B. —6.

may be. These works require a large proportion of labour and they result in continually decreasing operating costs for the motoring community. The Government has made special provision for the metalling of the more remote settlement roads, popularly termed the " backblock " roads, and the Public Works Statement will provide more detail of the substantial progress which has been made. After receiving certain aid from revenue, last year's net expenditure from the vote for roads was £1,126,757, and this year it is proposed to provide £1,500,000. The expenditure from all Government sources on works on main highways for the current year is estimated at £5,037,200, compared with £4,031,728 for last year. Land settlement and development—as represented by the various votes for lands improvement, irrigation and water-supply, swamp-land drainage, settlement of unemployed workers, native-land settlement, lands for settlement, and State forests—form a very large and important part of the public-works programme. The receipts from disposal of produce have increased substantially each year, and these are applied to operating-expenses and to further development. Good progress has been made with the establishment of selected workers on small farms while the native-land-settlement activities, which include the provision of new and better housing, are proving a splendid aid in solving the problem of settling the Maori in useful and productive work suited to his abilities and temperament. The Government has in hand a more active and organized policy in regard to afforestation, calling for substantially more expenditure, estimated at £640 ; 000 for the year. The total expenditure for the current year on land settlement and development is estimated to be £3,081,500, of which £1,770,000 will be from loans, £898,000 from the Employment Promotion Fund, and £413,500 from the disposal of produce. Hydro-electricity development is expected to involve much greater expenditure this year than for some years past, due mainly to the necessity for extensions in the Arapuni area and further plant at Waitaki as well as the additional headworks now in hand near Lake Waikaremoana. The demand for electricity continues to grow at a very healthy rate, and it is necessary to push on with extensions and new works in order to have sufficient installed capacity to meet that demand. The accounts for the past year disclose a surplus of approximately £390,000, after charging interest and depreciation, and this surplus will be applied to reduction of accumulated losses and to sinking fund purposes. The gross revenue for the current year is estimated at £1,550,000 against £1,450,000 for the previous year. Constructional expenditure is estimated at £1,192,000 this year, with £364,000 for working expenses, making a total (apart from interest) of £1,556,000. It is anticipated that £742,000 will require to be borrowed to meet this expenditure, the balance being found from revehue. The supply of electricity bids fair to become in the near future one of the most profitable of the State's commercial undertakings. In summarized form the various classes of work and the year's estimated expenditure thereon is as follows : — £ Railway construction and improvements .. 5,186,000 Highways and roads .. .. .. .. 6,537,200 Public buildings . . . . . . . . 2,360,000 Land settlement, development, and improvement . . 3,081,500 Hydro-electric development . . .. .. 1,556,000 Telegraph and telephone extensions .. .. 750,000 Other works (aerodromes, plant, and material, upkeep of buildings, &c.) . . .. .. 1,249,000 Total .. .. .. .. £20,719,700 Of this total it is anticipated that £14,263,000 will require to be raised by loans, the balance being available from taxation, electricity sales, disposal of farm and forest produce, transfers from the Employment Promotion Fund, and from miscellaneous revenue sources.

Land settlement and development.

Hydroelectricity.

Expenditure 1938-39.

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