PRIME MINISTER'S SPEECH.

Dominion, Volume 5, Issue 1454, 31 May 1912, Page 6

PRIME MINISTER'S SPEECH.

A SHADOWY POLICY. | PROPOSED LAND LEGISLATION. ELECTORAL REFORM. PREFERENTIAL VOTING TO REPLACE THE , SECOND BALLOT.

NATIONALISATION OF IRON INDUSTRY.

Opunake, May 30. Tho Prime Minister (tho Hon. T. Mackenzie) addressed a meeting numbering about 500 at Opunake to-night, and was accorded a very cordial reception. Mr. Mackenzie, in tho course of his "fipeech, said:—Tlio financial result of the last year is highly satisfactory, and, when compared with that of tho previous year, is an indication of tho soundness and 'continued prosperity of tho Dominion. I'or the year just ended tho revenue has amounted to no less a sum than Ji11,032,•511. This constitutes a record, as the largest amount, yet reached wfis that of tho previous year,, viz., .£10,297,000. The revenue of the year exceeded that of the previous year by c £7:i.j,500, the principal increases being:—Customs, .£251,000; rail- ' ways,' .£182,000; stamps, .£123,000; land . and income tax, ,-£60,000. The revenue -.during the year, including other receipts . amounting i to .£28,000, was in excess of tho expenditure by no less a sum.than wC720,800. A surplus of ,£58G,500 was ■ brought forward on April 1 of last year. Of this amount .£500,000 was transferred to the Public Works Fund. Tho surplus for the year just ended amounts to -£807,276, of which the Government contemplate lieing able to transfer a considerable sum to public works. As to the expenditure for the year: this amounts to X 10,3-10,000. Of this sum the Post and Telegraph Department was responsible for .£9B6,soo:—Railways, ,£2,-151.700; Education, 421,012,000; Defence, .£101,870. , Public Works Fund. Tho transactions relating to the Public Works Fund amounted last year to ; <£2,350,800. ■ This included receipts of loan money of ,£709.009, and transfer from the Consolidated Fund of .£500.000. The expenditure on public works during the year .'amounted to .£2,268,000, and other charges .£67.000, leaving a cash balance of .£32.580 at the end of tho year, At the same time it must be remembered that the loan -money, amounting to .£1,050,000. was not 'raised, so that available public works money'to start the current year with is .£1,132,000. This, with the amount trans- ' ferable from the Consolidated Fund will -give the Government a sum of from ~.E1,7f>0,000 to ,£2,000,000 for public works ■ for the current year. It was not con- . sidered advisable to raise the loan money authorised until it was actually required, is we would be paying interest upon a large sum of money which we did not rcnuire to use at tho time. Then again, though the loan has not been raised, it is more, than satisfactory to know, that arrangements have been so made that the ways and means are provided for until October. It may, however, be necessary to take an early opportunity lo go upon the money market, if favourable, to secure tho necessary funds to carry on until the end of the financial year. During the Liberal regime the total amount transferred to Public Works Fitnd from revenue amounts to no less a sum than ,£8,530,000. This means that, in addition to the amount borrowed for public works, there was expended upon such works out of revenue this large sum during a period of twenty years. Notwithstanding -the demands on our revenue for payment of widows' pensions, the increa c ?d cost'.of defence, and old-age pensions, tho finding of money for these purposes has been done without taxation. Indeed, when it is remembered what has been given awav in the past in remissions in taxation (for Customs alone exceeding ,Ef>,000,000), it must be very gratifying to all tho=e who are interested in their conntry, to know that with all these.increased services our revenue continues to improve, and is sufficient to meet our requirements. That mir country is flour'.shing cannot bo gainsaid. A Note of Caution. Tho banks havo struck a note of caution, and in this I think they were right. At tho same time, it is gratifying to be able to feel that tile stringency of tho money market which at present exists is duo to causes wholly unconnected with New Zealand. All the figures indicate internal prosperity—dairy produce is high, and its market assured; the latest wool sales show an advance; and so with all our slaplo products: tlio harvest is bountiful; nowhere is the slightest symptom of decline, and this view is \abundantly indicated by the buoyancy of tho revenue, which, after all, is a sure barometer. Unfortunately New Zealand, like all other countries, is subject to the general fluctuation of tho world's money markets, and the present stringency is in large measure duo to the enormous calls for capital from London and other money markets of tire world. For example, ,t00,000,000 has gone to China, Canada will take nearly as much for different enterprises, and enormous sums aro being sent in various other directions. All this, however, is for development purposes, and will in due time produco its harvest. It is a matter for regret that some of our lending institutions aro taking advantage of tho position by exacting higher rates of interest than the increased price of money justifies. Our settlers, however, would be in a much worse posilion were it not for thc'.chcap monev supplied by the Government. State-Guaranteed Advances. Since the State-Guaranteed Advances Act of 1909 was passed, all loans to local bodies by the Government are made through the office. In order to show how the Department has progressed, il may be stated that whereas iu 1896 the total advances to settlers amounted to ,£-129,122, tho advances to settlers mid workers •luring the last six years have been as "ollow:—1907, .8773.220; 1003, .CI,101,391; i 909, .£1,792,019; 1910, <£1,157,472; 1911, <61,612,070; 1912, .£2,717,925. At . present, is required Tjy the Act, there not, being sufficient funds to meet all applications, preference is being given to I hose of r£aoo and under. Notwithstanding this limitation last year was a record one in advances. The profits have been considerable, increasing from ,£12,321 in 1899 to .£60,110 in 1011. For some years to come interest will rise and higher rates of interest will prevail throughout tho world. Tho large profits hitherto made by the Department cannot, therefore, be expcctul to continue. Tho losses to March- HI, 1912, were only ,£9lO 3s. 'Id. The administration of the Department, is ab-olutely free from political influence, the granting or refusal of loans being a matter entirely in the discretion, of the board. Borrowing. Much has be?n said regarding our extravagant borrowing in the past. It must, however, he remembered that in a developing community it is essential that borrowing take place, anil niter (ill the success or otherwise of borrowing is contingent Oil the manner in which the money Is used. The result of our public expenditure shows un the whole a salklaclory return. It is. of course, for the public to say whether or not borrowing is to fake place; but' if the. country is to' develop we mu.-f'borrow considerable sui,,s, because it is impossible lo con-i'ler the raising of moneys necessary f.nr development by means of taxation alone, It. is, htm>

! ever, doubtful if our loans can be obtained. during the next few years on anything like as favourable terms as they havo been for the past ten years, {iiid it therefore behoves us to be cautij.is in our borrowing policy. Land and Income Tax. Last year tho revenue collected from land and income tax was Ju1,093,950. The Government has at present under consideration several important questions relating to taxation, it is considered that the present land tax exemption of ctaOO may be increased with advantage to settlers with families dependent upon them. It is further contemplated to thoroughly reconsider the system of graduation and recast the rates applicable to the graduated land tax. These alterations are being considered with a view of placing the burden of taxation on the shoulders of those who are best able to pay, and relieving those who are in less affluent circumstances, and also with a distinct view to rendering mora land available -for close settlement. Tho loss of revenue from the enlargement of the exemption clauses of the Act will be provided for by an illcrease in the higher grades of the graduated tax, The principle of granting concession to parents who are educating and maintaining a family has been adopted in various Continental income tax systems, and also in England and New South Wales. The allowance varies in different countries. In England the allowance is ,£lO in respect.of each child living and under the ago.of .16 vears, but taxpayers whose, incomes exceed ,£SOO are not entitled: to such allowance. • In New South Wales an allowance of .£SO is made for each child who is wholly maintained by the taxpayer, and who is under the age of 18 years. I thinkin New Zealand an allowance of .£SO might be made in respect of each child wholly dependent on the taxpayer for support.