Revenue summary.

Budgetary position.

8.—6

In addition, probably about £150,000 will have to be allowed for supplementary estimates and contingencies. The estimated revenue is as follows : — Taxation — .. • • • • £ £ Customs 6,200,000 Beer duty .. .. •• 650,000 Sales tax 1,750,000 Gold-export duty .. .". 140,000 Highways .. .. •• 1,650,000 Stamp and death duties .. . . 2,600,000 Land-tax .. .. .. 450,000 Income-tax 2,700,000 Miscellaneous .. .. •• 74,000 16,214,000 Interest receipts .. . . • • • • 2,551,000 Other receipts .. . • •• •• 1,541,000 From reserves .. .. •• •• 2,000,000 £22,306,000 The estimated budgetary position at the 31st March next is thus :— Expenditure 24,400,000 Eevenue 22,306,000 Shortage £2,094,000 The actual deficit that accrues at the end of the year will have to be carried forward in the form of floating debt, but I would point out that the estimates of expenditure include £1,366,000 for repayment of debt under the statutory debt repayment scheme. Thus the net increase in debt as a result of the year's operations on the basis of the estimates will be about £750,000 only. As already explained, this estimated shortage for the year does not, and indeed cannot, take into consideration the ultimate result that will accrue from disposal of the surplus sterling assets acquired under the exchange indemnity arrangements. Budgeting for a deficit cannot be regarded as satisfactory, and in normal times such a course would be inexcusable. At present, however, we are driven to it by the adversity of circumstances over which we have no control. If it is not to add to our troubles we must keep the budgetary position within safe limits, and as a result of tremendous efforts and heavy sacrifices manfully borne by the people this has been accomplished. Further than this Ido not think it wise to go m present circumstances. Our intention is to reach budgetary equilibrium at the earliest possible moment; but to have attempted to achieve a balance this year, either by increasing taxation or by further slashing expenditure, would have involved a far greater strain on the internal structure of the country than would have been advisable in present circumstances. It is accordingly not proposed to make any further increases in taxation, but, on the other hand, it will be clear from the position I have outlined that reductions in taxation are out of the question at present. We may justifiably hope, however, that the time is not far distant when we shall be able to take action m that direction. . . When in due course we come to look back upon these times it will be recognized that three measures which have been taken, however contentious they may have been when initiated, stand out as landmarks along the road to recovery. These are — (1) The adjustment of the exchange rate ; (2) The conversion of the whole internal debt, with related measures for stabilizing interest rates at lower levels ; and (3) The establishment of the New Zealand Eeserve Bank. In the meantime the essential fact is that the depression is passing, and, though much remains to be done to complete the work of restoration, we can go forward with lighter hearts buoyed up with the prospect of better times ahead.

20