THE BUDGET

New Zealand Graphic, Volume XLIII, Issue 20, 17 November 1909, Page 61

THE BUDGET

THE Minister for Finance (Sir J. G. Ward) delivered his Budget speech on Wednesday night. Attached to the Budget was the Statement delivered during the short Session in June last, and Sir Joseph ■Ward stated that this would make it Unnecessary for him to deal in detail With the complete figures for last financial year. The increase in public debt for the past year was £4,484,037, but it is only right to say that of this amount no less than £2,633,019 may be regarded as directly interest-bearing with additional profit. The acquisition of the ManaWatu railway, which was in full working Order, and therefore immediately revenue-producing, necessitated a loan of £1,600,000 to complete the purchase. For advances to settlers and workers an additional £1,172,300 was obtained [£250,000 for loans to local authorities, and £211,495 for the purchase of lands under the land for settlement scheme. These items, with the small sum of £124 invested in N.Z. consols, make up £2,633,919, all interest-bearing, and yielding profit. This leaves the sum of [£1,850,718 for general purposes, a large portion of which has been expended in additions to open lines and railway construction works that will bring revenue later on. The gross public debt of the Dominion grew from £38,830,350 at March 31, 1891, to £70,938,534 at March 31, 1909, an increase of £32,108,184, equal to 82 per eent; but of this amount no less than £21,090,070 was spent directly on reproductive objects, such as advances to settlers and workers, land for settlement, loans to local bodies, State coal mines, native land purchases, ete. What does the other side of the bal-ance-sheet show? The capital value ot land publicly and privately owned in 11909 was £270,537,296. The capital value of land publicly and privately owned in 1891 was £122,225,029, an increase in the value of land alone, irrespective of many other sources of property, stocks-, etc., of £148,312,267, equal.-to over 121 per cent increase. The value of the railways and rolling stock during the period 1891-1909 rose £13,844,058, viz., from £15208,374 to £29,052,432, equal to over 91 per cent. The figures may, therefore, be stated as follows: Increase on opened railways and equipment from 1801 to 1909', £13,844.058; increased capital supplied in advances ito settlers, land settlement, State coal mines, loans to local bodies, native land purchases, etc. (all directly reproductive), £21.090,070; total, £34,934,128. The surpluses, after paying full interest and all expenses on advances to settlers [(now over £70,000 per annum). State coal mines (now nearly £20,000 per annum, land for settlement ( £40,000), and native land purchase ( £37,419), are more than sufficient to make up for any deficiency on railways, so that the total amount of £34,934,128 may be considered reproductive. The increase in the public debt during the same period, 11891-1909, was £32,108.184. This shows Itlia-t the whole 'of the increased public debt has been utilised directly in reproductive objects producing profit, and the expenditure on unreproduetive objects, Such as roads, bridges, mines, public buildings, tourist, health, etc., has been provided out of revenue; but as the effect of the bulk of this expenditure is to open up the country and promote its development and progress, it may also be taken to be to a great extent reproductive in the return of revenue from increased taxes paid.

STATE INVESTMENTS. The profits earned by the State reproductive investments now reach nearly [£200,600, after payment of interest and expenses, and are increasing rapidly from year to year. It was not intended that these investments should reduce rates to what would be ruinous competition with private traders and investors. These rates may be said to -have now reached the minimum, but, notwithstanding this, the profits continue to steadily increase, and I anticipate that the time is not far distant when these profitearning institutions will be the means of providing a large annual sum, which, in return for the great services rendered by the State in establishing them, may

Ixj fairly regarded as a contribution towards increased charges for interest upon general loans. The investment in State coal mines lias proved so successful that in a few years’ time these properties will be good value for nearly half-a-million, and will stand to the Dominion practically free of cost.

PRIVATE WEALTH. During the period from 1891 to 1909, the population, excluding Maoris, increased from 634,058 to 960,642, an increase of 326,584, equal to 51 per cent, and country has been opened up and developed with steadily increasing rapidity. An estimate of the private wealth of the Dominion in 1909 shows that the total capital value of land privately owned is estimated at £205,845,053, the total value of live stock, machinery, implements, rolling stock, etc., £27,349,338, the total capital invested in trading and manufacturing estimated on the total income returned for taxation capitalised at 5 per cent £197,735,020, native land capital value £16,276,236, lessees’ interest in Crown lands £10,546,281, church and other land not included £2,625,202, education lands' £5,038,615, fixed deposits £ 20,084,880, banks’ mortgages not taxed '£7,500,000, Public Trust common fund mortgages £2,309,415, building society mortgages £2,000,000, Post Office Savings Bank deposits £12,159,293, banknote issue £1,587,051; total, £511,050,384. The land values here given have been proved to be fully 30 per cent below' actual sales. In addition there is private wealth represented by incomes derived from salaries and professions amounting to £3,731,144, These directly employ little or no capital, but indirectly represent capital, and if capitalised at 5 per cent would represent £74,622,880. Then there are wage earners who make no returns of income. Their estimated total income is £45,061,350. This makes the public - and private wealth in 1909 £613,518,825, an increase from 1891 of £300,000,000. The public and private wealth per head Of the mean population is £768, an increase of £376 from 1891 to 1909, with an increase in population of 51 per cent. For every £1,000,000 increase of public debt, the assets have increased by fully £ 10,000,000. This, in commercial circles, would be considered very sound business. There has been no increase in rates of taxation, direct or indirect, during the period from 1891 to 1909. On the contrary, there have been enormous concessions from nearly every branch of public revenue.

LAST YEAR’S LOANS. During the session of 1908 Parliament authorised the raising of £1,250,000 for public works, and £1,000,000 for the purchase of the Wel-lington-Manawatu railway. Owing to the stock market being unfavourable for loans, I decided not to go on the public market, and obtained all the money I required in London on much more favourable terms. Of the £1,250,000 public w<frks loan, £1,000,000 was issued on debentures at 3J per cent interest, at 99 7-8, free of brokerage, the purchasers having the option of converting all or any into 31 per cent inscribed stock. Of this amount, £500,000 has been converted into 34 stock at £lO2, and the balance replaced by the issue of 3J stock, due in 1940. Of the remainder of the public works loan, £lOO,OOO was issued at 4 per cent, at 4 per cent premium, due on November 13, 1913, and £lOO,OOO at 3J at par, due on April 1, 1912. Both these amounts will later on be converted into 34 per cent stock. The balance of £50,000 was issued at 3J per cent at par, due April 1, 1916. As to the Manawatu railway purchase Joan, £500.000 was issued on debentures at 3J per cent at 99 7-8 net, no brokerage, the purchasers having the right of converting all or any into 3J per cent inscribed stock. Of this parcel, £270,000 was converted at 102, and the balance of £230,000 replaced by the issue of 34 per cent inscribed stock, due 1940. The remaining £500,000 was issued at 4 per cent at 4 per cent premium, to mature March 1, 1916. In addition to the above, £982.300 has been obtained in Loudon for advances to set-

tlers and workers at low rates of interest. Offers from Australia to purchase £315,000 of our debentures were received and accepted, the rate of interest being 4 per eent, a premium of 2 per cent being obtained on almost every parcel. Several persons have unsolicited taken up £121,415 worth of 4 per cent debentures, with a currency of seven years. During the financial year just dosed debentures amounting to £3,133,238 fell due, and of this large amount £2,148,488 was renewed by the holders, leaving £984,750 to be provided for by the sale of new debentures. A large saving in interest charges was made, debentures for over £ 1,060,000, which previously carried a rate of 4 per cent, being placed at 3J per cent. The exact position was as follows: —Amount matured, 4 per cent, £2,010,800 ; 34 per cent, £1,057,438; 3 per cent, £65,000; total, £3,133,238. Henewed or provided for, 4 per cent, £910,825; 34 per cent, £2,221,763; outstanding, £650; total, £3,133,238. Loans maturing during the present financial year total £2,269,023. Of this amount £1,552,650 fell due during the last six months, of which £684,800 has been renewed by the holders, and £867,850 paid off. The balance at credit of the Loans to Local Bodies’ Account on March 31 last was £2,951. Up to that time the total proceeds of debentures issued and carried into this account was £3,178,100, and the total disbursements have been £3,175,149, of which £2,506,379 represented loans to local bodies, and £566.970 towards opening up blocks of land for settlement. DIRECT TAXATION. There has been, proceeded Sir Joseph, a steady increase in the amount of land tax collected, partly accounted for by the increase in values, and partly by the legislation of 1907. The increase in ordinary land tax last year amounted to £43.677, wholly from increased values. The increase in the graduated land tax amounted to £23,248, resulting also from increased valuations. The absentee tax increased by £ 129, consequent on the increased graduated tax. In 1908-9 a total of 39,132 taxpayers contributed the whole of the direct taxation of this country, amounting to £1,186,182, equal to £3O per taxpayer. < The income tax revenue for years past has shown a consistent increase. The incomes returned for taxation have increased over what they were 15 years ago by the enormous sum of £10,043,703, and increasing by large amounts each year. During that time there has been an increase of 7,396 income taxpayers.

POSTAL AND LAND REVENUES. The revenue of the Postal and Telegraph Department again shows a material increase, having reached no less a figure than £913,995, or £91,356 more than last year. I estimate that at least £938,000 revenue will be received during the current year in land revenue and settlement. The total land revenue from all sources was £696,375. This i£37,581 more than the previous year. The territorial revenue amounted to £222,856, and the revenue received as rentals from the lands dealt with under the Lands for Settlement Act was £237,831. It is estimated that the gross land revenue for the year 1909-10 will amount to the sum of £659,000, of which £224,000 will belong to ‘“territorial.”

LAND SETTLEMENT. The number of Crown tenants at tho close of the year was 25,204, an increase of 1108 during the year, the area held being 18,264,083 acres. The area disposed of during the year for immediate sale for cash payment was 42,176 acres, to 371 purchasers, the amount received being £41,689. In addition to the disposal by immediate sale, the freehold was acquired by 232 holders of deferred payment, perpetual lease, occupation with right of purchase, and lease in perpetuity holdings, to tire extent of 55,372 acres. The total areas selected during the year on settlement conditions—that is, exclusive of pastoral and miscellaneous holdings—were 521,145 acres, by 1863 persons. Under the Lands for Settlement Act five estates were finally acquired and opened for close settlement during tho past year, at a cost, with incidental expenses, of £382,426. Up to March 31, 1909, a total of 1,195,292 acres were purchased at a cost of £5,146.999, with a further expenditure of £452,680 for ex-

penses incidental to the acquisition and subdivision into smaller fayms and construction of new roads. This large investment shows rentls, etc., received £1,710.032, and interest paid £1,331,980 for the whole period. STATE ADVANCES. About 28,000 settlers and workers have received assistance amounting to £9,810, 725. The average amount of the advances now outstanding is £390 for tb'“ settlers. And £251 for the workers. The total amount of the advances for the combined departments during the year amounted to the record sum of £1,792,019. Four yeans ago the total amount of the advances made during one year was £ 100,000. The Department ■advanced during the year in the settlers’ office alone £1,521,409, an excess over the previous year of over a quarter of a million. The repayments to the Department from all sources totalled £801,980. Advances paid out to workers during the year numbered 1116. and amounted -to the sum of £298,184 6/, an excess over the previous year of 336 loans for £94,206 3/10. Up to March 31 loans aggregating £603,800 had been granted to 2399 workers. LABOUR AND CAPITAL. There is noticeable a general feeling of enhanced confidence between employers and employed. The Conciliation Commissioners and Councils have not only prevented much litigation and eased the former strain on the Arbitration Court, but have brought about a spirit of forbearance and agreement, which is full of promise and encouragement. The recent scarcity of employment was not universal, but was locally severe, especi ally .'u Wellington. 'The financial depres sion it- now apparently over. Flaxmills are beginning to reopen and building con tracts are being let with the spring. The high prices of our staple exports, and the productivity of the country generally, which has been undiminished during the time of stress, will again induce prosperity. MINING. Referring to the mining industry. Sir Joseph Ward spoke of the prospects of an early start in testing the deep quartz reefs at the Thames. In April last arrangements were completed with the native owners, and the Urewera district native reserve was opened to the prospector and the miner, but nothing definite as to the value of the mineral wealth ot the area has yet been recorded, and this also applies to the output of coal fcthe year. SEABORNE MAILS. Turning to the question of ocean mails. Sir Joseph Ward proceeded: Negotiations •have been proceeding with a view of including Auckland as a port of call of the Vancouver steamers, and I am hope ful that the sympathetic attitude ot Canada will assist towards securing tho desired result. Sir Wilfrid Laurier has, in response to a cable from me, replied that Canada is agreeable if Australia. Consents. I am submitting the matter by letter to the Prime Minister of Australia, with a view to Auckland being included as a port of call. I trust that, the Commonwealth may be able to agree to what would be of advantage to Canada, Australia, and New Zealand, its a linking up of the three countries by a service of this kind must confer advantages upon all. In the meantime, 1 have endeavoured to arrange a close connection with Vancouver and Fiji, but the high cost of this, and the undesirability of establishing such a section if there is a possibility of the main line being diverted to Auckland, may make, it advisable to await the result of the negotiations proceeding between the Dominion, Canada, and Australia, but should it not eventuate, then every effort must be made to establish a mail and passenger service from Auckland to San Francisco, via Suva and Honolulu. 1 have devoted much attention to the possibility of establishing a service by New Zealand steamers between Auckland ami San Francisco by way of Tahiti, only to find that without assistance from the American Government the cost of such a service is beyond our resources. There is, however, some reason to believe that in the next session of Congress the muchdebated Shipping Subsidy Bill will become law, when a service by American steamers will, it is practically certain, be undertaken. At the same time, 1 do not think we should overlook the advantages to New Zealand of having a suitable service via Suez, and 1 am hope-

ful that finally we may have the advantages to this country of regular services by the three routes—Vancouver, San Francisco, and Suez. These, together with the direct services that are being run for passenger and cargo purposes between New Zealand and Great Britain, fihould place us in a position in the oversea carrying for our general trade of much greater advantage than at present.

BY WIRELESS. ■Referring to wireless telegraphy, Sir Joseph Ward said:—l am of the opinion that considerable developments aro likely to take- place within the next 12 months, and this country should wait and obtain the best system obtainable. Three wireless stations should be erected in New Zealand, of sufficient power to enable communication to be made with ‘Australia, and for a radius of about .1200 -miles from the extreme north of the mainland; and simultaneously legislation providing for the establishment of the wireless system on passenger steamers trading from New Zealand should be passed. 1 hope to be in a position to lay definite proposals before Parliament next session.

COST OF PENSIONS. The widening of the scope of the Old-age Pensions Act in 1908 has been snainly responsible for an increased expenditure of 111 1.560 during th e financial year just closed. As, however, the majority of those obtaining the benefit of the new provisions did not participate until after October, the full effect will be much more pronounced during the current year, for the first six months of which the increased expenditure has been at the rate of £26,000 per annum. The number of pensioners increased by 827, the greatest numerical advance since 1901, the percentage to the population eligible by age being 34, as against 32 in 1908. The question of the full exemption of pensioners’ bona-fide homes has been raised, and has received considerable attention at my hands. It will further increase the expenditure, and in these circumstances it is only fair that when pensioners have relations who are able to maintain them, but allow the burden to fall on the State, the pensioner’s property should go to the State. This will enable a contribution towards this humane fund to be made instead of the money going into the coffers of comparatively- well-to-do people, who have been relieved from the monetary obligation that would have been entailed upon them but for the existence of the old-age pensions.

INTER-ISLAND FERRY. The Wellington-Lyttelton ferry service was next dealt with, Sir Joseph Ward stating:—Up to the present the service has Wen carried on by the Union S.S. Company in a satisfactory manner, but the Government are considering whether the time has not arrived when something definite should be given effect to in order to own and control the steamers carrying the mails •nil passengers, a large number of the latter being travellers on the Government railways in both the North and South Islands. The matter has been the subject of negotiations with tho Union S.S. Company, and should it assume a definite shape the House will bo duly advised. Two steamers of the -Maori type are necessary, so as to give a close connection on every night of the week except Sunday, thus enabling the transport of mails and passengers to be carried out under State administration at both ends.

THE RETRENCHMENT SCHEME. ■Sir Joseph said the extraordinary drop in the value of some of our principal products brought about an alteration in the commercial condition of the. country that told its tale upon the revenue. For the six months of the present year the Customs revenue is not satisfactory. This fall in the Customs revenue, on top of the large reductions made in Customs duties, adversely affected our general financial results, and a reduction of public expenditure became necessary. This the Government at once faced, though naturally with reluctance. Advantage was taken of the position of affairs to amalgamate some Departments, and where we formerly had 30 Departments we now have but 19. The establishment of a uniform system of accounts, now being considered by a special committee, will certainly lead to further economies being effected. The total number of employees who were affected by the reductions- -?jit into •pcration was, of all classes, 940.

PROPRIETARY RACE MEETINGS The attention of Government has, said Sir Joseph Ward, been called to conditions under which galloway and pony races are conducted, and the Government is of opinion that they should be stopped, and the House will be asked to do so. The number of race meetings held throughout the Dominion is too great, and proposals will be submitted to limit them, and at the same time the House will be given an opportunity of deciding what form of betting is to be allowed on racecourses.

DEATH DUTIES. The existing legislation with regard to the imposition and collection of death duties calls for amendment, and I propose to introduce a new Death Duties Bill, which will impose two descriptions of duty, viz., death duty in respect of estates of deeeased persons, and gift duty in respect of gifts made by a person in his lifetime. Death duties under the proposed bill will consist of two kinds, viz., estate duty and succession duty. The bill will provide for a graduated rate, rising from 2 per cent in estates of £2OOO and increasing to 8 per cent in cases of estates of £lOO,OOO. Estate duty will 'be imposed not only upon the property of a deceased, which vests in his executor or administrator under his will or interest, but al&c upon certain other property which tor tii is purpose is deemed to form part of this estate. For example, entailed estates, property over which the deceased possessed a general power of appointment, gifts made by the deceased within three years of death, and settlements of property to take effect on the death of deceased. Similar provisions to these are contained in the English law, and are distinctly necessary in order to safeguard this duty against existing and future evasions. Unlike estate duty succession duty will be imposed as in England, not upon the property of deeeased, but upon each separate interest taken off the property by others, whether as legatees, devisees, or otherwise. The rate of duty will depend upon the relationship between the successor and the deceased. Up to a very large amount a widow, child, or grandchild pays no succession duty. Up to a large amount a man who succeeds to his wife’s property pays 2 per cent, and after that amount is reached the rate is increased. Other relatives not more remote than a cousin, pay 5 per cent, and more remote relatives and strangers in blood pay 10 per cent. No succession duty is payable on any property left in trust or to charitable, educational, religious, or other public purposes in New Zealand. Although estates under £lOOO are exempt from estate duty, they pay succession duty in the same manner as larger estates. If a man leaves an estate worth £lO,OOO to his widow and children, it will pay an estate duty of 8 per cent, but no succession duty, except in respect to the portion of the estate which exceeds £4OOO. If, however, he leaves his estate to a remote relative or stranger in blood, it will pay estate duty at 8 per eent, and succession duty graduated upon the total amount. Duty will be imposed on all gifts made by any person in his lifetime, with the exception of gifts of less than £5OO in value, and of gifts to any charitable use, the rate of duty to be 5 per cent of the value of the gift. The new duty will differ from the existing duty in two chief respects. First: The new duty will be imposed on all gifts, whether made by an instrument in writing or not. Under the existing law gift duty is merely stamp duty imposed upon the instrument of gift, if there be such an instrument. Consequently gifts of money and other gifts, however great in value, now escape duty altogether. Recent illustrations have shown how the existing law may be employed to effect successful evasions of death duties in some of the largest estates. Second: Existing gift duty is levied at the same rate as the existing death duty, therefore, it depends partly on the aggregate value of the donor’s estate, and partly on the relationship between him and the beneficiaries, instead of depending solely on the amount of gift.

BANK TAXATION. The banks have not been contributing to the revenue a fair proportion of the income tax by comparison with other public companies or private firms. An increase was made in 1900, but even this has not recovered any of the lost ground. The ratio of the average assets and liabilities to be taken as forming the basis for taxation was ia-

creased to 10/- per centum in 1900. Since then the increased prosperity of the Dominion, in which the banks have shares, has further accentuated the position. I propose to further increase the rate in order to produce £14,000 per annum additional. I will also ask for authority, in order to bring it more into fair proportion of the total revenue obtained from this source, to increase the charge made under the Stamp Act, 1908, on the bank note issue from 10/- per cent to 15/- per cent. This will give £16,000 additional revenue.

INCOME TAX. The graduated income tax needs readjusting on a more equal graduation. It is anticipated that the scale which is appended will produce an increased revenue of about £BO,OOO and equalise the difference in rates as between firms and persons and companies. I propose to ask the House to make provision for a system of graduated income tax upon the following scale, allowing an exemption of £3oo:—Under £4OO, at 6d. in the £; from £4Ol to £6OO, 7d. in the £; £6Ol to £BOO, Bd. in the £; £BOl to £l,OOO, 9d. in the £; £l,OOl to £1,250, lOd. in the £; £1,251 to £1,500, lid. in the £; £1,501 to £1,750, 1/- in the £; £1.751 to £2.000, 1/1 in the £ ; over £2,000, 1/2 in the £.

RAILWAY CONSTRUCTION. In order to prevent the possibility of unpayable railways being established in the country, those which, upon careful examination, it is found are likely to render a return of less than three per cent, I propose to submit legislation to end the inroad that such losses make upon the general railway revenue of the country by the construction of railways that are not likely to return as low a rate of interest as that I have named. Legislation upon this important matter will be submitted during the session. As there must of necessity be a certain amount of doubt as to what the position of the Customs revenue will be at the end of the year, which depends upon the general condition of trade, I feel that it is incumbent in the best interests of the country that the financial position should be put upon such a basis as will provide both for any possible shrinkage of Customs revenue, and also for fresh expenditure incurred by any new undertakings that circumstances render it necessary 1 to establish. To enable this to be done, it is necessary to provide additional revenue, and I now submit a proposal, by which I consider- the result desired can be arrived at. The increased expenditure under all headings is as follows: — Interest on cost of a Dreadnought, £70.000 ; 4 per cent per annum for extinction of loan, £80,000; contribution to railway superannuation . fund, £25,000; contribution to public service superannuation fund on account of merging of police fund, £5,000; total, £30,000. Additional cost of internal defence, £100,000; additional armament and equipment, £150,000; extended over three years at £50,000 a year. This gives a grand total of £330.000. To meet this, I propose to obtain from the altered system of death duties an additional £ i 50,000, by abolishing the break in the long-distance mileage rates upon railways, and making rates uniform to Id. per mile secondclass and IJd first-class, £lOO,OOO per annum; by the adjustment of the income tax by making it a graduated one, £80,000; by imposing one per cent additional upon the true value of all dutiable goods, £50,000; by charging 2| per cent on the total receipts of race clubs, £38,000; and from banks, £30,000. This gives a total increase in revenue of £448,000, leaving a balance of £118,000; which is not, in my opinion, too large a sum in order to provide for unforeseen expenditure. It is only fair to all classes of the community to give a slight contribution towards strengthening our position in matters of defence, and in respect of the item of one per cent upon Customs I propose to ask the House to authorise us to fix it until March 31, 1911, only. It is but reasonable to expect by that time the improved and increasing condition of our trade will give a much larger return than at present obtaining from Customs and other sources of revenue. I cannot impress too strongly upon hon. members, and trpon the country generally, the fact that in face of concessions amounting k>, in round figures, £600,006, that

eame into operation during the las* year, and _of which during that period £400,000 in Customs took place, our revenue, fchich amounted to £9,000,000, was only £55,000 short of that of the previous year.

NEXT YEAR’S ESTIMATES. T he. expenditure for the present year is estimated at £9,015,878, as against an actual expenditure last year of £B,i 85,513. The permanent charges show: an increase of £292,767, while the ordinary departmental expenditure shows a decrease of £48,275. The estimated! revenue for the current year is set down to produce £9,020,000, or £18,815 more than the actual of last year. I think it is safe to estimate our Customs revenue for the current year at £2,163,000, or £171,248 less than the previous year. The Minister for. Railways estimates the railway revenue at £3,050,000, and the expenditure at £2,143,500. This will leave a net revenue of £906,500. Beer, duty is stated at £113,000, a slight decrease on the actual of last year, which may be looked for consequent, on the increase of no-license areas arising from the results of last local option polls. The land tax estimate is £525,000. In estimating the income tax, as the assessments for this year will be on the returns of income of the year ended March 31, 1909, I have deemed it prudent to take into consideration the comparative depression that existed during that period, and da not think it wise to count on a revenue: from that source of more than £300,000, as compared with the actual collection of £321,044 for last year. Registration and other fees show a decrease of £24,000, as last year’s revenue ineluded a receipt of £23,500 poll tax from. Chinese immigration which cannot be expected this year in view of the educational test now insisted upon. At the close of last year there was a balance brought forward of £184,321; add estimated revenue, £9,020,000, making £9.204,321; deduct estimated expenditure, £9,015,878, leaving a surplus of £188,443 at the close of the year.

PUBLIC WORKS FUND. The balance at credit of the Public Works Fund on March 31 last was £383,709, to be augmented by balance of 1908 loan not raised, amounting to £50,000, making a total ways and means available at that date of £433,709. The position of the fund may be set forth as follows:—-Balance March 31, 1909, £380,709; balance loan, 1908, £50,000; loan authorised by Finance Act, 1909, £1,250,000; loan authorised this session, £1.000,000; for 18 months’ expenditure, £ 2,683,709.

REVIVAL OF TRADE. The financial stringency which has prevailed throughout the world during the year may happily be regarded as a thing of the past. Professed prophets of evil, who wail their Jeremiahs at the smallest cloud shown in the financial horizon, are already changing their note! now that the sky is clearing.

THE RATE OF BORROWING. In conclusion, Sir Joseph said: —I have placed before you matters of great moment. By giving effect to the proposals that it has been my duty to set before you our financial position will be enormously strengthened. I do not think it is wise for this country to continue borrowing annually for public works to the extent that it has been doing, and if the proposals I have outlined are given effect to we should, with, I hope, an early increase in the revenue from the Customs, be able to set aside at least £500,000 per annum after the altered taxation has been in full operation for a year. To that extent the future borrowing for the purpose of carrying on the necessary works for the-development of the country can be reduced.