8.—6.

these hydro-electric schemes continue to be a financial success. The net surplus for last financial year, after providing for working-expenses, depreciation, and interest, was £117,000, which is to be applied towards sinking fund and reduction of past losses. Another major item in this year's capital programme is public buildings, including schools, for which a net vote of £435,000 is proposed. The largest single work in hand is the Dunedin Post-office, for which it is estimated £120,000 will be required this year. In addition, £150,000 is to be provided for school buildings, primary and secondary, and £90,000 for mental hospitals, where additional accommodation is urgently needed. An instalment of £30,000, being portion of the subsidy of up to £100,000 promised for the National Art Gallery and Dominion Museum, is also provided on the estimates. Finally, I may mention, now that financial commitments on major works generally are becoming lighter, it is proposed to commence the erection of new administrative blocks of buildings to house Government Departments in Wellington and Auckland. The present Government buildings are old and the accommodation is quite inadequate. In fact, the amount now being paid by way of rent for additional accommodation would probably be sufficient to pay interest and sinking fund on the capital cost of new buildings to house all Departments. The gain in convenience to the public and administrative efficiency would be considerable. In addition to proceeding with these works, the carrying-out now of other necessary building-works is considered by the Government as economically sound quite apart from the associated immediate benefits that will accrue in acceleration of employment in the various trades concerned. At the same time the proposals have a close bearing on the problem of finding further useful employment, and from this aspect are to be considered in conjunction with other measures to which I will refer presently. As it will be some time before construction work can be started,. very little expenditure on these projects will be involved this financial year. Before departing from the subject of building operations, I may say that some local bodies are giving consideration to the problem of improved housing conditions in what may be termed slum areas. In England it is noted that considerable activity by local bodies in this matter exists, and here I may say this Government is willing to co-operate as far as possible with local bodies in New Zealand in any projects of this nature. Provision to the extent of £1,910,000 is being made for expenditure on highways and roads apart from cost of administration. Of this amount £900,000, representing an increase of £255,000 over last year's expenditure, is being provided out of the Main Highways Revenue Fund for maintenance expenditure. On the highwaysconstruction work it is proposed to spend £510,000, about half of which is for bridges and the balance for sealing and other surface improvements. This leaves £500,000 for expenditure under the Public Works Fund vote for settlement roads in the various counties throughout the Dominion. The expenditure will be mostly for metalling roads in the more remote districts. In addition, as was the case last year, a considerable amount of road works will be carried out with assistance from unemployment funds. Other items in the programme are £260,000 for extensions of the telephone and telegraph systems, and £220,000 for irrigation, lands improvement, and swamp drainage. Continuation of the work on the Omakau Irrigation Scheme in Central Otago will absorb £64,000, while £50,000 will be spent on the Taupiri Drainage Scheme, and considerable sums in continuing the reclamation of valuable harbour flats in. North Auckland. As may be seen from the estimates, various smaller amounts have been set down for other votes. To summarize the position, I may say that the capital programme is broadly made up as follows : — £ Public works .. .. .. .. .. 2,862,000 Small Farms Scheme .. .. .. .. 375,000 Additional expenditure for land-development .. 150,000 Native-land development . . . . . . 120,000 Forestry .. ... .. .. .. 53,000 £3,560,000

Public buildings.

New major works.

Housing schemes.

Highways expenditure.

Miscellaneous works.

Summary of capital programme.

8