D.—l.

The activities of the Main Highways Board for the past financial year are described in its annual report, which is attached to this Statement. The report indicates that the total receipts from revenue sources amounted to £2,202,638, as compared with £2,758,808 for the preceding period. The reduced income from motor-spirits tax accounts for £475,208 of the decrease of £556,170, and this reduction is, of course, directly attributable to the petrol restrictions that have operated over the period. The total expenditure from the Main Highways Account for the financial year ended 31st March, 1941, on actual works, as distinct from loan and special charges, amounted to £2,659,002, which is a very substantial reduction on the preceding year's figures. Maintenance expenditure was reduced by £235,088, the renewal of bridges involved £29,727 less than in the previous year, while the curtailment in constructional activities showed a saving of £1,675,205. The total reduction in main highways expenditure therefore was no less than £1,940,020 as compared with the previous year. In addition, interest and loan charges amounted to £587,747 and general rate subsidies paid to local authorities totalled £213,457. The improvements completed included formation and widening lengths totalling 186 miles and the metalling of various sections aggregating in length 128 miles. The length of dustless surfacing added during the year was 243 miles and the length of new bridging totalled 9,405 lin. ft. The maintenance of the main-highways system, including the amounts spent by the Main Highways Board and local authorities, represents an average cost per mile of £97*1, compared with £117-6 for the preceding year. While a decrease in the average maintenance cost per mile has resulted, due to the reduced traffic, the general standard of maintenance has been maintained. The Highways Board's proposals for the current year provide for adequate and reasonable maintenance of the existing assets, the renewal of decayed or dangerous bridges, and the completion of contracts already in hand, alopg with the improvement of sections of highway considered necessary by the Army authorities. HYDRO-ELECTRIC DEVELOPMENT. All generating stations have operated smoothly during the year, and the financial results of operations have again been very satisfactory. After paying net operatingexpenses the revenue for the year gave a return of 9-07 per cent, on the average capital in operation, as compared with 8-7 per cent, for last financial year. The development of secondary industries made necessary by the war has been a factor in increasing the demand in both Islands, and the units generated in Government generating-stations and Government-controlled stations showed an increase over the previous year of 13-90 per cent, in the North Island and 13-41 per cent, in the South Island. Amending legislation passed last year rendered the Electric Supply Account liable for payment of taxes, and the sum of £336,049 was accordingly paid for income-tax, national security tax, and social security charge. Demand versus Generating-capacity. During the year it has been found necessary to call on all North Island Electric Supply Authorities, which are dependent on the Government hydroelectric generating-stations, to exercise a strict control over the increasing electrical demand in their respective areas. The response so far has enabled the Public Works Department to postpone the implementing of any arbitrary scheme for rationing of supplies, which is the only alternative and one which it is desired to avoid if possible.

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