FINANCIAL STATEMENT. (In Committee of Supply, 1st August, 1939.) BY THE RIGHT HON. M. J. SAVAGE, ACTING MINISTER OF FINANCE.

Appendix to the Journals of the House of Representatives, 1939 Session I, B-06

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INDEX. PAGE Accounts, Public .. . . . . . . . . . . 7, 14 Aircraft factory, establishment of .. .. .. . . 7 Air defence .. . . . . .. .. . . 6, 7 Army .. . . . . . . . . . . . . . 6 Beer duty .. . . .. .. ~ . . . . . . 14 British export credits . . . . .. .. . . . . 2 Budgetary position for 1939-40 . . . . . . . . 12, 14, 15 Capital works, expenditure on . . .. . . . . . . 11 Conversion loan, London . . . . . . . . . . . 9 Dairy Industry Account: Deficit 1936-37 . . .. . . .. 8 Death duties .. .. . . .. .. .. . . 14 Debt charges .. . . . . .. .. . . .. 12 Debt operations . . .. . . .. . . . . .. 8 Debt, public . . . . . . . . .. .. . . 8 Defence Conference . . .. . . . . . . . . 6 Defence contribution . . . . . . . . .. . . 14 Defence expenditure . . . . . . . . . . 7, 11 Defence, national . . . . . . . . . . . . . . 6 Domicile of debt .. . . . . . . .. . . .. 8 Dominion's sterling resources .. . . . . . . .. 2 Economic policy . . . . . . . . . . . . . . l Estate, succession and gift duties .. . . . . . . 14 Estimated expenditure, 1939-40 . . . . . . . . . . 15 Estimated revenue and expenditure, 1939-40 . . . . . . . . 12 Estimated revenue, .1939-40 .. .. .. . . . . .. 14 Expenditure, 1938-39 . . . . . . .. .. . . 7 Expenditure, 1939-40, estimated . . . . . . . . 12, 15 Expenditure on defence .. . . . . .. .. . . 7 Expenditure on housing . . . . . . . . . . . . 6 Financial programme for public works . . . . . . . . 11 Financial proposals for 1939-40 . . . . . . . . 12, 13 Flying schools .. . . .. . . .. .. . . 7 Highways and roads .. . . . . . . . . . . 11 Housing expenditure .. . . . . . . . . .. 6 Housing, national survey . . .. . . .. . . . . 4 Housing programme .. . . .. .. .. . . 4 Housing, results achieved . . . . . . . . . . . . 5 Housing, shortage of skilled labour . . . . . . . . . . 5 Hydro-electricity .. . . .. .. .. . . .. 11 Import selection . . .. . . . . .. .. .. 3 Income-tax . . .. . . . . .. . . .. 13 Iron and steel industry .. . . . . .. . . . . 4 I—B. 6.

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PAGE. Land and Income Tax, amendment . . • ■ • ■ .. 13 Land settlement . . . . • • • ■ • . . 10 Local loan . . .. • • ■ ■ ■ ■ ■ • • " London. conversion loan . . . . ■ ■ • ■ ■ ■ ■ ■ 9 London credits London negotiations. . . . • • • • • ■ • • • • - Minister of Finance: Visit to London . . . . • • - • 2, 12 National defence .. .. .. • • • • • • • • 6 National housing survey .. .. • • • • • • • • 4 National Savings Scheme . . . . • . • • • • ■ • 9 Navy . . .. . . . . . ■ • • ■■ • ■ 6 Overseas remittances. . . ■ • ■ • • • • • ■ • 3 Petrol-tax . . .. . . • ■ • • • ■ • • . . 13 Proposals for 1939-40 . . . . . . . . • • 12 Public Accounts . . . . . . • • • • • • • ■ 7, 14 Public buildings . . . . . • ■ • • • ■ • . . 11 Public debt . . . . • • • • • • • • • • 8 Public debt charges .. . . . ■ • • • • . . 12 Public debt, net increase .. .. .. ■ • • • • ■ 8 Public works . . .. ■ • • • • • • • 10, 11 Railway construction . . . . . . . . . . 10 Redemptions . . . . . . . . . . . . . . 8 Remittances, overseas . . . . . . . . • • • ■ 3 Reserve Bank credit . . . . . . . . . . . . 8 Revenue, 1938-39 .. . . .. . . . . .. .. 7 Revenue, 1939-40. estimated. . . . . . . . . . 12, 14 Secondary industries . . . . . . . . . . . . 2 Shortage of skilled labour .. . . . . .. .. .. 5 Social security . . . . .. .. .. . . . . 8, 12 Sterling resources of Dominion . . . . .. .. .. 2 Supplementary Estimates . . .. .. .. . . 15 Surplus, 1938-39 . . .. . . . . . . . . .. 7 Surplus, 1939-40 . . . . . . . . . . . . 15 Surplus, transfer of. . . . . . . . . • • • .. 8 Taxation increases . . . . . . . . . . . . 13 Terms of London conversion loan . . . . . . . . . . 9 Transfer of surplus. . . . . . . . . . . . . . 8 Treasury bills .. . . . . .. . . .. .. 8

II

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19 3 9, NEW ZEALAND.

FINANCIAL STATEMENT. (In Committee of Supply, 1st August, 1939.) BY THE RIGHT HON. M. J. SAVAGE, ACTING MINISTER OF FINANCE.

Mr. Chairman, — As the Hon. Mr. Nash has not yet returned from his important mission in London, it has fallen to my lot as Acting Minister of Finance to present this Budget to the House. In view of the direct bearing upon the public finances, I would like to say a few words about the economic policy of the Government. All our efforts are directed towards raising the standard of living of the people generally and to promoting a healthy and happy community. The standard of living depends upon the volume of production as well as on its equitable distribution, for Ave cannot consume or exchange for other goods Avhat has not been produced. To raise the standard Ave must have greater production, and every man, Avhether he is employer, manager, or worker, can and should make his contribution towards a larger output. I may say that to the extent any man fails to do his best he is retarding the fulfilment of the Government's programme of economic and social advancement. For their part the Government is concerned to see that every man able to work gets an opportunity to earn an income that will enable him and his family to enjoy at least an adequate standard of comfort. This involves organizing the economy of the Dominion on a basis that will normally provide full employment in productive industry. That in a nutshell is the Government's economic policy. When the present Government took office in 1935 there were many thousands out of employment, consumer purchasing-poAver was at a low ebb, and there was consequently little life in trade and industry. In such circumstances our first concern Avas to relieve the hardships of the unemployed by providing work for them. It has all along been recognized that the only permanent solution of the unemployed problem is for the men to find work in productive industry, but at the time there Avere no vacant jobs in industry. The Government therefore took immediate and vigorous action to put in hand public works of a useful character and to subsidize an expansion of works on the part of local bodies. The result was a rapid increase in consumer purchasing-power, Avhich automatically provided the scope for an expansion of industry.

Economic policy

2—B. 6.

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For the past year unemployment has been virtually eliminated and the people have enjoyed a state of full employment. There is no need for me to quote statistics to show the beneficial results that have followed, for they are apparent to every one. Action along the lines indicated produced quick results, but in the absence of an equally rapid expansion in production it led to an increase in imports and a drain upon the sterling resources of the Dominion. To meet this position, which was accentuated to a considerable degree by transfers of capital abroad, exchange control and import selection were introduced last December. One way or another imports had to be reduced, and the Government were convinced that there was more scope for constructive action through selecting imports than in lifting the rate of exchange to check all imports without discrimination. A reduction in imports means less goods for consumption and therefore a lower standard of living unless the contraction in imports is offset by a local expansion in the production of consumable goods. The necessity for restriction of imports provided an opportunity and an incentive for an expansion of local manufacture, and in selecting imports the Government have given the needs of industry preference over manufactured commodities. In fact, the Government had to choose between standing by while the standard of living fell or organizing a drive for a greater output from local industry, both primary and secondary. Another important factor previously mentioned is that we must look to industry for the only possible permanent solution of the unemployment problem. The present basis upon which we have reached a state of full employment cannot be anything but a temporary phase because it is not economically sound to keep so many men engaged permanently upon works, however desirable they may be, that do not add to the present flow of consumable commodities. The standard of living depends mostly on the latter, and if public works, which by their nature can only be reflected in consumable commodities or services over a long period of years, were continued at the present level for long the present difficulties would be accentuated, and in one way or another the result would be a lowered standard of living generally. In saying that, however, I would like it to be clearly understood that the Government have no intention of throwing thousands of men out of employment. The problem is being tackled along constructive lines of transferring the men into industry as quickly as possible. Expansion of industry involves plant, machinery, and raw materials, most of which must be imported, and thus adds in the short-run to the strain upon our overseas resources. A number of overseas manufacturers who are establishing factories in New Zealand have helped by supplying the necessary plant from their own resources overseas. Our position generally has been eased and more time for necessary economic adjustments secured as a result of Mr. Nash's successful negotiations in London, and I would like to take this opportunity on behalf of the Dominion of thanking the Imperial Government for the help they have given us. As honourable members are aware, this help takes the form of £5,000,000 sterling of export credits at 4| per cent, interest with a currency of five years for Government imports from the United Kingdom and £4,000,000 sterling of shortterm credits for commercial purposes. Both classes of credits are available for the purchase of British goods. Government imports at present are being swelled by material for our defence forces, and a considerable portion of the credit granted for Government purposes will be utilized for this purpose. Mr. Nash went to London primarily to negotiate a conversion of the large loan of £17,172,000 which falls due for repayment on Ist January next. It was unfortunate that such a large loan had to be dealt with in circumstances that could hardly be less favourable for such an operation having regard to the reactions on the London market caused by the international situation, and in the success of his efforts Mr. Nash fully merits the congratulations of the country. In the course of the discussions in London it became clear that a good deal of misunderstanding existed as to Government proposals concerning import selection. It was by no means generally appreciated that a considerable

Dominion's sterling resources.

Negotiations in London.

Secondary industries.

2

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proportion of the present restrictions is solely for the purpose of reducing imports to the level of our ability to pay for them. These economy restrictions are temporary, and will be relaxed as the need for them passes. The essential point is that they are quite apart from the Government's proposals for developing selected industries in New Zealand. We have a large export trade which it is desirable should be extended as much as possible, and over and above external debt charges we must exchange our exports for imports. We want all the imports we can afford in addition to maximum production in our own factories to raise the standard of living. This objective also renders it imperative to select for development—firstly, industries that can produce goods that we require at a competitive price, and, secondly, those from which we obtain the greatest net advantage having regard to production costs and the necessity for finding employment for many thousands of our people in productive industry. To achieve the objective industry must be efficient, and this is not possible unless it is organized in economic units and is not overcapitalized by having too many units. This is where the Industrial Efficiency Act is proving very useful. Manufacturing and distributing interests have demonstrated a willingness to use the Act better to co-ordinate their activities and relationships on a co-operative basis and thereby to attain more economic production. There are also clear indications that some manufacturers are prepared to establish certain types of industries only if the provisions of the Industrial Efficiency Act can be invoked to prevent uneconomic competition, without which they consider the investment of capital in such cases would not be justified. In this respect also, therefore, the industrial policy is securing substantial advantage to the Dominion. The appreciation of the Act by industrial and trade organizations and individual operators is evidenced by the fact that at their own request nine industries have been gazetted as licensed industries during the year, making the total number twenty-four. To remove the misunderstandings that existed, the Government policy in legard import selection was clarified by a joint statement issued by the United Kingdom and New Zealand Governments. This statement, which was also published in New Zealand, reaffirmed our policy to ensure the maximum expansion of trade between the United Kingdom and New Zealand consistent with the maintenance of sound economic conditions in New Zealand and the Government's obligations to existing industries. It was also readily agreed that we would not use import selection to foster uneconomic industries, or, as already explained, to do so would defeat our main objective of raisins; the standard of living. In administering the import selection scheme preference is, of course, given to essential requirements for defence, for primary industries, and for secondary industries, while at the same time every endeavour is made to divert purchases to United Kingdom markets. In regard to the remittance of moneys overseas—now subject to Reserve Mink permit—sterling funds are first of all earmarked to provide for State and local-authority debt charges, which alone involve a very substantial sum. Then allowance is made for interest on private debts and investments held by persons T Tw, °^ ei ' necessary ex Penditure, while the balance is for im P° rts > b °th State and private. Thus New Zealand is giving pride oi place to her overseas commitments. In applying the system every endeavour has been made to encourage the development of economically justifiable industries in New Zealand— lastly m accordance with the policy to which I have previously referred and teecondly, to reduce the call on sterling funds in future years by importing raw materials m place of finished goods. In carrying out this policy there has naturally been an increased demand for machinery for manufacturing purposes and for raw materials. We will receive the benefit of these importations in utuie years, but the immediate effect has been to increase the demand for StLt nds ' and tMs in has led t0

Import selection

Overseas remittances.

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This pressure upon sterling funds, combined with the fact that import licenses for each half-year have mostly been issued early in the period to which they apply, with consequent immediate heavy demands upon the banks, has given rise to a feeling of uncertainty as to when sterling will be made available to importers individually. Importers have recently been invited to submit through their bankers particulars of the remittances required for their import business to 31st December next. On receipt of such particulars license-holders will be advised of the particular month or months during which their remittances may be made." Thus the uncertainty will be removed and importers will know exactly where they stand and be able to place their orders abroad with confidence. While dealing with the development of industries special mention should be made of the iron and steel industry, for this is a basic industry for many other industries. After passing the authorizing Act in 1937 progress in establishing the works was held up pending investigations to prove the quantity of ore that is available at Onekaka. The Government naturally wanted to be sure that raw materials in sufficient quantity were available before launching a large-scale project. The exploratory work has now demonstrated that there is sufficient usable iron-ore and ironsand in the country to supply the industry for half a century, and it is expected that further investigations will disclose additional deposits. Sufficient coal of suitable quality is also available, and a further expert report by H. A. Brassert and Co., Ltd., of London, who are specialists in steelworks, indicates that the proposed works will be able to produce steel at a price comparable with that being paid to-day. In other words, the industry will be an economic one in every sense, as practically all the raw materials will be available in New Zealand. The services of H. A. Brassert and Co., Ltd., have been retained to design and supervise the. construction of the plant, involving a capital outlay of about £5,000,000 spread over a period of about three and a half years. The influence of such an expansion of productive employment will be farreaching. During the constructional stage of the steel plant a considerable amount of employment will be created, and many hundreds of men representative of various trades will participate in the work of site preparation, foundations, assembly of plant, and erection of buildings, &c. When the plant comes into full operation approximately one thousand five hundred men will be directly and permanently employed. In addition the indirect employment will be considerable. In the coal-mines, for instance, the additional demand for coal, amounting to nearly 200,000 tons per annum, not subject to seasonal variations, will create favourable conditions for continuous production with stable employment for the miners. It means that approximately two thousand workers will be directly engaged in production either in the steel plant or in supplying the necessary raw materials of domestic origin. HOUSING. The Government have consistently maintained in the forefront of their programme the provision of adequate housing facilities for the people. The problem is one which requires to be approached with breadth of view and imagination. It is one of great magnitude and involves intelligent planning for the provision of the best possible environment for the people, who spend so great a proportion of their lives in their homes. In order to appreciate the full significance of the problem one of the first steps taken by the Government was to order a national housing survey. Under the provisions of the Housing Survey Act, 1935, an obligation was placed upon 119 local authorities to conduct housing surveys. To date 115 authorities have complied with the Act, and the survey discloses that no less than 6,827 houses in the principal centres of population should immediately be demolished, while 9,835 dwellings are overcrowded. In addition, there are 31,663 houses which are unsatisfactory but are capable of being repaired. It is not practicable, however, to consider an early programme of demolition until the acuteness of the present

Iron and steel industry.

Housing programme.

National housing survey.

4

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shortage of houses has been reduced to a reasonable extent. Further, it is not possible to proceed with a successful slum-clearance campaign until special empowering legislation on similar lines to that in operation in Great Britain is available. During the Government's present term of office it is hoped to submit a Housing and Slum Clearance Bill for the consideration of Parliament. ! may add that the Government have also under consideration special provisions for dealing with the difficult problem of houses in rural districts. The Government's house-building operations through the Department of Housing Construction have been expanded to the limit set by the availability of skilled labour. Tn the 1936 Budget, when the Government's housing policy was announced, it was stated that it provided for the construction of 5,000 houses. It is expected that the five thousandth home will be delivered for occupation in less than three months time, and by that date another 2,500 houses will be partially completed. On numerous occasions since the commencement of the Government's house• building programme it has been stated by critics of the Government that private enterprise in house building would practically disappear and that therefore the Government's efforts would result in no more houses being available than in the past. How far from the truth these contentions were is disclosed by the statistics, which show that permits taken out for private dwellings numbered 4,140 for 1935-36 compared with 4,648 for 1938-39. The operations of the Department have been superimposed upon the noi inal woik carried out by private enterprise, assisted, of course, in the usual manner by State Advances loans. During last year the Housing Construction Department commenced building 3,445 houses, while the total number of dwellings ai i anged for was 8,093, a figure that has broken previous records by a substantial margin. The previous highest figure for permits for dwellings was 7,179 for the year 1926-27. The fact that such progress has been made concurrently with the most vigorous programme of other Government buildings on record, and in spite of the grave depletion in our sources of skilled labour as a result of the virtual co apse of the apprenticeship system during the depression years, is a remarkable achievement and reflects great credit on both the building industry and the worvers engaged in that industry. Further, not only has the Government's policy resulted in the production of a record number of homes, but more people were enabled to own their own homes in 1938-39 than in any year for almost a decade. This fact disproves conclusively the statements which have been persistently circulated that the present Government's objective was to create a universal state tenantry. It was realized at the commencement that the progress of the Housing Scheme would _ depend very largely on the availability of skilled labour. It was reported in the last Budget that the operations of the Department were being seriously delayed on account of this factor. It was also mentioned that w»V,3! ge T", t Brt ; sans el "I> l0 >- cd "V contractors on each house that the construction was only 18. After the date of the last Budget the position grew progressively worse, until hy November, 1938, there were only 15 artisans employed per house under construction. When the number of houses in progress was taken into consideration it was realised Zt the epartment was relatively worse off in November than in July to the extent of the services of about six hundred artisans. The housing survey, together with the position disclosed by the inspections of the premises occupied hy applicants for for ate so r m " for many people that the Government decided to adopt the most nrorrmt ~ i:r e, Si; •: r ply of t illed V iiom overseas. >arly m the present year Mr. J. Hods-ens MP wa<* rlprmW)

Results achieved.

Shortage of skilled labour.

5

8.—6.

Housing expenditure.

Up to the 31st -July, 1939, the total expenditure on housing, purchase of land, provision of services, administration, &c., amounted to £7,106,000; while the total commitments for land purchases and contracts entered into from the inception of the scheme to the present date amounts to approximately £10,000,000. For the financial year 1938-39, the first year during which the Department can be said to have worked to capacity, the cost of administration was only 2 67 per cent., a low figure for a construction organization. DEFENCE. The alarming manner in which the international situation has deteriorated during the past year has rendered it necessary for the British Commonwealth and other peace-loving nations to accelerate their preparations for defence. It is of tragic significance that the millions of pounds which the nations of the world are daily expending on uneconomic weapons of defence or aggression, as the case may be, would go a long way towards raising the standard of living and improving the economic security of the peoples concerned. However, so long as peace and our national security continue to be threatened, the Government will not fail in their duty to build up defence Forces adequate to protect our shores and to play a worthy part in the wider field of the general defence of the British Commonwealth of Nations. With a view to ensuring that adequate arrangements and proper co-ordination existed for the defence of British interests in the Pacific—an area in which New Zealand is naturally more vitally interested —it was decided to invite the Governments concerned —namely, the United Kingdom and Australian Governments— to take part in a Defence Conference to be held in New Zealand. The invitation was very readily accepted, and a most successful conference was held in Wellington during May last. A useful exchange of ideas took place, and plans were prepared by the representatives concerned to ensure maximum co-ordination in the unfortunate event of hostilities breaking out. At the close of the Conference the Imperial Government very kindly agreed to allow Major-General Mackesey, one of their delegates, to remain in New Zealand in order that he might prepare a report on New Zealand's land Forces. Thus the Government have before them a clear-cut policy, and are pressing forward steadily towards its completion. Adequate defence requires co-ordination of effort among the three fighting services—the Navy, the Army, and the Air Force—and behind them an organization to minimize possible interruptions with trade and industry by building up reserve stocks of materials and generally providing for essential supplies for both the armed Forces and the civilian population. In every required direction preparations to meet possible trouble are being pushed forward vigorously. In the case of the Naval Forces, action lies chiefly along the lines of completing the Naval Dockyard, building and stocking a naval armament depot and storehouses, building and equipping workshops, and the provision of adequate training facilities. In regard to the last-named, three small seagoing training-vessels are being built. On land the fortifications of the defended ports are being modernized and strengthened. The establishment of the Territorial Army has been raised to 16,000. and recruiting for this Force, and also for the National Reserve, is proceeding satisfactorily. Training facilities in all directions are being increased correspondingly, and every effort is being made to build up stocks of equipment, armament, ammunition, and stores necessary for training and for mobilization. In general, new life has been put into the Army, which is being moulded as rapidly as possible into a force of which the people may be proud. The Air Force as a fighting unit hardly existed when the Government took office in 1935. The programme announced in 1937 has recently been expanded, and great strides have been made in building up an efficient force. Efforts so far have been concentrated largely on training personnel, constructing fully-equipped military aerodromes, and generally building up an efficient ground organization.

National defence.

Defence Conference.

Navy.

Army.

Air Force.

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oka M ° dern on §'" ran S e bombers for two squadrons will be delivered shortly while 250 aircraft for training and other purposes have been ordered, and a number o th f. se h ave already been delivered in New Zealand. Stocks of bombs and other munitions have been obtained. As a result of the visit of the United Kingdom Air Mission, arrangements have been made foi the establishment of an aircraft factory at Wellington and an order is to be placed with the de Havilland Aircraft Co., Ltd. fo'r the manufacture of one hundred Tiger Moth fighting planes at a cost of £155 000 The expansion of the flying training organization in Few Zealand is being undertaken £ C oSn at 7W!' ! } e Im P erial Government, who have agreed to accept and pay tor 220 JNew Zealand-trained pilots per annum. During last approval has been given to the establishment of a Flying Training School at Blenheim capable of an output of 140 pilots a year, and to an increase m size of the Flying Training School, Wigram, to ensure a similar output Good progress has been made with the development of the station at Ohakea with th ® provision of additional accommodation at Wigram and Hobsonville,' and with the establishment of the new station at Blenheim. The construction of the operational station at Whenuapai is proceeding satisfactorily, and it is anticipated tiiat the expansion programme will be complete by December 1940 The Railway Workshops Scheme for the training of apprentice personnel is developing m accordance with the initial programme. The'instructional School at the Hutt Workshops commenced training thirty mechanics in July, 1939 and in November mstmctlon Wlll commen ce in the other Railway Workshops Territorial squadrons have been formed at Auckland, Wellington, and Chnstchurch, and it is expected that the squadron at Dunedin will be formed in January, 1940. Capital expenditure involved in the expanded programmes for the three Services will exceed £5,000,000, spread over the next two years. Maintenance costs will be m the vicinity of £3,000,000 per annum. For all purposes the expenditure during this financial year will be about £5,400,000. PUBLIC ACCOUNTS. Of JnQ e n?n bl i C aC 'J or the 7 ear ended 31st March > closed with a surplus ot £809,000, for which buoyant revenue was mamly responsible. It is satisfactory to note that, although there were no increases in rates of taxation, the revenue received from taxation exceeded the previous year's receipts by £642 000 The following is the position :— Revenue. £ £ Taxation .. .. .. .. . . 32, 306,000 f^ erest 2,127,000 Other receipts 2,149,000 36,582,000 Expenditure. Permanent appropriations— £ Debt services .. .. 9,311,000 Exchange .. .. .. 1,422,000 Highways .. .. .. 3,055,000 Other services .. .. 545.000 » i . — 14,333,000 Annual appropriations—Social services .. .. 12,946,000 Other services .. .. 8,494,000 21,440,000 35,773,000 Surplus .. .. .. _ _ £809,000

Defence expenditure.

Surplus 1938-39.

7

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It is proposed to transfer this surplus of £809,000 to the Social Security Fund, and the necessary legislation to give effect to this will be introduced later during the session. This transfer will reduce the amount of subsidy otherwise payable to the Fund for the current financial year. Included in the expenditure (" Annual Appropriations : Other Services ") is a transfer of £272,000 to the Dairy Industry Account to cancel the indebtedness in the account resulting from the deficit in the guaranteed price for dairy-produce during the 1936-37 season. Full details of both revenue and expenditure have already been published and are shown in the Budget tables so I do not now propose to review the results in detail. It is worthy of note, however, that practically every item of taxation other than Customs —and for this item the receipts for 1937-38 were abnormal —showed substantial increases over the previous year. This fact is a clear indication of the greater prosperity of the people generally. PUBLIC DEBT. During the past financial year the provision of funds for expenditure on public works and other capital purposes resulted in a net increase in the public debt of £13,768,930. New issues, which were all made in New Zealand, were made for the following purposes: — £ Public works .. .. .. .. .. 9,622,279 Electric supply .. .. .. .. 180,000 Main highways . . . . . . . . 2,675,600 State coal-mines . . .. . . . . 95,000 State forests . . . . .. . . . . 175,000 Housing . . . . . . . • • • 4,000,000 Raised for redemption, but not used at 31st March, 1939 . . . . .. •• 1,107 £16,748,986 Against the increase of £16,748,986 are offset redemptions totalling £2,980,056, which were made from the undermentioned accounts : — £ Public Debt Repayment . . . . . . 1,756,618 Sinking Funds. . . . . . . . • • 228,030 Reparation and War Credits . . .. . . 5,025 Repayments of capital by other accounts . . . . 990,383 £2,980,056 The net increase of £13,768,930 has raised the total public indebtedness to £303,970,272, which at 31st March, 1939, was domiciled as follows : — £ London .. .. .. . • •• 156,853,016 Australia .. .. .. •• •• 879,600 New Zealand . . . . • • • • 146,237,656 £303,970,272 During the year revenue Treasury bills totalling £3,575,000 were issued, but all these were redeemed out of revenue, and consequently no revenue bills were outstanding at the close of the year. The money for housing and most of the borrowing for public works and other purposes were obtained from the Reserve Bank. This method of finance has the effect of increasing internal purchasing-power, and its usefulness is conditioned by the volume of production. In present circumstances, when sterling funds are short and imports have to be restricted, this type of

Transfer of surplus.

Public indebtedness.

Domicile of debt.

Treasury bills.

Reserve Bank credit.

8

8.—6.

finance, while justifiable and beneficial under certain circumstances, has obvious limitations during the current year. In fact, it must be clear to anybody who studies the position that we are not suffering from a shortage of money in New Zealand, but from a shortage of what money will buy. Accordingly, in May last a Government loan of £4,500,000 was offered to the public in New Zealand. The nominal rate of interest was 4 per cent., and the issue price 96 for stock maturing in 1958, but in respect of which there is an offer to redeem at par at any time after 31st May, 1954. Alternatively, investors were offered stock to mature in 1948 at an issue price of 99. The loan, I am pleased to say, was substantially oversubscribed. The proceeds are being applied, in terms of the prospectus, to public works and general developmental purposes, including capital expenditure on defence works. The terms of issue for that loan were fixed on a basis designed to enable as large a section of the community as possible to invest. It was recognized, however, that many people of limited means, though willing to help, would not have a lump sum available for investment during the short period the loan was open for subscription. As a corollary to the main loan, therefore, the Government proposes to inaugurate a scheme specially designed to enable the wage and salary earners and persons of small means to invest portions of their incomes. Full particulars of this scheme will be made available at an early date, but, briefly, the proposal is to open up an avenue of investment in Government funds for sums of money, however small. The investment can be built up by small payments over a period bearing interest at a rate comparable with that of the recent loan. The term will be for a fixed period of four or five years. Each individual's contributions will be accumulated in a separate National Investment Account in his name and, if desired, will be convertible into National Savings Bonds. As the most convenient means of bringing this scheme within reach of the public the organization of the Post Office Savings-bank will probably be utilized to handle the details. Legislation will be brought down at an early date to give effect to these proposals. I have already referred briefly to the important negotiations in London in connection with the conversion of the Dominion's £17,172,000 sterling loan which falls due for repayment in January next. Applications are now being invited in London for a £16,000,000 sterling cash and conversion loan bearinginterest at 3| per cent, per annum and issued at £99 per cent. The balance of the total of £17,172,000 outstanding is held by New Zealand institutions, and other arrangements will be made for its conversion on due date. Further details regarding the loan are as follows:— (1) Holders of the £3 lOs.-per-cent. stock, due to be repaid on Ist January, 1940, have the right to receive, in exchange for each £100 stock surrendered, £100 £3 lOs.-per-cent. conversion-stock 1939-45 together with a cash payment of one pound. (2) Cash applications will be accepted to an amount sufficient to make up, with the stock issued in conversion, a total of £16,000,000. (3) The proceeds of the cash receipts will be applied towards redemption at par on Ist January, 1940, of the £3 lOs.-per-cent. stock 1940, which has not been converted. (4) The new stock will be redeemed by purchase at or under par, exclusive of accrued interest, or by half-yearly drawings at par in sums of £100, commencing Ist July, i 940. (5) The New Zealand Government have undertaken to provide for redemption of this stock by making available in London, out of funds accruing from exports from the Dominion or otherwise, sufficient sterling to repay the whole of this issue by Ist January, 1945, bv half-yearly instalments of £1,000,000 during 1940 and £1,750,000 thereafter, payable on or before 30th June and 31st December in each year.

Local loan

National Savings Scheme.

London Conversion loan.

3—B. 6.

9

8.—6.

(6) During periods sth June to 20th June, and sth December to 20th December in each year, commencing in 1940, holders of stock will have the option of converting such stock, in sums of £100, into one-half each of £3 lOs.-per-cent. stock 1949-54 and 1955-60, at rates to be published from time to time. To the extent that these options are exercised in any halfyear the obligation to redeem in that half-year will be reduced. (7) The New Zealand Government reserve the right on or at any time after Ist July, 1941, on giving not less than three months' notice, to redeem at par the whole or any portion of the stock, not being less than a nominal amount of £1,000,000 sterling, at any one time. The list, for both cash and conversion applications, opened on the 26th July, and will close on the sth August. PUBLIC WORKS. For the reasons I have already given, and to carry towards completion the large works already in hand, the public-works programme for the current year, apart from defence works, is approximately of the same magnitude as last year. It may be said that we have reached the peak so far as public works is concerned, and our job now is to concentrate on tapering the magnitude of the programme down to a more economic level by transfer of men to the primary and secondary industries. As a matter of fact, this year's programme includes £3,639,000 for expenditure on land-development, including settlement of new areas, improvement of existing areas, extensive assistance to the Maoris in establishing them in agricultural and pastoral pursuits, the expansion of afforestation, and the drainage of swamp lands. At 31st March last the aggregate area comprised in the numerous land-settlement projects was 1,071,000 acres, of which a large proportion is under actual cultivation or pasture. More than 2,400 settlers have been established within recent years, and 4,800 workmen are also employed on the development of general areas not yet subdivided into holdings. As some indication of the results now attained, the statistics for 1938-39 show that 101,000 dairy cows and other cattle together with 274,000 sheep were carried, while 5,260,000 lb. of butterfat and 5,540 bales of wool were produced. The cash returns from this and other produce totalled £474,000, a record amount, and this is apart from the increased production from privately-owned lands in the irrigation areas of Otago and Canterbury. With regard to the afforestation activities of the Government, a total of 8,355,000 acres is now comprised in the various forest areas, some 1,450 men are. employed, and last year's cash receipts from the disposal of forest produce were £153,000, being £9,000 more than in the previous year. In regard to works in hand this year, a prominent place is occupied by construction of new railway-lines, and by improvements and additions to existing lines. Construction has been completed on the East Coast trunk line to Wairoa, and this has been opened for traffic. Further expenditure will be made on the South Island Main Trunk and other lines which were in hand last year. The railway improvements and additions for the current year are anticipated to require £4,000,000, of which £700,000 will be provided from depreciation and renewal reserves. This expenditure will be devoted to a continuance of the enlarged scheme of rolling-stock upon which a commencement was made last year, and to further station, siding, and signalling improvements, as well as to deviations and grade easements. In this and other sections of public works careful consideration has been and is being given to the question of the call upon overseas exchange and to the relative merits of the demands of these works and of private industry.

Public-works programme.

Land settlement.

Railway construction,

10

8.—6,

For main highways and road operations, including maintenance of highways, a total of £7,000,000 is being provided, this being £250,000 more than was expended last year. The great volume of work now being undertaken with the aid of modern machinery upon the Dominion's road transport routes, in both densely and sparsely populated areas, has been favourably commented upon by the travelling public. Apart from State housing activities, which I have already dealt with, the \ aiious general public buildings—new offices, post and telegraph buildings, schools, &c.—are expected to require £2,150,000. Of this total £900,000 has been allocated for the various school buildings which are required. As mentioned last year, co-ordination of building activities is being maintained so that the most urgent needs are met first and the best use made of available labour and material. Ihe increased industrial activity in the Dominion is clearly reflected in the increasing demand for electricity. The Government's generating-works have been fully loaded, and substantial additions to the installations at Arapuni and Waikaremoana in the North Island and Waitaki in the South Island are m hand. The revenue receipts totalling £1,622,457 for the past year were more than £200,000 higher than for 1937-38, which was. itself a peak year. The commercial accounts to be presented with the Public Works Statement will disclose a substantial profit for last year, and this will be applied to i educing, very materially, the sinking-fund arrears brought forward from earlier years. An ample supply of cheap power is essential to the expansion ol industry on a large scale, so expenditure on this type of work is clearlv sound business. It is. anticipated that constructional expenditure for the current year on the additions mentioned previously and on a new generating-station at Highbank, Canterbury, and numerous minor extensions throughout the Dominion will require £1,400,000, and operating expenses £440,000. To provide over a short period for the heavy capital expenditure on defence, VZZJZSS** been included in the Public Works Fund estimates for an amount of £2,200,000. These details cover the principal classes of public works. The financial aspect of the whole programme for this year is shown more clearlv bv the tollowmg summary:— Railway construction and improvements . . 5 230 000 Highways and roads " 7,000,000 i üblic building's . . . 2150 000 Land settlement, development, and improvement . . 3'639000 Hydro-electric development . . . . . . I^B4oooo Telegraph and telephone extensions . . . . '600'000 Defence . . . . . . ' 2,200 000 Other works (aerodrome extensions, lighthouse works, development of tourist resorts, plant, material, &c.) .. 1,258,000 Total ■ • ■ • • • ■ . £23,917,000 Attention has on previous occasions been drawn to the fact that constructional and maintenance operations are so frequently interwoven that a considerable proportion properly chargeable to revenue is necessarily included n the statement of expenditure on public works. To defray this proportion lowevei, it is anticipated that revenue-moneys to a total of £4,855,000 will' be forthcoming from taxation, disposal of produce from the land, and from electricity sales and miscellaneous sources. The balance of £19,062,000" will

Highways and roads.

Public buildings.

Hydrceiectricity.

Defence.

Financial programme

11

Debt charges.

Social security.

Estimated revenue and expenditure 1939-40.

8.—6

require to be provided from loan-money. The local loan, already raised, together with the amount to be raised under the National Saving Scheme, will provide a portion of the amount required. The £5,000,000 sterling credits for Government imports, arranged by the Hon. Mr. Nash in London, will account for a substantial portion of the balance, because the works involve the importation of a large amount of material from the United Kingdom. 1939-40 PROPOSALS. All the various matters I have dealt with form the background of the Budget for the year and affect it in one way or another. Dealing first with the expenditure, honourable members will find that the estimates provide for a continuation of existing services. Debt charges show an increase of £741,000, of which provision for interest for a full year on new borrowing for last year and anticipated borrowing to finance this year's capital expenditure programme accounts for £535,000. The balance, for the most part, arises from the automatic increase in the item for Repayment of Public Debt. The coming into, operation of the Social Security Act is reflected in some relatively large changes in the estimates. The items for pensions, apart from war pensions, have disappeared from the Consolidated Fund estimates, and have been replaced by a new vote providing for the transfer of £2,000,000 to the Social Security Fund. The votes for education and health show an increase of £547,000, but, even so, for the reason stated, the aggregate for all the votes grouped under the heading of " Social Services " is approximately £2,300,000 less than for last year. Against this the disappearance of the Employment Promotion Fund has rendered it necessary to make some provision under the Consolidated Fund for promotion of employment, as these subsidies cannot be discontinued all at once. Accordingly, for that purpose, £2,500,000 has been provided under vote " Labour," and £400,000 under vote "Native." These adjustments involve a net increase of approximately £600,000 in the expenditure from the Consolidated Fund. As I have already indicated, there is a heavy increase in the cost of defence, towards which the votes for the three Services on the Consolidated Fund have been increased bv £1,114,000. The various increases I have referred to have been offset to the extent of £185,000 by a net decrease of this amount in other votes, leaving a net aggregate increase in the estimated Consolidated Fund expenditure of £2,270,000. On the revenue side of the account we are faced with a total net shrinkage estimated at £822,000. The importation of raw materials in preference to finished goods under the import selection policy will, it is anticipated, reduce Customs duties by £1,650,000 in comparison with last year's receipts. The yield from income-tax at the existing rates is estimated to return £705,000 less than for 1938-39, while the revenue from stamp and death duties is anticipated to be lower by £130,000. Against these reductions are offset an increase in railway interest of £500,000, while other items have been increased by £1,163,000, of' which £990,000 represents the profit derived from the issue of our own silver coins. These, with other minor increases and decreases, are estimated to reduce the total revenue by the £822,000 referred to. At this stage, allowing £200,000 for supplementary estimates and contingencies, the budgetary position is:— £ Expenditure . . . . • ■ ■ • ■ • 38,243,000 Revenue . . . . • • ■ • ■ ■ 35,760,000 Leaving a shortage of . . .. .. £2,483,000

12

8.—6.

I might explain that in arriving at these results the expenditure estimates have been carefully overhauled, while, on the other hand, every endeavour has been made to arrive at as accurate an estimate of the revenue as possible. The position therefore is that we are faced with the problem of increasing the revenue from taxation by £2,500,000. The problem is not an easy one, and the Government have given very careful consideration to various alternatives in order that the additional burden might be so placed as to bear as lightly as possible upon the people. To meet the position it is proposed to obtain a further £1,000,000 from income-tax, £200,000 from additional death duties, £300,000 by increasing beer duty from Is. 3d. to Is. 9d. a gallon, and £1,000,000 through raising the petrol-tax by fourpence a gallon. For individuals the present rate of income-tax is Is. Bd. in the pound, increased by l/100th of a penny for every pound of taxable income up to £5,500, and thereafter by l/150th of a penny up to a maximum of Bs. 2d. in the pound for earned income. On unearned income these rates are increased by one-third: To obtain the additional revenue it is proposed to increase the basic rate by fourpence, making it 2s. in the pound, and to continue the graduation beyond £5,500 at 1/lOOth of a penny, instead of l/150th of a penny as at present, up to a maximum of Bs. 7d. in the pound reached at £7,900. At the same time the amount of the general exemption will be reduced from £210 to £200. This will have the effect of bringing within the scope of the tax a few more single men without dependants, and of increasing the taxable balance of all other taxpayers by £10.

Revenue.

Petrol-tax.

Income-tax.

I realize that taxpayers are interested not so much in the technical changes made as in the net effect on their personal assessments. To illustrate the alterations I will quote the following examples based on a typical case of the earned income of a man with a wife and two dependent children:—

The additional tax payable by a man with an income of £365 is only about one pound a year, while the increase on an £8,000 income is equal to approximately one pound a day. In regard to companies, the basic rate is to be raised from Is. to 2s. in the pound to bring it to the same level as proposed for individuals. The rate of graduation, however, is to be reduced, from the present rate of l/100th of a penny in the pound up to £5,500 and l/150th of a penny thereafter up to a maximum of 7s. 6d. in the pound, to a rate of l/125th of a penny in the pound up to a maximum of 7s. lid. reached at £8,875. 1 may add that, later this session, an amendment to the Land and Income Tax Act will be introduced to correct a number of anomalies. This Bill will include a_ repeal of the provision exempting from income-tax the income of farmers trom land in cases where the holdings do not exceed an unimproved value of £3,000. These amendments, however, will apply not to tax payable in February next, but to the tax payable in the following year.

13

Total Income. At Present. Amount of Tax under j I crea j T new Proposals. j £ £ s. d. £ s. d. £ s. d. 300 .. .. Nil Nil Nil 365 .. 0 8 4 1 10 2 1 1 10 400 . . 3 8 0 5 2 1 1 14 1 600 . . 22 8 0 27 12 1 5 4 1 1,000 .. .. 70 8 0 82 12 I 12 4 1 5,000 .. .. 1,283 14 7 1,365 18 9 82 4 2 8,000 .. .. 2,841 13 0 3,203 8 9 361 15 9

Estate, succession and gift duties.

Beer duty.

Defence contribution,

Estimated revenue 1939-40.

8.—6

The effect will be to place farmers upon the same basis as other sections of the community. It will generally be agreed that if a farmer makes a profit from his operations sufficient, after deduction of all the usual allowances, to bring his income within the scope of the taxation provisions he should pay tax on the same basis as any other taxpayer. To obtain the £200,000 from death duties, it is proposed to increase the scales for estate, succession and gift duties by approximately 20 per cent., discontinue the present exemption of £1,000 for life-insurance moneys, and slightly reduce the present exemption for estates passing to widows. The life-insurance exemption was introduced in 1.925, but experience has shown that there is no real justification for it, and it is not granted in Great Britain or in any of the Australian States. Concerning the exemption to widows, the present allowances are £5,000 in respect of estate duty and £10,000 for succession duty. The exemptions now proposed are £3,000 plus one-third of the difference between this and the amount of her succession up to £4,500, making a limit of £3,500. In the ease of succession duty the proposed exemption i 3 £5,000 plus a third of the difference between this amount and the amount of her succession up to £10,000, making a limit of £6,666 13s. 4d. Even with all these adjustments, death duties in New Zealand on estates below £5,000 are appreciably lower than those charged in Great Britain or in the Australian States. I may add that the statistics show that the great majority of estates m New Zealand are for amounts below £3,000, and if such an esate is left to a widow no duties are payable. In regard to the proposed increase in beer duty I may mention that the rate was Is. 6d. a gallon in 1934, but was then reduced to Is. 3d. Most of the additional revenue required is to be obtained from income-tax on the one hand and petrol-tax on the other. The former is regarded by the Government as the appropriate field for providing for normal expansion of State activities, while the latter is considered in the light of a special contribution towards the additional heavy costs of defence. Petrol-tax has been chosen because, directly and indirectly, it reaches every section of the community, and all should share in the cost of defence. The tax has the merit of pressing much more lightly upon large families than other forms of indirect taxation and a good deal of it is in the nature of a luxury-tax. I may add that the rates of the mileage-tax imposed by section 4 of the Motor-vehicles Amendment Act, 1934-35, upon motor-vehicles using motive power other than petrol, such as Diesel oil, will be increased correspondingly. Allowing for the effect of the additional taxation, the estimated budgetary position for the year is as follows: — Revenue. Taxation — £ Customs . . ■ • • • ■ • 10,000,000 Beer duty . . ■ . • • • • 1,300,000 Sales-tax . . • • ■ • • • 3,500,000 Highways . . ■ ■ • • • • 3,250,000 Stamp and death duties . . • ■ • • 3,480,000 Land-tax . . • • • • • • 1,000,000 Income-tax . . ■ • • • • • 9,600,000 Miscellaneous .. ■ • • • • • 190,000 £ 32,320,000 Interest recoveries . ■ • • ■ • • • 2,780,000 Other receipts • • • • • 3,160,000 F 5,940,000 38,260,000

14

8.—6

£ Total revenue . . 38,260,000 Expenditure. Permanent appropriations— £ £ Debt services . . . . .. 10,022,000 Exchange . . . . . . 1,500,000 Transfer of highways revenue . . 3,233,000 Other permanent appropriations 376,000 — 15,131,000 Annual votes — Social services . . . . 10,613,000 Other services . . . . 12,299,000 — 22,912,000 Supplementary estimates and contingencies . . 200,000 38,243,000 Estimated surplus . . . . .. . . £17,000 In conclusion I would say that we have already made much progess in improving the general standard of living. Given the continued co-operation and Avhole-hearted support of the people we can so increase production as will enable us to consolidate our position on a sound economic basis. With this as a starting-point we will move forward to even higher standards in the future.

Estimated expenditure 1939-40.

15

8.—6

TABLES TO ACCOMPANY THE FOREGOING STATEMENT. Page Table No. I.—Abstract of Receipts and Expenditure of the Financial Year ended 31st March, 1939. See Parliamentary Paper 8.-l [Part I]. Table No. 2. —The Public Debt on 31st March, 1939. See Parliamentary Paper 8.-l [Part lII], Table No. 3. —Revenue for the Year ended 31st March, 1939, compared with the Year ended 31st March, 1938 .. .. .. .. .. ~ .. .. ii 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, 1939 .. .. .. .. .. iii Table No. s.—Estimated Revenue for 1939-40, compared with the Actual Revenue for 1938-39 .. iv Table No. 6.—Stamp and Death Duty Revenue for the Year ended 31st March, 1939, compared with the Year ended 31st March, 1938 .. .. .. .. .. .. iv Table No. 7.—Statement of the Customs Duties collected for 1938-39, compared with 1937-38 .. v Table No. B.—Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1939, compared with the Year ended 31st March, 1938 .. .. .. .. .. y 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, 1939 .. .. .. .. .. .. .. . . vii Table No. 10. —Estimated Net Expenditure for 1939-40, compared with the Actual Net Expenditure for 1938-39 .. .. .. .. .. .. .. .. ix Table No. 11. —Public Works Fund—Statement showing Net Expenditure under Appropriations for the Year ended 31st March, 1939, compared with the Year ended 31st March, 1938 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, 1939 .. xi Table No. 13.—Statement showing the Amount charged to " Unauthorized " in each Financial Year from Ist April, 1929, to 31st March, 1939 .. .. .. .. .. xii Table No. 14. —Statement showing the available Financial Resources of the various Accounts on the 31st March, 1939, as compared with the 31st March, 1938 .. ' .. .. xiii Table No. 15. —Statement of Amounts paid on account of Pensions for the Financial Years ended 31st March, from 1935 to 1939 .. .. .. .. .. .. .. xiii Table No. 16.—Education Expenditure—Total Expenditure on Education out of Public Funds since 1913-14 .. .. .. .. .. .. .. .. .. xiv Table No. 17.—Statement of Half-yearly Instalments of Principal and Interest for Repayment of Debt funded with Imperial Government .. .. .. .. xv Table No. 18. —Statement showing Maturity Dates and Domicile of Debt outstanding as at 31st March, 1939 .. .. .. .. .. .. .. .. xvi Table No. 19.—Statement showing Values of Imports and Exports of the Dominion in each Financial Year ended 31st March, from 1931 to 1939 .. .. .. ~ .. xvi Table No. 20.—Table showing Improvement in Economic Conditions .. .. .. .. xvii Copy of Prospectus of 1939 Internal Loan .. .. .. .. .. xviii

i—B. 6.

8._6.

Table No. 3. Revenue for the Year ended 31st March, 1939, compared with the Year ended 31st March, 1938.

II

Year ende d Yea r ended ; 31st March, j 31st Mareh, Increase. ' Decrease 1939. | 1938. I Taxation — £ £ £ £ Customs .. .. .. .. 10,650,428! 10,758,733 .. 108,305 Beer duty .. .. .. .. 1,076,796: 978,437 98,359 Sales tax .. .. .. .. 3,555,696 3,499,131 56,565 Film-hire tax .. .. .. .. 85,882 82,377 3,505 Gold-export duty .. .. .. 100,012 105,412 .. 5,400 Highways .. .. .. .. 3,059,989 2,838,711 221,278 .' Stamp and death duties .. .. .. 3,409,440 3,240,139 169,301 Land-tax .. .. .. .. 1,058,499 1,038,034 2o',465 Income-tax .. .. .. 9,303,495 9,078,763 224,732 Miscellaneous .. .. .. .. 5,535 44,693 .. 39 158 Total—Taxation .. .. .. 32,305,772 31.664,430 794,205 152,863 Interest —- On capital liability— Working railways .. .. .. 701,064 632,797 68,267 Postal and telegraph .. .. .. 588,000 590,000 2,000 On Public Debt Redemption Fund .. 392,486 463,866 .. 71 380 On other public moneys .. .. . . 445,896 454,702 .. 8^806 Total—Interest .. .. .. 2,127,446 2,141,365 68,267 82,186 Other receipts— Registration and other fees .. . 290,104 271,941 18,163 National-endowment revenue .. .. 147,394 154,319 .. 6 925 Territorial revenue .. . . .. 319,244 290,964 28,280 External affairs .. .. .. .. 196,503 238,575 .' 42 072 Justice .. .. .. .. .. 164,117 167,921 .. 3^804 Marine .. .. .. .. .. 167,850 163,578 4,272 .! Native .. .. .. .. .. 5,748 5,839 .. 91 Printing and Stationery .. .. .. 344,402 278,719 65,683 Profits of Trading Institutions .. .. 202,294 378,372 .' 176 j 078 Stamp duties .. .. .. .. 66,798 68.700 .. 1^902 Tourist and Health Resorts .. .. 126,229 117!945 8,284 Miscellaneous .. .. .. .. 113,094 14,583 Recoveries on account of expenditure of 4,844 18,151 .. 13,307 previous years Recoveries on account of unauthorized expendi- 206 113 j 93 ture of previous years Total—Other receipts .. .. 2,148,827 2,253,648 139,358 244,179 1,001,830 479,228 479,228 Totals .. .. 36,582,045 36,059,443 522,602

8.—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, 1939.

III

j Difference. Estimate for j Actual for I ' ' ' ' 1938-39. 1938-39. More LeS0 L I !_ i Taxation— £ £ £ £ Customs .. .. .. 10,000,000 10,650,428 650,428 Beer duty .. .. .. .. 1,000,000 1,076,796 76,796 Sales tax .. .. .. .. 3,400,000 3,555,696 155,696 Film-hire tax . .. .. .. 100,000 85,882 .. 14,118 Gold-export duty .. .. .. 100,000 "100,012 12 Highways .. .. .. .. 3,200,000 3,059,989 .. 140,011 Stamp and death duties .. .. .. 3,300,000 3,409,440 109,440 Land-tax .. .. .. .. 1,075,000 1,058,499 .. 16,501 Income-tax .. .. .. .. 9,500,000 9,303,495 .. 196,505 Miscellaneous .. .. .. .. 40,000 5,535 .. 34,465 Total—Taxation .. .. .. 31,715,000 32,305,772 992,372 401,600 Interest— On capital liability — Working railways .. .. .. 500,000 701,064 201,064 Postal and telegraph .. .. .. 590,000 588,000 .. 2,000 On Public Debt Redemption Fund .. 398,000 392,486 .. 5,514 On other public moneys .. .. .. 467,000 445,896 .. 21,104 Total —Interest .. .. 1,955,000 2,127,446 201,064 28,618 Other receipts— Registration and other fees .. .. 291,000 290,104 .. 896 National-endowment revenue .. .. 140,000 147,394 7,394 Territorial revenue .. .. .. 290,000 319,244 29,244 External Affairs .. .. .. .. 235,000 196,503 .. 38,497 Justice .. .. .. .. 170,000 164,117 .. 5,883 Marine .. .. .. .. 155,000 167,850 12,850 Native .. .. .. .. .. 5,000 5,748 748 Printing and Stationery .. .. .. 310,000 344,402 34,402 Profits of Trading Institutions .. .. 259,000 202,294 .. 56,706 Stamp duties .. .. .. .. 65,000 66,798 1,798 Tourist and Health Resorts .. .. 125,000 126,229 1,229 Miscellaneous .. .. .. .. 120.000 113,094 .. 6,906 Recoveries on account of expenditure of 10,000 4,844 .. 5,156 previous years Recoveries on account of unauthorized expendi- . . 206 206 ture of previous years Total —Other receipts .. 2,175,000 2,148,827 87,871 114,044 1,281,307 544,262 544,262 Total revenue .. .. .. 35,845,000 36,582,045 737,045

8.—6,

Table No. 5. Estimated Revenue of the Consolidated Fund (Ordinary Revenue Account) for the Year ending 31st March, 1940, compared with the Actual Revenue received for the Year ended 31st March, 1939.

Table No. 6. Stamp and Death Duty Revenue for the Year ended 31st March, 1939, compared with the Year ended 31st March, 1938.

IV

Estimate Actual Differences. for for : 1939-40. 1938-39. ! T Increase. Decrease. Taxation— £ £ £ £ Customs .. .. .. .. .. 10,000,000 10,650,428 .. 650 428 Beer duty .. .. 1,300,000 1,076,796 223 204 Sales tax.. .. .. .. .. 3,500,000 3,555,696 .. 55 696 Film-hire tax • .. 85,000 85,882 .. '882 Gold-export duty .. .. .. .. 100,000 100,012 12 Highways .. .. .. . . .. 3,250,000 190,011 Stamp and death duties .. . . . . .. 3,480,000 3,409,440 70,560 Land-tax .. .. .. 1,000,000 1,058,499 58 499 Income-tax .. .. .. 9,600,000 9,303,495 296,505 Miscellaneous .. .. .. .. .. 5,000 5,535 .. 535 Total—Taxation .. 32,320,000 , 32,305,772 780,280 766,052 Interest— On capital liability— Working Railways .. .. .. ,. 1,200,000 701,084 498 936 Postal and Telegraph .. .. . 645,000 588,000 57 000 On the Public Debt Redemption Fund .. .. 480,000 i 392,486 87 514 On other public moneys .. .. .. .. 455,000 9'104 Total—Interest .. .. 2,780,000 j 2,127,446 652,554 Other receipts— Registration and other fees .. .. .. .. 300,000 290,104 9,896 National-endowment revenue .. .. ,, 140,000 147,394 ' 7 394 Territorial revenue .. .. .. .. 295,000 " 24'244 External Affairs .. .. .. .. 180,000 196,503 .. 16'503 Justice .. .. .. .. .. .. 172,000 164,117 7,883 Marine .. .. .. .. .. .. 165,000 167,850 .. 2 850 Native •• •• •• ■ • •• .. 6,000 5,748 252 Printing and Stationery .. .. .. .. 320,000 344,402 24 402 Profits of Trading Institutions .. ... .. 261,000 202 294 58 706 Stamp duties .. .. .. .. .. 66,000 66,798 "798 Tourist and Health Resorts .. .. .. 128 000 *>9Q i 771 Miscellaneous " "B 1,003! 906 " Recoveries on account of expenditure of previous years, . 10,000 4,844 5 156 Recoveries on account of unauthorized expenditure .. .. '206 " 206 Total—Other receipts .. 3,160,000 2,148,827 1,087,570 76,397 2,520,404 842,449 842,449 Totals •• •• • 38,260,000 ! 36,582,045 1,677,955 "

Year Ended 31st March, * tem ! I Increase. Decrease. 1939. | 1938. j I , i, . , £ 1 £ £ £ Adhesive stamps .. .. 62,992 139,947 .. 76 955 Duty on instruments.. .. 393,619 -392,829 | 790 Estate and succession duty .. 1,702,681 1,576,483 126,198 Gift duty .. .. .. 115,031 103,116 ll'915 Impressed stamps, and duty on 233,430 227,326 6,104 cheques Company licenses .. .. 90,451 89,404 1,047 Sharebrokers'licenses .. 1,862 2,092 . ' 230 Totalizator revenue .. .. 661,443 102^569 Amusements-tax .. .. 92,993 98,64-6 .' 5*653 Lottery duty .. .. 20,389 20,883 .. '494 Overseas-passenger duty .. 30,598 26,673 3,925 Rates, fines, and miscellaneous 3,951 3,866 ' 85 252,633 83,332 83,332 Tota ls •• .. 3,409,440 3,240,139 169,301

8.—6

Table No. 7. Statement showing Customs Duties collected for Year ended 31st March, 1939, compared with the Year ended 31st March, 1938.

Table No. 8. Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1939, compared with the Financial Year ended 31st March, 1938.

V

I 1938—39. 1937—38. Increase. Decrease. 1 £ £ £ £ 'Tobacco, cigars, and cigarettes 2,138,254 2.076,893 61.361 Spirits, wine, and beer .. .. 865,406 902,188 .! 36,782 Motor-vehicles and parts* .. .. .. 734,964 i 972,574 237'610 Motor-spirit* .. .. 1,660 ,'380 1.531' 706 128^674 J ea 136,113 137,479 .. 1,366 Su g ar •• •• 667,176 649,409 17,767 Other goods .. .. .. 3,436,379 3,462,626 . 26 247 Primage duty .. .. .. 293,833 298,986 .. 5 153 Surtax •• •• ■■ 717,923 726,872 .. 8^949 207,802 316,107 207,802 Totals.. 10,650,428 10,758,733 .. , 108,305 * Excluding tire-tax and petrol-tax earmarked to Main Highways.

Year ended j year ended 31st March, [ 31st March, Increase Decrease 1939. 1938. Permanent Appropriations:— £ £ I £ £ Under special Acts of Legislature— Civil List .. .. .. .. .. 30,127 28,802 1,325 Debt Services— Interest .. .. .. .. .. 7,500,515 7.673,071 179 rms Amortization of debt— Sinking fund .. .. .. .. 10,859 10,859 Repayment of Public Debt Act, 1925 .. 1,754,123 1.679,774 74 349 Transfers to Loans Redemption Account .. .. 51,620 '' 5i'6°0 Payments on guaranteed loans .. Gr. 4,864 Or. 24 633 19 769 Securities redeemed .. .. _ . ' 205 ' '' Administration and management .. 50,311 49,888 423 Total—Debt Services .. .. I 9,310,944 9,440,784 94,541 224 38! Other Services— Education.. .. .. .. ,, 101,721 99,540 2 181 Other grants and subsidies .. .. .. 253,906 259,427 .. 5'52] Salaries and honoraria .. .. j 75,005 72 212 2 793 Pensions .. .. .. .. " 45'447 '676 Highways— Transfers to Main Highways Account .. 1 2,852,164 2.646 532 205 63? Paid to boroughs .. .. .. . ,j 176,910 ~13'o83 Expenses of collecting, &c... .. .. 26,021 24 818 l'203 Advances .. .. .. .. .. Gr. 6,750 14,'255 : ' 2l"005 Other special Acts — " ' Exchange on remittances of public moneys to 1,422,085 1.827,678 . 405 593 or from countries overseas ' Miscellaneous .. .. .. 44,993 143,934 98 941 Transfer to Reserve Fund Account .. .. .. 853,897- 853'897 Total—Other Services .. .. 4,991,502 6,150,891 225,568 1,384,957 ~ Total—Permanent Appropriations .. 14,332,573 15.620,477 321,434 1,6091i38~~

8.—6.

Table No. 8 —continued. Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1939, compared with the Financial Year ended 31st March, 1938 —continued.

VI

Year ended Year ended — 31st March, 31st March, Increase. Decrease. 1939. j 1938. | Annual Appropriations:— £ £ £ £ Vote, — Legislative.. .. .. .. .. 98,791 102,268 .. 3,477 Prime Minister's Department .. .. 24,644 23,167 1,477 Finance— Treasury .. .. .. •• •• 47,271 41,020 6,251 Customs .. .. .. .. 137,753 126,624 11,129 Land and Income Tax .. .. .. 135,106 165,998 .. 30,892 Stamp Duties .. .. .. .. 105,537 100,042 5,495 Audit .. .. .. ■■ •• 39,452 39,960 .. 508 Total —Finance .. .. .. 465,119 473,644 22,875 31,400 General Administration — Publio Service Commissioners'Office .. .. 13,590 9,913 3,677 Internal Affairs .. .. •• 499,861 509,582 .. 9,721 External Affairs .. .. 207,797 241,640 .. 33,843 Printing and Stationery .. .. .. 30*2,0i6 275,852 26,164 Marine .. .. .. .. 179,406 157,803 21,603 Labour .. .. .. •• •• 134,758 142,876 .. 8,118 Native .. .. .. .. ■ • 122,932 155,326 .. 32,394 Valuation .. .. .. •• •• 49,069 52,492 .. 3,423 Electoral .. .. .. .. .. 114,641 6,513 108,128 Census and Statistics .. .. .. 33,938 32,260 1,678 Total —General Administration .. 1,658,008 1,584,257 161,250 87,499 Law and Order— Justice and Prisons .. .. .. 337,071 336,958 113 Crown Law Office .. .. .. .. 8,279 7,583 696 Police .. .. .. .. .. 607,390 601,482 5,908 Total—Law and Order .. 952,740 946,023 6,717 Navy .. .. .. .. .. 835,331 760,529 74,802 Army .. .. . . .. 706,753 529,632 177,121 Air .. .. .. .. •• 557,205 313,652 243,553 Total—Defence .. .. .. 2,099,289 1,603,813 495,476 Maintenance of Public Works and Services 724,287 1,093,782 .. 369,495 Development of Primary and Secondary Industries — Lands and Survey .. .. .. .. 300,241 384,974 .. 84,733 Agriculture .. .. .. .. 1,078,426 845,419 233,007 Industries and Commerce, Tourist and Publicity 444,216 385,546 58,670 Scientific and Industrial Research .. .. 158,785 130,056 28,729 Mines .. .. .. .. .. 33,716 31,062 2,654 Transport .. .. . ■ . . .- 81,699 63,163 18,536 Total — Development of Primary and 2,097,083 1,840,220 341,596 84,733 Secondary Industries Social Services — Health .. .. .. .. .. 1,362,757 1,209,741 153,016 Mental Hospitals .. .. .. .. 417,483 394,454 23,029 Education .. .. .. .. 4,097,546 3,677,749 419,797 Pensions .. .. .. .. .. 6,933,819 6,466,656 467,163 National Provident and Friendly Societies .. 133,959 123,718 10,241 Total—Social Services.. .. 12,945,564 11,872,318 1,073,246 Unauthorized Expenditure— Services not provided for .. .. .. 374,580 88,652 285,928 Total —Annual Appropriations .. .. 21,440,105 19,628,144 2,388,565 576,604 2,709,999 2,185,942 2,185,942 Total Expenditure .. .. .. 35,772,678 35,248,621 524,057

8.—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, 1939.

VII

Net Actual Net Difference. Appropriations, Expenditure, ! — 1938-39. 1938-39. I „ I | ! More. j less. Permanent Appropriations :— £ £ £ c Under Special Acts of the Legislature,— Civil List .. .. .. .. .. 30,400 30,127 .. 273 Debt services— WsLui.ofD.bt- '• 5W - !15 ■ "MX Repayment of Pubiic Debt Act, 1925 !! 1. 1 754' 122 *27S21 Securities redeemed .. .. .. 1 00q ' ' ' J'™ Administration and Management .. .. 50'450 50 311 'loq Payments on Guaranteed Loans .. .. Or. ' 150 Or. 4 714 Total—Debt services .. .. 9,544,236 9,310,944 ~ 233,292 Other services— " " Education .. .. .. 101,721 101,721 Other Grants and Subsidies 258,500 253,906 "4504 Salaries and Honoraria .. .. .. 75,665 75 005 " ««n Pensions 45,428 45 447 " 19 3,181,000 3,055,095 .. 125 905 EscliMg e :' 1,800,000 1,422,085 .. 377915 Other Special Acts 28,400 38,243 9,843 Total—Other services .. .. 5,490,714 4,991,502 9~862 50M74 Total—Permanent Appropriations. . 15,065,350 14,332,573 ~ 9,862 742^9 Annual Appropriations :— " — Vote, — Legislative 105,060 98,791 .. 6;2 b9 Prime Minister's Department .. ., .. 24,395 24 644 249 Finance— ~~ — Treasury 4733s 47>271 Customs .. .. .. .. 132,643 137,753 1 5,110 Land and Income Tax 125,606 135,106 9 500 Stamp Duties 101,276 105,537 4 261 Audlt 44,950 39,452 .. "5,498 Total—Finance 451,813 465,119 18,871 General Administration— ~ " — Public Service Commissioner's Office .. . 14 720 iq son , , Internal Affairs ii, 7 57 External Aflairs .. .. .. .. 201,329 207,797 6,468 Printing and Stationery .. .. .. 292,691 302 016 9 325 f a " ne 179,214 179,406 'l 9 2 ir? our 105,802 134,758 28,956 112,432 122,932 10 500 alu t atl0 f 55,607 49,069 .. ' ' 6 538 Electoral 105) 7 69 114;641 8;872 b '° 38 Census and Statistics .. .. .. 36,090 33,938 .. "2 152 Total—General Administration .. 1,591,758 1,658,008 76,070~ ~ Law and Order— Justice and Prisons 33 9;641 :t37, 0 71 .. 2 570 Crown Law Office 8,282 8,279 ' o Fohoe 621,000 607,390 " 13 ,610 Total—Law and Order .. .. 968,923 952,740 ~ 16~183 Defence— ~~ — ApZ 802,196 835,331. 33,135 y ' '• 703,904 706,753 . 2,849 1 " '• '• •• 493,900 557,205 63,305 .. Total—Defence .. .. 2,000,000 2,099,289 99,289 Maintenance of Public Works and Services .. 668,822 724,287 55 465

8.—6,

Tabl e 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, 1939 —ctd.

VIII

-»«■ i . , , v , Difference. Net Actual Net Appropriations, Expenditure, 1938-39. 1938-39. More _ Less . Annual Appropriations—continued. £ £ £ £ Vote —continued. Development of Primary and Secondary IndusLands and Survey .. .. -• •• 314,035 300,241 .. 13,794 Agriculture .. .. .. 966,113 1,078,426 112,313 Industries and Commerce, Tourist and Publicity 452,908 444,216 .. 8,692 Scientific and Industrial Research •. •• 157,015 158,785 1,770 Mines .. 38,000 33,716 .. 4,284 Transport.. .. .. 80,624 81,699 1,075 Total —Development ol Primary and 2,008,695 2,097,083 115,158 26,770 Secondary Industries Social Services— „ , Health .. . . . • . 1,379,011 1,362,757 .. 16,254 Mental Hospitals .. ■ •• 420,960 417,483 •• 3,4/7 Education 4,069,655 4,097,546 27,891 Pensions .. .. •• 6,911,235 6,933,819 22,584 National Provident and Friendly Societies 134,820 133,959 .. 861 Total —Social Service? * • 12,915,681 12,945,564 50,475 20,592 Unauthorized Expenditure,— Services not provided for • ■■ •• •• 374,580 374,580 Total —Annual Appropriations .. 20,735,147 21,440,105 j 790,157 85,199 800,019 827,838 800,019 Total Expenditure .. . . 35,800,497 35,772,678 .. 27,819

8.—6,

Table No. 10. Estimated Net Expenditure of the Ordinary Revenue Account for the Year ending 31st March, 1940, compared with Actual Net Expenditure for the Year ended 31st March, 1939.

ii—B. 6,

IX

Estimate Actual Difference. for for 1989-40. 1938-39. Increase . Decrease Permanent Appropriations, —■ £ £ £ £ Civil List .. .. .. .. .. 30,200 30,127 73 Debt services— Interest .. .. .. .. .. 8,036,380 7,500,515 535,865 Sinking Fund .. .. .. .. .. 10,859 10,859 Repayment of Public Debt .. .. .. 1,907,144 1,754,123 153,021 Administration and Management .. .. .. 67,100 50,311 16,789 Payments of Guaranteed Loans, Redemptions, and 500 Gr. 4,864 5,364 TrSrii sf 6r8 « ——————— — — . Total—Debt services .. .. .. 10,021,983 9,310,944 711,039 Under Special Acts of the Legislature — Highways .. .. .. .. .. 3,233,000 3,055,095 177,905 Exchange .. .. .. .. .. 1,500,000 1,422,085 77,915 Other Special Acts .. .. .. .. 345,991 514,322 .. 168,331 5,078,991 4,991,502 255,820 168,331 Total —Perman6nt appropriations .. 15,131,174 14,332,573 966,932 168,331 Annual Appropriations, — Legislative .. .. .. .. .. 109,995 98,791 11,204 Prime Minister's Department .. .. .. 26,000 24,644 1,356 Finance — Treasury .. .. .. .. .. 48,200 47,271 929 Customs .. .. .. .. .. 174,958 137,753 37,205 .. Land and Income Tax .. .. .. .. 158,000 135,108 22,894 Stamp Dufies .. .. .. .. .. 103,000 105,537 .. 2,537 Audit .. .. .. .. .. .. 42,979 39,452 3,527. . ... 527,137 465,119 64,555 2,537 General Administration — Public Service Commissioners'Office .. .. 14,500 13,590 910 Internal Afiairs .. .. .. .. .. 609,500 499,861 109,639 External Affairs .. .. .. .. 214,722 207,797 6,925 Printing and Stationery .. .. .. .. 298,000 302,016 .. 4,016 Marine.. .. .. .. .. .. 204,112 179,406 24,706 Labour .. .. .. .. .. 2,720,000 134,758 2,585,242 Native.. .. .. .. .. .. 529,990 122,932 407,058 Valuation .. .. .. .. .. 53,000 49,069 3,931 Electoral .. .. .. .. .. 14,000 114,641 .. 100,641 Census and Statistics .. .. .. .. 36,500 33,938 2,562 4,694,324 1,658,008 3,140,973 104,657 Law and Order — Justice and Prisons .. .. .. .. 303,000 337,071 .. 34,071 Crown Law .. .. .. .. .. 8,449 8,279 170 Police .. .. .. .. .. .. 625,000 607,390 17,610 936,449 952,740 17,780 34,071 D6f0HCC ■ ______ Navy .. .. .. .. .. .. 919,970 835,331 84,639 Army .. .. .. .. .. .. 1,594,468 706,753 887,715 Air .. .. .. .. .. .. 700,000 557,205 142,795 3,214,438 2,099,289 1,115,149 Maintenance of Public Works and Services .. .. 750,000 724,287 25,713 Development of Primary and Secondary Industries — Lands and Survey .. .. .. .. 323,996 300,241 23,755 Agriculture .. .. .. .. 1,002,500 1,078,426 .. 75,926 Industries and Commerce, Tourist and Publicity .. 370,300 444,216 .. 73,916 Scientific and Industrial Research .. .. .. 170,000 158,785 11,215 Mines .. .. .. .. .. .. 90,000 33,716 56,284 Transport .. .. .. .. .. 83,000 81,699 1,301 ! 2,039,796 2,097,083 92,555 149,842 Social Services — — — Health.. .. .. .. .. .. 1,537,000 1,362,757 174,243 Mental Hospitals .. .. .. .. 409,000 417,483 .. 8,483 Education .. .. .. .. .. 4,470,000 4,097,546 372,454 War and Other Pensions .. .. .. .. 2,080,000 6,933,819 .. 4,853,819 Social Security .. .. .. .. .. 2,000,000 . . 2,000,000 National Provident and Friendly Societies .. .. 117,467 133,959 .. 16,492 N 10,613,467 12,945,564 2,546,697 4,878,794 Services not provided for .. .. .. .. .. 374,580 j .. 374,580 ! Total —Annual appropriations .. .. 22,911,606 21,440,105 7,015,982 5,544,481 7,982,914 5,712,812 | 5,712,812 Totals .. .. 38,042,780 35,772,678 2,270,102 ..

8.—6

Table No. 11. PUBLIC WORKS FUND. Statement showing the Net Expenditure under Appropriations for the Year ended 31st March, 1939, compared with the Year ended 31st March, 1938.

X

Vnt. Year ended Year ende(i Increase Decrease Vote - 31st March, 1939. 31st March, 1938. increase. uecrease. 1 - £ £ £ £ Public Works, Departmental .. .. 216,016 186,955 29,061 Railway-construction .. 1,234,646 1,120,218 114,428 Railways Improvement and Additions to 2,563,436 1,292,772 1,270,664 Open Lines Public Buildings— 1 General .. .. .. .. 807,469 261,017 546,452 Courthouses .. .. .. 34,868 16,403 18,465 Education Buildings .. .. 660,666 546,846 113,820 Prison Buildings and Works .. 7,656 9,476 .. 1,820 Police-stations .. .. .. 77,745 11,086 66,659 Postal and Telegraph .. .. 280,951 248,145 32,806 Mental Hospital Buildings .. .. 128,839 125,829 3,010 Health and Hospital Institutions .. 88,099 15,747 72,352 Lighthouses and Harbour-works .. 33,850 11,677 22,173 Development of Tourist Resorts .. 24,552 23,159 1,393 ■ .. Roads,&c... .. .. .. 1,290,838 1,126,757 164,081 Telegraph Extension .. .. .. 575,944 312,261 263,683 Lands, Miscellaneous .. . 134,977 147,436 .. 12,459 Irrigation, Water-supply, and Drainage.. 164,481 71,659 92,822 j Swamp Land Drainage .. .. 5,325 19,402 .. 14,077 I Settlement of Unemployed Workers .. 344,684 310,665 34,019 Native Land Settlement .. .. 493,695 254,827 238,868 Dairy Industry Loans .. .. .. 4,565 .. 4,565 Totals, annual appropriations 9,168,737 6,116,902 3,084,756 32,921 Unauthorized — Services not provided for .. .. 75 1,128 .. 1,053 Totals .. .. 9,168,812 6,118,030 3,084,756 33,974 33,974 i | 3,050,782

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, 1939.

XI

WAYS AND MEANS. Loans :— £ s. d. £ 8. 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 Oj New Zealand Loan Act, 1886 .. .. .. .. 1,325,000 0 0 District Railways Purchasing Aots, 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 Land 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 .. 5,061,533 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 Aot, 1916 .. .. .. .. .. .. 1,000,000 0 0 Finance Act, 1917 .. .. .. .. .. 850,000 0 0 Finance Act, 1918 (No. 2) .. .. .. .. .. 2,500,000 0 0 Finance Aot, 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 .. .. .. .. .. 2,126,013 12 6 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 .. .. .. .. 3,000,000 0 0 Finance Act (No. 3), 1934, Section 2 .. .. . . .. 4,000,000 0 0 Finance Act (No. 2), 1936, Section 2 .. .. .. .. 6,000,000 0 0 Finance Act, 1937, Seotion 11 .. .. .. .. 6,000,000 0 0 Finance Act, 1938, Section 2 .. .. .. .. .. 1,041,923 15 II 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 Aocount .. .. .. 12,867 3 9 Improvement Authorization Act 1914 420,783 17 4 Account Native Land Settlement Aooount .. .. 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 Carried forward .. .. .. .. 128,237,011 2 2

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, 1939 —continued.

Table No. 13. Statement showing the Amount charged to "Unauthorized" in each Financial Year from 1st April, 1929, to 31st March, 1939.

XII

WAYS AND MEANS—continued. £ s. d. £ s. d. Brought forward .. .. .. ■■ 128,237,011 2 2 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, 187G .. .. .. 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 Aot, 1912 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 70,838 6 11 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 .. .. ■. 50,905 15 1 Settlement of Unemployed Workers .. .. .. .. 242,680 3 7 Receipts under Section 12 of Native Land Amendment Act, 1932.. 40,092 12 2 Agriculture (Emergency Powers) Act, 1934, Section 26 .. .. 3,546 14 9 Finance Act, 1932 (No. 2), Section 6 —- Transfer from Land for Settlements Account.. .. .. 2,704 19 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 Receipts under the Native Housing Act, 1935 .. .. .. 2,494 4 11 16,020,039 13 6 £144,257,050 15 8 NET EXPENDITURE. =========== Expenditure on— Immigration .. .. .. .. .. .. 3,312,661 4 5 Public Works, Departmental .. .. .. .. .. 3,596,456 2 1 Railways, including Surveys of New Lines and Payment to Midland 63,811,338 2 2 Railway Bondholders Roads 26,317,129 10 1 Land-purchases .. .. .. •• 2,148,248 8 2 Settlement of Unemployed Workers .. .. .. .. 1,411,850 14 5 Development of Mining .. .. .. .. .. 879,714 10 11 Telegraph Extension .. .. .. .. .. .. 12,876,634 0 4 Public Buildings .. .. .. .. •• .. 16,051,492 15 7 Lighthouses, Harbour-works, and Harbour-defences .. .. 1,368,472 0 1 Contingent Defence .. .. .. .. .. .. 1,389,488 7 10 Rates on Native Lands .. .. .. .. 68,671 16 10 Thermal Springs .. .. .. .. .. . • 14,599 13 2 Development of Tourist Resorts .. .. .. .. 781,636 6 0 Lands Improvement .. .. .. .. .. .. 1,247,341 5 7 Swamp Land Drainage .. .. .. .. .. 103,008 17 4 Plant, Material, and Services .. .. .. .. .. 138,655 10 7 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 .. .. .. .. .. 1,550,349 2 6 Motor Transport Service .. .. .. .. .. 33,635 5 3 Transfer to Main Highways Account, Construction Fund .. .. 1,226,000 0 0 Native Land Settlement .. .. .. •• .. 1,187,025 13 4 Dairy Industry Loans .. .. .. .. .. .. 46,124 13 0 143,618,176 11 3 Balance on 31st March, 1939 — Cash in the Public Account .. .. .. .. .. 610,029 4 5 Investments .. .. .. .. .. .. .. 28,845 0 0 638,874 4 5 £144,257,050 15 8

Consolidated Fond.—Bevenue Account. „ _ OTHF.K PURLIC WOMS ! Tn-r.T Financial Yeab. - Accounts. Fund. Total. Ser^Wea n for Pr0 ' Bxoess of "Votes. Total. £ s. d. £ a. d. £ s. d. £ s. d. £ s. d. £ s. d. 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 1 10 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 '> 126,457 14 3 139,803 19 3 108,641 5 3 13 18 5 248,459 2 11 1936-1937 .. 36,790 15 3 113,473 1 4 150,263 16 7 81,170 9 10 2,002 19 6 233,437 5 11 1937-1938 .. 88,65110 2 138,382 16 1 227,034 6 3 6,100 2 8 14,120 10 9 247,254 19 8 1938-1939 .. 374,579 19 8 1415,576 1 5 790,156 1 1 143,575 7 1 165,951 12 8 1,099,683 0 10

8.—6

Table No. 14. Statement showing the available Financial Resources of the various Accounts on the 31st March, 1939, as compared with the 31st March, 1938.

Table No. 15. PENSIONS. Statement of Amounts paid on Account of Pensions for the Financial Years ended 31st March from 1935 to 1939.

XIII

1939. 1938. Account. Balance Liabilities Balanc0 ! Liabilities I tor BXstMarch, SlstMarch, 3l8 t|a rch , J Slstgarch, Consolidated Fund — £ £ j £ £ £ £ Ordinary Revenue .. .. 2,539,854 664,306! .. 1,769,487 469,016 500,000 Public Works Fund — General Purposes .. .. .. 638,874 719,016 | 6,958,076 153,861 565,011 8,580,355 Electric Supply .. .. .. 15,927 131,174 1,127,590 63,055 133,788 1,517,590 Electric Supply Sinldng Fund .. | 10,321 .. .. 11,680 Bank of New Zealand Shares .. 1,859,375 .. .. 1,859,375 Employment Fund Promotion .. 207,544 178,516 .. 1,158,890 139,075 Iron and Steel Industry Account .. .. 2,348 5,000,000 .. .. 5,000,000 Land for Settlements .. .. 905,782 1,901 6,278,000 668,714 1,564 6,278,000 Loans Redemption .. .. .. 24,399 .. .. 859,624 Main Highways Account .. .. 164,788 395,886 1,200,000 62,265 316,135 2,375,600 Public Debt Repayment .. .. 3,263 .. .. 5,757 Reserve Fund .. .. .. 1,272,494 .. .. 1,241,075 Samoan Loan Suspense .. .. • . .. 4.800 .. .. 4,800 State Coal-mines .. .. .. 7,625 27,891 60,000 11,956 21,421 105,000 State Coal-mines Sinking Fund '11.767 .. .. 9,526 State Forests .. .. .. 52,724 19,137 985,225 92,891 11,390 210,225 Working Railways .. .. .. 270,096 427,834 .. 1,057,235 435,014 Housing Account .. .. .. .. 4,550,000 .. .. 4,550,000 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 .. .. .. 7,984,833 2,568,009 26,284,691 9,025,391 2,092,414 29,242,570

Year ended 31st March, 1935. 1936. 1937. 1938. | 1939. I. | I £ £ I £ £ £ War .. .. .. 1,264,110 1,349,447 1,483,345 1,597,524 1,616,248 Old-age .. .. .. 1,519,889 1,718,601 2,413,103 3,235,057 3,577,129 Widows' .. .. .. 296,565 311,864 412,280 471,287 487,216 Miners' .. .. .. 58,740 67,834 83,253 88,167 87,094 Maori War .. .. .. 3,607 2,577 1,972 1,806 1,338 Epidemic .. .. .. 1,983 907 253 14 Civil Service Act, 1908 .. 5,211 4,676 4,106 3,632 3,256 Defence Act, 1909 .. .. 2,084 2,127 2,067 1,991 1,905 Judicature Act, 1908 .. 2,682 3,222 2,753 2,111 1,852 Police .. .. .. 1,449 1,575 1,849 1,820 1,783 Blind .. .. .. 21,227 22,991 6,181 Family Allowance .. .. 152,818 149,043 130,730 106,402 84,436 War Veterans'Allowances .. .. 16,544 110,667 161,267 158,584 Sundry .. .. .. 7,989 8,256 9,290 8,623 8,755 Invalidity .. .. .. .. .. 278,579 632,829 750,748 Totals .. .. 3,338,354 3.659,664 4,940,428 6,312,530 6,780,344

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 1938-39.

Additional amounts are available from revenue from reserves vested in postprimary schools and University colleges as follows : — £ Post-primary schools .. .. .. 41,489 University colleges .. .. .. .. 16,211 £57,700 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 1936-37 .. .. •• •• •• 6,831 1937-38 .. .. .. •• •• 7,952 1938-39 .. .. .. 13,266

XIV

Loan-money: Erection Consolidated Fund. of School Buildings and Residences. p er Head Vote, Subsidies ° f Year ' „ • , National Kducation Revenue j T > Public Education PopulaSpecial Endow- (excluding from Teachers Workfj Loang £ Acts. ment Superannua- Reserves . Super- Fund AocoBnt . Revenue. tion animation Subsidies). Fund. £ £ £ £ £ £ £ £ £ s. d. 1913-14 27,742 50,681 1,131,756 71,808 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 I 11 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 1-921-22 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 1927-28 127,289 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 4+ 1936-37 95,526 3,348,449| 88,713 169,362 268,884 .. 3,970,984 2 10 3 1937-38 99,540 3,629,906§ 159,955 177,178 546,434 .. 4,613,013 2 17 1 1938-39 .. •• 101,721 4,052,582|| 107,559 167,064 660,480 5,089,406 3 6 9 * Net revenue after deducting expenses and cost of collection. t Includes £80 charged to "Unauthorized." % On census results. § Includes £11 charged to " Unauthorized." || Includes £3,072 charged to " Unauthorized £3,149 Miscellaneous Revenue not taken into account.

8.—6

Table No. 17. 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.

XV

Date Instalments paid. Interest. Principal. B outstanding 6 ' 50 £ £ £ 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 1st 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. tFollowing 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 1938-39.

8.-6

Table No. 18. PUBLIC DEBT. Maturity and Domicile of Debt outstanding, 31st March, 1939.

XVI

Date of Maturity. Due in j New Zealand. £otal , London. I Australia. ; 1 1st April, 31st March, | ■ ! rublic. | JJepartmental. £ ! £ I £ £ ! £ Overdue .. •• •• ; 4,265 .. 4,265 Treasury bills .. .. • • 16,100,000 425,000 16,525,000 19251 .. 1946 .. 2,090,909* .. .. 2,090,909 19381 1942 .. .. .. 2,812,380 357,176 3,169,556 1939 .. 1940 .. 17,173,191 .. 266,241 8,900 17,448,332 1939+ 1942 ..I .. .. 4,613,505 .. 4,613,505 19391 1943 .. .. .. ! 13,678,870 .. 13,678,870 1940 1941 .. .. .. 500,010 .. 500,010 1941 '' 1942 .. .. 17,300 37,000 .. 54,300 19421 .. 1946 .. 9,211,315 631,155 9,842,470 1942+ .. 1963 .. 1 10,505,989 .. 378,639 .. 10,884,628 1943 .. 1944 .. 7,339,656 .. .. .. 7,339,656 1944 .. 1945 .. 7,780,408; .. .. .. 7,780,408 1945 .. 1946 .. 22,543,590! .. 2,500 .. 22,546,090 1946 .. 1947 .. .. .. 469,340 1,192,743 1,662,083 19461 1950 ..' .. .. 8,322,900 642,885 , 8,965,785 1947 " 1948 .. 11,341,609 83,300 1,676,650 2,301,600 15,403,159 1947+ •• 1958 .. 19,225,465 .. .. .. 19,225,465 1948 .. 1949 .. .. .. •• 10,500 10,500 1948+ 1954 .. 5,000,000 .. .. .. 5,000,000 1949 .. ! 1950 .. 7,500,000 .. .. .. 7,500,000 19491 .. 1953 .. .. .. 12,484,910 .. 12,484,910 1950 .. 1951 .. 1,250,000 779,000 250,000: .. 2,279,000 1952 1956 .. 12,000,000| .. 7,979,000$ 1,424,265$ 21,403,265 19521 1957 .. .. 6,810,060 2,183,565 8,993,625 1955 1956 .. .. .. 750 461,700 462,450 1955+ 1961 .. 3,989,100 .. .. .. 3,989,100 1956 .. 1957 .. 12,900 .. 2,710 2,439,204 2,454,814 1956+ 1972 .. 5,000,000 .. .. .. 5,000,000 1957 1958 .. 10,550 21,199,195 21,209,745 1958 " 1959 .. .. 2,000 17,799,947 17,801,947 1959 1! I960 .. .. .. .. 9,546,226 9,546,226 8 1946 .. 577,446§ .. .. .. 577,446 § 1958 .. 23,522,753§ .. .. •• 23,522,753 Totals .. .. 156,853,016 879,600 85,613,595 60,624,061 303,970,272 * Advances by Imperial Government for State Advances purposes. + Government has option to redeem at par on or after the earlier date on giving notice in the London Gazette. { Government has option to redeem on or after the earlier date on giving three months' notice in the New Zealand Gazette. § Imperial Government advances funded in terms of section 8, Finance Act, 1922. Payments at present suspended

8.—6

Table No. 19. 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 1931 to 1939 (excluding Specie).

Table No. 20. IMPROVEMENT IN ECONOMIC CONDITIONS. Table of Miscellaneous Statistical Information (on a March Year Basis) showing the Most Recent Figures compared with 1934-35, 1935-36, and the Lowest Point in the Depression.

iii—B. 6.

XVII

Exports, Imports. Excess of Exports. Year ended 31st March, ! AT ~ i , „ New Zealand' Sterling Zealand Full OnNew On Sterling Currency. Equivalent. Currency Sterling Zealand Cur- B as ; g Equivalent. Equivalent, rency Basis. £ (000) £(000) £ (000) £(000) £(000) £(000) 1931 •• •• 39,527 37,198 39,833 37,656 -306* -458* ]932 .. .. .. 33,943 30,857 24,761 22,510 9,182 8,347 1933 .. .. .. 37,510 32,677 25,059 22,049 12,4-51 10,628 1934 •• •• 46,043 36,834 26,136 20,908 19,907 15,926 1935 •• 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 | 937 •• •• •• 60,234 48,381 47,621 38,250 12,613 10,131 1938 •• •• 65,008 52,215 58,065 46,638 6,943 5;577 1939 •• •• 57,867 46,415 54,408 43,657 3,459 2J58 I * Excess of imports

Lowest Figure. J 1934-35. 1935-36. Latest Figure. Unit. | " " r— 4 —I 1 Amount, Amount. Amount, gfAmount. Value of total production .. .. £(m.) 1932* 83-6 1935* 97-0 1936* 114-2 1938* 135-6 Value of farm production .. .. „ 1932* 49-2 1935* 59-2 1936* 7<>-5 1938* 83-1 Value of factory productionf .. „ 1933* 17-7 1935* 20-7 1936* 93-2 1938* 30 0 Aggregate private income .. .. „ 1933 91-2 1935 104-4 1936 121-3 1938 167-0 Salaries and wages payments .. „ 1933 58-9 1935 65-7 1936 72-5 1939 109-5 Gross farming income 1933* 37-9 1935* 46-1 1936* 57-8 1938* 67-8 Exports exc udmg specie) 1932 33-9 1935 44-9 1936 49-7 1939 57-9 Imports (excluding specie) „ 1932 24-8 1935 32-6 1936 37-4 1939 54-4 Bank deposits (excluding Government) „ 1932 51-0 1935 62-3 1936 62-1 1939 fid 1 Bank debits (excluding Government) „ 1933 539-7 1935 660-3 1936 732-8 1939 937-^ Net bank-note circulation .. .. „ 1932 5-8 1935 6-3 1936 6-6 1939 10-4 Building permits issued in larger centres— Total value .. .. .. 1933 2-1 1935 3-1 1936 5-0 1939 10-0 Dwellings .. .. .. Number 1933 997 1935 2,173 1936 3 181 1939 fi 322 Mortgages registered .. .. £(m.) 1934 7-8 1935 11-8 1936 16-2 1939 20-1 Mortgages discharged 1933 8-1 1935 13-7 1936 17-6 1939 16-6 Land transfers „ 1934 9 . 6 1935 12 . 2 1936 lg . 6 Totahsator investments 1933 3.3 1935 3 . 9 1936 4-g M <"» • •• iM5 « 1528 »« «-* »>•» New deposits .. £( m .) 1933 16-9 1935 24-2 1936 25-6 1939 30-4 Amount to credit of depositors .. „ 1933 42-0 1935 49-4 1936 52-9 1939 60-7 Sales-tax collected , 1934 !. 8 1935 2 . 2 1936 2 . g ' Electric-power units supplied .. Million 1932 361-6 1935 591-3 1936 649-6 1939 1 029-2 Railways: Net ton-miles run .. „ 1933 363-4 1935 419-7 1936 443-6 1939 574-5 Shipping: Manifest tonnage .. „ 1934 5-7 1935 6-3 1936 6-7 1939 8-2 Motor-vehicles licensed .. Number 1933J 195,019 1935{ 209,462 1936J 228,247 1939J 307 931 Consumption of motor-spirit (gallons) Million 1932§ 55-4 1934S 62-1 1935s 69.3 iqqqs o« q Total factory employees .. .. (000) 1934 86-0 1935 93-6 1936 102-3 1939 123-7 Index-numbers of— ' Export prices (1909-13 = 1000) .. Number 1932§ 892 19348 1109 19358 1102 l<ms 1W7 «e Juices (1909 -13 = 1° 00) „ 1932I 1297 19341 1330 111% m5 llsf llTi Food groups (1926-30 = 1000) .. „ 1933§ 732 1934? 774 19358 835 19388 991 w4Lfates- <1926 " 30 = 10 ° 0) '• " 1933§ 795 808 1935§ 83? llgf 95^ Nominal (1926-30 = 1000) .. „ 1933§ 833 1934§ 839 19358 858 19388 1 081 Effective (1926-30 = 1000) .. „ 1932§ 1031 1934§ 1038 19358 1 025 1938S H37 Share prices (1926 = 1000) .. „ 1932§ 703 19348 960 1935§ 1026 193sf 916 * Year ended 30th June. f Does not include factory processing of primary products. J As at end of March. § Calendar year.

8.—6

Copy of Prospectus of 1939 Internal Loan. Dominion of New Zealand. NEW ZEALAND GOVERNMENT LOANS. Interest payable 31st May and 30th November. Issue of £4,500,000 in either op the following forms : — £4% Stock repayable 31st May, 1954/1958. £4% Stock repayable 30th November, 1948. First interest payment 30th November, 1939, on— First interest payment 30th November, 1939, on— Fully-paid allotments . . £2 os. 0d.% Fully-paid allotments .. £2 os. 0d.% Instalment allotments .. £1 10s. 6d.% Instalment allotments . . £1 10s. 6d.% Price of issue : £96 per cent. Price of issue : £99 per cent. Payable as follows : — Payable as follows :—• 1. For fully-paid allotments— 1. For fully-paid allotments— On application .. .. .. £96% On application .. .. £99% 2. For instalment allotments— 2. For instalment allotments— On application . . .. .. £10% On application .. .. £10% On Friday, 30th June, 1939 .. 40% On Friday, 30th June, 1939 .. 40% On Friday, 4th August, 1939 .. 46% On Friday, 4th August, 1939 .. 49% £96% £99% Authorized to be raised in accordance with the provisions of the New Zealand Loans Act, 1932, ivhereby the interest and principal are a direct charge upon the public revenues of the Dominion. Trustees may invest in either of the above-mentioned Loans under the powers of the Trustees Act, 1908, unless expressly forbidden in the instrument (if any) creating the Trust. The Reserve Bank of New Zealand gives notice that, on behalf of the Minister of Finance, it is authorized to receive applications for New Zealand Government Loans as above. If not previously redeemed, the £4 per cent. Loan, 1954/1958, will be paid off at par at the Reserve Bank of New Zealand on the 31st May, 1958 ; but the Minister of Finance reserves the right to repay at par at any time on or after the 31st May, 1954, on giving three months' notice, in the New Zealand Gazette, of his intention to repav. If the market selling price of the £4 per cent. Loan, 1954/1958, falls below the price of issue, namely £96 per cent., sums will be made available annually, as required, up to a total of 5 per cent, of the amount of the Loan outstanding at the end of the previous financial year, for the purchase for cancellation of such stock on offer below that price. If not previously redeemed, the £4 per cent. Loan, 1948, will be paid off .at par at the Reserve Bank of New Zealand on the 30th November, 1948. Stock of the £4 per cent. Loan, 1948, which has been in the beneficial ownership of a holder for a period of at least six months prior to death, will be accepted at par at any time before maturity in payment of death duties in respect of that person's estate. The proceeds of the issue are to be utilized for Public Works and. general developmental purposes, including capital expenditure on defence works. The ultimate repayment of the Public Debt of the Dominion is, in the main, provided for under the Repayment of the Public Debt Act, 1925, in pursuance of which New Zealand's Debt reduction resources shall be applied in the purchase and redemption of New Zealand Government securities at or before maturity. 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 of the Debt paid off under this scheme. The Repayment of the Public Debt Act applies to the major portion of the Dominion's Debt, certain loans for which adequate sinking fund provisions are specifically provided, and also the portion of New Zealand's War Debt funded with the Imperial Government, having been excluded from the Debt Repayment Scheme. Securities.—On surrender of fully-paid Allotment Letters on or after the 4th August, 1939, New Zealand Government Stock will be issued in either of the following forms as applicants may direct: — (1) Registered Stock transferable by Memorandum of Transfer. (2) Stock Certificate(s) to bearer with coupons annexed. Registered Stock will be convertible into Stock Certificates to bearer, and Stock Certificates will be convertible into Registered Stock, without payment of any fee. Transfers. —The Register of Stock will be kept at the Reserve Bank of New Zealand, Wellington, where transfers will be registered without payment of any fee. Stock will be transferable in amounts of £5 or multiples thereof.

XVIII

8.—6

Stock Certificates (until the name of some person is inserted therein as the holder) are transferable by delivery. Certificates of Title.—Certificates of Title evidencing ownership of the stock to which they relate will be issued, without payment of any fee, to holders of Registered Stock in either the £4 per cent. Loan 1954/1958, or the £4 per cent. Loan, 1948. Interest. —Interest will be payable half-yearly on the 31st May and the 30th November. A full half-year's interest will be paid on the 30th November, 1939, on fully-paid allotments of both Loans. A first payment of £1 10s. 6d. per cent, on instalment allotments will be made on the 30th November 1939. Interest on Registered Stock will be paid free of inland exchange by means of interest warrants, which will be transmitted by post at the risk of the stockholder. The Reserve Bank of New Zealand will accept directions from stockholders for payment of interest to any agent in the Dominion; existing instructions for the payment of interest in the Dominion on New Zealand Government Stock will obtain in respect of these Loans. Interest on Stock Certificates to bearer will be paid free of inland exchange by means of coupons annexed to the Certificates. Interest coupons may be presented at the Reserve Bank of New Zealand, Wellington ; at any branch of the Bank of New Zealand in the Dominion ; or at any Postal Moneyorder Office in New Zealand. Stamp Duty.—Stock of this issue will be exempt from Stamp Duty on the transfer thereof otherwise than by way of gift. Minors— Any person of the age of ten years or upwards may be registered as the holder of Stock and may execute transfers thereof. Exchange on Remittances.—Cheques in payment of allotments will be accepted free of inland exchange. Applications.—Applications, on the prescribed form, will be received at the Reserve Bank of New Zealand, Wellington ; at any branch of the Bank of New Zealand in the Dominion, or at any Postal Money-order Office in New Zealand. Applications must be for sums of £10 or for a multiple thereof. Applications for Fully-paid Allotments of the £4 per cent. Loan, 1954/1958, must be accompanied by a remittance of £96 per cent, of the nominal amount applied for, and applications for Fully-paid Allotments of the £4 per cent. Loan, 1948, by a remittance of £99 per cent, of the nominal amount applied for. In the event of partial allotment, the balance of the amount paid on application will be refunded to the applicant on allotment. Applications for Instalment Allotments must be accompanied by a deposit of £10 per cent, of the nominal amount applied for. If partial allotment is made, the balance of the deposit paid on application will be applied towards the payment of the instalment due on the 30th June, 1939 ; any surplus remaining after making that payment will be refunded to the applicant on allotment. In case of default in the payment of any instalment at its proper date, the deposit and any sum previously paid will be liable to forfeiture and the relative allotment to cancellation. Commission at the rate of ss. per £100 stock will be allowed to bankers and registered sharebrokers on allotments made in respect of applications bearing their stamp. Copies of this Prospectus and forms of application may be obtained at the Reserve Bank of New Zealand, Wellington ; at any branch of any Bank in the Dominion ; at any Postal Money-order Office in New Zealand ; or from members of any Stock Exchange in the Dominion. The list of Applications will be opened forthwith and will be closed on or before Wednesday, the 31st May, 1939. Reserve Bank of New Zealand, Wellington, 15th May, 1939.

Authority: E. V. Paul, Government Printer, Wellington.—l 939.

XIX

Explanatory Note on Omission of B. 7 and B. 7a (Appropriations chargeable on Consolidated and Public Works Funds and other Accounts). The appropriations chargeable on the Consolidated Fund and on the Public Works Fund and other accounts have prior to the year 1939-40 been published in the Appendices under the description 8.-7 and 8.-7 a respectively. The appropriations are compiled from the estimates of expenditure chargeable on the respective funds or accounts which have been submitted to and passed by the House. The estimates consist of the main estimates and the supplementary estimates. For reasons of economy the appropriations have not been printed separately. If it is desired to ascertain the amount appropriated for any particular item of the estimates, there must be added to the amount shown on the main estimates the amount, if any, for the same item shown on the supplementary estimates. The total amount appropriated for each vote on the estimates as opposed to the separate items of the vote (e.g., Vote " Legislative ") is shown in the summary published in the supplementary estimates. For the separate items, however, both main and supplementary estimates must be consulted. The estimates for the Consolidated Fund and for the Public Works Fund are shown separately. The same relative order is maintained in the supplementary estimates as in the main estimates.