1888 and 70,691 14 6 1893 Special Receipts under the Railways Authorization and Manage- 2,257 1 9 ment Act, 1891 Special Receipts under the North Island Main Trunk Railway Loan 114,550 19 6 Application Act, 1886 Sinking Funds released .. .. .. .. .. 506,819 19 3 Finance Act, 1932, Section 7 (4) —■ Sale of land under Hauraki Plains Act, 1926 .. .. .. 8,519 12 9 Settlement of Unemployed Workers .. .. .. .. 58,460 3 2 Receipts under Section 12 of Native Land Amendment Act, 1932.. 5,027 2 0 Agriculture (Emergency Powers) Act, 1934, Section 26 .. .. 41 7 6 Finance Act, 1932, No. 2, Section 16 —• Transfer from Land for Settlements Account .. .. .. 43 6 8 Transfer from State Forests Account .. .. .. 14 17 1 15,749,516 16 6 £126,938,969 17 2 NET EXPENDITURE. Expenditure on— Immigration .. .. .. .. .. .. 3,313,059 1 9 Public Works, Departmental .. .. .. .. .. 3,091,929 15 2 Railways, including Surveys of New Lines and Payment to Midland 56,582,336 5 11 Railway Bondholders Roads .. .. .. .. .. .. .. 22,986,306 16 10 Land-purchases .. .. .. .. .. .. 2,054,023 13 8 Settlement of Unemployed Workers .. .. .. .. 664,485 8 6 Development of Mining .. .. .. .. 880,872 10 11 Telegraph Extension .. .. .. .. .. .. 11,755,917 7 10 Public Buildings .. .. .. .. .. .. 12,069,671 12 4 Lighthouses, Harbour-works, and Harbour-defences .. .. 1,322,047 18 7 Contingent Defence .. .. .. .. .. 1,401,143 13 8 Rates on Native Lands .. .. .. .. .. 68,671 16 10 Thermal Springs .. .. .. .. .. .. 14,599 13 2 Development of Tourist Resorts .. .. .. .. 717,136 4 4 Lands Improvement .. .. .. .. .. .. 928,035 16 4 Swamp Land Drainage .. .. .. .. .. 55,916 10 3 Plant, Material, and Services .. .. .. .. ,. 140,986 5 1 Charges and Expenses of raising Loans .. .. .. .. 3,828,307 3 7 Coal-mines .. .. .. .. .. .. .. 10,835 8 0 Interest and Sinking Fund .. .. .. .. .. 218,500 0 0 Irrigation and Water-supply .. .. .. .. .. 1,303,179 2 2 Motor Transport Service .. .. .. .. . . 33,635 5 3 Transfer to Main Highways Account, Construction Fund .. .. 1,226,000 0 0 Native Land Settlement .. .. .. .. .. 357,970 17 4 Dairy Industry Loans .. .. .. .. .. .. 10,750 0 7 125,036,318 8 1 Balance on 31st March, 1936, — Cash in the Public Account .. .. .. .. .. 925,584 18 2 Investments .. .. .. .. .. .. .. 977,066 10 11 1,902,651 9 1 £126,938,969 17 2

I - . p ! Consolidated Fund.—Revenue Account. j Financial Year. 7 — 1 < » . ° THBB Public Wobks t Accounts. Fund. xoial. SerV^XjTorPr °" Bxcess of Votes - Total - I £ S. d. £ s. d. £ s. d. £ s. d. £ s. d. £ s. a 19&-1926 .. 30,265 7 9 26,257 3 7 56,522 11 4 30,811 19 2 23,665 13 8 111 000 4 " 1926-1927 .. 27,913 18 1 45,418 12 4 73,332 10 5 1,58110 7 2,80118 9 77,715 19 9 1927-1928 .. 15,942 15 4 51,560 10 5 67,503 5 9 10,740 8 2 49,604 6 11 127 848 0 10 1928-1929 .. 7,959 7 3 43,312 14 4 51,272 1 7 11,89114 4 20,639 17 2 83,803 13 1 1929-1930 .. 22,205 12 8 41,407 0 0 63,612 12 8 111,438 6 11 24,827 8 0 199 878 7 7 1930-1931 .. 4,585 0 0 129,903 7 1 134,488 7 1 3,450 8 7 1,586 13 11 139,525 9 7 1931-1932 .. 18,698 6 0 19,182 17 10 37,881 3 10 21,577 6 4 1,376 10 3 60 835 0 5 1932-1933 .. 45,724 18 4 16,005 18 3 61,730 16 7 57,667 110 40,160 8 3 159,558 6 8 1933-1934 .. 3,643 17 10 8,326 0 3 11,969 18 1 8,288 2 5 1 12 5 20 259 12 11 1934-1935 .. 17,313 13 4 69,966 7 1 87,280 0 5 47,973 11 7 21,384 12 0 156,638 4 0 1935-1936 .. 13,346 5 0 126,457 14 3 139,803" 19 3 108,641 5 3 13 18 5 248 459 2 11

8.—6.

Table No. 14. Statement showing the available Financial Resources of the various Accounts on the 31st March, 1936, as compared with the 31st March, 1935.

Table No. 15. PENSIONS. Statement of Amounts paid on Account of Pensions for the Financial Years ended 31st March from 1932 to 1936.

XIII

1936. 1935. Account. Balance Liabilities Authority*?*» Balance \ Liabilities Authority^ for 31stjarch, SlstjLch, Slstjarch, j SUtJarch, on S lst AprU, 19oo. lJoo. 1936 l"oo« J iv#oo. 1935. Consolidated Fund— £ £ £ £ £ £ Ordinary Revenue .. .. 479,636 287,813 500,000 204,835 236,879 500,000 Public Works Fund — General Purposes .. •• 1,902,651 385,582 4,005,634 1,193,331 234,656 6,255,634 Electric Supply .. .. • • 217,604 72,456 1,347,590 332,458 84,035 1,347,590 Electric Supply Sinking Fund .. 17,555 .. .. 1,669 Bank of New Zealand Shares .. 1,859,375 .. .. 1,859,375 Discharged Soldiers Settlement .. 151,751 8,383 .. 594,148 35 Land for Settlements .. .. 328,746 12,656 6,278,000 269,981 2,803 6,278,000 Loans Redemption. .. .. .. 584,583 .. .. 476,400 Main HighwayRevenue Fund .. .. •• 87,523 147,131 .. 33,568 104,062 Construction Fund .. .. 1,868 48,078 '905,900 182,136 30,210 1,055,900 Public Debt Repayment .. 106,387 .. .. 3,469 Reserve Fund .. .. • • 352,497 .. .. 339,228 Samoan Loan Suspense .. .. •• •• 4,800 .. .. 4,800 Silver and Bronze Coinage Account .. 634,753 .. .. 558,426 State Coal-mines .. .. •• 75,872 15,401 55,000 71,073 12,985 55,000 State Coal-mines Sinking Fund .. 8,821 .. .. 8,591 State Forests 14,565 8,952 546,225 41,852 5,396 546,225 Unemployment Fund .. .. 406,711 285,717 .. 1,332,946 250,000 Working Railways .. .. •• 1,796,656 298,137 .. 1,840,174 218,877 State Advances Loan .. .. .. .. 9,964,250 171 .. 10,198,730 Additional Unexhausted Authorities for raising Loans. Government Accident Insurance Act, 1908 .. .. 23,000 .. .. 23,000 State Fire Insurance Act, 1908 .. .. .. 98,000 .. .. 98,000 Totals .. .. .. 9,027,554 1,570,306 23,728,399 9,343,831 1,179,938 26,362,879

Year ended 31st March, 1932. 1933. I 1934. 1935. 1936. I I £ £ £ £ £ War .. .. .. 1,261,778 1,217,586 1,246,441 1,264,110 1,349,447 1,277,107 1,271,157 1,350,982 1,519,889 1,718,601 Widows' .. .. .. 340,162 311,317 302,020 296,565 311,864 Miners' .. .. .. 69,785 62,563 56,810 58,740 67,834 Maori War .. .. .. 7,582 5,831 4,522 3,607 2,577 Epidemic .. .. .. 5,580 4,197 3,290 1,983 907 Civil Service Act, 1908 .. 7,861 6,453 5,917 5,211 4,676 Defence Act, 1909 .. .. 2",483 2,176 2,163 2,084 2,127 Judicature Act, 1908 .. 1,833 1,833 2,272 2,682 3,222 Police .. .. .. 1,054 1,166 1,384 1,449 1,575 Blind .. .. .. 16,710 18,065 19,306 21,227 22,991 Family Allowance .. .. 90,100 122,810 146,766 152,818 149,043 War Veterans'Allowances .. .. .. .. 16,544 Sundry .. .. .. 6,501 6,627 8,022 7,989 8,256 Totals .. .. 3,088,536 3,031,781 3,149,895 3,338,354 3,659,664

8.—6.

Table No. 16. EDUCATION EXPENDITURE. Total Expenditure on Education out of Public Funds, including Primary, Secondary, Higher Education, Technical and Special Schools, and Child Welfare, 1913-14 to 1935-36.

Additional amounts are available from revenue from reserves vested in postprimary schools and University colleges as follows: — Post-primary schools .. .. .. 39,271 University colleges .. .. .. .. 21,051 £60,322 The following amounts were paid out of the Government Fire Insurance Fund for rebuilding school buildings destroyed by fire £ 1916-17 .. .. .. •• ..2,127 1917-18 .. .. .. .. •• 2,658 1919-20 .. .. .. .. ..15,682 1920-21 .. .. .. .. •• 16,162 1921-22 .. .. .. .. •• 27,103 1922-23 .. .. .. •• •• 8,542 1923-24 .. ~ .. 12,490 1924-25 .. .. •• •• •• 32,829 1925-26 .. .. .. .. ..4,938 1926-27 .« .. .. .. .. 10,337 1927-28 .. .. .. .. • 12,474 1928-29 .. .. •• •• 12,197 1929-30 .. .. •• • 6,357 1930-31 .. .. •• •• •• 6,671 1931-32 .. .. •• ■• 7,768 1932-33 .. .. .. 6,424 1933-34 .. ■■ • •• 3,846 1934-35 .. .. .. •• 8,541 1935-36 .. .. .. ..5,149

XIV

Loaii-inoney: Erection Consolidated Fund. of School Buildings and Residences. p er g; eac j I Vote, ! Subsidies of Year ' q . , ! Education Revecue I to Eduoation ° a • ea " a Special Endow- | (excluding fjom , Teachers Worfa Loans P Acts. ment I Superannua- Reserves . j Super- Fund Account. Revenue. : tion , annuation Subsidies). Ti'und. £ £ £ £ £ £ £ £ £ s. d. 1913-14 . 27,742 50,681 1,131,756 71,803 17,000 121,954 .. 1,420,941 1 5 3 1914-15 . 26,128 55,139 1,207,983 70,802 17,000 122,940 .. 1,499,992 1 6 2 1915-16 .. 46,874 64,858 1,329,166 84,390 17,000 97,972 .. 1,640,260 1 8 6 1916-17 .. 58,408 60,180 1,406,264 90,535 17,000 70,367 .. 1,702,754 1 9 8 1917-18 .. 59,362 70.345 1,511,256 90,518 17,000 63,082 .. 1,811,563 111 5 1918-19 . 57,716 76,177 1,602,995 92,095 43,000 115,656 .. 1,987,639 1 14 1 1919-20 79,747 78,988 2,031,825 99,352 43,000 195,500 .. 2,528,412 2 1 10 1920-21 .. 101,972 70,313 2,460,116 100,758 43,000 244,722 214,571 3,235,452 2 11 8 1921-22 96,217 71,737 2,580,562 105,448 43,000 2,469 563,411 3,462,844 2 13 10 1922-23 . 90,393 66,610 2,514,991 112,378* 68,000 .. 361,976 3,214,348 2 9 0 1923-24 . 96,506 77,788 2,604,508 116,808*68,000 .. 295,681 3,259,291 2 8 11 1924-25 128.844 86,746 2,752.271 118,973*68.000 .. 462,212 .3,617,046 2 13 2 1925-26 .. 111,389 87,512 2,854,719 119,978* 70,952 .. 564,946 3,809,496 2 14 9 1926-27 115,499 88,545 2,954,597 119,073*71,452 .. 550,954 3,900,120 2 14 11 L927-28 .. 127,289 90,518 2,974,615 123,247* 71,497 .. 369,134 3,756,300 2 12 1 1928-29 .. 137,233 94,934 3,067,296 127,444* 71,749 .. 375,423 3,874,079 2 13 1 1929-30 .. 140,561 87,420 3,193,828 129,531*146,781 .. 428,764 4,126,885 2 15 10 1930-31 125,331 94.506 3,230,200 106,405*46,907 .. 491,974 4,095,323 2 14 8 1931-32 82,163 79,375 2,851,922 88,207*46,935 259,148 .. 3,407,750 2 4 11 1932-33 .. 51,938 2,574,929 85,716* 47,043 52,623 .. 2,812,249 1 16 9 1933-34 53,221 2,480,055 107,129 57,294 51,435 .. 2,749,134 115 8 1934-35 : 87,207 2,550,100 128,738 165,306 51,289 .. 2,982,640 1 18 5 1935-36 .. .. 95,968 2,747,582| 118,883 170,026 121,424 .. 3,253,883 2 1 4J * Net revenue after deducting expenses and cost of collection. f Includes £262 charged to "Unauthorized." J On preliminary census results.

B. —6.

Table No. 17. State Balance-sheet as at 31st March, 1935. Liabilities. Assets. Capital— £ s. d. Land and buildings, including Crown, settlement, and £ s. d. Public debt* .. .. .. 284,431,217 610 endowment land, departmental land and buildings 40,283,405 17 7 Rural Advances'bonds .. .. 4,213,050 0 0 State forests, nurseries, and plantations .. .. 38,473,759 5 3 Public Debt Redemption Fund .. 17,225,644 10 6 Railways, including permanent-way and works, rollingCreditors — stock, and unopened lines .. .. .. 59,176,273 4 11 Sundry .. .. .. 2,144,585 16 0 Telegraphs, telephones, and wireless systems .. 11,021,636 3 6 Interest on debentures and stock due Electrical schemes .. .. .. 12,992,304 14 8 and unpaid* .. .. .. 17,412 15 0 Drainage and irrigation schemes .. .. .. 4,164,244 12 7 Interest on public debt accrued but Collieries, sawmills, quarries, &c. .. .. 388,633 3 10 not due* .. .. .. 2,333,270 14 1 Armament and military stores, aviation equipment .. 2,785,708 7 4 Wages and other payments accrued 7,245 13 5 Oyster-beds, fish-hatcheries, equipment, &c. .. 122,345 13 0 Payments in advance, &c. .. .. 457,359 6 1 Wharves, bridges, harbour-works, lighthouses, &(j. .. 726,493 9 11 Reserves— Plant, material, and furniture .. .. .. 2,985,316 3 1 General .. .. .. 3,767,466 4 6 Libraries, books, museum exhibits, stationery, Sinking fund and reserves for loan- stamps, &c. .. .. .. .. .. 219,971 4 10 redemption .. .. .. 3,272,681 10 1 Live and dead stock, farm crops, &c. .. .. 252,915 3 9 Depreciation .. .. .. 6,424,618 4 8 Government steamers, launches, motor-cars, &c. .. 495,506 2 6 Fire, accident, and marine insurance, Advances on loan or mortgage .. .. .. 55,731,964 12 2 bad debts, &c. .. .. 1,156,094 11 II Debtors— Amount held on deposit .. .. 570,376 311 Sundry .. .. .. .. .. 2,058,346 16 2 Suspense .. .. .. 298,611 5 1 Unpaid purchase-price of land and buildings, and Post Office investment and war-loan interest thereon .. .. .. .. 2,157,948 2 9 certificates .. .. .. 1,147,086 3 4 Postponed rents, &c. .. .. .. .. 433,304 4 11 Miscellaneous liabilities ~ .. 53,892 10 9 Interest and rent, due and unpaid, and due and Excess of assets over liabilities .. 59,010,458 911 accrued .. .. .. .. .. 3,579,597 14 9 Special investments — Nauru phosphate, rights .. .. .. 565,040 0 0 Bank of New Zealand shares .. .. .. 2,109,375 0 0 Reserve Bank of New Zealand .. .. 1,000,000 0 0 Public Trust Office (Public Debt Redemption Fund, &c.) .. .. .. .. 7,966,688 11 2 Special assets of various accounts — Native land schemes, &c. .. .. .. 950,416 7 4 Unallocated loan charges . . .. . . 627,663 7 9 Payments in advance .. .. .. .. 251,218 10 9 Properties acquired by Crown and properties in course of realization .. .. .. .. 1,122,023 18 3 Investments— Reserve Fund .. .. .. .. 324,907 9 3 Sinking funds .. .. .. .. 657,140 8 2 Miscellaneous, including investment of Treasury accounts .. .. .. .. .. 5,138,417 17 4 National Development Account— Expenditure on— £ s. d. Main highways, roads, &c.. . 29,943,424 0 11 Development of mining .. 867,467 15 11 Education . . .. 8,238,834 3 9 Immigration .. .. 3,319,158 9 4 Harbour-works .. .. 1,045,081 10 0 Land-development .. 783,799 7 6 Cost of raising loans .. 76,475 3 8 44,274,240 11 1 Other loan expenditure— War expenditure .. .. 65,142,599 9 8 Naval defence .. .. 1,389,656 1 5 Local bodies .. .. 3,037,229 19 2 Maori-land settlement .. 247,050 0 0 Miscellaneous .. .. 6,163,496 18 8 75,980,032 8 11 Cash — Public Account .. .. 5,666,605 17 5 Receiver-General .. .. 23,724 3 10 State Advances Office Account 980,157 18 4 Post Office or Post Office Savings-bank .. .. 508,386 9 0 Deposit accounts .. .. 34,335 9 1 In hand and in transit .. 37,173 0 6 Deposit with Bank of International Settlements .. 36,023 0 0 Public Trust Office .. 185,602 4 8 : 7,472,008 2 10 Miscellaneous assets .. .. .. 42,223 15 9 £386,531,071 6 1 £386,531,071 6 1 * See Note (2) below. Notes. —(1) To account for the whole public debt, loan expenditure on war and other purposes not represented by tangible assets has been included under the heading " Other Loan Expenditure." Interest is received in respect of portion of the local bodies' loan expenditure. (2) Of the amount shown as public debt, £1,193,441 17s. Id. is held by investment accounts within the Public Account. Interest accrued and interest due and unpaid in respect of this sum is also shown in both sides of the Balance-sheet. (3) Contingent liabilities :—- Subsidies (not including accumulated interest) short paid to — £ s. d. Teachers' Superannuation Fund .. .. .. * .. 1,403, 084 0 0 Public Service Superannuation Fund .. .. .. .. 2,304,085 0 0 - 3,707,169 0 0 Excess of subsidies recommended by Actuary over subsidies paid: Railway Superannuation Fund .. .. .. .. .. 1,273,000 0 0 4,980,169 0 0 Local authorities, loans guaranteed by the Govern- £ s. d. ment _ •• 2,975,075 0 0 Less accumulated sinking funds .. .. 941,541 14 0 2,033,533 16 0 £7,013,702 16 0

XV

B—6.

Table No. 18. PUBLIC DEBT. Statement of Half-yearly Instalments of Principal and Interest for Repayment of £27,532,164 advanced by the Imperial Government and funded in Terms of the Agreement dated 6th September, 1922.

XVI

I . I Balance of Debt Dato Instcilmonts paid» Intcrost» i Principal. outstanding. £ £ £ 1st December, 1922 684,794 141,171 27,390,993 1st June, 1923 .. .. .. .. 681,282 144,683 27,246,310 1st December, 1923 .. .. .. 677,684 148,281 27,098,029 1st June, 1924 . 673,996 151,969 26,946,060 1st December, 1924 670,216 355,749* 26,590,311 1st June, 1925 661,367 164,598 26,425,713 1st December, 1925 .. .. .. 657,274 168,691 26,257,022 1st June, 1926 653,078 172,887 26,084,135 1 st December, 1926 .. .. .. 648,778 177,187 25,906,948 1st June, 1927 644,370 181,595 25,725,353 1st December, 1927 .. .. .. 639,854 186,111 25,539,242 1st June, 1928 .. .. .. ■■ 635,225 190,740 25,343,502 1st December, 1928 .. .. .. 630,481 195,484 25,153,018 1st June, 1929 .. .. .. .. 625,618 200,346 24,952,672 1st December, 1929 .. .. •• 620,635 205,330 24,747,342 1st June, 1930 .. .. . • •• 615,528 210,437 24,536,905 1st December, 1930 .. .. .. 610,294 215,671 24,321,234 1st June, 1931 604,930 221,035 24,100,199 1st December, 1931t •• •• •• 24,100,199 * Includes £200,000 paid off the Naval Defence Loan in terms of the clause by which New Zealand has the right, on giving three months' notice, to repay at par any part of the principal. •f" Following on the "Hoover'' moratorium, the Imperial Government agreed to postpone the instalments of principal and interest due in December, 1931, and June, 1932, only one half-yearly payment was therefore made in 1931-32. Further postponements from 1st July, 1932, were agreed to by the Imperial Government. No payments were therefore made from 1932-33 to 1935-36.

8.—6.

Table No. 19. PUBLIC DEBT. Statement showing Maturity Dates and Domicile of Debt outstanding as at 31st March, 1936.

Table No. 20. EXTERNAL TRADE. Statement showing the Recorded, Sterling, and New Zealand Currency Values of Imports and Exports of the Dominion in each Financial Year ended 31st March, from 1930 to 1936 (excluding Specie).

iii—B. 6.

XVII

Due in Year^^at^ ty New Zealand. Total. (Year ended 31st March). at London. Australia. Public. Department. £ £ £ £ £ Overdue ' .. .. •• 3 > 0TO " 3 ' 070 1925-45* .. •• 2,090,909 .. •• •• 2,090,909 1936-37 .. • • 3,800 667,750 34,730 .. 706,280 1936-51+ 5,869,989 .. 5,869,989 1937-38 .. •• 92,600 751,400 .. 844,000 1937-401 • • •• 101,125 .. 12,325,550 .. 12,426,675 1938-39 4,000 3,000 265,130 .. 272,130 1QH8-41+ " .. .. •• 3,833,675 .. 3,833,675 1939-40 .. •• 17,173,191 .. 15,141 .. 17,188,332 1940-43+ .. 13,680,225 .. 13,680,225 1940—41 500 > 015 •• 500 ' 015 1941-42 •• 17,300 39,600 .. 56,900 943-44 " " 7,339,656 .. .. 7,339,656 194V46t " .. •• •• •• 9,842,625 .. 9,842,625 1943-63f •• •• 10,505,989 .. 378,639 .. 10,884,628 1944-45 .. •• 7,780,408 .. •• •• 7,780,408 1945-46 •• 22,543,590 .. 2,500 .. 22,546,090 1946-49J :: 8,967,195 .. 8,967,195 1947-48 .. •• 11,221,609 .. 11,221,609 948-49 :: •• •• •• •• •• 10 > 500 10 ' 500 1948-58+ •• •• 19,225,465 .. •• ■■ 19,225,465 1949-50 " .. ■■ 7,500,000 .. .. 7,500,000 mlSj:: 12,493,105 .. 12,493,105 1949-541* . . .. • • 5,000,000 . . • • • • 1950-51 1,250,000 812,000 250,000 .. 2,312,000 1952-55 " " 8 000,000f .. 9,976,125J .. 17,976,125 !n£oJo •' .. 260,000 260,000 SSe " :: :: :: .. 466,156 466,156 1955-60+ . •• 3,989,100 .. •• •• 3,989,100 1956-711" 5,000,000 .. •• 5,000,000 1956-57 " •• .. .. 4,024,790 4,037,690 1957-58 •• 24,100,199§ .. •• 14,385,114 38,485,313 icwLKQ " •• 18,768,348 18,768,348 1959-60 " •• •• •• •• 10,982,885 10,982,885 158,711,930 1,592,650 73,358,725 48,'897,793 282,561,098 * Advances by Imperial Government for State Advances purposes. t Government has option to redeem on or after the earlier date on giving notice in London Gazette. t Government has option to redeem on or after the earlier date on giving three months' notice in New Zealand Gazette. § Imperial Government advances fundec in terms of section 8, Finance Act, 1922.

Exports. Imports. , j Excess of Exports. Year ended 31st March. New Zealand Full On New On Sterline New Zealand Sterling 0urrency ; Sterling Zealand Cur- g Currency. Equivalent. Equivale n t . ! Equivalent, rency Basis. ' i I £ (000) £ (000) £ (000) £ (000) £ (000) £ (000) 1930 .. 48,412 47,933 49,430 49,085 -1,018* -1,152* 193J ' .. 39,527 37,198 39,833 37,656 -306* -458* 1932 " .. 33,943 30,857 24,761 22,510 9,182 8,347 1933 .. .. 37,510 32,677 25,059 22,049 12,451 10,628 lq o 4 " 46,043 36,834 26,136 20,908 19,907 15,926 iqqf; " ' .. 44,918 35,985 32,568 26,082 12,350 9,903 ]936 '' .. .. 49,676 39,900 37,440 30,072 12,236 9,828 * Excess of imports.

8.~6.

Copy of Prospectus of 1935 London Loan. NEW ZEALAND GOVERNMENT £3 PER CENT. INSCRIBED STOCK, 1952-1955. (Interest payable Half-yearly at the Bank of England on the Ist January and the Ist July.) Issue of £8,000,000. Authorized to be raised, under the New Zealand Loans Act, 1932. A First Payment of Interest, at the rate of 15s. per £100 Stock, will be made on the Ist January, 1936. Price op Issue £98 10s. per Cent. Payable as follows:— £ s. On Application . . .. . . .. ..50 per cent. On Tuesday, Ist October, 1935 .. .. .. 93 10 „ £98 10 The Government of New Zealand undertake to observe forthwith the conditions prescribed under the Colonial Stock Act, 1900, as notified in the Ijondon Gazette of the 14th December, 1900, in order that Trustees may invest in this Stock under the powers of the Trustee Act, 1925, unless expressly forbidden in the instrument creating the Trust. The Governor and Company of the Bank op England give notice that, on behalf of the Agents appointed for raising and managing Loans under the above Act, they are authorized to receive applications for £8,000,000 New Zealand Government £3 per cent. Inscribed Stock, 1952-1955. If not previously redeemed, the Stock will be repaid at par at the Bank of England on the Ist July, 1955; but the New Zealand Government reserve to themselves the right to redeem the Stock, in whole on in part, by drawings or otherwise, at par on, or at any time after, the Ist July, 1952, on three calendar months' notice having been given in The Times of such intended redemption. In the latter event the Stock will cease to bear interest on the date fixed for such redemption. The New Zealand Government Stock issued and payable in London and the interest thereon so payable, the property of persons not domiciled in New Zealand, are not, and will not be, subject to any taxes, duties, or levies by the Dominion. By Act 40 and 41 Vict. Ch. 59, the revenues of the Dominion of New Zealand alone will be liable in respect of this Stock and the dividends thereon and the Consolidated Fund of the_ United Kingdom and the Commissioners of His Majesty's Treasury will not be directly or indirectly liable or responsible for the payment of the Stock or of the dividends thereon, or for any matter'relating thereto. The proceeds of the Issue will be applied to the repayment on the Ist October, 1935, of New Zealand Government £5 per Cent. Inscribed Stock, 1935-1945, of which due notice is being given in the London Gazette and The Times. The total amount of this Stock now outstanding is £10,135,800, and the balance of the moneys required for repayment is being provided by the New Zealand Government so that the present operation involves an actual reduction in the Public Debt. The transactions of the New Zealand Ordinary Revenue Account for the year ended 31st March, 1935, including £1,578,000 provided from revenue for the redemption of debt and without recourse to reserves, resulted in a surplus of £626,000. The Exports from New Zealand during the financial year ended the 31st March, 1935, amounted to £44,918,000 and the Imports to £32,568,000, resulting in a favourable visible balance of trade of £12,350,000. Returns at present to hand in respect of the current financial year indicate that a favourable balance is being maintained. The gross Public Debt of the Dominion on the 31st March, 1935, was £280,580,000, being a decrease compared with the previous year of £22,210,000. This reduction was brought about chiefly by the redemption in full of all short-term debt, Treasury Bills totalling £22,857,000 being paid off during the year. An increase of £3,300,000 in long-term debt was offset by the redemption of a further £2,653,000 of this class of indebtedness, the net result on all public debt transactions thus being the reduction of £22,210,000 already referred to. The redemptions include a portion of the War Debt, which has been reduced from £81,840,000 in 1921 to £65,330,000 on 31st March, 1935. This shows a total reduction in the War Debt of over £16,500,000 since 1921. All Reparation moneys received from Germany have been applied in the reduction of War Debt. The new loan moneys received during the year were applied principally to Public Works (Railways, Electric Power, Telephone and Telegraph Extensions, and other productive works).

XVIII

8.—6.

Against the Public Debt of New Zealand must be set assets valued at approximately £309,000,000. Of these assets £268,000,000 are directly interest bearing and productive— e.g., Railways, Telephones and Telegraphs, Hydro-electric Development, Advances to Settlers and Workers, Crown Lands, Sinking Funds, &c., and the remaining £41,000,000 are indirectly productive, such as Roads, Public Buildings, &c. The Repayment of the Public Debt Act passed by the New Zealand Parliament in 3925 substituted for the long-term Sinking Fund, system a method whereby the Dominion's Debt reduction resources are now made available to purchase New Zealand Government securities on the open market for cancellation or to pay them off at maturity, thereby ensuring an actual reduction in the Public Debt annually. For this purpose there is issued annually out of the Consolidated Fund a sum equal to | per cent, of the Debt affected, and to this is added a sum equal to interest at 3| per cent, per annum on the Debt paid off under this scheme. By this means a portion of the savings in interest on the Debt paid off is applied to further repayments of Debt, so that the Debt reduction resources are increasing year by year. It is estimated that the Debt outstanding at the inception of the scheme will be liquidated over a period of approximately sixty years, while all subsequent Loans will be liquidated within a similar period from the dates of issue; the total Debt so far redeemed under this system is £11,832,000. The Sinking Funds which accrued under previous legislation have been capitalized and will be held intact. On the 31st March, 1935, approximately 43 per cent, of the total New Zealand Public Debt was domiciled in the Dominion, as against only 17 per cent, in 1914. The Books of the Stock will be kept at the Bank of England, where all assignments and transfers will be made. Transfers will be free of Stamp Duty. Interest will be payable half-yearly at the Bank of England on the Ist January and the Ist July. Interest Warrants will be transmitted by post. Applications, which must be accompanied by a deposit of £5 per cent., will be received at the Bank of England Loans Office, 3 Bank Buildings. Princes Street, London, E.C. 2. In case of partial allotment the balance of the amount paid as deposit will be refunded by cheque. Default in payment by the Ist October, 1935, of the balance due that day will render the deposit liable to forfeiture and the allotment to cancellation. Applications may be for the whole or any part of the Issue in multiples of £100. No allotment will be made of a less amount than £100 of Stock. Scrip Certificates to Bearer will be issued on or after the 16th July, 1935, in exchange for the Allotment Letters. These Certificates, when fully paid, may be lodged for inscription forthwith. NEW ZEALAND GOVERNMENT £5 PER CENT. INSCRIBED STOCK, 1935-1945. (Total outstanding, £10,135,800.) Holders of the above Stock, which will be repaid on the Ist October, 1935, may surrender their holdings in whole or in part and receive therefor New Zealand Government £3 per cent. Inscribed Stock, 1952-1955, at the rate of £100 £3 per cent. Stock for each £100 nominal £5 per cent. Stock surrendered, together with a Cash Payment at the rate of £1 10s. per cent, on the nominal amount of Stock converted. Holders who accept this offer will receive three months' interest payable on the Ist October, 1935, in respect of the £5 per cent. Stock surrendered. This conversion offer is limited to a total amount of £8,000,000 New Zealand Government £5 per cent. Stock, 1935-1945, and the List of Applications will be closed when this amount of Stock has been surrendered. Applications for conversion must be made on the special printed forms. Application Forms have already been sent by post to all holders (in the case of a joint account to the first-named holder). Preferential allotment will be given to holdings which are tendered for conversion as above. A commission of ss. per £100 Stock will be paid to Bankers or Stockbrokers on Allotments made in respect of cash or conversion applications bearing their stamp. Prospectuses and Application Forms may be obtained at the Bank of England Loans Office, 3 Bank Buildings, Princes Street, London, E.C. 2, or at any of the Branches of the Bank of England; of Messrs. Mullens and Co., 13 George Street, London, E.C. 4; at the Bank of New Zealand, 1 Queen Victoria Street, London, E.C. 4; of Messrs. J. and A. Scrimgeour, 3 Lothbury, London, E.C. 2; at any Stock Exchange in the United Kingdom; or at the Office of the High Commissioner for New Zealand, 415 Strand, London, W.C. 2. The List of Cash Applications will be opened and closed on Monday the Ist July, 1935. The List of Conversion Applications will be opened forthwith and will be closed on or before Monday, the Bth July, 1935. Bank of England, London, 28th June, 1935.

XIX

8.—6.

Copy of Prospectus of 1936 London Loan. NEW ZEALAND GOVERNMENT £3 PER CENT. INSCRIBED STOCK, 1952-1955. (Interest payable Half-yearly at the Bank of England on the Ist January and the Ist July.) Issue of £4,000,000. Authorized to be raised under the New Zealand Loans Act, 1932. A First Payment of Interest, at the rate of £1 ss. per £100 Stock, will be made on the Ist January, 1937. Price of Issue £98 10s. per Cent. Payable as follows: — £ s. On Application . . .. . . . . ..50 per cent. On Friday, 31st July, 1936 . . . . . . 93 10 „ £98 10 The Government of New Zealand have observed the conditions prescribed under the Colonial Stock Act, 1900, as notified in the London Gazette of the 14th December, 1900, and Trustees may invest in this Stock under the powers of the Trustee Act, 1925, unless expressly forbidden in the instrument creating the Trust. The Governor and Company of the Bank of England give notice that, on behalf of the Agents appointed for raising and managing Loans under the above Act, they are authorized to receive applications for £4,000,000 New Zealand Government £3 per cent. Inscribed Stock, 1952-1955. If not previously redeemed, the Stock will be repaid at par at the Bank of England on the Ist July, 1955; but the New Zealand Government reserve to themselves the right to redeem the Stock, in whole or in part, by drawings or otherwise, at par on, or at any time after, the Ist July, 1952, on three calendar months' notice having been given in The Times of such intended redemption. In the latter event the Stock will cease to bear interest on the date fixed for such redemption. New Zealand Government Stock issued and payable in London and the interest thereon so payable, the property of persons not domiciled in New Zealand, are not, and will not be, subject to any taxes, duties, or levies by the Dominion. By Act 40 and 41 \ r ict. Ch. 59, the revenues of the Dominion of New Zealand alone are liable in respect of this Stock and the dividends thereon and the Consolidated Fund of the United Kingdom and the Commissioners of His Majesty's Treasury are not directly or indirectly liable or responsible for the payment of the Stock or of the dividends thereon, or for any matter relating thereto. The proceeds of the Issue will be applied to the repayment on the Ist August, 1936, of New Zealand Government £6 per Cent. Inscribed Stock, 1936-1951, of which due notice is being given in the London Gazette and The Timec. The total amount of this Stock now outstanding is £5,869,988 9s. 9d. and the balance of the moneys required for repayment is being provided by the New Zealand Government so that the present operation involves an actual reduction in the Public Debt. The transactions of the New Zealand Ordinary Revenue Account for the year ended 31st March, 1936, including £1,440,000 provided from revenue for the redemption of debt and without recourse to reserves, resulted in a surplus of £270,000. The Exports from New Zealand during the financial year ended the 31st March, 1936, amounted to £49,676,000 and the Imports to £37,439,000, resulting in a favourable visible balance of trade of £12,237,000. Returns at present to hand in respect of the current financial year indicate that a favourable balance is being maintained. The gross Public Debt of the Dominion on the 31st March, 1936, was £282,561,000, involving a gross increase for the year of £3,837,000 long-term Debt of which £2,400,000 was raised for Public "Works (Railways, Electric Power, Telephone and Telegraph Extensions and other productive works), the balance representing increases due to conversions, &c. This gross increase was offset by redemptions totalling £1,857,000, leaving a net increase in the long-term Debt of £1,980,000. The redemptions include a portion of the War Debt, which has been reduced from £81,840,000 in 1921 to £65,035,000 on 31st March, 1936. This shows a total reduction in the War Debt of £16,805,000 since 1921. Against the Public Debt of New Zealand must be set assets valued at approximately £309,000,000. Of these assets £268,000,000 are directly interest bearing and productive, e.g., Railways, Telephones and Telegraphs, Hydro-electric Development, Advances to Settlers and Workers, Crown Lands, Sinking Funds, &c., and the remaining £41,000,000 are indirectly productive, such as Roads, Public Buildings, &c. The Repayment of the Public Debt Act passed by the New Zealand Parliament in 1925 substituted for the long-term Sinking Fund system a method whereby the Dominion's Debt reduction resources are now made available to purchase New Zealand Government securities on the open market for cancellation or to pay them off at maturity, thereby ensuring an actual reduction in the Public Debt annually. For this purpose there is issued annually out of the Consolidated Fund of the Dominion a sum equal to \ per cent, of

XX

8.—6.

the Deist affected, and to this is added a sum equal to interest at 3 J per cent, per annum on the Debt paid off under this scheme. By this means a portion of the savings in interest on the Debt paid off is applied to further repayments of Debt, so that the Debt reduction resources are increasing year by year. It is estimated that the Debt outstanding at the inception of the scheme will be liquidated over a period of approximatly sixty years, while all subsequent Loans will be liquidated within a similar period from the dates of issue; the total Debt so far redeemed under this system is £13,272,000. The Sinking Funds which accrued under previous legislation have been capitalized and will be held intact. On the 31st. March, 1936, approximately 44 per cent, of the total New Zealand Public Debt was domiciled in the Dominion, as against only 17 per cent, in 1914. A reduction of £2,257,000 in the London domiciled Debt took place during the year ended the 31st March, 1936. The Books of the Stock are kept at the Bank of England, where all assignments and transfers are made. Transfers are free of Stamp Duty. Interest is payable half-yearly at the Bank of England on the Ist January and Ist July. Interest Warrants are transmitted by post. Applications, which must be accompanied by a deposit of £5 per cent., will be received at the Bank of England Loans Office, 3 Bank Buildings, Princes Street, London, E.C. 2. In case of partial allotment the balance of the amount paid as deposit will be refunded by cheque. Default in payment by the 31st July, 1936, of the balance due that day will render the deposit liable to forfeiture and the allotment to cancellation. Applications may be for the whole or any part of the Issue in multiples of £100. No allotment will be made of a less amount than £100 of Stock. Scrip Certificates to Bearer will be issued on or after the 21st May, 1936, in exchange for the Allotment Letters. These Certificates, when fully paid, may be lodged for inscription forthwith. NEW ZEALAND GOVERNMENT £6 PER CENT. INSCRIBED STOCK, 1936-1951. (Total outstanding, £5,869,988 9s. 9d.) Holders of the above Stock, which will be repaid on the Ist August, 1936, may surrender their holdings in whole or in part and receive therefor New Zealand Government £3 per cent. Inscribed Stock, 1952-1955, at the rate of £100 £3 per cent. Stock for each £100 nominal £6 per cent. Stock surrendered, together with a Cash Payment at the rate of £1 10s. per cent, on the nominal amount of Stock converted. Holders who accept this offer will receive six months' interest payable on the Ist August, 1936, in respect of the £6 per cent. Stock surrendered. A first interest payment of £1 ss. per cent, on the new Stock will be made on the Ist January, 1937. Applications for conversion must be made on the special printed forms. Application Forms have already been sent by post to all holders (in the case of a joint account to the first-named holder). Applications for the conversion of Stock Certificates to Bearer must be accompanied by the relative Stock Certificates with all unmatured Coupons attached. Preferential allotment will be given to holdings which are tendered for conversion as above. The List of Conversion Applications will be closed as soon as the required amount of Stock has been surrendered and in any case not later than the 11th May, 1936. Until the 2nd December, 1936, New Zealand Government £3 per cent. Inscribed Stock, 1952-55, issued in accordance with the terms of this Prospectus will be designated "A " Stock; but on that date it will be amalgamated with the £3 per cent. Stock, 1952-1955, already existingA commission of ss. per £100 Stock will be paid to Bankers or Stockbrokers on Allotments made in respect of cash or conversion applications bearing their stamp. Prospectuses and Application Forms may be obtained at the Bank of England Loans Office, 3 Bank Buildings, Princes Street, London, E.C. 2, or at any of the Branches of the Bank of England; of Messrs. Mullens and Co., 13 George Street, London, E.C. 4; at the Bank of New Zealand (the Bankers to the Government of New Zealand in London), 1 Queen Victoria Street, E.C. 4; of Messrs. J. and A. Scrimgeour, 3 Lothbury, London, E.C. 2; at any Stock Exchange in the United Kingdom; or at the Office of the High Commissioner for New Zealand, 415 Strand, London, W.C. 2. The List of Cash Applications will be opened and closed on Monday, the 4th May, 1936. The List of Conversion Applications will be opened forthwith and will be closed on or before Monday, the 11th May, 1936. Bank of England, London, 30th April, 1936.

By Authority: G. H. Loney, Government Printer, Wellington.—l 936.

XXI