8.—6

XVI

The Local Authorities Branch shows a loss of £635, which is very small compared with the losses of the previous years. During the two previous years the loss amounted to £22,557, and this will be provided for out of the surplus in the Consolidated Fund at the 31st March, 1913. Since the introduction of last year's legislation the business has undoubtedly been -put on a better footing. Amended legislation is being introduced which will consolidate and simplify the present law regarding State advances. The existing system, under which the Superintendent is required to raise the money for certain other Departments with the administration of which he has no connection, has proved cumbersome and inconvenient, and it is intended to provide that in future the Treasury shall raise all moneys required for such purposes as land for settlement, Native-land settlement, opening up of Crown lands, &c, instead of the Superintendent. The amending Bill will also make provision for bringing the sinking funds of all new loans of the Advances Office under the operation of the Public Debt Extinction Act. With regard to existing loans, the Superintendent has hitherto been required to pay each year 1 per cent, to the Public Trustee for investment as a sinking fund. To do this, capital moneys had to be encroached upon to some extent. It is proposed that, with regard to these loans, the Superintendent shall himself invest the sinking fund in loans to settlers, workers, or local authorities instead of paying it to the Public Trustee for investment. Previous to the date when the present Government took office the Advances Board found it impossible, owing to financial stringency, to entertain applications for loans to repay existing mortgages. The Board also then found it necessary, for the same reason, to limit the loans under the Advances to Settlers Branch to sums not exceeding £500. Kecently, I am glad to say, the Board has been able to relax this stringency somewhat, and loans are now being granted for the purpose of repaying existing mortgages in the case of Crown leaseholders, and the limit of loans to settlers has been extended from £500 to £750. In November, 1912, it was also found necessary to limit the loans granted under the Advances to Workers Branch to sums not exceeding £300. In May last this limit was raised to £400, and loans up to that amount are now being granted to workers by the Board. The following tables will show the greatly improved position of the Department's funds at the 30th June, 1913, as compared with the 30th June, 1912 : — 30th June, 1912. 30th June, 1913. Advances to settlers— £ £ Total commitments '. . .. 73,142* 154,2241 Total funds .. .. .. 644,739f 813,043' Advances to workers — Total commitments .. . . 559,891f 63,775 Total funds .. .. . . 655,166 158,978 Advances to local authorities— Total commitments .. . . 711,820 488,170§ Total funds . . . . . . 96,783 428,980 * Includes £34,680 temporarily transferred from Public Debt Sinking Fund Branch, f Includes £360,000 temporarily transferred from Settlers Branch to Workers Branch, j Includes £10,000 temporarily transferred from Guaranteed Mining Advances Branch. § Includes £151,840 temporarily transferred from Settlers Branch. All loans granted by the Advances Office are on what is known as the instalment system —that is, each half-yearly instalment paid by the borrower for the loan is comprised partly of principal and partly of interest. The proportion of these half-yearly instalments which represented repayment of capital during the year was as follows:— £ Advances to settlers .. .. .. 111,431 Advances to workers .. .. .. .. 35,410 Advances to local authorities .. .. .. 20,121