B.—4A,

FINAL REPORT.

To His Excellency the Right Honourable Lord Bledisloe, G.C.M.G., K.8.E., Governor-General and Commander-in-Chief in and over His Majesty's Dominion of New Zealand and its Dependencies. May it please Your Excellency,— 1. The Commission entrusted to us by Your Excellency directed us to inquire into and report on the public expenditure in all its aspects, to indicate economies that might be effected if particular policies were either adopted, abandoned, or modified, and generally to make recommendations to the Government for effecting forthwith all possible reductions in public expenditure, having regard especially to the present and prospective position of the public revenues. 2. Your Excellency's Commission directed us to furnish a final report not later than the Ist May, 1932, since extended to the Ist July, 1932. METHODS EMPLOYED, 3. Since presenting our interim report we have reviewed in detail the expenditure of Departments of State and have taken such personal evidence as appeared necessary. In particular we have examined Permanent Heads of Government Departments in regard to the various State activities under their administration and have reviewed the problem of reducing expenditure. 4. The fact that large economies in expenditure have been effected during the last three years has rendered our task in exploring further avenues of possible economies by no means an easy one ; nevertheless our recommendations which follow indicate that there are still many directions in which public expenditure can be appreciably reduced, though, in view of reductions previously brought into effect the scope for what may be termed " simple economies " was by no means wide. 5. Recognizing the need for the most rigid control of expenditure and for effecting further substantial economies in view of the continued decline in the national income, we have found it necessary to recommend general reorganization in many State Departments and in connection with services financed by the State. These we do not term " simple economies," and it is this extensive review of departmental organizations which has necessitated the extensions of time in which to submit this final report. GENERAL REVIEW OF BUDGETARY POSITION. 6. Since the presentation of our interim report the position of national finances has been outlined by the Minister of Finance, and it is well known that the last financial year ended with a deficit of approximately £2,140,000. 7. The Minister has also given a summary of the prospective position of the public revenues for 1932-33 and indicated the necessity of providing for a possible deficiency of £8,300,000. 8. It was with the knowledge that the Dominion would have to face a substantial deficit for 1931-32 that we commenced our investigations, and it early became evident that the position for 1932-33 would be much more serious. As the result of this knowledge we recommended substantial economies in public expenditure—economies which to those who did not appreciate the gravity of the position may have seemed too drastic. We were convinced at the time that the economies recommended were necessary to assist in establishing budgetary equilibrium within a reasonable space of time, and it was for this reason we expressed the hope that a policy of selection would not be adopted, and that economies would be effected even where strong opposition might be expected. 9. We realize that some of the recommendations made in this report also relate to classes of expenditure which have many advocates, and powerful arguments will no doubt be urged for the continuance of such expenditure. The same remarks apply to many of the recommendations contained in our interim report, but in the present circumstances, and recognizing the seriousness of the crisis with which the Dominion is confronted, the only comment which is necessary is, " Has the Dominion the means at the present time to continue expenditure on the same scale as in recent years ? " To that question there can only be one answer. Therefore we consider it our duty to recommend whatever reductions we conceive to be possible with the least harm in order to bring expenditure within the limits of general revenues.

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