THE FINANCIAL STATEMENT.

Dominion, Volume 3, Issue 873, 20 July 1910, Page 4

THE FINANCIAL STATEMENT.

BIG LOAI PROPOSED.

-REGORDI EXPENDITURE ON PUBLIC WORKS

4 MM THREE MILLIONS WANTED.

GOVERNMENT'S. SINKING Fill 'SCHEME.

' Tho Prime Minister, in his Financial Statement brought down in the House last evening,, stated that the revenue for the year had been the highest on record) tho Treasury books closing with 'a substantial balance of £432,316. Notwithstanding the financial stringency of , the previous year, the receipts of re- ' venue exceeded his estimate by no less than £218,201. There had been a marked revival of trade, and with it an, improved revenue. Tho total revenue was £9,238,261, the estimate be-' ing £9,020,000, Tho Railways were responsible for £3,258,263, or £208,263 more than estimated. Customs exceeded tho estimate by £41,121, and Miscellaneous Revenue was £26,099 more than was Revenue was £26,099 more than was anticipated. Stanlps did uot come up to the estimate by £68,648, and Territorial Revenue was short by the sum of £21,413. ■ Comparing the revenue receipts with that'of the previous year, there was a satisfactory increase of £237,076 on tho receipts of the preceding year. The principal increases were in Railways, which gave no less than £339,756 bet- . ter than the previous year; Land-tax was responsible for £37,369, and Miscellaneous £31,889. Customs showed a decrease of £130,127 owing to reduced importations, and Stamps suffered to /the/extent of £53,976; while registra-| tion and'other fees were less by £28;756 owing- to the loss of Chinese poll-tax consequent on the introduction of the educational test. : " THE EXPENDITURE. As .regards the results of the ex-1 penditure of the Ordinary Revenue Account of last year, as. compared with the Prime Minister's estimates, the actual amount.underspent was, £119,777, which • shows 'that, care- in tho expendi- . ture was exercised, and should call for recognition from impartial critics, as ■ a Finance.Minister must necessarily see that a sufficiency of funds are provided to insure the year's requirements being met. - Tho estimated expenditure for all services was- £9,110,699, and tho amount actually spent £8,990,922. As the permanent appropriations exceeded tho estimate by -£11,612, the saving i was effected in the' Departmental appropriations, for which purpose £5,607,902 was voted and £5,476/513 was expended, the amount unissued being £131,389. In every class except Legislative , there was a saving on tho •amount appropriated. Even the Railways, which had the authority by law 'to. make r ;use of the surplus revenue, amounting to £208,263, did not require ;to. trench ■» upon this amount. The amount spent on Departmental appropriations was less than in the previous year by £98,970.. There was a saving in eleven classes' of.no less than £210,223, while five classes show an increase of £111,253. The latter classes comprised the Post ■and Telegraph (£41,226;,- Working Railways (£47,881), and Education :(£14,712), in which, the services could 'not be- cut down "without impairing their efficiency or depriving the public of many conveniences. • v Tho- financial results for the year could bo sot forth as follow :— < "■■■■■' ■ . . •. . £ Balance brought . forward, April ' 1, 1909- 104,321 'Receipts during ■ yea)— Revenue : £9,171,119 ■ National endow-. : • ments , 67,142 Other receipts... 656 £9,238,917 . '\ Expenditure! during yearPermanent ap-i pxopriations ... 3,514,40!; \ Departmental appropriations 5,466,095 Services not pro- ' vided for ... : .. ' 10,418 8,990,922 'Excess of receipts over'expenditure £247,995 Balance, March 31, 1910 , ■ £432,310 Last year Sir Joseph Ward estimated a surplus of £188,443, subject to,provision being mode for items on the suppleuit liter? tstiniates, which amounted t0£"5,221. This estimate included the balanco brought forward from the previous year. The promise that tho large amount of. Treasury bills outstanding would bp reduced had been fulfilled. Tho bills cannot be done away with altogether, as they must bo issued in 'anticipation of accruing revenue to meet regularly recurring outgoings'. They should, however, be resorted to only for this or other urgent purposes, and paid off within the year for which they aro issued. The diminution in tho amounts of those bills out-standing at the end of each financial year was as follows: — 1905-6, £700,000; 1006-T, ' £550,000;-1907-8, £400,000; 1908-9, £250,000: 1909-10, £100,000. PUBLIC WORKS FUND. The balance* -from last year was £383,709. This • was increased by £1,964,833, being loan moneys received £1,902,225, other receipts £2608, making a total of £2,348,542. The ordinary expenditure was £1,993,171, charges, and expenses, etc. (including the redemption of debenture for £300), relating to loans, £18,015; transfer to State Coalmines Account, £24,990; total expend ditnre, £2,030,176; leaving a balanco on March 31 last of £312,366. Loan money to bo received after March 31:- £ Under Finance Act, 1909 250,000 Under Aid to Public Works and Land Settlement Act,' 1909 100,000 ■ _ £350,000 '21e amount available to start current year, inclusive of the balanco at the end of ° financial year, is- £662,366 . LAND FOR SETTLEMENTS. For acquiring estates, and expenses incidental thereto, there was expended £279,238. In the previous year the emount was £372,245. There are still considerable areas under offer, but the prices asked make it difficult to purchase any great area. During the'year 14 estates were purchased, ten of which have been settled. The number of' applicants f or farms containing an

area sufficient to keep a man fully employed all tho year round was far in excess of the number of sections offered. It would, therefore, appear that there is an unsatisfied demand for suitable lands in fair-sized holdings, which every effort must be made to meet. LAND TAX. Tho collection l for the year was £642,270, being £17,270 in. excess of the estimate of £625,000, and an increase of £37,370 over tho collection of tho previous year. Recurring increases cannot be expected in the immediate future from this branch of the revenue. Tho legislation of 1907 is beginning to have effect, inasmuch us many of tlio largo landowners are now engaged in subdividing and disposing of their surplus land. INCOME TAX. .The estimate for tho year was £300,000, and actual collection £316,835, giving an increase over estimate of £16,835. The collection for 1908-9 was £321,044, and for 1909-10 £316,835, a reduction this year of £4209. Having regard to tho comparative depression in trade during tho year ended March 81, 1909, which is the period for which tho returns were made on which the income tax for 1909-10 was charged, the above results must be considered very satisfactory. The percentage of expenditure to receipts of land and income tax revenue is collected in this Dominion at a very low cost:— Land tax, 3.11 per cent.; income tax, 1.87 per cent.; both taxes, 2.70 per cent. . ' ■ ' . THE, PUBLIC DEBT. On March 31 last the gross public debt stood at £62,168,407. This will Bhow a reduction as compared with the previous -year, but it is necessary to state that this is due to tho transfer of £12,247,238 to the' State Guaranteed Advances Department under the New Zealand State Guaranteed Advances Act of last .session,.being the amounts secured by assets'- under tho Land for Settlement Acts —advances to settlors and workers, which are not to be shown as part of tlio Dominion's public debt, but are, nevertheless, an indirect liability, which are yearly being reduced by sinking funds provided against each of the' loans, as well. as an improving asset, from the fact that the annual repayments are yearly increasing the margin of what was the original security. During tho _ year loan moneys or advances amounting to £3,554,938 were received. This amount was made up as follows:—For public works, £1,950,225; Hutt, Railway,- and Road, £52,590; duplication ■-- of lines, £76,500; lands for settlement, £169,485; loans to local bodies, £325,000; advances to settlers, £585,000; .advances to workers, £300,000; State coal-mines, £30,000; scenery preservation, £10,000; New Zealand Consuls, £9078; increase by conversions, £47,060; total, £3,554,938. On the other hand, £77,527 New Zealand Consols were naid off, and a debenture for £300, under tlio Aid to Public Works Act, 1901, which was outstanding, was redeemed. A very large portion of the public indebtedness, is directly interest-hearing, and many millions of it have, assets of values largely in excess of tho amount of capital borrowed in respect of them. Deducting the amounts so represented by assets such as railways, Native lands purchased with borrowed moneys, moneys advanced to local bodies secured on rates, tho'total amount will not be more than,_ say, £25,000,000. Considering tho avorago and increasing wealth of the people, New Zealand's vast rcsourciea, expanding v revenue, and the purposes for which the moneys borrowed have been expended, tlio public debt need causo no anxiety. "For overy million of our debt our assets may safely be said to have increased by three millions." LOAN TRANSACTIONS. The loans falling due during tho present financial year amount to £621,943. No difficulty is expected in satisfactorily arranging for them at maturity. Of this amount £42,500 already matured, of which £41,500 has been renewed by the holders; -.Debentures for £1000 liavo not. been presented. A saving- of interest has been effected on the renewals. Of £20,0Q0 bearing interest at. the rato of 4-J per cent., £16,900 has been renewed at 4 per cent., and £8100 at !U per cent. The balanco of £16,500 has been renewed at the samo'rato of interest, viz., 4 per cent. Borrowing power for public works was given last year to- tho amount of £2,250,000. The London market was, however, unfavourable for tho floating of the loans, and the Primo Minister therefore deferred going on the market. During tho year a' largo amount of money has been offered in fairly large sums for investment from beyond the Dominion at 4 per cent, par, and in each instance they wore declined. Sir Joseph Ward had an offer for £400,000 3-i-per-cent. stock at £103 for every £100, which he accopted. It was not until April of this year that lie was able to place our loan on tho market; the general election' in tho Old Country, and other reasons over which New Zealand had no control, prevented his doing so before. The results of the flotation of a 3i-por-cent. loan of £1,850,000 were most satisfactory. The money was raised at £98J- under five-year convertible debentures, holders to have the option of converting their holdings into 3i-per-cent. inscribed stock at tho rate of £102 of stock for every £100 of scrip or debentures. Tho loan was underwritten, hut the underwriters had only to retain 17 per cent, of tho loan. Even this, in comparison with other loans raised about the same timo, was most gratifying, and shows the present high position of tho Dominion's credit. There has been a large increaso in tho deposits in' tlio Post Office Savings Bank, for which investments had to bo found, and sufficient moneys havo been provided from that sourco to lend,to local authorities at 3J per cent., brokerage and other loan charges being saved by this transaction. It has not therefore been found necessary so far to go on the London market for moneys for the State Guaranteed Advances Department. Thoro can bo no safer or bettor way for using these funds. Tho money belongs to our own peoplo and the interest remains in tho Dominion. Tho amounts borrowed under tho State Guaranteed Advances Act between the date of coming into operation of that measuro on February 2 and March 31 amounted to £475,000. .RAILWAY CONSTRUCTION AND IMPROVEMENT. The expenditure under this heading was pgain somewhat heavy, h-wina

amounted to over a million and a J quarter, made up as under:— Railway construction, £786,947. Additions to open lines,' £316,464. Wellington and Hutt Railway and Road Improvement Account (railway expenditure only), £30,813.. Railways improvement account, £81,249. _ : AVellmgtoii: and Manawatu railway purchase- account, £39,991. ' WATER POWER. Proposals, will bo submitted shortly to undertake- one or more water-power schemes, and to extend the work from' tirno to time- until all the larger centres of population have been, supplied with hydro-electric power, and until tho principal sources of energy have- been turned to commercial advantage. It is proposed to devote about £500,000 per annum to this work; more detailed proposals iu reference- to tho matter will be brought down in tho Public Works Statement. Authority to raise this amount will bo asked for. Full particulars regarding irrigation schemes for Central Otago will be submitted to tho House shortly, with proposals for putting a portion of the work in hand. OCEAN MAILS. Notwithstanding strong efforts which have been made to induce tho Commonwealth Government to allow the .Vancouver steamers to call at Auckland, tho proposal has not yet been agreed to. As Ca.nada desires that New 'Zealand should be included in the service, Sir Joseph Ward is unable- to understand what practical objection the-Com-monwealth,' Government Jia-s in not agreeing to tho request for New Zealand's inclusion in tho present extension, of the existing contract,' which expires in.July, 1911. In tho meantime, the Government of Canada has called for tenders for a service by alternative, routes, including a call at Auckland. Tenders aro receivable up to November 1, and there is reason tefhope that under any new arrangement Now Zealand wall become a partner in tho service. It would be a matter for regret if we have -establish a service of our own, as, failing an arrangement satisfactory to New Zealand, we can and must do. TELECRAPHS AND TELEPHONES. . A saving of £10,000 a year to bo made by improvements in the Post* and Telegraph Department will be applied to the improvement,and acceleration of letter-carriers' deliveries, tie establishment of rural mail deliveries, reduction of parcel-post rates, and to contributions to settlers in aid of private telephone wires. Tenders have been called for two high-power wireless telegraph stations, at Doubtless Bay and tho .Bluff;'-. and three medium-power stations at or near Gisborne, Capo Farewell, and Sunnier. These should supply all requirements m tho meantimo for defence, naval purposes, and the- mercantile marine. It is hoped to have tho system in operation in about twelve months' time. RETRENCHMENT AND CLASSIFICATION. Very great savings have been effected in the public service not only, by dispensing with the services of many officers, but in other ways resulting from the amalgamation of Departments and enforcement of economies wherever possible. 'Over £300,000 per annum has been saved to tho country by tho application of tho retrenchment system. The improved condition of things, and the growth of the business of the different Departments resulting therefrom make further retrenchment impossiblo without seriously impairing the efficiency of the public service. A continuously-sitting board is required to complete the classification of tlio public service, and tho heads of Departments constituting tho present board 1 - cannot possibly do tho work. The intention is to legislate with a view of appointing a smaller hoardsay, of five responsible officers of tho service—who, .with the work already , completed by the present board, should be ablo to have their report ready for the next session of Parliament. ' - - ■■ Tho' Public Service Superannuation Fund. totalled, on December 31, £154,548, an addition of £83,067. The contributions made. by. officers amounted to £82,890. A substantial increase is shown in the interest earned by tho fund, tho amount received last year being £1294 18s. (3d. ' As tho fund is increasing rapidly, and is practically all invested oithor at 5 per cent, or 4i per cent., a grpat increase iu tlio interest-accretions may bo expected in the , future. Tlio total number of contributors at tho ond of the' year ■ was 7322, a. net increaso of .87. POST-AUDIT. It is intended to, as far as possible, change the present . system, where it exists, of pro-audit to that of postaudit. Tho business of tho country dono through Government Departments will thereby bo much facilitated. Whero large sums have to bo paid away, and tho safety of such transactions depends upon some" questions of title, sucli as purchases under the Land for Settlements Acts or advances of State moneys on mortgage, pre-audit will be retained. MATIVE LAND Tho Native Land Court held sittings in twenty-seven different localities, and investigated tho ownership of 113,281 acres, in addition to partition applications affecting 148,370 acres. Fortyeight appeals—a noticeable decrease— wero dealt with by the Nativo Appellate Court. Leases totalling 245,444 ncres have been granted by Maori Land Boards.. Settlement of tho greater part of the area has been dolayed for want of surveys,,and arrangements liavo been made to expedite them. An amendment of tho Rating Act is necessary to facilitate the collection of local rates' from Native lands, and to provide for tho proper' enrolment of Native ratepayers. ' NATIVE TOWNSHIPS. The legislation now on tho Statute Book'relating to these was framed at a timo when many obstacles stood in tlio way of forming European settlements in purely Maori districts, such as tho Country, Upper Wanganui, and tho East Coast. After much negotiation the Maori owners agreed to cede land for 'townships, to be administered by the Crown or Maori LaJid Boards on their behalf. The tenuro was leasehold. The growth of settlement in and around tlio townships established under such system necessitates a change. Many of the Native owners desire to sell, whilo tho tenants desire to purchase. It is thoreforo proposed to permit arrangements for that purpose to bo ' made either by private snlo or through tho Crown acquiring. Tho machinery of tho Native Land Act, 1909, will bo utilised. An alternative will bo suggested to tenants to convert thoir presont leases into Glasgow leases. Tho Government propose to repeal tho Thermal Springs District Act, 1908, and, subject to certain conditions, to make lands within that district available under the Native Land Act, 1009. ■ Tho West, Coast Settlement reserves «nd other Nativo resorves will also bo dealt with. LAND. Tho Government will shortly bring down a Land Bill, which will, it is believed, bo acceptable to a majority of tho peoplo and of the members of tho House. Tlio special aim of this Bill will bo to provide a further and a bettor means of obtaining land for tlio people, while the difficult question of tenuro will be placed upon a footing which conserves in reasonable degreo tho rights and interests of l aoth State and the settlers. In order to further , tha <"iin purposes />f this JJill', iiu-.

portant amendments of tho Land Settlement XMiianco Act of last year will be submitted. . LANE SETTLEMENT FINANCE ACT. Several associations under this Act are under wny. Two associations havo completed purchases, and a third .is just about completed." In putting tho Act'into operation several weaknesses have been discovered. One of them is tho necessity for the survey of au estate before tho board can consider an application by an association to purchase. Tho present limitation of area is a difficulty. Very few estates likely to be sold under the Act aio all of such a uniform quality that they can be profitably hold, even in 200-acro sections; Tho size of the sections might ho left to the board to fix. STATE-CUARANTEED ADVANCES DEPARTMENT. Tho business during tho year was as follows: —Number of loans granted to settlers, 27.45, amounting to £1,095,120; to workers, 1359 in number, amounting t'o £362,352. Tho amount advanced since tho Department commenced operations, including sums repaid aiid loaned again, is—to settlers, £10,245,265; and to workers, £1,074,225: making a total of £11,319,490. The board of the office, after full consideration, lias d ec >ded that tho present term foi repayment of loans to workers—36.V years—is too long, and in the interests or safety has recommended a reduction; and, further, that there shall be two classes of security, first and'second—moneys lent on first-class securities being repayable in thirty years, and on second-class securities in twenty years. It has beei! decided to furnish intending borrowers with complete plans and specifications of different types of buildings suitable for workers, costing from £200 up to £450, tho maximum amount to be lent. Figures are quoted to show that there will bo no hardship in repaying the principal "moneys moro quickly than at present. LOANS TO LOCAL AUTHORITIES. The total applications for loans received from February 1 ■ to June 30 numbered 188, and amounted to £1,570,948. Of those applications, 28, for £604,820, were declined; 131, for £754,047, wero provisionally approved; and 24, for £184,491, wero finally approved—that is, granted; and fivo, for £27,590, were postponed. There would bo a very large development in this branch in tho near future, and alterations of the procedure in obtaining loans would bo made After tlk ivisu of the,, ratepayers that tho loan should bo obtained was clearly expressed, the svholo of tho remaining work to complete tho borrowing could be undertaken by the Department. : ■ The term for repayment of loans by local authorities might reasonably lie oxtonded for fifty years. It.would make tho instalments lighter. For each £100 tho instalment of principal and interest at 3-1 per cent, with a term of repayment ot 3G£ years is £4 17s. 6d. per annum. For fifty years it would be £4 ss. only. Even at 4 per cent, interest tho annual instalments would be only £4 13s. ljd. per £100. Tho charge ■ made by tho ' Department—namely, a commission one half of 1 per cent. —was too low. A difference of one-tenth of 1 per cent, would bo a very light charge, but it would probably pay tho cost of raising tho loan, and tho interest lost while funds woro waiting investment. EXTINCTION OF PUBLIC DEBT. It was proposed to introduce a scheme to repay the whole of our present debt in seventy-five .years, and to provide that all ,I'uturo loans would come under it, aiid bo extinguished in that time after their creation. The'adjustments would be automatic, and the fund always remain actuarially sound no matter what interest was being earned or how much was borrowed or redeemed. As a corollary to tho establishment of this fund, a Bill would bo submitted asking for authority to create stock under which all our loans could be consolidated. Tho amount of accumulations would grow slowly at first, and it would % be better not to commenco repayment of our loans until a largo sum was available. Power would ho given to purchase for cancellation Government debentures at or below par should there be a surplus of funds that could not otherwise bo invested. Probably if not a penny of our debts wero repaid for tho wholo term of 75 years the sum that tho fund would then represent could bo safely absorbed by our settlers, workers, and local"bodies,' without seeking any other investment whatever. Nothing would bo done to disturb the sinking funds at present being accumulated to dischargo , a loan under any Act or ordinance by which on raising it a sinking fund was. agreed to bo created for its repayment. It would be highly improper to apply such sums, or divert any contributions rightly duo to them, to tho repayment of the general loans of the Dominion. With increased prosperity tho contributions to tho fund might even bo increased in order to shorten the term of repayment. NATIONAL ANNUITIES, ETC. Under tho scliomo for National Annuities by a moderate payment in the years of his or her prime a contributor would bo assured from want in old ago or infirmity. Widows and children of contributors would bo provided with assistance —tho widow during widowhood, and the children until tho age of fourteen. Such a system will removo the fear and anxiety of tho worker as to his futuro and that of thoso dear to him, and should do much to encourage thrift. Provision would bo made for a schemo whereby tho wives of our lowwaged workers and poorer small settlers may be relieved of some of tho anxiety which at present accompanies motherhood. Until an adequate supply of midwives and sufficient accom- v modation in our hospitals for maternity cases could be furnished tho hospital boards would bo asked to make immediate arrangements for medical attendanco upon expecting mothers in ' their own homes. The expenso of this attendance will bo defrayed partly by contributions from tho husband, and the remainder out of tho Consolidated Fund. It was proposed that in tho cases in question tho Government should pay two-thirds of tho cost. In order that this provision should not be abused, it would apply only in cases where tho earnings of tho workers or settlers are under £200 a year. Legislation would also ho introduced providing that our different police stations throughout tho country districts of New Zealand should discharge tho functions of local labour, bureaux, tho purpose of this provision being to furnish unemployed workers, on tho ono hand, with reliable information as to where work may be obtained, and, on the other hand, to furnish employers with similar information as to whoro labour is availablq. Tho general purpose of this provision is to enablo labour to more promptly find its best market. ANTI-TRUST LEGISLATION. Owing to the Stato owning tho means of transport and communication, Now Zealand could not .suffer as other .countries havo whero trusts havo got control of railways, canals, and telegraph lines. Tho position was, however, sufficiently grayo to warrant drastic legislative provisions to.keep them in check, and such would bo submitted to Parliament this session. The evils of monopolies wero not confined to tho countries whero tho trust originates. Their baneful intlueuco may bo world-wide. An example was tho American Standa.nl Oil Trust. Thoro were others. Such organisations- had been levying toll on tho inhabitants of the Dominion to an iiicrcdiblo extent, and havo by their monopolistic power been ablo to prevent the full, advantages of the re-

cent tariff concessions reaching the consumer. By such rapacity every man, woman and child in New Zealand had been injured. BEET SUCAR. ; There seemed no reason why this country should not produce beet sugar in largo quantities. Such an industry would givo'employment to a great number of workers,, and Parliament would bo asked to consider legislation with a view to tho establishment of tho beet sugar industry in the Dominion. Any aid given towards such a project must bo conditional upon tho country proserving tho right to acquire and control it after a given period of years. LOCAL GOVERNMENT. . Full opportunity would bo given to Parliament to discuss tho contemplated reforms, with a view, to placing this w]iolo matter on a sound and extended basis. It must bo remembered that the present condition of things had bean so long in existence that radical : reforms 'must be cautiously proceeded with. There wore, altogether, moro than fivo hundred county councils, borough councils, town boards, road boards, .river boards, water-supply and drainago boards in tiiis country. Of 168 of these boards the. revenues were less, than £500 per annum, and the proportion of expenso to revenue of'these varies from 17 to 26 per cent., as against less than 10 per cent, for counties and 5 per cent, for boroughs. It was recognised that the areas of many local authorities ■ in this country must bo redefined. This proposal necessarily involved .the extinction of a number of existing local bodies, but this principle of extinction would bo carried no further than was plainly necessary to securo tho best results. Effective provision, would be mado for the subdivision of tho new areas into wards or districts, and a further safeguard furnished that rates raised in particular districts would bo spent in them and not elsewhere. Tho Bill would also provide for a transfer to tho now councils ■ of all the work and functions of our existing education boards, caro being taken that this important branch of tho country's work was to bo carried out by~a divisional committee and under moro effective conditions than exist at present. Under the extended jurisdiction of. the local authority the Government proposed to transfer tho work of the building, and ' maintenance « of ■schools, providing tho whole.of tho money for the former and a contribution for the latter. To insure tho decentralisation of maintenance votes now annually passed by Parliament, it was proposed to provido a sum at tho beginning of the system of £250,000 per annum. Local authorities who rated themselves to the extent of Jd. ■in _ tho £ and over would necessarily receive-' moro consideration, than those who rated under this amount. Tho intention was to create larger bodies, and give thorn greater powers than they possessed at present. EDUCATION AND LIBRARIES. Tho restoration of tho votes for school committees and for libraries will give as much pleasure to those concerned as to the Government in restoring both items. It was also hoped to make additional provision on tho Supplementary JliStimates for the maintenance and rebuilding of schools. The amount on tho main estimates was about the same as voted last year, but it might bo found necessary to provide still further funds for this important purpose. FINANCE FOR 1910-11. Be was pleased to bo able to say that tho outlook for tho present financial year was very satisfactory. The operations of tho year should give a considerable balanco on the right sido of the lodger. The expenditure was estimated at £9,316,470, against tho actual expenditure of ' £8,980,504 during last year. There would bo increases as follows: Permanent charges, £157,701: departmental, £178,265. Principal increases wero: Interest, £75,327; Land Act, £17,696; old age pensions, £26,189 j contribution to railway and police superannuation funds, £28,000. Departmental expenditure would amount to £0,6W,360, being £178,265 in excess of last year. Tho principal increases were : Post and telegraph, £57,871; railways, JGoo,086; education, £66,359; defence, £22,330. The first three woro duo to expansion of business, and that of defonco to tho alterations in tho system. His estimate of tho revenue f'or the c o"- r n e y car wns ••£0(611,575, being £0/3,314 in excess of that of last j-cniv fho Customs revenue promises to show a largo increase. Ho estimated tho total .for the year at £2,550,000, and railway revenue at £3,250,000. Tho rovcuuo derived from Customs for tho first throe months of tho present financial year showed the satisfactory increase of £71,000 over the amount received for tbp corresponding quarter of last year. This was, no doubt, tho natural reaction consequent upon tho great surplus of exports over imports during the year just closed. This surplus amounted to £6,128,433,, while tho value, of the exports, as compared with tho value for your ended March 31, 190!) shows an increase- of £4,475,273 the figures being £21,490,519 against £17,015,246/ Commercial advices wero that heavy stocks of goods wero on order and afloat, and there was every 'reason to expect that tho Customs revenue for 1910-11 would, amount to £2,850,000 including £55,000 surtax and £55,000 from parcel-post, being an estimated excess over the amount collected last year of .£178,875. He estimated that uiider existing 'rates, and not taking into account any possible alteration in the law land tax would produce £025,000 niul income tax £325,000, the two givin" a total of £950,000. Theso two sources of reyenuo wero now providing nearly u million a year.. For the reasons given before as to tho effect of the legislation of 1907, ho did not deem it'wise to expect more from the land tax than tho sum mentioned, which was £17 270 less than collected in 1909-10. As'regards income tax, his estimate was £8165 moro than the collection of 190910, but, having regard 1,0 tho improvement in trade and commerce during the latter part of the year ending March last (for which the returns would bo made), there was very little doubt this would bo achieved. The estimated resulta would be:-— £ Balance from last year 432,310 Estimated revenue for 1910-H :..... 9,611,575 10,043,891 Less estimated expenditure 9,316,470 Balanco at credit at end of current financial year £727,421 This, amount would bo subject to alteration after the Government knew what it was necessary to provido on tho Supplementary Estimates. LOAN FOR PUBLIG WORKS PURPOSES. There was a great demand for roading, railway expansion, and other public facilities, necessitating tho raising of an additional loan. The balance of the Public Works Fund on March. 31 last, with tho available borrowing power, was £662,366,. To augment this amount ho proposed to transfer £500,000 from tho Consolidated Fund. This, however, would not bo sufficient for tho prosecution of the urgently-required works which it was our policy to vigorously push on,'and ho therefore-proposed to ask Parliament to authorise' a loan of '£1,750,000 for railways, voada, and other, public works . • , "HOPE AND COURAGE." "Tho closing words which apply to all I havo snid (remarked Sir Joseph in conclusion) are those of hope and courage. Our first jined is.

still to havo trust in tho future of New Zealand. This young nation can achieve whatever it believes it can achieve; and in this land, .with its rich endowment of with a sturdy people mostly of British stock,. wo'need not fear tho future, hence 1 repeat, 'hopo and courage,' not 'fear and misgiving, , should bo our watchwords." Reference was also made to defence' matters, but no now announcement was made,under this head.

MR. MASSEY'S VIEWS.

A RECORD IN DULLNESS. ."Tho dullest and most uninteresting Financial Statement I have over heard, was how the Leader of the Opposition .summed it up after hearing it road.' "The Land Bill is mentioned," ho said, "but not tho faintest idea is given ol what its provisions are to be like. There is also mention of the Local Government. Bill, and a Bill providing for the post-audit instead of the pro-audit, and some spaco is devoted to tho question of sinking fuuds; but we havo heard all this before, and nothing has come of them up to tho present. Ido not think very, much of either tho aiidit proposal or tho sinking fund proposal (though the latter particularly is right in theory), but I would like to see a Bill brought forward providing for the improvement of tho local government system, but so far as I can see there is not the slightest chance of this being dealt with this session. A Bill of this importance should have boon circulated before tho. House mot, and introduced right away, if it was to have any chance of becoming law." 'The Statement is moro notable for what it omits than what it contains," said Mr. Massey in conclusion. ;