8.—6

The amount of £3,500,000 available under the Memorandum of Security Agreement has already been borrowed and expended in discharging our final cash commitments connected with the Empire Air Training Scheme and in meeting part of the cost for the Middle East Forces. Current charges will be met by cash payments from our own London funds. To meet the estimated excess of expenditure over revenue it has been necessary to rely again on public subscriptions to a war loan but of a very much reduced amount. In 1942-43 war loans raised in New Zealand amounted to £62,600,000, in 1943-44 to £55,800,000, and in 1944-45 to £45,900,000. This year the amount required is £25,000,000, and it has already been provided through the 1945 Victory Loan which was opened on the 14th May, 1945, and closed on the 16th June, 1945, oversubscribed on present figures by some £500,000. This satisfactory result is subject to variation, however, by National Savings receipts for the balance of the year. I must mention again, not only in relation to the 1945 Victory Loan, but also both from the national as well as the individual point of view the great value to our internal economy resulting from National Savings. From a small but sound beginning, investments in National Savings Bonds and Accounts have grown steadily until on the 31st March, 1945, £31,442,088 was invested in these securities. As much of this sum represents spending-power diverted from civilian to war production, the impetus given to our war effort is obvious, and the value to economic stability, inestimable. I would emphasize, however, that the need for restricted spending still exists ; that purchases should be limited to essentials particularly so that our returning Forces may satisfy their urgent needs ; and that surplus funds, or any other forms of loose cash, are well and safely invested in National Savings where they will be of benefit to New Zealand now, and of great benefit to the investors later when ample supplies of goods are once again available. The first repayment of National Savings fell due on the 30th June last when deposits in National Savings Accounts of approximately £10,000,000 matured. To meet the cases of those who did not immediately require their deposits, arrangements were made to reinvest the funds at 3 per cent, interest for a further period to the 30th June, 1946. On the other hand those wishing to withdraw, to transfer to a savings-bank account, or to reinvest for a two-yearly term were at liberty to exercise these options freely and at will. National Savings Bonds mature five years from the date of issue and the first of these will therefore be due in October of this year. Holders may redeem the bonds in cash on the respective due dates or, if they so desire, reinvest in the current issue of National Savings Bonds, or deposit the money in a National Savings Account. As has already been announced, the Government have decided to pay a gratuity to all full-time servicemen and servicewomen in the Armed Forces, whether they have served overseas or within New Zealand. In • view of the arduous and hazardous nature of service overseas, the rates of gratuity have been fixed at £3 15s. per month for overseas service and £l per month for full mobilized home service. To ensure that the full benefit of the gratuity is available to the serviceman or servicewoman without inflating prices, it is proposed to spread the payments oyer a period. It is recognized, however, that many servicemen may require the gratuity for some bona fide purpose before the date fixed, such as the repayment of a rehabilitation loan ; the discharge of a mortage, whether State or private ; or the purchase of a home and furniture. Subject to reasonable safeguards to ensure that the money is so applied, a simple procedure will be established to provide for payments for such purposes. The full details of the scheme are being worked out and will be announced shortly. The Government appreciate the valuable contribution made by the Friendly Societies to the social progress of the Dominion, and in particular for their work on behalf of their own members during the present war, when they have made provision to keep contributions fully paid up, of all members who are full-time servicemen or servicewomen. In addition to this help the societies have sustained heavy losses of membership by casualties in the fighting Forces. As some measure of contribution towards this loss, the Government have decided to reimburse to Friendly Societies 50 per cent, of the sums which are paid out by them to beneficiaries of members killed in action or dying during the period of the war as a result of the war with Germany and Japan. The cost to date is estimated at £30,000 of which the Government will pay half.

Memorandum of Security.

1945 Victory Loan.

National Savings.

Repayment of National Savings.

Gratuities.

Friendiy Societies war losses.

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