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INDEX
PAGE Aid to Britain .. .. .. 6 Consolidated Fund .. 10, 15 Debt Transactions, 1948-49 .. 23 Defence Programme .. 12 Development Requirements .. 27 Estimates for 1948-49 Consolidated Fund .. .. 11 National Development .. .. 21 Social Security .. .. 16 European Recovery Programme . . 4 Exchange and Import Regulation . . 9 Expenditure— Consolidated Fund .. 12, 15 Social Security Fund .. .. 16 Financial Policy .. .. .. 10 Geneva Trade Agreement .. . . 2 Gold Duty .. .. .. 29 Havana Charter .. .. 2 Housing .. .. .. 21 Hydro-electricity .. .. .. 21 Immigration .. .. .. 19 Income-tax Rebate .. .. 30 Increased Production .. . . 30 Internal Economic Conditions .. 25 International Situation .. .. 3
PAGE Loan Maturities .. .. 23 Loan Requirements .. 21 Long-term Contracts .. 7 National Development Programme .. 21 National Income Statistics .. 24 National Savings .. .. 28 New Zealand Balance of Payments .. 8 Other Votes .. .. ..14 Overseas Passenger Tax .. 30 Prospectuses for Loans .. xxii, xxiv Public Debt .. .. .. 22 Receipts, Consolidated Fund 11, 15 Rehabilitation .. .. 18 Sales Tax on Motor-omnibuses .. 29 Savings, Importance of .. 28 Social Security Fund .. 16 Stabilization Subsidies .. .. 14 State Coal-mines .. .. 21 State Forest Finance .. .. 14 Sterling Area .. .. 5 Tables .. .. .. i-xxi Taxation Adjustments .. .. 29 Tourist and Health Resorts .. 20 United Kingdom Position .. 5 War Expenses, 1948-49 .. .. 18 War Expenses Account .. 17
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1948 NEW ZEALAND
FINANCIAL STATEMENT (In Committee of Supply, 19th August, 1948)
By the Right Hon. Walter Nash, Minister of Finance Mr. Chairman, —• I think that most, if not all, of us had hoped that by this time, some three years after the cessation of hostilities in the Second World War, the shadows and many of the economic effects of war, would have largely passed by. Unfortunately, that is not so. At a time when many millions of men are reported to be still under arms in various countries of the world, when the United States Congress has voted greatly increased funds for air armaments, and when international relations are so unsatisfactory as they have been and are in Berlin, we can hardly claim to have passed from beneath the shadow of war. The financial aspect of our own relatively minor precautions is brought home to us when we compare this year's estimated provision of £11,666,000 for the Army, Navy, and Air Force votes (apart from £1,700,000 set down for the cost of J Force) with the total of £2,000,000 provided in the estimates of ten years ago. Nor do the shortages of materials and labour, the difficulties and inflated prices of imports, and the insistent and continued demand for our exports permit us to forget that the effects of war do not end with the formal cessation of hostilities. If any further financial reminder is required it is only necessary to consider the growing bill for pensions and the large part, some £211,000,000, of our public debt which was raised to meet portion of the cost of the 1939-45 war.
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The outstanding characteristics of our present economic situation are therefore still largely due to war, and may be summarized as follows: Ample markets for our produce. Full employment. National income greater than the available supplies of goods and services. Excessive pressure on prices. These are very important economic phenomena, and for that reason I propose to take up later some part of the time of the House in examining their effect on the national welfare and in considering and explaining what are the best financial decisions that can be taken in the interests of New Zealand to provide not only for maintenance, but also for improvement of our standard of living. We have had in the past many anxieties as to markets and fluctuations of prices, but the long-term meat and dairy-produce agreements which have just been concluded with the Government of the United Kingdom will help to provide, in respect of those commodities at least, for stable conditions during the next seven years. It is a pleasure to express appreciation of the work of the representatives of the Dairy Products Marketing Commission and of the Meat Producers' Board with Mr. B. C. Ashwin, Secretary to the Treasury, in the result of the negotiations recently completed in London. Whilst the agreement will make a major contribution to the economy and welfare of the United Kingdom it also provides security of markets for our butter, cheese, and meat, which mil be very helpful in the difficult years ahead. New Zealand has, despite a war effort that ranks proportionately with that of the best, fared comparatively well during the past ten years and can be included among the more fortunate nations of the world. A large part of her national income arises, however, from sales to overseas countries, and a similarly large part of her national expenditure is devoted to imports and to settlement of overseas obligations. For these reasons New Zealand must inevitably be affected directly and strongly by international trends in regard to demand, supply, and prices and cannot afford to ignore proposals for international collaboration and agreement in matters pertaining to trade and employment. Geneva Trade Agreement and the Havana Charter An outstanding feature in international economic affairs in the past year is the completion of the text of the Havana Charter for an International Trade Organization and the provisional application by a large number of important trading nations of the General Agreement on Tariffs and Trade made at Geneva. The House has already approved the Geneva Agreement, which embodies the principal
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provisions of the Havana Charter. The Geneva Agreement and the subsequent text authenticated at Havana have their origin in the Atlantic Charter of 1941, which stressed the desirability of international co-operation for economic advancement, this objective being again expressed in greater detail in the Lend-Lease Agreement of February, 1942. In furtherance of this ideal the United States Government issued in December, 1945, its " Proposals for an International Trade Organization," which were then considered at a series of three conferences attended by seventeen countries held in London, New York, and Geneva between October, 1946, and August, 1947. At Geneva negotiations for tariff reductions by all countries represented there were completed and embodied in the General Agreement on Tariffs and Trade. The Havana Conference, at which fifty-eight countries were represented, met for four months from November, 1947, to March, 1948. An enormous amount of effort, much of it expended by very able statesmen, administrators, and economists, is represented in these agreements. No one, and least of all any delegate at the Havana Conference, would claim that the world has in these documents provided the cure for all its present economic ills, which will require other more dynamic means to ensure speedy recovery. Nevertheless, the operation of the provisions of the Havana Charter and a faithful observance of its principles will be an important step towards future avoidance of those severe depressions and economic hardships largely brought about and always increased by unilateral restrictive measures, which so often occurred in the past and especially in the period between the two world wars. The major value of the Havana Charter will develop only over a period of years. The true significance of Havana, as I see it, lies in the fact that it concluded a series of conferences which have produced the broadest international economic agreement of all time, combining satisfactorily all shades of national economic outlook and a recognition of the needs of countries in all stages of economic development. International Situation The pattern of international trade since the war has brought clearly into view the extent of the grave economic dislocation arising from the severe physical destruction and social distress of six years of world-wide conflict. Not all countries suffered in the same way or to the same extent. Balances of trade with individual countries which had previously been favourable became unfavourable, pre-war markets disappeared with lowered standards of living, and pre-war sources of supply were disrupted. This grave diversion of trade from the pre-war pattern within Europe and the resulting uncertainty as to the future has accentuated balance-of-payments problems.
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Balances arising from trade are normally cleared through, the international exchanges, but at the present time many countries have an unfavourable over-all balance of payments on current account and, by reason of war, small reserves on which to draw. The majority of European countries are short of dollars and each country is pressing other countries of whose currencies it may have a surplus to convert that surplus into dollars. The fear of being called upon to convert currency arising from an adverse balance of trade has resulted in further limitations being placed on the demand for goods from other countries. This limitation of demand seriously affects production. Exchange difficulties of the type I have mentioned are not by any means limited to Europe, but are merely more marked there because of the already serious economic situation on which they are superimposed. The exchange problem reached a most serious stage when the United Kingdom was forced in August, 1947, to suspend convertibility of sterling into dollars. Up to that time other countries' holdings of convertible sterling had been kept at the lowest possible level by mutual agreements and by exercising governmental influence on the flow of trade. Despite these arrangements the ability to convert into dollars or other currencies any net sterling earned in the course of trade led to such an alarming drain on Britain's own reserves of dollars that, failing the suspension of convertibility, the reserves would have been exhausted in about six months. Since the suspension of sterling convertibility, the system of bilateral exchange and trade agreements which was already fairly well developed between European countries has been greatly extended. The object of these bilateral exchange agreements is generally to provide that both parties will agree to hold the currency of the other up to certain limits without requiring conversion. Until the favourable balance of one party to the transaction reaches the stipulated figure trade can proceed freely between the contracting countries, and in this way a reasonable freeing of channels of trade has been achieved, to the advantage of all countries. This system of bilateral agreements is regarded as a stage in progress towards multilateral world trade. European Recovery Programme The next stage—a stage of regional multilateralism —is just commencing. The sixteen nations of Western Europe who are to benefit under the European Recovery Programme, popularly known as E.R.P. or Marshall Aid, are taking active steps to ensure the removal of barriers to trade between them and achieve orderly economic development. Recognizing the urgent need of these countries for outside assistance, the United States is to finance under the programme the supply of commodities essential to their economic recovery.
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The European Recovery Programme in its final form leaves considerable discretion to the Administrator, Mr. Paul Hoffman, in its operation. Details are at present being worked out, but it appears that the bulk of the assistance will take the form of United States exports. " Off-shore " purchases (that is, purchases made in other countries) may be paid for with dollars provided by the United States, subject to the consent of the Administrator. The assistance is being given as grants or loans, the proportions of each being left to the decision of the Administrator and his Advisory Council. Participation is conditional on the country concerned entering into an agreement with the United States as a basis for economic co-operation. This great and generous Programme, which is equalled in its conception and vision only by the mutual aid provided under the Lend-Lease Act of 1941, demonstrates the liberal economic policy of the United States and augurs well for the future of international economic co-operation. Sterling Area The sterling area provides an outstanding example of an efficient trade and payments system. New Zealand is fortunate in being a member of the sterling area, and therefore able to trade over a large part of the globe, without being limited in her purchases from any other sterling country by ability to export to that country. The centre and strength of the sterling area is the United Kingdom, in whose well-being we have a vital economic interest. United Kingdom Position In acting as banker for the sterling area, and in financing, through convertibility of sterling into dollars, a substantial proportion •of the dollar deficit of the rest of the world, the United Kingdom has since the war faced international financial problems of unprecedented magnitude. In circumstances of extreme difficulty the United Kingdom accepted, in December, 1945, a loan from the United States of 3,750,000,000 dollars and a loan of 1,250,000,000 dollars, from Canada. By her own efforts, supplemented by these borrowed moneys and by drawings on the International Monetary Fund, the United Kingdom has financed a net drain on the total reserves of the sterling area of £(stg.) 226,000,000 in 1946 and £(stg.) 1,023,000,000 in 1947. Last year Britain's deficit on overseas trade and earnings was £(5tg.)675:,000,000. Members of the British Commonwealth, other than the United Kingdom and the colonies, are not eligible for Marshall Aid, and it is recognized that non-European countries within the sterling area have some responsibility to assist the recovery programme. It would handicap rather than help recovery if they should endeavour to overcome their own dollar deficits by the diversion of goods to dollar countries. Therefore the dollar requirements
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of the sterling area for essential commodities are an important element in the whole problem, and ways and means of dealing with it are under consideration. It is clear that the only real and permanent solution is a development of world trade on a multilateral basis as envisaged in the Havana Charter. Aid to Britain In order to render the maximum assistance possible to the United Kingdom, the Government, in August and September of last year, invited some three hundred persons, representative of all sections of the community, to assemble in Wellington and discuss ways and means to conserve dollars, to avoid waste, to facilitate the despatch of produce to the United Kingdom, and to increase production, particularly in the primary industries. At the same time the United Kingdom requested New Zealand to endeavour to limit payments for imports and other overseas transactions to our current receipts of foreign exchange from exports and other sources. This request was designed to free the United Kingdom from being called upon to export to us goods which did not earn current imports for herself so that she might employ the productive effort thus released in the production of goods for export to other countries, particularly in hard-currency areas. This objective has been an over-riding factor in determining our external trade policy this year, and it seems that, apart from debt-repayment transactions, the objective mil be substantially achieved. At the same time we have adopted the utmost economy in the expenditure of dollar funds. I would like at this stage to emphasize that the need for Aid to Britain is just as important to-day as it was a year ago, and will continue to be of vital importance to New Zealand until Britain is over her present difficulties, which may require a longer period than most people realize. The successful rehabilitation of the British economy depends in large measure on the success of the European Recovery Programme. There is no need for me to reiterate how much New Zealand's economy is dependent on prosperity in Great Britain, but I feel that the point cannot be emphasized too often. Therefore, New Zealand must, in turn, be prepared to support the European Recovery Programme because its success is vital not only to the economic recovery of the world in general, but also to the prosperity of our principal customer and the major supplier of our imports. We may be called upon to assist the plan generally by foregoing in some part certain commodities which will have to be diverted to European countries to assist their reconstruction. We can assist Britain actively, and through her the other countries of Europe, by increasing our exports of primary produce.
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Only when the European Recovery Programme has done its work may we look forward to a stage when the nations of the world, co-operating within the framework of the International Trade Organization, can achieve a full measure of productivity and international exchange of commodities which is essential to a general improvement in standards of living and the attainment of lasting peace. Long-term Contracts The Dairy Products Marketing Commission, continuing the wartime policy of the Government, has recently entered into a new contract, covering seven years' dairy exports, with the United Kingdom Ministry of Food, and a contract for the same period has been arranged between the two Governments with respect to meat. The price fixed for the first year for butter is 2355. sterling per hundredweight and the price for cheese is 1335. sterling per hundredweight, representing in both cases an increase of approximately 15 per cent. over the previous season's prices. The meat prices for 1948-49 have been advanced by 18 per cent, over the prices in the 1947-48 season. The contracts provide for the sale to the United Kingdom of our export surplus subject to availability of quantities which may be required to maintain New Zealand's connections with other markets. The prices to be paid under both dairy and meat contracts are subject to annual negotiation, but a limit of 7f per cent, is set on the price movement up or down in any one year. I have already stressed the vital interest New Zealand has in assisting in every possible way the economic recovery of the United Kingdom. The long-term contracts recently concluded will make a substantial contribution to this end, for they guarantee to the United Kingdom the supply of a substantial proportion of her requirements of imported foodstuffs. Furthermore, the long-term market and stability of price which the new contracts provide are specifically designed to give confidence to our farmers in taking steps to expand production l . An undertaking to the United Kingdom Government has been given to endeavour to increase production and in particular, in the case of meat, to aim at a target of 50,000 tons additional production by 1955. Such expanded exports will not only aid Britain by adding to the food-supply of her people, but also will increase New Zealand's export receipts (and thus our ability to import) and afford obvious benefits to individual farmers and to the community generally. At the same time the United Kingdom Government has indicated its intention of doing everything possible to supply New Zealand with adequate quantities of commodities essential to our economy, and particularly to facilitate measures to ensure availability of tractors, fencing-wire, and other equipment toour farming industry.
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New Zealand Balance of Payments A stable long-term market for our exports does not solve all our external problems. Because of our high per capita level of overseas trade, the economy of New Zealand, and thus the standard of living of our people, is highly susceptible to variation through changes in the prosperity of the rest of the world. If New Zealand's exports receipts were reduced the guaranteed price system would, where applicable, ensure the maintenance of farmers' incomes and prevent depression spreading from this source, while other internal government action could be taken to ensure the maintenance of a high level of employment. Our ability to import a large quantity of goods may, on the other hand, be impaired by reduced export receipts, by an increase in prices of the goods we desire to purchase, or by lack of dollars and other currencies preventing or restricting us from purchasing imports in the best markets. The Government has sought to provide against the possibility of a falling off in export receipts by the long-term bulk-purchase contracts with the "United Kingdom for meat and dairy products. The tendency for our imports to increase in price and the fundamental unbalance of international trade which is reflected in the world dollar shortage are, however, factors which we must accept; and though we may cushion their effect on our economy, we cannot, except by increased production in New Zealand, prevent shortages. New Zealand's balance of payments transactions are estimated for the calendar year 1948 as follows: Receipts £(NA) Butter . . . . .. . . . . 37,000,000 Cheese .. .. .. .. . . 13,000,000 Meat .. .. . . .. .. 30,500,000 Wool .. .. .. .. .. 37,250,000 Other exports .. .. . . .. 25,000,000 Other than for exports .. . . . . 32,000,000 Estimated receipts .. . . £174,750,000 Payments £(rz>) Licensed imports . . .. .. .. 120,000,000 Government imports for Government use . . 13,000,000 " Government imports for public use .. .. 8,500,000 Debt services .. .. .. . . 4,000,000 Other Government requirements .. . . 11,500,000 All other payments .. . . .. 25,250,000 Estimated payments .. .. £182,250,000
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Eeceipts from exports are being well maintained, the estimated figure being £(N.Z.) 13,750,000 ahead of the actual receipts for 1947. Other receipts at £(N.Z.) 32,000,000 are running at a high figure, but an appreciable portion of this item is represented by incoming transfers of capital sums, so that it would be unwise to expect the present level to be maintained. Government imports of goods for use on Government works and services, at £(N.Z.) 13,000,000, are approximately the same as last year. Government imports of goods for public use provide for such items as tea, wheat, egg-pulp, and citrus fruit. The heading ■" Other Government Requirements " comprises various items such as settlement of war claims and payment for naval and other vessels, together with legation, immigration, and other international expenses. The main item on the payments side is for licensed imports, which, at £120,000,000, is £5,000,000 more than last year and considerably more than double the expenditure on imports in 1938, when all imports, including Government, amounted to £55,000,000. Against the overseas balances we still have a very large backlog of capital expenditure for farming, secondary industry,, hydroelectric, and other public works, as well as requirements for the homes of our people. This backlog was created during the war, and in part still remains owing to non-availability of many classes of goods. Overseas balances at the end of July amounted to £(N.Z.) 92,000,000. It is vital to our economy that our wartime accumulation of sterling should not be unduly reduced until we have provided for these deferred capital and maintenance needs. While in 1948 we have therefore sought to limit current expenditure of overseas funds to our current receipts so as to aid Britain's recovery we must continue import control to ensure so far as possible that the most important things come in first. Exchange and Import Regulation The administrative machinery built up during the war for exchange and import regulation will have to be maintained to ensure the best use of our resources. The import policy will be directed towards securing an adequate supply of essential commodities and in particular materials and equipment for primary producers and manufacturers. Any funds available for imports after these needs have been met will be used as far as is necessary to improve our living standards. An over-riding factor in the administration of both import and exchange control is the need to conserve both United States and Canadian dollar funds. Out of an estimated dollar expenditure in the calendar vear 1948 of $76,700,000 New Zealand will have directlv earned $41,200,000, and the balance of $35,500,000 will be required from the sterling-area pool. I have already mentioned the problems
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faced by Britain through her shortage of dollar funds, and it is therefore apparent that we must exercise greater restraint in making calls on the already inadequate supply, even though this may cause delay in the importation of many highly desirable commodities. Financial Policy I hope I have thus far conveyed to members some conception of the surrounding economic circumstances within which New Zealand must make her decisions as to fiscal policy, as to increasing or reducing individual purchasing-power, and as to altering existing taxation and financial conditions. I propose at a later stage to go further into: the more local questions of capital development, the supply of savings for that purpose, and the general situation as to money-supply and the trend of national income as against available goods and services. First, however, I think it would be desirable to give particulars of the public accounting results for the past year, together with some comment on more outstanding aspects of the many transactions which go to produce those results. Members who desire the full detail will find them in the certified and audited statement of Public Accounts known as B-l [Pt. I], which has already been laid before the House. The first and most important of the Public Accounts is, of course,, the Consolidated Fund. CONSOLIDATED FUND The revenue of the Consolidated Fund reached the figure of £117,116,000 or £7,256,000 in excess of the revised Budget estimate. Nearly all headings of revenue showed an increase, particularly large increases being Customs, £3,091,000; income-tax, £1,132,000; and departmental receipts, £2,351,000. Expenditure from the Consolidated Fund amounted to £115,330,000 exceeding the amount appropriated by £5,478,000. The expenditure included a special transfer to Loans Redemption Account for debt redemption of £4,000,000, mainly to meet the repayment of a loan of £3,761,000, which fell due on 15th May, 1948, and has since been repaid. Under the heading of " Other Special Acts " the sum of £2,055,000 was transferred to War Expenses Account to meet the cost of six " Loch " class frigates and one survey vessel purchased
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from the United Kingdom. These two items account for the main increase in expenditure. Most of the other items of expenditure followed the Budget estimate fairly closely except for the Armed Services votes which were under expended by £790,000 in respect of construction works and purchase of technical equipment. A surplus of £1,786,000 resulted from the year's transactions of the Consolidated Fund, and this amount has been transferred to War Expenses Account under the authority of the War Expenses Act, 1939. It is estimated that with this and funds available from the sale of war assets, &c., there will be sufficient in the War Expenses Account to meet commitments for maintaining our J Force in Japan and for certain rehabilitation costs without recourse to borrowing. Estimates for 1948-49 Total revenue of the Consolidated Fund for 1948-49 is estimated at £114,867,000, and expenditure at £113,573,000, leaving a balance of £1,294,000 for the Supplementary Estimates. Receipts Taxation revenue for 1948-49 is estimated at £96,345,000, compared with the amount of £96,099,000 received for the previous year. The revenue from Customs is expected to be less than last year by over £2,000,000, due partly to the concessions, estimated to cost £1,000,000, under the General Agreement on Tariffs and Trade, and partly to the diversion of imports from foreign sources. Last yeai a relatively large proportion of our imports was from foreign countries, and consequently paid duty at higher rates. The estimate of income-tax to be received in 1948-49 in respect of income derived in 1947-48 is £39,000,000. In addition, arrears of tax uncollected are estimated at £3,300,000. The non-collection of this sum is largely due to shortage of staff at Wellington and Hamilton, which has delayed assessments. It is estimated that the collection of arrears during the current year will amount to £1,800,000, bringing the total receipts to £40,800,000, leaving arrears totalling £1,500,000 for collection in the next financial year.
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The remaining items of revenue comprise interest on the investment of public moneys, profits from State trading undertakings, and departmental receipts. The latter item is estimated to produce £11,222,000, compared with £13,842,000 last year. The reduction is accounted for by smaller recovery of stabilization subsidies, mainly from the primary industries accounts, of £1,250,000, compared with £3,611,000 last year. The total revenue other than taxation is estimated at £18,522,000, a reduction of £2,495,000 over actual receipts last year. Expenditure Debt services,, providing for interest on the public debt, amortization of debt, and administration and management of the public debt amounted to £26,612,000 last year, but this included the special transfer of £4,000,000 for debt redemption. The comparable figure this year is £22,768,000. Under the Civil List and other permanent appropriations £2,709,000 was paid last year, and this included a special transfer of £2,055,000 to the War Expenses Account for the purchase of naval vessels, as previously mentioned. Apart from debt services the amount provided under the permanent appropriations is £3,058,000; the major item is a subsidy to the Government Superannuation Fund of £2,530,000, being £1,530,000 statutory contribution and £1,000,000 towards liquidating the accumulated deficiency in the Fund, which has arisen from the use of the moneys of present contributors to pay portion of retiring-allowances. The annual appropriations for are £87,747,000 compared with £86,009,000 spent last year. Apart from the transfer to Social Security Fund, social services, such as public and mental hospitals, education, and war pensions, are estimated to cost £21,789,000, an increase of £2,255,000, substantially due to increased subsidies to Hospital Boards and provision of further educational facilities. Defenoe Programme A substantial increase in the cost of the Armed Services of over £2,284,000 includes provision for the transfer of £1,000,000 to an Air Defence Fund. Civil Aviation expenditure is also included under - vote " Air."
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The major points in connection with Defence policy were announced by the Minister of Defence last April. Our Armed Forces will be equipped in such a manner as to enable us to meet our defence obligations and to co-operate with the British Commonwealth in a general defence plan. The policy provides for:— The maintenance in commission of one cruiser, six anti-submarine vessels, one surveying vessel, auxiliary minesweepers and smaller craft, with one cruiser in reserve. The establishment of a well-trained and equipped Territorial Force organized and instructed by a small and efficient Regular Force. A Regular Air Force consisting of five squadrons—two being long-range bomber reconnaissance squadrons, one fighter, one transport,, and one a flying-boat squadron, with the necessary ancillary engineering, equipment, and training units. The Regular Air Force will be supported by a Territorial Air Force, Air Training Corps, and an Air Force Reserve. Associated with the three fighting Services will be an important Defence Scientific Corps to ensure that the latest developments in the scientific world will be incorporated in the plans for defence. For the first time in our history the Women's Services, which played such an important part during the recent war, have become part of the Regular Forces. It is proposed to establish an Air Defence Fund, to the credit of which it is intended to place £1,000,000 this year and substantial amounts in succeeding years. The cost of modern first-line aircraft, when they become available to New Zealand, is likely to be heavy and would otherwise have to be financed in the year of purchase, thereby either placing an undue burden on the Consolidated Fund at that time or necessitating the use of loan-moneys for defence purposes. It is sound policy to build up a special fund to meet this inevitable expenditure. Our maintenance of an active Force overseas will virtually cease with the return of our Army and Air Forces from Japan this year.
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Stabilization Subsidies In connection with the stabilization policy, it will be recalled that certain revisions and cancellations of some subsidies were made in last year's Budget. These alterations have now taken effect, and the estimates for stabilization subsidies in the year 1948-49 are £11,586,000, which is a lower figure than for recent years. Shipping and transport subsidies, which are estimated at £2,052,000, include a railway working loss estimated at £600,000. Other important subsidies relate to coal, carriage of lime and fertilizers, clothing, and essential foodstuffs, such as dairy produce, tea, wheat, and flour. The effect of these subsidies is to hold the cost of living and to assist in maintaining stabilization. Other Votes The total estimated cost of other votes is £27,677,000, representing an increase of approximately £1,200,000 over last year. The main variations in individual votes are a substantial reduction in Internal Affairs on account of the transfer of the subsidy to the Superannuation Fund to permanent appropriations, and increases in Labour and Employment due to immigration activities, and in Agriculture on account of additional services. State Forest Finance The provision of funds for State forests activities has been recorded in the past in a separate account within the Public Account and known as " State Forests Account." As the expenditure from year to year has exceeded the revenue the difference has been made up by borrowings. A separate cash account to record forest finance is not essential, and it is proposed to provide the necessary legislation to close this account. Votes are being provided on the Consolidated Fund to make funds available for forests administration and on the Public Works Account for forests development.
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Although the separate cash account will no longer exist, the Department will continue to publish its normal commercial accounts, and in this way the full cost of State forest activities will still be readily available. Summary, 1948-49 Summarizing the budgetary position we arrive at the following:— Receipts Taxation— £ £ Customs .. .. .. .. .. 22,000,000 Beer duty .. .. .. .. .. 4,375,000 Sales tax .. .. .. .. .. 15,750,000 Film-hire tax .. .. .. .. .. 130,000 Highways .. .. .. .. .. 3,125,000 Stamp duty .. .. .. .. .. 9,200,000 Land-tax .. .. .. .. .. 900,000 Income-tax .. .. .. .. .. 40,800,000 Miscellaneous .. .. .. .. .. 65,000 96,345,000 Interest .. .. .. .. .. .. 5,123,000 Profits of trading undertakings .. .. .. 2,177,000 Departmental receipts .. .. .. .. 11,222,000 18,522,000 £114,867,000 Expenditure Permanent Appropriations— Debt services— £ £ £ Interest and management .. 17,585,000 Eepayment .. .. .. 5,183,000 22,768,000 Other special Acts .. .. .. .. 3,058,000 25,826,000 Annual votes — Social Security .. .. .. .. .. 15,000,000 Other Social Services .. .. .. ..21,789,000 Armed Services .. .. .. .. .. 11,666,000 Stabilization .. .. .. .. .. 11,615,000 Other votes .. .. .. .. .. 27,677,000 87,747,000 Total expenditure as per main estimates .. .. .. 113,573,000 Supplementary Estimates and contingencies .. .. .. 1,294,000 £114,867,000
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Expressed in another form the expenditure shows that the cost of defence is equivalent to the amount required to stabilize prices. It also shows that the social services, including payments from the Social Security Fund, to which I am about to refer, use up nearly one-half of our total revenue. That is to say, health, education, and social security are estimated to cost the taxpayer out of his income or the worker out of his production £64,494,000 during the current year. SOCIAL SECURITY FUND I now come to the Social Security Fund, the expenditure from which last year was £40,443,000 which was £404,000 (approximately 1 per cent.) in excess of the amount estimated and provided for. The total revenue of the Fund, apart from the contribution from the Consolidated Fund, amount to £26,274,000. This was £2,547,000 in excess of the amount of £23,727,000 estimated at the time of the previous Budget. The contribution from the Consolidated Fund was £16,000,000. The Fund, in consequence of the additional social security charge received, closed with a credit balance of £7,241,918. The following figures set out the estimated expenditure and receipts for the year ending 31st March, 1949: — Expenditure _ Family benefits .. .. . . .. 13,843,000 Monetary benefits other than family .. 20,271,000 Emergency benefits . . . . . . . . 267,000 Medical benefits .. .. . . . . 7,562,000 Administration expenses . . . . . . 762,000 £42,705,000 Eeceipts Social security charge . . . . .. 30,000,000 Miscellaneous receipts . . . . . . 65,000 Transfer from Consolidated Fund .. .. 15,000,000 £45,065,000 The estimated expenditure of £42,705,000 is £2,262,000 in excess of 1947-48, which is principally on account of increased cost of monetary benefits. This is due partly to the additional amount required for an increase in the number of beneficiaries, and partly to the increased annual rate of Universal Superannuation, while 1948-49 will also bear, for a full year, the increased rates of benefits 'which operated from Ist October, 1947, whereas the 1947-48 accounts carried only a half-year increase.
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Under the heading " Medical benefits," which includes maternity benefits, the estimated requirements for 1948-49 are £7,562,000 as compared with the actual expenditure of £7,021,000 for 1947-48. The maternity benefits payable to public maternity hospitals and licensed private maternity hospitals were increased in 1947 from a maximum of £ll to £l5 per case. As from Ist February, 1947, the treatment carried out under the State School Dental Service has been extended, and dental attention is now available to adolescent children up to and including the age of fifteen years as a benefit under the Social Security Act. During the past year the provisions of the Social Security Hospital Benefits for Out-patients Regulations 1947 were extended to include the provision of certain artificial aids. Contact lenses and hearing-aids became available during 1947, and as from Ist April, 1948, 80 per cent, of the cost of artificial limbs will be borne from the Social Security Fund. A survey of ambulance services throughout New Zealand has recently been conducted preparatory to framing regulations covering the introduction of an ambulance benefit under the Social Security Act. During the past year (1947-48) the Government arranged for the setting-up of a Medical Services Committee to examine and report on all aspects of the working of the Medical and Pharmaceutical Benefits and to suggest improvements to the existing procedure. The Committee has now completed its findings and its report is at present under consideration by the Government. As I have mentioned,, it is estimated that the revenue to the Fund from the social security charge will be £30,000,000, or approximately £3,750,000 in excess of last year. This increase is anticipated on account of the charge being payable for a full year as against a half year in 1947-48, and also to the additional revenue which is expected on account of improved prices for primary products. War Expenses Account At this time last year I said that no further borrowing for War Expenses Account would be required and that it was a good thing to reach the end of borrowing for war purposes. lam happy to say that, despite expenditure of some £17,694,000 last year, the War Expenses Account was wholly financed from current receipts and the transfer of the surplus from Consolidated Fund from the previous year. Details of the expenditure are: Armed Services, £8,541,000; rehabilitation and gratuities, £6,199,000; redemption of war debt, £3,300,000; and miscellaneous, £63,000; a total of £18,103,000, reduced
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by a credit in ancillary of £409,000. Receipts comprised the 1947-48 surplus of £4,611,000; the special transfer from Consolidated Fund, sale of surplus assets, £5,426,000; rehabilitation repayments, £1,434,000; and miscellaneous receipts, £3,497,000; a total of £17,023,000. War Expenses, 1948-49 During the current financial year the position of War Expenses Account is estimated as follows: — Receipts £ Balance at Ist April, 1948 . . .. .. 2,960,000 Consolidated Fund surplus, 1947-48 . . .. 1,786,000 Disposal of surplus assets . . .. .. 1,860,000 Repayments of rehabilitation advances .. .. 1,380,000 Net proceeds of sale of commodities, including tea, imported by Ministry of Supply .. .. 1,400,000 Miscellaneous .. .. .. .. 1,057,000 £10,443,000 Expenditure £ Serrices, including J Force . . .. .. 2,100,000 Rehabilitation .. . . .. .. 4,900,000 Gratuities, including bonuses . . .. .. 1,355,000 Miscellaneous .. .. .. .. 2,088,000 £10,443,000 Rehabilitation In conformity with the Government's policy, there has been continued activity in all rehabilitation schemes over the past financial year. Demobilizations during the year numbered 19,755, bringing the total to 202,265 as at 31st March, 1948. Under the Farm Training and Settlement Scheme, organized and controlled by the Rehabilitation Board, a large number of young and well qualified men have already been established on the land. Primarily this has been a rehabilitation task, but it has a distinct value in the national economy in increasing primary production. Many thousands of men have been given trade and professional training under the Trade Training and Educational Schemes which have provided individual occupational rehabilitation. A large number of men have been added to the skilled, professional, and trade forces of the country. Educational assistance has been given in 16,490 new cases and 14,474 renewals, and over 13,000 men have been assisted by training in trades.
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In addition to the Trade and Farm Training Schemes carried out by the Board for ex-servicemen, the Disabled Servicemen's Ee-establishment League acting as the Board's agent provides training at Auckland, Napier, Wellington, Christchurch, Dunedin, and Invercargill in a number of trades suitable to the disabled. The farm at Milson, Palmerston North, is doing valuable work in training suitable disabled men in rural activities. The Blinded Servicemen's Trust Board has continued its work as the agent for the Rehabilitation Board in the training and care of those ex-servicemen of the 1939-45 war who lost their sight or suffered serious visual disablement. The total rehabilitation expenditure and loan authorizations for 1947-48 amounted to £19,087,000, making the total to 31st March, 1948, £65,318,000, which has been utilized in:— £ Loans for housing, farm settlement, purchase of businesses, furniture, and tools of trade . . 49,361,000 Purchase of lands for settlement, development, and other expenses .. .. .. 8,427,000 Trade training .. .. .. .. 3,702,000 Miscellaneous .. .. .. .. 3,828,000 £65,318,000 Although the cost of State houses which have been allocated to ex-servicemen is not included in the figures above, the provision of these houses has been a major contribution in rehabilitation. So far over 8,000 State rental houses have been allocated to ex-service-men. In all, with the loans which have been granted to buy and to build, over 28,000 men have been provided with permanent housing. Certain classes of home-servicemen were earlier made eligible for housing-loan assistance, and recently similar classes have been made eligible for certain business-loan assistance. Further extensions of eligibility will be considered when the progress in settlement of servicemen already eligible warrants this being done. In considering what will be needed in rehabilitation it must be remembered that extensions of eligibility widen the field of applicants. There has been very substantial progress in rehabilitation, but there are still major tasks ahead in land settlement and housing for those who have not yet been placed on farms or provided with homes. Immigration In conditions of shortage of labour it is obviously wise to facilitate immigration and the Government is continuing with its plan of assistance to suitable immigrants. The estimated expenditure for 1948-49 is £740,000.
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Shipping difficulties have restricted the arrivals for the twelve months ended 31st December, 1947. In order to speed up the immigration scheme the Government has chartered the former hospital ship " Atlantis " for a period of four years. Alterations at present being carried out will increase the passenger accommodation of the vessel from 600 to 900. As the vessel will make three or four trips each year it will be possible to transport at least 3,000 assisted immigrants each year. Every endeavour is being made to secure additional space for passengers. It is estimated that for the year ending 31st December, 1948, 1,630 assisted immigrants will sail in ordinary steamship lines and 852 on the " Atlantis " when she resumes service. This gives a total of 2,482, as compared with 968 for the twelve months ended 31st December, 1947. This figure will be stepped up in subsequent years as the shipping position improves. The problem of housing accommodation is being met by the provision of hostels, and by converting and equipping surplus armed service establishments. Tourist and Health Resorts During the financial year the Government purchased the Franz Josef Glacier Hotel as it was considered necessary for a first-class hotel to be maintained at this outstanding tourist resort and national park. Certain reconstruction work and renovation is necessary in order to achieve the proper standard required, and, having regard to higher priorities, this work is proceeding as rapidly as possible. During the year considerable progress has been made with the renovations which are necessary before the Chateau Tongariro can be reopened. This hotel previously catered for a very large number of tourists, and it is considered essential that accommodation be made available again as soon as possible. Progress has also been made in the renovations and reconstruction necessary to Wairakei Hotel. It is a most popular tourist resort and one which merits the maintenance of a first-class service, and the work now being carried out will achieve this object. During the financial year there has been a marked increase in the number of overseas tourists who arrived in New Zealand. The United Nations Organization has stressed the advantages of the tourist industry as a means of bringing a greater understanding between the peoples of the world and on the material side the overseas funds brought to New Zealand by such travellers are an important factor in the economy of the country, and one which will increase rapidly as additional sea and air transport becomes available.
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NATIONAL DEVELOPMENT PROGRAMME In last year's Budget I indicated that the sum of £26,875,000 was estimated to be required to cover loan expenditure on development works. Of this amount £25,947,000 was actually raised, and the balance not required at the end of the year, £2,122,000, was used for debt redemption. For the current financial year the loan programme has increased to approximately £33,000,000. The figures compared with last year's expenditure are: — Expenditure, Estimated, 1947-48. 1948-49. £ £ Housing . . . . . . 6,600,000 8,000,000 Electric supply . . .. 5,500,000 6,000,000 Land for settlements . . . . 1,700,000 3,500,000 State coal-mines . . . . 1,600,000 3,000,000 Railway improvements .. 1,800,000 2,500,000 Education buildings . . .. 1,000,000 1,300,000 State forests .. .. .. 1,000,000 1,200,000 Highways construction .. 1,300,000 1,750,000 Other works .. .. .. 3,300,000 5,750,000 £23,800,000 £33,000,000 It will be seen that there is a substantial increase of £9,200,000. The last item " Other works " showing an increase of £2,450,000, covers various public works activities and the balance of the share capital in the National Airways Corporation and the British Petroleum Company of New Zealand, Limited. This extensive programme will be financed from the current " tap " loan issue of 3-per-cent. stock and from State departmental issues. State Coal-mines In the Financial Statement of last year, I referred to the offer by the Westport Coal Company, Limited, to sell its undertaking, and the Government's decision to accept the offer on a share basis at the price of £2 per share. During the year the shareholders adopted their directors r proposals and the Government acquired the shares of the company for cash and Government stock. With a few exceptions where estates have yet to be cleared or where shareholders cannot be located, the shares have now been transferred to the Crown. In order to provide for the early dissolution of the company an Act was passed this session vesting the outstanding shares in the Crown, but protecting; the rights of these shareholders.
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The Mines Department took over the operation and management of the company's Denniston and Millerton mines on Ist April of the present year, and it is planned to operate the distribution side of the business as from Ist October next. The Birchwood mine at Ohai has been managed by the Mines Department as from 28th November, 1947, and on sth January last the Kamo mine (North Auckland) passed into the ownership of the State. With these additional purchases the number of State-owned mines as at Ist April, 1948, totalled 26 —underground, 20; opencast, 6. Negotiations are in progress with the companies concerned for the purchase of some of the remaining large mines. PUBLIC DEBT Full details of the debt transactions are shown in a statement on page 70 of the Public Accounts for the financial year 1947-48, paper B-l [Pt. I], which has already been laid before the House. The more important features are that our overseas debt has been reduced by £14,259,000, occasioned chiefly by the repayment of a London loan of £14,027,011, which matured on Ist November, 1947. To finance the redemption £14,000,000 of stock was issued in New T Zealand to the Eeserve Bank and various Treasury Accounts. The net result of the transaction was a saving of overseas interest of £631,215 per annum offset in part by the payment each year of £140,000 interest in New Zealand. Without any increase in the charges for debt services it is possible, by applying the savings so realized, to liquidate £14,000,000 of debt over a period of slightly less than thirty years, and special provision has been made accordingly for the first instalment this year. Special contributions towards debt redemption were also made last year from Consolidated Fund £4,000,000, War Expenses Account £3,300,000, and from the transfer of the balance in National Development Loans Account of £2,122,000. Last year the Public Debt Eedemption Fund was abolished, and in accordance with the legislation then passed the capital moneys of the Fund amounting to £11,288,000 were utilized to redeem debt. That fund had been built up under the former Public Debt Extinction Act, 1910, whereby the annual contributions were invested as sinking funds through the State Advances Office and the Public Trust Office. The previous system was superseded in 1925 when the
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Repayment of the Public Debt Act of that year was enacted, the accumulated sinking funds being " frozen " at their then totals. By applying the Fund as has been done, the net result is to cancel an asset mainly in G-overnment securities and reduce the total of the public debt by a similar amount. The effect on the Budget is practically nil as we lose the interest, £358,000, on this investment and save a corresponding payment of interest on debt cancelled. The transaction does not affect in any way the planned liquidation of the Public Debt which was commenced under the Repayment of the Public Debt Act of 1925, and is continued under the New Zealand Loans Amendment Act of last session. The domicile of our Public Debt as at 31st March last, ignoring the funded debt of the 1914-18 war on which payments have been suspended since 1931, was as follows: £ In London . . .. .. 103,984,457 In Australia . . . . .. 779,000 In New Zealand .. .. .. 494,111,972 £598,875,429 The floating debt in the form of Treasury Bills, included in the above figures, remains at £55,000,000 as it was at 31st March, 1947. Only 17| per cent, of the debt was held overseas, and this will be further reduced by the current year's transaction. 1948-49 Debt Transactions Already this financial year two loans falling due have been dealt with. These were an internal loan of £3,761,485, which was repaid at maturity on 15th May, 1948, and a London loan of £24,031,831, where the option to repay earlier than the maturity date, Ist March, 1958, was exercised in July by giving notice to repay on the Ist October, 1948, and by offering conversion into a new 3 per cent. 1966-68 stock, £16,000,000 sterling— i.e., £( N.Z.) 20,000,000 of the loan, the balance being repayable in cash in London. Stock will have to be issued in New Zealand to meet the cash repayment. The offer was made at a time when the international situation depressed the London financial market, with the result that approximately only 50 per cent, of the conversion offer was accepted, leaving a balance of £8,166,300 sterling which was taken up by the Reserve Bank. Since the closing date of the loan a considerable amount of this stock has been sold at a premium. The amount being transferred to New Zealand domicile is £(N.Z.)4,031,831, and this will have the effect of reducing
25
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our effective London debt to £(N.Z.)99,952,626 or £79,962,101 sterling. This transaction for the first time in twenty-five years reduces the overseas debt below £(N.Z.) 100,000,000 and considerably lowers the heavy interest commitments which have for many years been a charge against our export credits. One further internal loan of £3,492,230, at 4 per cent, maturing 30th November, 1948, requires attention this financial year. National Income Statistics It is pleasing to record a recent important advance in the presentation of detailed statistical information regarding the economic affairs of New Zealand. I refer to the publication entitled National Income of New Zealand, 1938-39 to 1947-48, which has been compiled by the Government Statistician and will be available to members to-night. The series of tables published, the principal of which are printed in this Budget, represent an important first step for this country in social accounting. In the tables is set out the distribution of income between the various factors engaged in producing the current flow of goods and services of all kinds. This information throws valuable light upon the distribution of our national income and should prove most useful in guiding future economic policy. It will also provide a much better basis for comparison than was obtainble from the older method of comparing on a per capita basis. The tables are not in any way complete, and it is proposed as further information becomes available to publish more tables giving in more detail the distribution of income between the various sections of the population. As is the case in other countries it is hoped to develop further the studies in social accounting, and to publish as soon as is practicable additional series of tables showing the national output, distinguishing the various branches of economic activity and setting out the contribution of each to current production of goods and services. Similarly, it ,is hoped to develop also the National Expenditure tables, to indicate statistically the manner in which the income earned by the factors of production is devoted to current consumption, to investment in extensions of fixed or floating capital, and to the maintenance of existing capital equipment. The following table illustrates one of the many ways in which national income studies may be employed to shed light upon current problems of economics and of public finance in particular. The table gives a comparison of the proportion of total private (including
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company) income absorbed in taxation for the years 1938-39 and 1947-48. The purposes on which taxation has been expended are also indicated broadly:— Taxation and Gross Revenue Expenditure—l93B-39 and 1947-48 Per cent, of Per cent, of Total Total Private Private 1938-39. Income. 1947-48. Income.' £(m.) £(m.) Interest on public debt .. 755 38 1804 40 General government . . 6-14 30 1160 25 Maintenance of works and services (net) .. 377 1-9 5-71 1-3 Social services . . .. 2003 100 5998 132 War and defence .. 2-22 11 11-44 25 Stabilization .. .. . . . . 1098 2-4 Development of industry 2-45 1-2 5-60 1-2 4216 210 123-35 271 Total taxation .. .. 37-77 18-8 122-28 26-9 Total private income .. 20070 100 45500 * 100 * Provisional The comparisons supplied by this table are interesting. It will be observed that the share of total private income absorbed by taxation was about 19 per cent, in 1938-39, as compared with 27 per cent, in 1947-48. As might be expected the main increase is due to expanded social services, which ten years ago represented 10 per cent, of the total private income, and in 1948 had risen to 132 per cent. The item of " Stabilization," which did not appear in 1939, now accounts for 24 per cent, of the total private income. The increased percentage devoted to war and defence is a reflection of the fact that, although fighting has ceased, high costs have still to be borne. I have quoted this table merely as one illustration of the useful information which can be provided by the National Income Statistics. They will be of considerable, assistance in helping us to see the various phases of our finances in truer perspective. Internal Economic Conditions The quantity of goods and services available for consumption in any country determines the standard of living in that country; and the goods, whether imported or locally produced, which are available for consumption cannot in the long-run exceed the goods produced whether imported or consumed within the country. As it would be undesirable, except for essential capital expenditure, to draw too heavily on our balance of overseas funds, any future improvement in standards should depend largely on increased local production.
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The successful full-employment policy of the Government, a policy now recognized as essential to maximum international trade, has been based on the maintenance of an adequate supply of purchasing-power equitably distributed among the community so as to constitute a high effective demand for goods and services. The maintenance of such a level of demand in relation to available goods and services will continue to be a dominant feature of Government policy; but it must be noted that what is the desirable level of demand at any time is determined by the supply of goods and services available or likely to become available. Tn New Zealand at the present time there is no unemployment, and thus any increase in demand (through an increase in wages, in profits, or by drawing on past savings, or cessation of present savings) cannot result in increased employment. No country can participate in war without a substantial expansion of purchasing-power beyond the availability of consumer goods usually in demand. New Zealand is no exception, having been affected not only by reduced local production of consumer goods when our resources were diverted to war, but also by the scarcity and high price of imported commodities. This reduced supply of goods on the one hand and the total of incomes swollen by overtime payments and the employment of an expanded labour force on war work on the other has upset the balance between- supply and demand and is exercising distinct inflationary pressure. The war finance policy of the Government drew off a considerable portion of this excess purchasing-power, and in this respect war loans, national savings, and wartime taxation all played an important part. In counteracting the effect on prices and wages of the excess purchasing-power still in circulation, and in preventing increased cost of essential imported commodities from exercising an undue effect on costs of production, the policies of stabilization and price-control have been as successful in New Zealand as in any other country of the world. As indicated previously substantial increases have recently been negotiated in the bulk-purchase contract prices paid by the United Kingdom for butter, cheese, meat, and tallow exports. These increases will be credited to the dairy and meat industry stabilization accounts. The local payouts to dairy and meat producers, however, will shortly come under consideration, and the fixation of appropriate prices will be of major importance to economic stability. In the case of the dairy industry, the determination of the guaranteed price is a matter for the Dairy Products Marketing Commission. In the case of meat, the fixation of the opening schedules for meat exports is a matter for discussion between the Government and the meat industry. In both cases prices will be based on the cost of production in accordance with the established practice.
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It had been hoped that an increased supply of goods after the Avar would enable purchasing-power accumulated during the war to be expended without undue economic upset. The very length of the war, however, has impeded this process by causing a large accumulation of spending-power, while at the same time it has retarded our own production by delays in maintenance and in capital expansion. Added to this, the economic disorder of the rest of the world has imposed upon us shortages of many essential commodities, while the high prices of imported goods has resulted in drawings on our accumulation of overseas funds without satisfying our postponed needs. It will be evident, therefore, that the stabilization and pricecontrol policy is clearly justified and should be continued, but that other measures will also be necessary. The most desirable way of restoring a due balance between supply and demand would be to increase supply, which must, as I have already pointed out, come in the future either directly or indirectly from increased production within New Zealand. While every endeavour of the Government will be directed towards this end, there are necessarily such shortages as the supply of labour which cannot be made good at once, and attention will therefore have to be directed to still other corrective processes. The Government's credit-control policy administered by the Eeserve Bank is another of the methods used towards attaining equilibrium. Bank overdraft accommodation is an essential part of normal trading activity, and it would be most unwise to bring about any sudden or drastic curtailment of this source of finance. The main principle of the credit-control policy is that bank advances are not to be used under present conditions for the acquisition of permanent assets. Development Requirements This year it is proposed to undertake a programme aimed at the maximum practicable extension of productive works such as hydro-electric, land-settlement, coal-mining, and housing. In framing this programme close regard has been given to the availability of man-power and materials, which has shown some improvement during the past year. It has also been necessary to provide that the rate of progress on many urgent national and local-body projects will ensure completion within the most efficient and economical construction period. For this reason submissions made by Government Departments and local authorities for inclusion in the 1948-49 programme of State and Statesubsidized works have been subjected to a very thorough examination and have been considerably reduced.
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Provision on a liberal scale, considering the conditions in the construction industry, has been made, however, for housing, hydroelectric, education, and hospital buildings, highways, railway improvements, and extension of our air services, as well as otherclasses of works essential for the development of our economy. In arranging the finance for development expenditure it is also necessary to avoid any course which would in any way increase the present inflationary pressure. It is anticipated that the development programme will be financed from savings becoming available during the year. Importance of Saving I wish to emphasize the necessity in present circumstances for adequate saving. There is an important responsibility on the community. To the extent that the public makes savings available by subscription to Government loans, by increased deposits in national savings accounts or in the Post Office Savings-bank or in trustee savings-banks, it exercises an anti-inflationary influence and permits the continuance of those many development works, known in economic terms as " investment," which, whether promoted by public or private interests, are absolutely essential to increased production and to maintenance and raising of the general standard of living. In times of depression there is usually excessive saving and inadequate investment, but at present the reverse tends to be the position, and it is essential that the community seriously consider whether it is not devoting too large a part of its income to current consumption. It is intended to intensify the drive for increased savings, and I would ask firms, businessmen, farmers, and societies and individuals with money suitable for investment to assist to the utmost in this matter. Through national savings and Post Office and trustee savings-bank accounts all workers can play an important role because their savings in the aggregate can become considerable. Including the Post Office and trustee savings-banks with national savings accounts and bonds, the increase in savings of the community in recent years have been: — £(m.) 1942-43 .. .. .. 16-75 1943-44 .. .. .. 24-54 1944-45 .. .. .. 23-49 1945-46 .. .. .. 22-83 1946-47 .. .. .. 14-48 1947-48 .. .. .. 5-57 The accumulated balances of all " small" savings at 31st March, 1948, amounted to £223,493,000.
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The recent marked downward trend of these figures will be noticed. No doubt that trend had relation to the considerable increase in imports and expansion of manufacturing and other production within the Dominion. The indications are for some improvement in small savings, and with greater popular support, that improvement will be maintained and expanded. In this connection the figures quoted in Table No. 9 appended to this Budget are interesting as showing what was achieved through National Savings alone during the war period. Though a slight recession is evidenced in the post-war period the figures are still at a very high level, and a continuance of this aspect of saving will materially help not only the national economy but also every individual investor. Taxation Adjustments I come now to the question of what alterations of taxation might reasonably be made in respect of this financial year. The importance of saving at the present time cannot be emphasized too often and a case could readily be made for maintaining taxation with a view to creating an appreciable surplus. It is the Government's opinion, however, that if the current need for saving is explained the people mil respond adequately, and that the. prolonged financial strain of the war calls for some equitable addition to the relief already provided since the cessation of hostilities. It will be recalled that during the present session of Parliament the General Agreement on Tariffs and Trade, as drafted at Geneva, was approved, and that this will result in a reduction of approximately £1,000,000 annually in the cost of incoming goods and thereby benefit consumers generally. It is also proposed to make the following adjustments in taxation during the financial year:— Gold Duty To encourage the production of gold and to maintain existing undertakings the present gold duty of 12s. 6d. per ounce will be removed. The cost of this remission for a full year is estimated to be £65,000. It is also proposed to make provision under the Emergency Regulations for the purchase by the Reserve Bank of New Zealand of all gold produced in the Dominion. Motor-omnibus Sales Tax To meet in general the representations of local authorities who in many cases are expanding their transport systems with trolley and passenger buses it is proposed to reduce the sales tax on motor-omnibus •chassis from the present rate of 20 per cent, to a rate of 10 per cent. The remission will cost in a full year the estimated sum of £125,000.
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Overseas Passenger Tax To provide revenue during the depression years a duty of 5 per cent, was levied on all fares paid by overseas passengers. The duty is difficult to collect and representations have been made by overseas companies and passengers and New Zealand travellers for its remission. It is proposed to abolish the duty, and the loss of revenue for a full year is estimated to be £50,000. Income-tax Rebate To give some relief to individual taxpayers and particularly to those on lower incomes, it is proposed to grant for the current year a rebate up to £lO on the income-tax assessment of individuals. The procedure will result in complete freedom from income-tax of all those whose assessments are £lO or less and will provide for a deduction of £lO from all individual assessments in respect of income derived during the year ended 31st March, 1948. The reduction in revenue on this account is estimated to be £3,250,000. The aggregate loss of revenue under all headings for the current year is estimated to be £4,000,000 and provision has been made for this sum in the figures of estimated receipts totalling £114,867,000, which I have mentioned earlier this evening. Increased Production Before concluding my statement I should like to emphasize again the necessity for increased production. The great need for our dairy products, meat, and wool which exists in the Homeland and elsewhere presents a challenge which we should meet. The urgent need of others is in this case reinforced by our own need to provide the maximum quantity of exports in order to pay for much needed imports. We must obtain for our industries the best possible capital equipment. In the manufacturing, primary, and construction industries increased horse-power through mechanization brings increased production. The Government is making provision to supplement this need for machinery by the development of hydroelectric resources, and a high priority is accorded to industrial equipment in the allocation of import licences. Conclusion It may fairly be concluded that throughout the post-war period New Zealand has been successful in her policy of full employment. In peacetime, as in wartime, there is no reason why any one able and willing to perform useful work need stand idle. Through
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the operation of our social-security system, the current financial aspect of which I have already discussed, much has been done to achieve an equitable redistribution of our national income so that provision is made by the healthy and the fortunate to assist in guaranteeing a reasonable share of production to the aged, the young, the widow, the ailing, and those engaged in the production of essential goods and services. Ours is a country more fortunate than most. It is, however, a country affected by international events and to a degree dependent upon economic changes in other countries. At the same time millions of other people are dependent on us for the maintenance of their standard of living. The standard of living of this and any country can be maintained and improved only by sustained and efficient production. The Government is representative of the people, and as such has the major responsibility for the increase of production and to facilitate the improvement of industrial methods. That, however, is a responsibility not for one central body alone, not for a few corporations or individuals alone, but is an obligation of every citizen. The team spirit has been well inculcated in our people, and there will be no more appropriate time than the ensuing years for energetic and enthusiastic efforts towards the building of a better New Zealand and a better world. The taxation concessions announced in this Statement will give relief where it is needed most. Further improvement in that regard will depend upon the productive efforts of all the members of the community. The theme which I have endeavoured to expound is that, until the effects of war are more fully dissipated, Ave must all make some sacrifice (in New Zealand it is not a heavy one) in the interests of further development and for the benefit of -ourselves, our successors, and our kinsmen and others overseas. Britain has asked us to produce and supply more; we can do so, and we should do so. By aiding Britain Ave aid ourselves. She is fasti increasing the volume of exports by A\ T hich she obtains the food and raw materials without which she cannot live, but she has a long and hard road to traverse. So far as lies in their poAver I believe our people Avill help and that New Zealand Avill live up to the reputation which has Avon for our citizens and country such a high place in the British Commonwealth and the world of nations.
33
1948 NEW ZEALAND
ADDENDUM TO FINANCIAL STATEMENT OF RIGHT HON. WALTER NASH MADE TO THE HOUSE OF REPRESENTATIVES, 19th AUGUST, 1948 Mk. Cha-irma:n", — Whilst the subjects I have mentioned and the adjustments proposed are of importance, there is another question to which consideration must he given. If members will examine the statistics that are available it will be found that there is a disequilibrium between New Zealand prices and those prevailing in other countries. The latest analysis suggests that unless corrective measures are taken this disequilibrium and disparity will grow. If the income of our country is to be equitably shared —as every one agrees it should be —we must bring costs down and action to do so must be immediate. When in 1929-33 the fall in overseas prices jeopardized the primary-production industries of this country, it was in general agreed that some action was necessary to maintain them. Whether the actual course followed was wise or otherwise is debatable, but it was decided to depreciate the New Zealand rate of exchange to £(N.Z.)125 to £(stg.)loo, and that rate has been operating up to the present time. The present comparative index figures suggest that an adjustment in the rate is now warranted and necessary. After examining the whole position it has been decided to appreciate our currency from the present rate of £(N.Z.)I25 z =£(stg.)loo to parity with sterling, and the new rate will operate at once. With regard to primary-producers, the Government will,, if desired, negotiate a guaranteed-price procedure to cover their costs.
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Table No. 1 Revenue of the Consolidated Fund, Social Security Fund, and War Expenses Account for the Year ended 31st March, 1947, and for the Year ended 31st March, 1948
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37
, 1947. 1948. Consolidated Social Security War Expenses Total. Consolidated Social Security War Expenses Total. Fund. Fund. Account. Fund. Fund. Account. Taxation — £ £ £ £ £ £ £ £ Income-tax 32,085,057 32,085,057 36,632,581 36,632,581 Land-tax 939,559 939,559 854,456 854,456 National security tax 9,404,220 9,404,220 772,029 772,029 Social security charge . 22,383,884 22,383,884 26,176,635 26,176,635 Registration fees 15,287 15,287 Customs duties 15,718,983 15,718,983 24,390,881 24,390,881 Beer duty 4,251,509 4,251,509 4,404,051 4,404,051 Sales tax 15,550,547 15,550,547 15,945,813 15,945,813 Highways tax .. 2,972,036 2,972,036 3,543,954 3,543,954 Stamp duties 9,549,709 9,549,709 9,382,555 9,382,555 Other.. 243,773 243,773 172,833 172,833 90,715,393 22,399,171 113,114,564 96,099,153 26,176,635 122,275,788 Loan-moneys 7,964,695 7,964,695 Reciprocal aid 1,710,170 1,710,170 Interest receipts 4,714,100 4,714,100 5,002,728 5,002,728 Disposal of surplus assets 11,071,364 11,071,364 5,425,622 5,425,622 Amount received from U.S.A. Govt. 3,269,204 3,269,204 Other receipts 12,864,980 120,993 12,571,278 25,557,251 16,014,234 97,432 4,93*6,852 21,042,518 108,294,473 22,520,164 36,586,711 167,401,348 117,116,115 26,274,067 10,356,474 153,746,656 Transfers from Consolidated Fund .. -21,000,000 18,000,000 3,000,000 -22,666,078 16,000,000 *6,666, 018 87,294,473 40,520,164 39,586,711 167,401,348 94,450,097 42,274,067 17,022,492 153,746,656 * Includes Budget surplus 194G-47, £4,611,018
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Table No. 2 Statement of the Actual Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1948, compared with that of the Financial Year ended 31st March, 1947.
38
— Year ended 31st March, 1948. Year ended 31st March, 1947. Increase. Decrease Permanent Appropriations— Under Special Acts of Legislature— Civil List £ 101,724 £ 97,083 £ 4,641 £ Debt Services — Interest Transfer to Loans Redemption Account— New Zealand Loans Amendment Act, 1947— Section 14 (Annual Contribution) Section 11 (c) Administration and management 17,825,052 4,377,223 4,200,000 210,064 17,558,876 4,048,499 700,000 207,994 266,176 328,724 3,500,000 2,070 Total —Debt Services 26,612,339 22,515,369 4,096,970 Other Services— Highways Other special Acts 219,281 2,387,907 2,955,611 3,362,648 (a)2,736,330 974,741 Total —Other Services 2,607,188 6,318,259 3,711,071 Total —Permanent Appropriations 29,321,251 28,930,711 4,101,611 3,711,071 Annual Appropriations— Vote, — Legislative 152,506 138,675 13,831 Prime Minister's Department 156,966 119,262 37,704 External Affairs 673,909 395,570 278,339 Finance — TreasuryStabilization Customs Land and Income Tax Stamp Duties Audit 309,711 14,621,917 272,086 560,749 169,458 104,311 179,175 i4,539,431 247,807 543,828 148,067 105,962 130,536 82,486 24,279 16,921 21,391 i, 651 Total —Finance 16,038,232 15,764,270 275,613 1,651 General Administration— Public Service Commission Internal Affairs Island Territories Printing and Stationery Marine Labour and Employment Maori Affairs Valuation Electoral Census and Statistics .. Rehabilitation 63,872 3,184,825 652,875 669,451 434,283 935,873 463,807 171,276 35,257 75,556 373,330 41,130 1,154,957 430,801 423,959 418,526 894,519 429,248 131,976 158,293 137,135 398,645 22,742 2,029,868 222,074 245,492 15,757 41,354 34,559 39,300 123,036 61,579 25,315 Total —General Administration 7,060,405 4,619,189 2,651,146 209,930 («) Main Highways Account now abolished. See also new vote, " Highways Maintenance," on next page.
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Table No. 2 — continued Statement of the Actual Expenditure of the Consolidated Fund, etc.—ctd.
39
— Year ended 31st March, 1948. Year ended 31st March, 1947. Increase. Decrease. Annual Appropriations—continued V ote —continued Law and Order — Justice and Prisons Crown Law Office Police £ 554,872 12,971 968,836 £ 480,980 12,662 1,044,953 £ 73,892 309 £ 76,117 Total —Law and Order 1,536,679 1,538,595 74,201 76,117 Defence— Navy Army Air 1,736,627 3,470,245 4,175,219 1,309,869 2,840,749 2,955,930 426,758 629,496 1,219,289 Total—Defence 9,382,091 7,106,548 2,275,543 Maintenance — Maintenance of Public Works and Services Highways Maintenance^ 6,405,234 3,404,081 5,281,124 1,124,110 3,404,081 Total—Maintenance 9,809,315 5,281,124 4,528,191 Development of Primary and Secondary IndustriesLands and Survey Agriculture Scientific and Industrial Research .. Mines Transport Industries and Commerce Tourist and Health Resorts 1,184,258 1,609,709 745,004 107,166 220,849 1,276,855 452,739 726,342 i,450,342 580,882 118,233 184,455 513,074 359,767 457,916 159,367 164,122 36,394 763,781 92,972 ii,067 Total—Development of Primary and Secondary Industries Socal Services— Health Mental Hospitals Education War and other pensions Social Security National Provident and Friendly Societies Total —Social Services 5,596,580 3,933,095 1,674,552 11,067 4,718,733 1,243,332 8,883,246 4,688,312 16,000,000 * 3,409,844 1,072,130 7,712,490 4,735,185 18,000,000 117,118 1,308,889 171,202 1,170,756 46,873 2,000,000 117,118 35,533,623 35,046,767 2,650,847 2,163,991 Unauthorized Expenditure— Services not provided for 68,845 809,649 740,804 Total—Annual Appropriation 86,009,151 74,752,744 14,459,967 3,203,560 18,561,578 6,914,631 6,914,631 Total Expenditure 115,330,402 103,683,455 11,646,947 * Provision now made under vote " Treasury." f New vote. Main Highways Account abolished 1st April, 194?
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Table No. 3 SOCIAL SECURITY FUND
40
Year ended Year ended Year ended Year ended Estimate for Year ended 31st March, 1949. 31st March, 1945. 31st March, 1946. 31st March, 1947. 31st March, 1948. Receipts £ £ £ £ £ Registration fees 574,436 585,713 15,287 Social security charge .. 13,663,858 14,557,460 22,383,884 26,176,635 30,000 ', 000 Miscellaneous receipts 38,112 143,020 120,993 97,432 65,000 Balance from previous yea f .. 2,945,139 2,389,701 1,716,303 5,410,977 7,241,918 Transfer from Consolidatec [Fund .. 4,500,000 7,000,000 18,000,000 16,000,000 15,000,000 21,721,545 24,675,894 42,236,467 47,685,044 52,306,918 Expenditure Administration expenses . 563,667 721,587 704,194 707,883 762,249 Emergency benefits 105,843 121,959 134,287 227,857 267,000 Hospital benefits, &c.— Maternity benefits 530,734 600,209 672,989 800,030 881,000 Hospital benefits .. 2,266,688 2,173,460 1,986,288 1,949,489 2,000,000 Medical benefits .. 1,287,023 1,427,309 1,760,574 2,167,826 2,280,000 Pharmaceutical benefits 980,237 1,133,366 1,439,686 1,558,350 1,651,000 Supplementary benefits 170,032 229,971 352,043 545,793 750,000 Monetary benefits —■ Age .. 8,492,015 9,817,615 11,881,119 12,976,286 14,055,000 Widows 985,451 1,043,593 1,529,010 1,709,626 1,900,000 Orphans 23,253 24,178 22,905 24,187 27,000 Family .. 1,405,112 2,611,759 12,680,778 13,798,648 13,843,000 Invalids .. 1,072,619 1,183,537 1,328,485 1,367,300 1,387,000 Miners 74,367 88,359 105,416 110,106 110,000 Maori War 78 101 104 111 12 Unemployment 27,822 31,661 24,332 8,357 9,500 Sickness 351,866 565,420 853,328 897,093 914,000 Universal superannuatio a .. 995,036 1,185,508 1,349,689 1,593,757 1,869,000 Social Security Amendr aent Act, 263 427 1943, section 13 (8) (c ) : Maintenance moneys Balance .. 2,389,702 1,716,302 5,410,977 7,241,918 9,601,157 21,721,545 24,675,894 42,236,467 47,685,044 52,306,918
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Table No. 4 WAR EXPENSES ACCOUNT Statement showing the Net Expenditure for the Year ended 31st March, 1948, compared with the Year ended 31st March, 1947
41
Year ended Year ended 31st March, 31st March, Increase. Decrease. 1947. 1948. Navy— £ £ £ £ Pay and allowances 896,878 62,465 834,413 Accommodation, victualling, and clothing 206,013 4,104 201,909 War and other stores 1,565,143 61,561 1,503.582 Medical services 19,041 1,101 17,940 Educational and vocational services Or. 78 78 Land, buildings, and ships 435,536 2,002,569 1,567,033 Docking, repairs, maintenance, and rent . 453,880 76,716 377,164 Transport 42,224 87,121 Miscellaneous effective services .. 22,095 8,603 13,492 Non-effective services 258,108 11,855 246,253 Army— Pay and allowances 3,985,961 2,271,198 1,567,111 3,281,874 4,930,783 1,489,397 3,441,386 Accommodation, victualling, and clothing 441,132 2,869 438,263' War and other stores 3,495,590 3,589,408 93,818 Medical services 506,183 118,724 387,459 Educational and vocational services 4,841 824 4,017 Land, buildings, and fortifications 189,257 189,257 Repairs, maintenance, and rent 45,150 45,150 Transport Miscellaneous effective services 827,595 363,807 463,788 101,536 9,024 92,512 Non-effective services 4,106 10,144 6,038 AirPay and allowances 10,546,173 5,584,197 99,850 5,061,832 1,458,183 257,541 1,200,642 Accommodation, victualling, and clothing 390,705 51,901 338,804 War and other stores 237,909 123,158 114,751 Medical services 43,975 228 43,747 Educational and vocational services 408 408 Land, aerodromes, and other buildings 212,492 .'4,004 208,488 .Repairs, maintenance, and rent 39,692 154,547 144,855 Transport 137,087 29,360 107,727 Miscellaneous effective services 26,921 64,163 37,242 Non-effective services 55,888 960 54,928 Ancillary— Primary producers' subsidies 2,603,260 685,862 152,097 2,069,495 Or. 9,702 668,063 677,765 Stabilization subsidies 21,324 21,324 Promotion and expansion of industry 207,744 150,022 57,722 E.P.S. and other security measures 106,868 4.280 102,588 Services for Armed Forces (recoverable) Cr. 1,087,158 Or. 844; 826 242,332 Reserve stocks, indents, and manufactured goods Cr. 472,111 Or. 710,132 238,021 (recoverable) Soldiers' financial assistance, patriotic, and similar grants Bulk purchase and sales by Food Controller 3,632 54,647 51,015 560,780 Cr. 536,844 1,097,624 National Service Department .. UNRRA 3,612,000 41.4,091 3,197,909 Miscellaneous (recoverable in part and whole) 334,412 353,654 i'j,242 Miscellaneous (non-recoverable) 2,381,087 38,016 2,343,071 5,658,876 Cr. 409,029 990,354 7,058,259 Rehabilitation advances, &c. 4,742,478 5,148,443 405,965 Reciprocal aid : Reverse lend-lease 1,249,865 1,249,865 Gratuities 1,776,596 1,049,796 726,800 Gift of food to Britain 1,072,964 1,072,964 Gift to British Government as part of cost of World 12,500,000 12,500,000 War II Allied military currency repaid to Allied financial 56,511 56..5U agency Loss on devaluation Occupation Currencies .. : 63,359 63,359 Transfer to Loans Redemption Account 3,500,000 3,300,000 200,000 . . 24,898,414 9,561,598 469,324 15,806,140 ' , • S 3,278,742 33,277,600 ■ 3,278,742 Total 47,692,684 17,693,826 29,998,858
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Table No. 5 PUBLIC DEBT Maturity and Domicile of Debt outstanding, 31st March, 1948
*ln respect of many of the loans the Government has the option to redeem the securities at an earlier date. For particulars, see 8.-l [Pt. I]. t Excludes debt as under : £ Advances from Imperial Government funded in terms of section Bof Finance Act, 1922 .. 30,125,250 Other debt on which interest has been suspended and principal repayments postponed by agreement with Imperial Government .. .. .. .. .. .. .. .. 2,613,636 £32,738,886 Summary of Departmental Investments £ Investments held by accounts within the Public Account .. .. 26,552,345 National Broadcasting Service .. .. .. ~ .. 1,950,000 Marketing .. .. .. .. .. .. .. 27,453,510 Government Life Insurance .. .. .. .. .. 6,670,860 Maori Trustee .. .. .. .. .. .. 538^860 Post Office .. .. .. .. .. .. .. 144,043,650 Post Office: National savings .. .. .. .. .. 40,250,000 Public Trustee .. .. .. .. .. .. 14,707,150 Reserve Bank .. .. .. .. .. .. 42,045,335 State Advances Corporation .. .. .. .. .. 410,250 State Eire Insurance Office— Accident Branch .. .. .. .. .. .. 717,500 Fire Branch .. .. .. .. .. .. 1,150,600 £306,490,060
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Loans maturing in Financial Year ending 31st March.* Due in London (in New Zealand Australia. New Zealand. Total Debt (Nominal Amount). Currency). Public. Departmental. £ £ £ £ £ Overdue 3,445 3,445 Treasury bills 10,000 54,990,000 55,000,000 Interest free 4,802 4,802 1949 6,981,040 272,675 7,253,715 1950 . 9,375,000 11,375,100 5,759,575 26,509,675 1951 . 1,562,500 779,000 2,341,500 1952 2,603,475 5,455,030 8,058,505 1953 . 11,342,955 1,136,125 12,479,080 1954 . 9,io3,224 9,307,375 360,565 18,821,164 1955 6,100,170 358,930 6,459,100 1956 . 15,000,000 17,434,800 971,805 33,406,605 1957 . 29,785,800 4.055,790 33,841,590 1958 24,031,831 20,910,695 134,788,720 179,731.246 1959 10,006,920 63,624,590 73,631,510 1960 . 7,147,795 1,336,800 8,484.595 1961 . 7,889,599 18,951,010 2,264,415 29,105,024 1962 . 14,000,000 14,000,000 1964 . 9, .174,570 23,373,675 6,044,790 38,593,035 1965 . 11.157.615 8,670,250 19,827,865 1966 21,547,734 1,125,240 2,400,000 25,072,974 1972 . 6,250,000 6,250,000 Tota Is • 103,984,458f 779,000 187,621,912 306,490,060 598,875,430f
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43
Table No. 6 IMPROVEMENT IN NEW ZEALAND ECONOMIC CONDITIONS Most Recent Information compared with Earlier Periods
Depression low. 1935-36. 1938-39. Latest Figure. . — Unit. Year ended 3lst March, Amount. Year ended 3ist March, Amount. Year, ended 31st March, Amount. Year ended 31st March, Amount. Production — Value of total production "Volume of total production (1938-39 = 100) £(m.) .. Index No. 19321 83-3 19361 19361 113-8 93 19391 19391 136-1 100 19471 19471 .230 -0 5 114 5 "Value of farm production > Volume of farm production (1938-39 = 100) .. £(m.) .. Index No. 19321 49-2 19361 19361 72-5 101 19391 19393 82-6 100 19471 19471 135 0 5 108 5 ' Value of gross farming income .. £(m.) .. 19331 38-1 19361 57-8 19391 69-0 19471 115-0 5 . Wool production (bales) (000) .. 19361 717 19391 921 19471 1,060 Butter production (tons) (000) .. 19361 168 1939' 148 19471 146 ' Cheese production (tons) (000) .. 19361 89 19391 85 19471 92 Meat production (tons) (000) .. 19399 470 19471 555 5 Value Of factory, production 2 Volume of factory production 2 (1938-39 = 100) £(m.) .. Index No. 19331 17-7 19361 19361 23-2 76 19391 I939i 30-5 100 1947' 1947' 60 -0 3 1445 Total factory employees (000) .. 1934 3 86-0 1936 3 102-3 1939 3 123-7 1948 3 162-8 Electric-power production (units) Million.. 1936 1,031-7 1939 1,413-5 1947 2,528-0 Gas production (coal-gas sold) (cubic feet) Million.. 1936 3,324-4 1939 3,591-4 1947 4,637-4 Coal production (tons) (000) .. 1933 4 1,821 1935 4 2,115 1938 4 .2., 222 1947 4 2,-752 Timber production (superficial feet) Million.. 1932 154-2 1936 293-1 1939 316-7 1948 428-75 For footnotes, see end of table.
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Table No. 6— continued IMPROVEMENT IN NEW ZEALAND ECONOMIC CONDITIONS- continued Most Recent Information compared with Earlier Periods— continued
44
Unit. Depression 1 ow. 1935-36. 1938-39. Latest Figure. — Year ended 31st March, Amount. §,§! OT Amount. Year ended 31st March, Amount. Ill T-l CO Amount. Production —continued Building permits issued in urban districts — Total value all buildings Private dwellings Government housing construction : Dwellings commenced (included above) £(m.) .. Number Number 1933 1933 2-5 1,496 1936 1936 5-9 4,140 1939 1939 1939 12-1 8,093 3,432 1948 1948 1948 21-4 9,854 2,651 Membership of workers' unions (000) .. 1933 4 71-9 1935 * 80-9 1938* 249-2 1947* 260-4 Transport and Communication — Value of exports (excluding specie) Volume of total exports (excluding specie), (1936-38 — 100) £(m.) .. Index No. 1931 4 35-0 1935* 1935* 46-5 96 1938* 1938* 58-4 97 1947* 1947* 129-4 119 Value of imports (excluding specie) Volume of total imports (excluding specie), (1936-38 = 100) £(m.) .. Index No. 1931 * 26-5 1935* 1935* 36-3 72 1938* 1938* 55-4 105 1947* 1947* 128-7 115 Post and telegraph : Volume of business handled £(m.) .. 1933 153 1936 220 1939 286 1948 665 Radio-receiving licences (000) .. 19363 192-3 19393 317-5 1948 3 421-0 Railways — Passenger journeys Net ton-miles run Million.. Million.. 1933 1933 18-4 363-4 1936 1936 20-4 443-6 1939 1939 23-3 574-5 1948 1948 25-9 937-4 Motor-vehicles licensed (000) .. 1933 3 195-0 1936 3 228-2 1939 3 307-9 1948 3 360-9 Finance — Net national income at factor cost Salary and wage payments (included above) £(m.) .. £(m.) .. 6 6 e 6 6 6 6 6 1939 1939 193-0 112-1 1948 1948 422 -0 5 217-55 Trading bank deposits (excluding Government) Weekly bank debits (excluding Government) £(m.) .. £(m.) .. 1932 1933 51-0 10-4 1936 1936 62-1 13-8 1939 1939 64-1 18-0 1948 1948 165-7 42-3 Net bank-note circulation £(m.) .. 1932 5-8 1936 6-6 1939 10-4 1948 40-4 Net overseas funds of banks (New Zealand business only) .. £(m.) .. fi 6 1936* 44-1 1939 7 9-3 1948' 84-9
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1 Production year-— approximately twelve months ended June. 2 Does not include factory processing of primary products. 3 As at end of March. 4 Calendar year. 6 Based on advance estimates and subject to alteration. 6 Not available. 7 As at last Monday in March. 8 15 th March. "Average of production years 1936-37, 1937-38, and 1938-39. 10 In terms of purchasing power on basis of wartime prices index linked to retail prices index series. -
45
Finance —continued Post Office Savings-bank — New deposits .. . . .. .. .. ■ Amount to credit of depositors £(m.) .. £(m.) .. 1933 1933 3 16-9 42-0 1936 1936 3 25-6 52-9 1939 1939 3 30-4 60-7 1948 1948 3 72-6 148-4 Trustee Savings-banks — New deposits Amount to credit of depositors £(m.) .. £(m.) .. 1933 1933 3 5-7 10-5 1936 1936 3 6-7 11 - 8 1939 1939 3 8-6 13-9 1948 1948 3 16-1 31-8 National Savings Accounts : Amount to credit £(m.) .. 1948 3 36-1 Mortgages registered Mortgages discharged Land transfer transactions £(m.) .. £(m.) .. £(m.) .. 1934 1933 1934 7-8 8-1 9-6 1936 1936 1936 16-2 17-6 15-6 1939 1939 1939 20-0 16-6 23-7 1948 1948 1948 32-0 25-4 40-5 Sales-tax receipts (total revenue) £(m.) .. 1936 2-5 1939 3-6 1948 15-9 M iscellaneous — Totalizator investments £(m.) .. 1933 3-3 1936 4-5 1939 7-8 1948 24-2 Marriages (rate per 1,000 of mean population) Births (rate per 1,000 of mean population) 1932 4 1935 4 6-81 16-17 1935 4 1935 4 8-23 16-17 1938 4 1938 4 10-09 17-93 1947 4 1947 4 10-92 26-42 Prices Index Numbers — Exports( 1909-1 3=1000) Index No. 1932 4 892 1935 4 1102 1938 4 1367 1947 4 2513 Wholesale (1926-30=1000) Index No. 1932 4 878 1935 4 936 1938 4 1036 1947 4 1654 Retail (with wartime prices index linked on) — Food groups (1926-30=1000) All groups (1926-30=1000) .. Wartime prices index (15th December, 1942=1000) Index No. Index No. Index No. 1933 4 1933 4 732 795 1935 4 1935 4 835 837 1938 4 1938 4 991 951 6 1947 4 1948 8 6 1173 1110 Wage-rates — Nominal: Adult males (1926-30=1000) Effective: Adult males (1926-30=1000) Index No. Index No. 1933 4 1932 4 833 1031 1935 4 1935 4 858 1025 1938 4 1938 4 1081 1137 1947 4 1947 4 1489 1269 10 Share prices — Industrial (1938=1000) Finance, &GU (1938=1000) All groups (1938=1000) Index No. Index No. Index No. 1932 4 1932 4 1932 4 667 852 769 1935 4 1935 4 1935 4 1102 1120 1112 1938 4 1938 4 1938 4 1000 1000 1000 1947 4 1947 4 1947 4 1444 1697 1570
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Table No. 7 RETAIL PRICES OF BASIC FOODSTUFFS
Table No. 8 MARRIED TAXPAYER—DEPENDENT WIFE AND TWO CHILDREN
46
Unit of Quantity. Retail Price (in New Zealand Currency). Commodity. New Zealand (Wellington), Australia South Africa (Cape Town), Great Britain (March, Canada (February, 1948). United States of America (March, (June, 1948). 1948). Oil, 1948). 1948). 1948) s. d. s. d. S. d. s. d. s. d. s. d. Bread 2 lb. .. 0 5* 0 6f 0 8J 0 61 1 2 1 8| Flour .. 201b. .. 4 3* 6 11 8 5-1-7 2 9 8 15 6 Tea .. lb. 4 8| 2 9 6 3| 4 2 6 4| Coffee .. lb. 3 81 2 Of 3 8f 3 21 Sugar .. lb. 0 6* 0 4| 0 4f o"6i 0 7J0 7 Milk (fresh) Quart .. 0 7 0 8 1 01 1 0| 1 Of 1 3f Butter lb. 1 6 1 H| 3 1* 1 8 4 6 5 4| Cheese lb. 1 4-1-1 Qi 2 4i 1 0i 3 6 3 111 Bacon lb. i iif 2 2 3 6i 2 6 4 41 4 5 Raisins lb. 1 3 1 3-| 1 6f 1 4-| Prunes lb. 1 3 2 21 l"3 1 3i 1*4 Canned peaches .. 30 oz. tin 2 3| l"?* 2 10* 1 H| Beef (rib roast) .. lb. 0 101 0 8 0 10 2 1 3 1J 4 1 Mutton (leg) lb. 1 1 0 lOf1 4| 1 101 Pork— . Loin lb. 1 2| 1 6| 1 101 3 4J Chops lb. 1 4-f 1 7* 1 llf 4' "4-1-
Fixed Gross Income per Annum. Tax Payment during Financial Year ended 31st March, 1946 : Residue includes Family Benefit, paid subject to Means Test. Tax Payment during Financial Year ended 31st March, 1947 : Residue, including universal family benefit £52. Tax Payment during Financial Year ended 31st March, 1948 : Residue, including universal family benefit £52. Tax Residue Tax Residue Tax Residue £ £ £ £ £ £ £ 400 .. 58 40 30 342 412 422 500 .. 87 64 51 10s. 413 488 500 10s. 600 .. 120 90 75 480 562 577 800 .. 188 146 126 612 706 726 1,000 .. 263 207 182 737 845 870 1,300 .. 480 391 353 10s. 1,020 *1,161 *1,198 10s. 2,000 .. 738 613 563 1,262 *1,439 *1,489 Jncome-tax at basic rate, plus " 33£ per cent. Combined charge at 2s. 6d. Income-tax based On income derived during year ended 31st March, 1945, and paid in February, 1946. Wife exemption, £50. Child exemption, £50. Income-tax at basic rate, plus 15 per cent. Combined charge at 2s. Income-tax based on income for year ended 31st March, 1946, and payable in February, 1947. Wife exemption", £100. Child exemption, £50. * Maximum rebate ih tax, £26. Income-tax at basic rate, plua 15 per cent. Combined charge Is. 6d. Income-tax based on income for year ended 31st March, 1947, and payable in February, 1948. Wife exemption, £100. Child exemption, £50. * Maximum rebate In tax, £26.
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47
Table No. 9 INVESTMENTS IN NATIONAL SAVINGS (Including National Savings Bonds) £ October, 1940, to 31st March, 1941 .. .. .. 1,329,786 Year, 1941-42 .. .. .. .. .. 5,272,568 „ 1942-43 .. .. .. .. .. 3,853,180 „ 1943-44 .. .. .. .. .. 10,529,871 „ 1944-45 .. .. .. .. .. 10,234,238 „ 1945-46 .. .. .. .. .. 9,480,911 „ 1946-47 .. .. .. .. .. 7,405.669 „ 1947-48 .. .. .. .. .. 8,683,559 56,789,782 Less Repayments .. .. .. .. 13,517,048 Investments at 31st March, 1948 .. .. £43,272,734
Table No. 10 INDEX NUMBERS OF VOLUME OF GOODS
Base : 1938-39 - (100) Produced in New Zealand. All Goods available for Use in New Zealand. Year ended 30th June, Available for Use in New Zealand. Imported. Total. Exported. Total. Per Head. Total. Per Head. 1939 1940 1941 1942 1943 1944 1945 1946 1947 100 105 112 110 109 107 113 112 114* 100 106 111 109 116 132 155 110 113* 100 104 113 110 104 91 83 113 115* 100 103 112 109 102 89 80 105 104* 100 84 69 58 58 66 63 71 93* 100 96 95 88 85 81 75 95 106* 100 95 94 88 84 79 72 89 96* * Provisional.
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Table No. 11 NATIONAL INCOME
48
(£(million) ) 1938-39. 1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. 1945-46. 1946-47. 1947-48. Salary and wage payments .. .. .. 111-2 110-8 118-0 121-3 127-7 141-6 147-9 162-6 187-1 208-4f Pay and allowances of Armed Forces .. .. 0-9 2-7 13-7 21-5 41-0 51-1 41-9 41-4 17-0 9*lf Social security benefits and pensions .. .. 7-6 11-3 12-4 12-8 . 14-3 15-9 17-5 20-8 34-7 37-5 Rental value, owner-occupied houses .. .. 6-3 6-9 7-3 7-8 8-0 8-4 8-9 9-3 9-8 10• 5f * Other personal income (excluding company dividends) 54-7 59-5 58-4 62-4 67-1 72-5 79-9 89-9 108-5 134 -Of Company income (before distribution) .. .. 20-0 25-2 24-1 28-1 33-3 36-9 38-4 42-2 50-4 55 -5f Private income .. .. .. .. 200-7 216-4 233-9 253-9 291-4 326-4 334-5 366-2 407-5 455-0f Plus — Government and local authority trading profits .. 2-5 3-7 4-9 6-7 8-9 10-1 8-8 9-4 9-2 8-5f Lump-sum payments from United Kingdom Government 0-3 1-9 2-7 3*5 3-3 3-3 5-0 5-0 5-0 5-0 Less transfer income — Social security benefits and pensions .. .. —7-6 —11-3 —12-4 —12-8 —14-3 -15-9 -17-5 —20-8 -34-7 -37-5 Public debt interest (paid in New Zealand on "unproductive" debt) —2-9 —3-2 —3-3 —3-6 —4-3 —6-0 —7-6 —8-4 —9-0 — 9• 0"f" Net national income at factor cost (national income) .. 193-0 207-5 225-8 247-7 285-0 317-9 323-2 351-4 378-0 422 -Of * For details see Table Ho. 13. t Provisional.
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Table No. 12 PERCENTAGE DISTRIBUTION OF VARIOUS ITEMS OF PRIVATE INCOME
Note.—The break-up of " Other Personal Income " for the years 1939-40, 1940-41, and 1945-48 to 1947-48 is based on fairly arbitrary premises and should not be regarded as accurate as the remainder of the detail given in this table.
49
— 1939-40 1940-41 1941-42 1942-43 1943-44 1944-45 1945-46 1 1946-47jl947-48 Salary and wage payments 51-2 50-4 47-8 43-8 43-4 44-2 44-4 45-9 45-8 Pay and allowances of Armed Forces 1-3 5-9 8-4 14-1 15-6 12-5 11-3 4-2 2-0 Social security benefits and pensions 5-2 5-3 5-0 4-9 4-9 5-2 5-7 8-5 8-2 Rental-value owner-occupied houses 3-2 3-1 3-1 2-8 2-6 2-7 2-5 2-4 2-3 Other personal income— Professional occupations 2-6 1-9 "* *" 2-1 2-3 2-7 Commerce, trade, or business .. 4-7 3-9 4-7 5-3 §•6 Farming 11-7 11-6 >23-8 22-2 20-6 21-7< 11-3 11-8 13-9 Interest, rent, &c. 7-6 6-5 4-2 3-8 3-5 Other 0-8 0-7 0-8 1-2 1-3 Primary Produce Stabilization 0-1 0-4 0-8 0-8 1-6 2-2 1-3 2-2 2-5 Accounts (change in balances) Companyincome (before distribution) 11-6 10-3 11-1 11-4 11-3 11-5 11-5 12-4 12-2 Private Income 100-0 100-0 100-0 100-0 100-0 100 -0 100-0 100-0 100-0
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Note.—The figures in this table are based on income-tax statistics and other relevant data. Detail not available for years 1938-39 and 1941-42 to 1944-45. The figures are provisional.
Table No. 13 ESTIMATED DISTRIBUTION OF OTHER PERSONAL INCOMES
Table No. 14 NATIONAL INCOME: INDEX NUMBERS, PRINCIPAL ITEMS
50
(This table is an analysis of the item " Other Personal Income " in Table No. 11) 1938-39. 1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. 1945-46. 1946-47. 1947-48. Professional occupations (on own account) Commerce, trade, or business Farming Interest, rents, &c. Other Primary Produce Stabilization Accounts (change in Tbalances) Total other Personal Income £(m.) -1-0 £(m.) 5-5 10-2 25-4 16-4 1-8 0-2 £(m.) 4-5 9-2 27-0 15-2 1-5 1-0 1 £(m.) 2-1 £(m.) 2-4 £(m.) 5-1 £(m.) 7-2 £(m.) 7-5 17-0 41-5 15-4 3-0 5-5 £(m.) 9-5 21-5 48-0 15-5 5-0 9-0 £(m.) 12-0 25-5 63-0 16-0 6-0 11-5 54-7 59-5 58-4 62-4 67-1 72-5 79-9 89-9 108-5 134-0
Base: 1938-39 =(100) — 1938-39. 1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. 1945-46. 1946-47. 1947-48. Salary and wage payments (including pay and allow100 101 117 127 150 172 169 182 182 194* ances of Armed Forces) Social security benefits and pensions 100 149 163 168 188 209 230 274 457 493 Other personal income (including rental value of owner100 109 108 115 123 133 146 163 194 237* occupied houses) Company income (before distribution) 100 126 121 141 167 185 192 211 252 278* Private income 100 108 117 127 145 163 167 182 203 227* Net national income at factor cost 100 108 117 128 148 165 167 182 196 219* * Provisional.
8~6
Table No. 15
51
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Table No. 16 PRIVATE DISPOSABLE INCOME
52
(£(million)) 1938-39. 1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. 1945-46. 1946-47. 1947-48. Salary and wage payments (including pay and allowances of Armed Forces) Less direct taxation .. Gross 112-1 4-9 113-5 8-0 131-7 13-3 142-8 16-6 168-7 23-0 192-7 27-2 189-8 28-7 204-0 29-8 204-1 25-3 217-5* 23-5* Net 107-2 105-5 118-4 126-2 145-7 165-5 161-1 174-2 178-8 194-0* Social security benefits and pensions .. 7-6 11-3 12-4 12-8 14-3 15-9 17-5 20-8 34-7 37-5 Other personal income (including rental value, owner-occupied houses) Less direct taxation Gross 61-0 11-5 66-4 13-1 65-7 18-5 70-2 20-4 75-1 24-3 80-9 26-0 88-8 27-0 99-2 29-0 118-3 29-2 144-5* 28-7* Net 49-5 53-3 47-2 49-8 50-8 54-9 61-8 70-2 89-1 115-8* Company income (before distribution) Less direct taxation .. Gross 20-0 6-6 25-2 8-5 24-1 12-6 28-1 13-0 33-3 17-2 36-9 20-5 38-4 24-2 42-2 25-1 50-4 22-6 55-5* 24-0* Net 13-4 16-7 11-5 15-1 16-1 16-4 14-2 17-1 27-8 31-5* Private Income. Less direct taxation .. Gross 200-7 23-0 216-4 29-6 233-9 44-4 253-9 50-0 291-4 64-5 326-4 73-7 334-5 79-9 366-2 83-9 407-5 77-1 455-0* 76-2* Private Disposable Income 177-7 186-8 189-5 203-9 226-9 252-7 254-6 282-3 330-4 378-8* * Provisional.
B-6
Table No. 17 TOTAL PRIVATE INCOME (Net of direct taxation) Showing Value of Individual Items and such Values expressed as a Percentage of Total, and as Index Number on Base: 1938-39 = (100)
ii B—6
53
— 1938-39. 1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. 1945-46. 1940-47. 1947-48. Salary and wage payments (including pay and allowances of Armed Forces) — Value (£m.) 107-2 105-5 118-4 126-2 145-7 165-5 161-1 174-2 178-8 194-0* Per cent. 60-3 56-5 62-5 61-9 64-2 65-5 63-3 61-7 54-1 51-2* Index No. 100 98 110 118 136 154 150 162 167 181* Social security benefits and pensions — Value (£m.) 7-6 11-3 12-4 12-8 14-3 15-9 17-5 20-8 34-7 37-5 Per cent. 4-3 6-1 6-5 6-3 6-3 6-3 6-9 7-4 10-5 9-9* Index No. 100 149 163 168 188 209 230 274 457 493 Other personal income (including rental value of • owner-occupied houses) — Value (£m.) 49-5 53-3 47-2 49-8 50-8 54-9 61-8 70-2 89-1 115-8* Per cent. 27-9 28-5 24-9 24-4 22-4 21-7 24-2 24-8 27-0 30-6* Index No. 100 108 95 101 103 111 125 142 180 234* Company income (before distribution) — Value (£m.) .. .. 13-4 16-7 11-5 15-1 16-1 16-4 14-2 17-1 27-8 31-5* Per cent. 7-5 8-9 6-1 7-4 7-1 6-5 5-6 6-1 8-4 8-3* Index No. 100 125 86 113 120 122 106 128 207 235* Total private disposable income — Value (£m.) 177-7 186-8 189-5 203-9 226-9 252-7 254-6 282-3 330-4 378-8* Per cent. (300) (100) (100) (100) (100) (100) (100) (100) (100) (100) Index No. 100 105 107 115 128 142 143 159 186 213* * Provisional.
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Table No. 18
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Table No. 19 PRIVATE INCOME
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Note.—While the retail prices index numbers may be regarded as a reasonably appropriate correction factor for salaries and wages, their application to the wider field of national income is less valid. When an analysis of national expenditure becomes available it will be possible to devise a more suitable corrective for price changes. In the meantime the results given in Tables Nos. 19 to 21 must be regarded as affording only an approximate indication of general trends in real income.
iii B—o
55
At Current Prices. At 1938-39 Prices. Retail Prices Year. Total. Per Head. Index Number* Base; Total. ! Per Head. Private Income. Direct Taxes. Private Disposable Income. Private Income. Direct Taxes. Private Disposable Income. 1938-39 = (1000). Private Income. Private Disposable Income. Private Income. Private Disposable Income. 1938-39 .. 1939H10 1940-41 1941-42 1942-43 1943-44 1944-45 1945-46 1946-47 1947-48 £(m.) 200-7 216-4 233-9 253-9 291-4 326-4 334-5 366-2 407-5 455 -Of £(m.) 23-0 29-6 44-4 50-0 64-5 73-7 79-9 83-9 77-1 76-2+ £(m.) 177-7 186-8 189-5 203-9 226-9 252-7 254-6 282-3 330-4 378-8+ £ 124-6 132-4 141-2 152-0 171-9 191-2 194-1 210-0 229-0 250-6+ £ 14-3 18-1 26-8 29-9 38-0 43-2 46-4 48-1 43-3 42-0+ £ 110-3 114-3 114-4 122-1 133-9 148-0 147-7 161-9 185-7 208 -6+ 1000 1050 1093 1129 1173 1182 1185 1186 1191 1254 | £(m.) I 200-7 ! 206- ] i 214-0 224-9 248-4 1 276-1 282-3 1 308-8 342-1 362 -8+ I £(m.) 177-7 177-9 173-4 180-6 ! 193-4 213-8 214-9 238-0 277-4 302- If £ 124-6 126-1 I 129-2 i 134-7 ! 146-5 161-7 163-8 177-1 192-3 199-8+ I £ 110-3 108-9 104-7 108-1 114-1 125-2 124-7 136-5 155-9 166-4+ INDEX NUMBERS BASE: 1938-39 = = (100) 1938-39 1939-40 1940-41 1941-42 1942-43 1943-44 .. 1944r-45 1945-46 1946-47 1947-48 100 108 117 127 145 163 167 182 203 227+ 100 129 193 217 280 320 347 365 335 331f 100 105 107 115 128 142 143 159 186 213+ 100 106 113 122 138 153 156 169 184 201+ 100 127 187 209 266 302 324 • 336 303 294| 100 104 104 111 121 134 134 147 168 189f 1 100 103 107 112 124 138 141 154 170 181f 100 100 98 102 109 120 121 134 156 170+ 100 101 104 108 118 130 131 142 154 160+ 100 • i 99 95 98 103 i 114 1 113 ! 124 ! 141 | 151+ * Old series up to December, 1942, linked to wartime prices index. t Provisional.
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Table No. 20 NET NATIONAL INCOME AT FACTOR COST
56
At Current Prices. At 1938-39 Prices. Retail Prices i Year. National Income. j National Income. Base f AW = (1000). Total. Per Head. | Total. | Per Head. J Total. Per Head. Total. Per Head. £(m.) £ £(m.) £ 1938-39 .. .. .. 193-0 119-8 100 100 1000 193-0 119-8 100 100 1939-40 .. .. .. 207-5 127-0 108 106 1050 197-6 120-9 102 101 1940-41 .. .. 225-8 136-4 117 114 1093 206-6 124-8 107 104 1941-42 . .. 247-7 148-3 128 124 1129 219-4 131-4 114 110 1942-43 .. .. .. 285-0 168-1 148 140 1173 243-0 143-4 126 120 1943-44 . .. .. 317-9 186-2 165 155 1182 269-0 157-6 139 132 1944_45 .. .. .. 323-2 187-6 167 157 1185 272-7 158-3 141 132 1945-46 .. .. 351-4 201-5 182 i 168 | 1186 296-3 169-9 154 142 1946-47 378-0 212-5 196 j 177 | 1191 317-4 178-4 164 149 1947-48 .. .. .. 422-Of 232-4f 219f | 194f ! 1254 336-5t 185-3f 174f 155J * Old series up to December, 1942, linked to wartime prices index. 1" Provisional.
£—6
Table No. 21 SALARY AND WAGE PAYMENTS
57
(Including Pay and. Allowances of Armed. Forces) Year. At Current Prices. Retail Prices Index Number* Base: 1938-39 = (1000). At 1938-39 Prices. Total. Direct Taxes. Total, Less Direct Taxes. Total. Total, Less Direct Taxes. 1938-39 .. 1939-40 .. 1940-41- .. 1941-42 .. 1942-43 .. 1943-44 .. 1944-45 .. I945_46 .. 1946-47 .. 1947-48 .. 1938-39 .. 1939-40 .. 1940-41 . . 1941-42 .. 1942-43 . . 1943-44 .. 1944-45 . . 1945-46 .. 1946-47 .. 1947-48 .. £(m.) 112-1 113-5 131-7 142-8 168-7 192-7 189-8 204-0 204 •] 217 -5j100 101 117 127 150 172 169 182 182 194f £(m.) 4-9 8-0 13-3 16-6 23-0 27-2 28-7 29-8 25-3 23-5f Index Ni 100 163 271 339 469 555 586 608 516 480f £(m.) 107-2 105-5 118-4 126-2 145-7 165-5 161-1 174-2 178-8 194-Of umbers Base 100 98 110 118 136 154 150 162 167 181f 1000 1050 1093 1129 1173 1182 1185 1186 1191 1254 : 1938-39 = (IOC £(m.) 112-1 108-1 120-5 126-5 143-8 163-0 160-2 172-0 171-4 173-4+ >) 100 96 107 113 128 145 143 153 153 155f £(m.) 107-2 100-5 108-3 111-8 124-2 140-0 135-9 146-9 150-1 154-7f 100 94 101 104 116 131 127 137 140 144f * Old series up to December, 19-42, linked to wartime prices index. t Provisional.
B—6
Copy of 'Prospectus of Internal Loan Dominion of New Zealand NEW ZEALAND GOVERNMENT LOAN Issue at par of 3-per-cent. Stock maturing 15th July, 1963-65 Interest payable 15th January and 15th July Authorized to be raised in accordance with the -provisions of the New Zealand Loans Act, 1932, whereby the interest and principal are a direct charge upon the public revenues of tJie Dominion Trustees may invest in this Loan under the powers of the Trustee Act, 1908, unless expressly forbidden by 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 the issue of stock in terms of this Prospectus. The proceeds of this issue will be used partly for repaying existing loans and partly for National Development purposes. 1. Applications. —Applications, which must be accompanied by a cheque for the full issue price of the stock, may be lodged at the Reserve Bank of New Zealand, Wellington, at any Branch of any bank in New Zealand, including trustee savings-banks, at the District Treasury Offices at Auckland, Christchurch, or Dunedin, or at any postal money-order office in New Zealand. All cheques should be drawn in favour of the Reserve Bank of New Zealand, Wellington. Applications must be for a multiple of £lO, with a minimum of £5O. 2. Securities.— -New Zealand Government Stock will be issued in either of the following forms, as may be directed by the applicant in the form of application : (a) Ordinary Stock transferable by Memorandum of Transfer without payment of any fee and free of stamp duty unless the transfer is by way of gift. Ordinary Stock may be exchanged for Stock Certificates to Bearer free of charge : (b) Stock Certificates with interest coupons annexed. When issued, Stock Certificates will be payable to bearer and will be transferable by delivery. The first or any subsequent holder may insert the name of a nominee, after which the Stock Certificate will not be transferable. Stock Certificates payable to bearer or to a person named in the Certificate may at any interest date be converted into Ordinary Stock without the payment of any fee. (c) Death Duty Stock, which in terms of Section 40 of the N.Z. Loans Act, 1932, may be tendered at par by the executor or administrator of a deceased stockholder in payment of Death Duties in the estate of the deceased Stockholder. Death Duty Stock is not transferable as such but may be exchanged for Ordinary Stock. 3. Registration. —The Register of Stock will be kept at the Reserve Bank of New Zealand, Wellington, where transfers will be registered free of charge. Any minor of the age of ten years or upwards is entitled to be registered as the holder of Stock and to execute transfers thereof. Ordinary Stock and Death Duty Stock will be registered in the name of the applicant, and Registration Certificates will be issued as soon as registration has been effected. If a Certificate of Title is required, application should be made on the prescribed form.
58
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4. Interest. —lnterest will be paid half-yearly on the 15th January and 15th July in each year, and the first payment, representing interest from the date of the lodgment of the application moneys up to the 15th July, 1948, will be made on that date. The first payment will in every case be made to the original subscriber and will be paid by means of warrants forwarded by post from the Reserve Bank of New Zealand. Subsequent payments on Ordinary Stock and Death Duty Stock will be made by means of interest warrants forwarded to the stockholder as at the due date of payment. The Reserve Bank of New Zealand, however, will accept directions from the stockholders for payments of interest to any agent in the Dominion, and existing instructions for the payment of interest will apply to stock issued in terms of this Prospectus. Interest on Stock Certificates, other than the first payment which will be paid in accordance with the provisions outlined in the second paragraph of this section, will be paid by means of coupons annexed to the Certificates. 5. Repayment.- —The Minister of Finance reserves the right to repay the 3 per cent--1963-65 Loan at par at any time during the period 15th July, 1963, to the 15th July, 1965, on giving at least three months' notice in the New Zealand Gazette of his intention to repay. If not previously redeemed, the Loan will be repaid at par at the Reserve Bank of New Zealand on the 15th July, 1965. 6. Exchange on Remittances. —Cheques in payment of amounts subscribed to this Loan will be accepted free of inland Exchange. 7. Commission. —Commission at the rate of ss. per £lOO of Stock issued will be allowed to Bankers and registered Sharebrokers. 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 New Zealand, including trustee savings-banks ; at the District Treasury Offices at Auckland, Christchurch, or Dunedin ; at any postal money-order office in New Zealand ; or from a member of any Stock Exchange in the Dominion. The list of applications will be opened forthwith and may be closed at any time determined by the Minister of Finance. Reserve Bank of New Zealand, Wellington, 19th January, 1948.
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Copy of Prospeckis of London Conversion Loan Consent of I Lis Majesty's Treasury has been obtained to this issue, in compliance with the Order made under Section 1 of the Borrowing (Control and Guarantees) Act, 1946 NEW ZEALAND GOVERNMENT 3 PER CENT. STOCK, 1966-1968 interest payable half-yearly on the Ist March and the Ist September Issue of £16,000,000 Stock Under the New Zealand Loans Act, 1922 Trice of issue £lOO per Cent, payable as follows : On application . . .. . . . . .. £lO per Cent. On the 27th July, 1948 . . . . .. . . £3O per Cent. On the 27th September, 1948 . . .. .. £6O per Cent. £lOO The Government of New Zealand have observed the conditions prescribed under the Colonial Stock Act, 1900, as notified in the London Gazette of the 14th December, 1900, and the Stock is, therefore, an investment authorized under the Trustee Act, 1925, and the Trusts (Scotland) Act, 1921. The Governor and Company of the Bank of England give notice that, on behalf of the Agents appointed for raising and managing Loans under the New Zealand Loans Act, 1932, they are authorized to receive applications for such amount of the above Stock as is not required for issue in exchange for holdings of New Zealand Government 44 per Cent, inscribed Stock, 1948-1958, in accordance with the offer contained herein. Under the provisions of the New Zealand Loans Act, 1932, the principal of and interest on the Stock are charged upon the Public Revenues of New Zealand. Under the provisions of the New Zealand Land and Income Tax Act, 1923 (No. 21), income derived by a person not resident in New Zealand from New Zealand Government Stock the interest on which is payable in London is not liable to taxation in the Dominion The Revenues of the Dominion of New Zealand alone are liable in respect of the Stock and the interest thereon, and the Consolidated Fund of the United Kingdom and the Commissioners of His Majesty's Treasury are not directly or indirectly liable or responsible for the payment of the Stock or of the interest thereon, or for any matter relating thereto. The following information is furnished by the High Commissioner for New Zealand : Under the provisions of the New Zealand Loans Amendment Act, 1947, which replaced the Repayment of the Public Debt Act, 1925, resources are made available, under the control of the Public Debt Commission constituted under the Act, for the purchase of New Zealand Government Securities on the open market for cancellation or to pay them off at maturity, thereby providing the Commission with the means of effecting an annual repayment of Public Debt. The Act provides for the annual appropriation to Loans Redemption Account of a sum equal to one-half per Cent, of the Public Debt coming within the Act and outstanding at the end of the previous financial year, together with a further sum equal to four per Cent, of the debt repaid or redeemed under the 1925 and 1947 Acts before the same date.
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Since September, 1939, the Dominion has repaid under the provisions of the 1925 and 1947 Acts, and from other sources, over £47,000,000 of New Zealand Government Stock issued in the United Kingdom, thus reducing the New Zealand Public Debt in London to £110,000,000. During the corresponding period the value of New Zealand's exports has risen from £46,500,000 per annum to over £100,000,000 per annum. The proceeds of the Stock issued for cash will be applied towards the redemption on the Ist October, 1948, of New Zealand Government 4| per Cent. Inscribed Stock, 1948-1958, which is not exchanged under the terms of this prospectus. The Stock, if not previously redeemed, is to be repaid at par at the Bank of England on the Ist September, 1968, but the New Zealand Government reserve to themselves the right to redeem the Stock, in whole or in part, by drawings or otherwise, at par at tin l Bank of England on, or on any date after, the Ist September, 1966, on three calendar months' previous notice being given by public advertisement in The Times, in which case the Stock to be redeemed will cease to bear interest on the date so fixed for redemption. The Stock will be transferable by deed, in multiples of one penny, free of charge and stamp duty. The Bank of England have been appointed Eegistrar of the Stock. Interest will be payable half-yearly on the Ist March and the Ist September; the first interest payment will be made on the Ist March, 1949. Interest warrants will be transmitted by post and Income Tax will be deducted from payments of more than £5 per annum. If allotments of the Stock in respect of cash applications and applications for exchange of New Zealand Government 4| per Cent. Inscribed Stock, 1948 1958, do not reach the total of £16,000,000 Stock, the balance of the Stock will be issued for cash to the Reserve Bank of New Zealand on the terms of this prospectus. Issue of Stock for Cash Applications, which must be accompanied by a deposit of £lO per Cent., will be received at the Bank of England, Loans Office, London, E.C. 2. In case of partial allotment the balance of the amount paid as deposit will be applied towards the payment of the first instalment; any surplus remaining after making that payment will be refunded by cheque. Default in the payment of any instalment by its due date will render the deposit and any instalment previously paid liable to forfeiture and the allotment to cancellation. Applications must be for £lOO Stock or a multiple thereof; no allotments will be made for a less amount than £lOO Stock. Allotment letters will not be posted before the 14th July, 1948. Scrip Certificates to Bearer, in denominations of £lOO, £5OO, £l,OOO and £5,000 will be issued in exchange for allotment letters and must be surrendered for registration at the time when the final instalment is paid. The first interest payment in respect of Stock issued for cash will be at the rate of £1 : 10s. per £lOO Stock and will be made on the Ist March, 1949. The List of Cash Applications will be opened and closed on the 2nd July, 1948. Issue of Stock in Exchange for New Zealand Government 41? per Cent. Inscribed Stock, 1948-1958 Holders of the above Stock, which will be redeemed at par on the Ist October, 1948, are invited to apply to exchange their holdings, in whole or in part, for New Zealand Government 3 per Cent. Stock, 1966-1968, on the terms set forth in this prospectus.
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Holdings of New Zealand Government 4| per Cent. Inscribed Stock, 1948-1958, in respect of which, applications are accepted, will be exchanged, as on the Ist September, 1948, into New Zealand Government 3 per Cent. Stock, 1966-1968, at the rate of £lOO of snch Stock for each £lOO Stock surrendered. Holdings of New Zealand Government 4| per Cent. Stock, 1948-1958, in respect of which applications are accepted will be known until the close of business on the 31st August, 1948, as New Zealand Government 4| per Cent. Inscribed Stock, 1948-1958, " Assented ". Interest at the rate of £2 : 7s. 6d. per £lOO "' Assented " Stock will be paid on the Ist September, 1948, to the persons who are registered as holders of " Assented " Stock at the close of business on the 3rd August, 194<S ; this payment represents : (a) The half-year's interest due on the Ist September, 1948, and (b) Interest for one month (from the Ist September, 1948, to the Ist October, 1948) at 1| per Cent, per annum, being the difference between 4J per Cent, per annum and 3 per Cent, per annum. The first interest payment in respect of Stock issued in exchange for New Zealand Government 4|- per Cent. Stock, 1948-1958, will be a full six months' interest and will be made on the Ist March, 1949. The total of New Zealand Government per Cent. Inscribed Stock, 1948-1958, outstanding is £19,225,465. This offer of exchange is limited to a total amount of £16,000,000 4|- per Cent. Stock and the list will be closed when applications in respect of this amount of Stock have been accepted, provided however that applications will not be received after the 14th July, 1948. Applications for exchange must be made on the special printed forms which have been sent by post to all registered holders of 4i per Cent. Inscribed Stock, 1948-1958 (in the case of joint accounts to the first-named holder or to the first-named holder whose registered address is in the United Kingdom). Applications in respect of Stock Certificates to Bearer must be lodged at the Chief Accountant's Office, Bank of England, London, E.C. 2, and must be accompanied by the relative Stock Certificates. A Commission of ss. per £lOO will be paid to Bankers or Stockbrokers on allotments made in respect of applications bearing their stamp, viz. : On cash applications . . .. ss. per £lOO nominal of New Zealand Government 3 per Cent. Stock, 19661968, allotted. On applications for exchange .. ss. per £lOO nominal of New Zealand Government 4| per Cent. Inscribed Stock, 1948-1958, for which applications are accepted. Prospectuses and forms may be obtained at the Bank of England, Loans Office, London E.C. 2, or at any of the Branches of the Bank of England ; at the Office of the High Commissioner for New Zealand, 415, Strand, London W.C. 2 ; at the Bank of New Zealand (the bankers in London to the Government of New Zealand), 1, Queen Victoria Street, London E.C. 4; from Messrs. Mullens & Co., 13, George Street, London, E.C. 4 ; from Messrs. J. &A. Scrimgeour, 3, Lothbury, London E.C. 2 ; or at any Stock Exchange in the United Kingdom. A copy of the authorizing Act may be inspected at the Bank of England, Loans Office, during business hours until the 16th July, 1948. Bank of England, 29th June, 1948. By Authority: E, V, Paul, Government Printer, Wellington.—l94B, Price, Is. #*,]*
62
Explanatory Mote 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 B-7 and B-7a 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 (B-7 [Pt. I]) the amount, if any, for the same item shown on the supplementary estimates (B-7 [Pt. II]). The total amount appropriated for each 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. Commencing with the financial year 1942—43, a further change was made in the presentation of the estimates of expenditure. The estimates for the Public Works Fund were not submitted separately, but were incorporated in the one estimate of expenditure. The word " Fund " was dropped, and the public-works estimates are under the heading of the Public Works Account. The same relative order is maintained in the supplementary estimates as in the main estimates.
Permanent link to this item
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Bibliographic details
FINANCIAL STATEMENT (In Committee of Supply, 19th August, 1948), Appendix to the Journals of the House of Representatives, 1948 Session I, B-06
Word Count
19,769FINANCIAL STATEMENT (In Committee of Supply, 19th August, 1948) Appendix to the Journals of the House of Representatives, 1948 Session I, B-06
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