H.—ls.

Briefly, the financial results obtained during the past eleven years are as follows : —

From this it will be seen that the Department's financial position has improved considerably since the commercial balance-sheet system came into operation, but, unfortunately, the standard reached in 1928-29 could not be maintained owing to the loss of revenue from whaling operations in the Ross Dependency. In 1921-22 the deficiency was £95,153 14s. lid., while during 1931-32 this figure was reduced to £14,316 12s. 6d., a net improvement of £80,837 2s. sd. In view of the decline in revenue consequent upon the prevailing financial depression, the Department adopted a policy of rigid economy during 1931-32. The numbers of staff in all branches were reduced to a minimum, and every item of expenditure was closely overhauled and curtailed wherever possible. Excluding interest on capital and depreciation, the expenditure showed a decrease of £16,040 compared with the figures for 1930-31. The charges for depreciation and interest on capital show a marked increase owing to the purchase of the new lighthouse vessel, which is capitalized at £80,000, in comparison with £20,000 for the old tender " Tutanekai." The full extent of economies initiated during 1931-32 is not reflected in the year's accounts, and consequently a still further saving in expenditure may be anticipated during the current year. Negotiations for the transfer of the control of Hokianga Harbour from the Department to the Hokianga County Council reached a successful conclusion during the year, with the result that a saving of approximately £500 per annum will be effected in the departmental accounts. The loss on the working of the Inspection of Machinery Branch for the year has been reduced from £5,397 16s. 10d. to £2,954 13s. 5d., principally due to the exemption of farm machinery not exceeding 6 horse-power from annual inspection, with a resultant reduction of eight in staff and a saving in salaries and travelling-expenses. However, the full benefit of the saving is not reflected in the year's accounts, as special legislation was necessary to give effect to the step taken, and this was not passed until late in the financial year. It is anticipated that this branch will now be self-supporting, despite a general reduction of 10 per cent, in fees which was put into operation on the Ist May last. At the present time the fees for the inspection of machinery are based upon the horse-power of prime movers, but this is giving rise to anomalies so far as electrical machinery is concerned. The Department is now collecting data which will enable a new scale to be drawn up and the fees assessed on a more equitable basis. Westpobt Habbour. The following statement shows the revenue and expenditure in respect of West/port Harbour for the past eleven years : —

The loss for the year under review amounted t0.£11,546 lls. lid. after making full provision for all charges in the "way of depreciation, interest, and sinking fund. This loss was due to the abnormal depression in the coal trade which, unfortunately, is showing no signs of improvement.

2

Before paying Interest After paying Interest Year - on Capital. on Capital. £ s. d. £ s. d. 1921-22 .. .. .. Deficiency 74,146 4 2 Deficiency 95,153 14 11 1922-23 .. .. .. „ 48,082 11 0 „ 63,798 18 3 1923-24 „ 9,759 8 1 „ 27,231 4 9 1924-25 „ 2,144 4 11 „ 19,882 0 6 1925-26 .. .. .. Surplus 517 2 2 „ 17,294 8 10 1926-27 .. .. „ 5,881 5 2 „ 12,124 0 10 1927-28 „ .5,941 6 0 „ 12,178 12 0 1928-29 .. .. .. „ 17,531 8 1 Surplus 1,474 15 2 1929-30 .. .. .. „ 8,494 8 11 Deficiency 8,940 6 3 1930-31 „ 1,891 10 5 „ 16,365 0 9 1931-32 „ 5,877 19 4 „ 14,316 12 6

i " Year. Expenditure. Revenue. Year. Expenditure. Revenue. j l_ £ s. d. £ s. d. £ s. d. £ s. d. 1921-22 .. 63,950 110 25,836 19 3 1927-28 .. 65,828 1 7 65,909 8 1 1922-23 .. 50,738 17 5 38,700 8 1 1928-29 .. 68,87113 0 64,214 5 6 1923-24 .. 46,619 111 42,285 7 4 1929-30 .. 64,877 10 5 66,274 17 3 1924-25 .. 44,666 14 0 50,378 11 0 1930-31 .. 53,436 16 9 53,013 2 11 1925-26 .. 51,909 4 11 57,539 12 11 1931-32 .. 46,149 4 8 34,602 12 9 1926-27 .. 52,769 12 6 62,976 13 10