8.—6

XIV

NAVAL DEFENCE. The expenditure on naval defence for the financial year amounted to £293,244, made up as follows : — Permanent charges — Naval Defence Act, 1909 11.M.5. " New Zealand "— £ £ Interest .. .. .. ..77,081 Repayment of funded debt .. .. 4,938 82,019 Annual appropriation — Vote, Naval Defence (" Philomel " and " Chatham ") 211,225 £293,244 The time has arrived when we should participate to a greater extent in the naval defence of the Empire and assume a share of the burden which it entails. I propose, therefore, to ask honourable members this year to increase the total appropriation for naval defence to £500,000. This amount will include the workingexpenses provided for within the vote and a sum not exceeding £100,000 as a contribution towards the cost of establishing a naval base at Singapore. This base will be of more value to Australia and New Zealand than to any other British countries in the Pacific. The " Chatham " will in the near future be exchanged for an up-to-date oilburning light crusier. The Admiralty have emphasized the necessity for the provision of oil-fuel reserves in the dominion —independent of commercial stocks, which, moreover, are practically non-existent at the moment—before oil-burning cruisers are sent to the South Pacific. An item, therefore, has been placed on the estimates for the erection of a 5,000-ton oil-tank at Devonport, as Auckland has proved to be eminently suitable as a repairing and storing base for a small squadron. Items appear in the estimates for effecting certain necessary improvements in the facilities afforded by the repair base at Auckland and of the establishments there. A further item of £5,000 has been inserted with a view to relieving the British Government of the subsidy which they have been paying continuously since 1909 under agreement with the Auckland Harbour Board for the payment of £150,000 over a period of thirty years, as under that agreement New Zealand now derives the greatest benefit in the docking and repair of naval vessels. I may add that the Imperial Naval authorities prefer the system of local expenditure in operation in New Zealand to any direct contributions; and even with regard to the cash contribution towards the cost of a naval base at Singapore, may prefer that the difference between the current expenditure and the proposed total appropriation of £500,000 should be used for strengthening the defences of our ports. EDUCATION. The expenditure from Government sources on education services during the past financial year has been as follows : — Votes from Consolidated Fund — £ Department of Education .. .. .. 2,514,991 Special Acts .. .. .. .. 90,393 Teachers' Superannuation Fund .. .. 68,000 Primary-education reserves revenue .. .. 103,293 National-endowment revenue .. .. .. 66,610 Education loans for buildings, &c. .. .. 351,378* Public Buildings Fire Insurance Fund . . . . 8,542 £3,203,207

* Does not include cost of raising loans, £10,598.