A—3

26. Public Finance To meet expenditure, revenue is raised in the Cook Islands themselves, and the principal items at present are receipts from stamp sales, Customs import duties, and income-tax paid by taxpayers resident in the Group. With the addition of two local duties, the New Zealand Customs Tariff applies, and for Customs purposes the Group is treated as if it were part of New Zealand. Income-tax, as in New Zealand, also applies, and is collected through the Land and Income Tax Department. Apart from incometax which may be payable in some cases, there is no direct taxation of the Native community. Subsidies to cover the deficit on ordinary working are granted annually by the New Zealand Government, and, in addition, in recent years special grants have been made for particular purposes, mainly of a capital or development nature. There are no banking facilities in the Group. A comparative statement showing revenue and expenditure and subsidies, &c. for the last five years is set out below : •

19

Year. Revenue Obtained in the Territory. Expenditure of the Territory. Deficit. Subsidies and Grants from Ifew Zealand. Final Surplus or Deficit. £ £ £ £ £ 1943-44 40,818 59,798 18,980 27,000 General +8,020 1944-45 40,228 120,239 80,011 27,000 General 48,992 Airfield 3,477 Sanatorium XA •> 1945-46 49,337 93,017 43,680 27,000 General —QQbZ I 16,669 Sanatorium -li 1946-47 73,999 107,530 33,531 7,289 General 939 Scholarships 275 Milk in schools 1,971 Road maintenance 425 Pensions 1,713 New residences 2,601 New bridges 3,100 Sanatorium -15,218 1947-48 78,773 147,106 68,333 57,469 General 515 Residences 5,131 New roads and bridges 2,797 Maintenance, roads and bridges 716 Milk in schools 9 Reef survey 918 Sanatorium 1,278 Emergency air and shipping calls to relieve distress or serious illness 1,357 Scholarships 682 Radio reconstruction 119 War pensions +2,658 Note.—Advance of £27,814 for electric-power scheme is not included in 1947-48 figures.