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Last Year's Results I should like here to direct attention to the financial results of last year's operations. Consideration of Government finances can conveniently be giveii under two main headings, viz:— (a) Current Account.—Moneys received from taxation and other revenue sources and spent on education, social security, and similar matters. (b) Capital Account. —Money raised by borrowing and spent on capital works such as hydro-electric schemes, housing, schools, and such like. (a) Current Account Revenue Expenditure. Deficit (—) £ £ 6 Cl £ Consolidated Fund . . . . 124,997,000 120,689,000 + 4,308,000 Social Security Fund .. . . 43,773,000 46,360,000 2,587,000 War Expenses Account .. 3,249,000 4,279,000 1,030,000 Net surplus on Current Account . . .. .. + £691,000 (b) Capital Account £ Expenditure on works . . .. . . .. .. 34,399,000 Loans raised . . . . .. .. .. .. 19,399,000 Deficiency on Capital Account made up by newly created Reserve Bank credit .. .. . . . . £15,000,000 \ In order to meet commitments for 1949-50 recourse had to be made to the creation of new Reserve Bank credit to the extent of £26 million, made up as follows: For repayment of debt . . . . £ll million To make up the deficiency in the Capital Account .. .. .. £l5 million Total . . .. .. £26 million I have already called public attention to the fact that this large amount of newly created money was authorized at a time when New Zealand was enjoying abundant production and record prices for her exports.

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