8.—6

be in direct ratio to the cost of handling. It was not in any way calculated to increase the aggregate cost to the users, but was designed essentially to ensure a more equitable return upon the handling of long-distance traffic. Conversely, the charges for short-distance traffic were reduced. The new system met with much criticism, particularly from some of the business community. The opposition was not based upon any inherent weakness in the principle of charging according to distance, but the new method was apparently looked upon as too radical a departure from the flat rate system of charging, which, from long usage, had been regarded as a fixed policy in respect of telegraph charges. Having regard to the objections raised to the graduated method of charging, and with a view of giving every consideration to the wishes of users, the Government has agreed to revert in the near future to the flat rate method. This will be in the direction of resuscitating in a measure the one-time popular sixpenny telegram. The new charge will be on a flat rate basis at the rate of Id. per word, with a minimum charge of 6d. The following are a few of the many concessions recently granted by the < Post and Telegraph Department to its clients : — 1. Removal of certain restrictions on the posting of business accounts and circulars : 2. Reduction in postage on registered newspapers from Jd. for 3 oz. to |d. for 8 oz : 3. Free medical advice by radio-telegram to ships at sea: 4. Abolition of telephoning fee for inward and outward telegrams : 5. Half-toll rates from 6 p.m. instead of 8 p.m. on week-days, also all day on Sundays and holidays: 6. Toll charges reduced to one-fourth rate from 10 p.m. to 6 a.m., with maximum charge for three minutes of Is. within either Island and Is. 6d. inter-Island : 7. Reduction in " No-reply " toll charge : 8. Reduction from 4d. to 2d. in minimum charge for short distance telephone toll communciations : 9. Extension from 2 hours to 12 hours Sunday service in 108 exchanges : 10. Extension of Auckland Exchange base-rate area : 11. Overseas radio-telephone charges reduced 25 per cent. : 12. Initiation of " Person to Person " call. From these it will be evident that valuable concessions have been given to both city and country subscribers. BUDGETARY POSITION FOR 1935-36. I come now to the general budgetary position for this financial year. As one would expect from the progressive improvement in economic conditions reviewed in my opening remarks, the public revenues continue to be buoyant. Increasing imports mean additional customs revenue, and, after a careful survey of results to date and the prospects for the remainder of the year. I have set down the estimate of Customs revenue for the year at £7,900,000, a comparative increase of £476,000, or approximately 6 per cent., over receipts for last year. Then the rising volume of factory production and the improvement in local trade and industry generally must substantially increase the yield from the sales tax at the existing rate. The estimate of the comparative increase is £304,000. In these circumstances it is also reasonable to expect an increase in the yield from the petrol tax, while it is known that there is an appreciable rise in the number of motor registrations. Accordingly it is anticipated that highways revenue will exceed last year's receipts by £130,000. Income-tax is always difficult to gauge, and last year's receipts were substantially higher than was anticipated. For this year we can confidently expect the yield from the tax to rise to £4,250,000, an increase of £404,000, oi about 11 per cent.

Other concessions.

Customs revenue.

Sales tax.

Highways revenue.

Income-tax.

4—B. 6.

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