THE PUBLIC DEBT.

Dominion, Volume 6, Issue 1822, 7 August 1913, Page 4

THE PUBLIC DEBT.

AN EXPLANATORY TABLE. The gross public debt at tho end. of tho financial year amounted to £90,060,763. The following tablo shows for what purpose.? the various amounts were borrowed:— £ Maori war 2,357,000 Defence 3,653,452 Public works ; 45,188,493 (Includes railways, roods, and bridges construction and lands improvement, public buildings, telegraph and telephone lines, narbours and lighthouses, immigration, tourist and health resorts, development of water power, development of goldfields and coal mines.) New Zealand State-guaranteed Advances— (Includes transferred liability.) Advances to Settlers Branch... 8,225,641 Advances to Workers Branch 2,2-1-6,942 land for Settlements Branch 6,871,161 Local Authorities Branch *2,258,000 Native Land Settlement Branch 516,100 Guaranteed Mining Advances Branch 15,000 Bank ef New Zealand shares.....' 500,000 New Zealand' Consols 475,891 Purchase of Native lands 2,715,217 State coal mines 225,000 Loans to local bodies 3,507,000 State fir** insurance 2,000 Reserve Fund securities 800.000 ffesncry preservation' 60,000 Deficiencies in revenue, charges, and expenses of raising loans, increase by conversion, etc.. provincial liabilities and miscellaneous 8,250,903 £90,060,763 'Includes £153.785 advanced for opening Crown lands, £85,000 for Hauiraki Pleiins settlement, and £35,000 for Rangitaiki land drainage. By Sections 30 and 37 of tho New Zealand State-guaranteod Advances Act, 1909, the amount transferred lo tho Advances Office is £20,132,847.. Of the above £90,060,763. approximately £55.000,000 bus been utilised in such works construction of,railways, telegraphs, and telephones: advances to settlers, workers, and local authorities; purchase of land for settlement purposes, etc.. which are directly reproductive investments. The net debt amounted to £87,457,121, arrived at as follows:— £ '£ Gross debt of tho Dominion 90,060,763 Less sinking fundsGovernment Loans to Local Bodies Acts 799,601 Naval Defence Axst. 1909 102,028 New Zealand Stateguaranteed Advances debt ...... v ... 932,978 Public Debt Extinction Act, 1910 300,936 War and Defence loans 192,691 Canterbuiry Loan Ordinance, 1862 23,838 New Zealand Loans Act, 18G3 251,570 2,603,642 Net debt March, 1913 £87,457,121 Increase in Our Indebtedness. Owing to the borrowing of the four-and-a-half-million and tho tliTee-million loans during tho past year our "public debt has increased by £5,706,850 since March 31, 1912. The increases were— £ State-guaranteed Advances DebtAdvances to settlers (£36,100 at 3J p:r cent., London; £73,900 at 32 per cent., Dominion; £227,763 at 4 per cent.,| London)... 337,763 Advances to workers (£750,000 at , 3i pot cent., London; £174,008 at 4 per cent., London; £7,000 at 4 per cent., Dominion) 931,008 Land for settlements (£55,000 at 3.J per cent., London; £125,300 at 32 per ceut., Dominion: £356,723 at 4 per .cent., London; £15,500 at 4 per cent., Dominion) 552,523 Local authorities (£175,000 at 3J per cent., Dominion; £86,000 at 3} per cent,, Dominion; £400,000 at 4 peir cent., London) : 661,000 Native land settlement (at 32 per cent., Dominion) 80,000 Guaranteed mining advances (at 4 per cent., Dominion) 10,000 £2,572,294 Public Works— £ Aid to Public Works and Loud Settlement Act, 1911 (£876,000 at 35 per cent. London; £49,000 at 32 per cent, Dominion; £25,000 (at 4 per cent. Dominion) 950,000 Aid to Public Works and Land Settlement Act, 1912 (proportion £3,000,000 Stock Loan, 1912), (at 4 per cent, London) 1,242,900 Aid! to Water-power Works Act, 1912 (at 3J per cent, Dominion) 50,000 Irrigation and Water-supply Account (Appropriation Act, 1912) (£IO,OOO at 32 per cent, Dominion; £5000 at 4 per cent, Dominion) 15,000 Government Railways Amendment Act, 1910 (£15,000 at 32 per cent, Dominion; £13,780 ot 4 per cent, Dominion) 28,780 Immigration and Public Works Loan Act, 1870 (stock croatod— proportion £3,000,000 loan, 1912 —for redemption debentures due 15th April, 1913), (at 4 per cent, London) 363,000 2,G49,650 Less redemptionsAid to Public Works and Land ' Settlement Act, 1900 1.000 2.648.680 ■Miscdlaneous-Coal-mines Act. 1908 (Appropriation Act, 1912), (£25,000 at 3} per cent, Dominion; £50,000 at 4 per cent, London) 75,000 Naval Defence Act. 1909 (at 3J per cent, London) 28.1.500 New Zealand Consols Act, 1908 i (at 3i ner cent, Dominion) ... 1,780 Scenerv Preservation Act, ISOB (at 3i per cent, Dominion) ... 15.000 Increase of stock debt for charges and expenses, conversion, etc (£24,090 at 3J per cent, Jondon: £86,50G .it 4 per cent, London) 110.598 455,576

SUMMARY. Slate-guaranteed Advances debt 2,572.291 Public Works 2.G4S.GSO Miscellaneous •185,876 Tolnl increase for 11)12-13 5,700,850 PUBLIC REVENUES. TEMPORARY LOANS. AN AMIONDMENT PROPOSED. It is proposed lo nmeml the Public Revenues Act in order that Tr-oa.-niv bills may 1)0 issued in 1/ninluii. This will far cilitato (ho raising of temporary loans for the purposes of tho Consolidated Fund in anticipation of revenue. During tho linwncial year the sum of .£750,000 was transferred from llio Consolidated to the Public Works Fund, making tho total amount ol' revenue transferred to tho Public Works Fund sinco 1891, £9,280,000. In accordance with tho recommendations contained in tho rc|)ort of tho Commissioners appointed to report on the unclassified Departments of ilio Public Service, a simplification in tlio publication of the public accounts of tho Dominionhas been introduced. Tho public accounts, instead of being issued in separate accounts as well an in a combined publication known as B—l, will be issued in two parts only, and a jrc-at deal of duplication will be avoided. Tlis principle adopted, for the first time, lost year of referring the Estimates for the consideration of the. Public Accounts Committco will be continued. Pull details of all expenditure for the year ended Marcli 31, 1912, have been prepared at some expenso to the country. It' will be remembered tliat the Commissioner above referred to raised the question of tho necessity for the publication of these details, and I propose, therefore, that the continuance of the printing of this information for futuro years shall be referred to the Public Accounts Committee for consideration. It is estimated that the cost of the preparalion of tho return for the year ended March 31, 1912, was, approximately, £4009. The cost of raising the £3,000,000 loan in London will be laid before honourable members as soon as the final accounts are received from the Hisli Commissioner. The proceeds of this loan have been to *. very large extent devoted to the current needs of the Dominion, circumstances made it imperative that the previous loan should be largely utilised for the purpose of redeeming existin* loans.then maturing, or repaying advance*. I subjoin a. comparison of-the last two loans, showing the purposes for which tho moneys were, when raised, devoted. Comparison of the Last Two Loans Borrowed on London. Market, showing Purposes to which tho Loans were applied. • . £4,500,000 loan of 1911—Date raised, Juno 7, 1912 j repayment of advances obtained in anticipation of loan or in payment of maturing debentures. £2.785,500; expenditure in London (Naval Defence), £283,500; balance available for ■ expenditure in tho Dominion, £1,431,000- , £3,000,000 loan of 1912—Date raised, February 13, 1913; repayment of advances obtained in anticipation of'loan or in payment of maturing debentures, £451.800; expenditure in London (Naval Defence), nil; balance available for expenditure in tho Dominion, £2,518,200. Allocation of £3,000,000 Loan. The following is the allocation showing tho purposes to which the recent loan of £3,000,000 was applied:— £ State Coal Mines Account 50,000 Public Works Fund I '1,443,20(1 Advances to settlers 200,000 Advances to workers 150,000 Land for settlements 300,000 Local authorities 400,000 Redemption of debentures 451,800 £3,000,000 •Includes £205,300 raised for redemption of debentures,, but not being required for that purp6sb,..was subsequently added , to. the original Public Works Fund allocation, Loans Falling Due. ... Tho loans-falling, duo during the next seven years .are as follow;— Year endiing 31st Mar. London. Australia. N.Z. Total 1914 230,400 — 08,400 298,800 1915 8,145,200 352,100 1,333,505 9,830,865 1916 848,800 137,550 3,283,2-52 4,259,702 1917 225,200 1,087,800 572,240 1,885,240 1918 40,700 84,400 3,26G,45S 3,391,556 1919 134,350 60,000 1,302,465 1,496,815 1920 38,000- .26,800 572,450 637.250 9,662,750 1,738,650 10,398,858 21,800,258 The £9,830,865 due in 1915 includes the whole of tho £4,500,000 loan of 1911 aud £3,142,600 of tho £5,000,000 loan of 1910 not converted. It will be seen that a very largo amount of loan money, has to bo met during the year ending • March 31, 1915. This matter largely occupied my attention during my recent visit to London, and I fully anticipate that satisfactory arrangements will lio mado when the proper time arrives for raising tho money. Tho reserve securities held by the Government in London amount to £800,000, and theso are at tho present time earning interest and are unpledged. Charges for Inscription of Stock, The charges mado by tho Bank of England -for tho management and inscription of our stock in London amount to close on £20,000 per annum. Prior to May 1,, 1908, a sliding scalo of charges had been agreed upon with tho bank, under which the charges diminished as the quantity of the inscribed stock increased On the date mentioned, however, a now arrangement was entered ir.to\and a fixed rato per million of stock was agreed upon. The change brought about savings in the charges which were temporary only, and by 1914, assuming that tho two loans coming duo in that year are replaced by stock, the annual saving will bo converted, into an-annual loss, which will progress at a yearly increasing amount as our national debt increases. I approached the Bank of England when in London, with a view of obtaining a reconsideration of the charges, but eo - far 110 .definite conclusion has been arrived at. Proceeds of Land Sales. It will bo remembered that Section 5 of tho Land Laws Amendment Act; 1912, provided,.amongst other things, that from April 1, 1913, all proceeds of sales of land should be credited to tho Land for Settlements Account, instead of to tho Consolidated Fund. These moneys will for tho future, therefore, lie devoted to tho purchase and settlement of other lands. POST OFFICE SAVINGS BANK. POSITION REVIEWED. With a view of bringing the rates of interest paj-able to dopositors in tho Post Offico Savings Bank more into lino with the current market rates, it was decided to increase tho amount' of interest to depositors from 31 to 3} per cent, from Hay 1, 1913, in respect of sums not exceeding £300. In consequence of this increased rato payable to depositors by tho Post Office, it became necessary for the Treasury to increase the Vato payable in respect of debentures issued to the Post Offico for tho investment of its funds. The rate payablo by the Trensury was, accordingly, raised from 32 per cent, to 4 per cent, from May 14, 1913. The following table will show the relative sums borrowed by the Treasury from the Post Office for each of the years ending March 31, 1912 and 1913:— Comparison of Post Offico Investments in Now Zealand Government Securities during the year ended March 31, 1912, aud Mai-eli 31, 1913, respectively, showing Purposes to which Money was applied. 1912. 1913. Fund or Account. £ '£ Consolidated Fund (Treasury bills) 500,000* 175,000' State Coal-mines Ac-' count .' 20,000 25,000 Seonerv Preservation Account 5,000 15,000 Public Works Fund 76,750 49,000 Aid to Water-power Works Account — 50,000 Irrigation and Watersupply Account — 10,000 Rail\vay:s Improvements Account 10,000 15,000 Loans lo Local Bodies Account. 50,000 — Land for Settlements Account mi. 525,850 125,300

Nativo Land Settlement 1 . Account 254,500 80,000 I New Zealand State-guar-iink'cil Advances— ) Advances to Workers 425,000 — ] Advances to Local Au- ; thorilies 222,000 201,000 1 Guaranteed Mining 1 Advances 5,000 — I 2,004,100 805,300 i •Thcss amounts wei'o repaid during the ' respective financial ycarß. Public Debt Extinction. J The sum paid out of the Consolidated | Fund towards tho extinction of out loans ] amounted to X' 149,343 for the y«itr. ■ the year previous a sum of JCIW.BSS wan eimilarly paid to the Superintendent ot the Advances Ofiioe, and for tine two years during which tlio Public Extinction Act has been in oixaration a total eum of JC300,93G (including interorit) has been invtotwl by th? Superintendent in loans to settlers, workers, or local authorities , in accordance with tho provisions of the Aot. Particular of those investments will bo , found in tho printed balance-sired and report of tine Superintendent of the Stnto Advances Office. Closing Accounts. It is intended to close the Maori Land Settlement Account, which was practically supcrstded bji the Nativo Land Settlement Account established by the Native Land Act, 1009, mid honourable members will bo asked to authoriso the «b----porption of the old account by the Native Land Settlement Account, which now includes all ;evenue and expenditure in connection with Nativo land settlement. A. proposal will also bo submitted ( to amalgamate the Loans to Local Bodies Account, Still kept in the Treasury, with that of the Loa.is to Local Authorities Branch of the State Advances Office, which offico deals with all Government loans to local authorities. Public Service Reform. The Commissioner and Assistant Commissioners appointed tinder tlio Public Service Act, 1912. oommenced duty at tho beginning of the year, and have since been engaged in investigating tho condition of the Public Smtvico. One of the first duties of the Commissioner was to classify the Service, and it is hoped that ' the classification will be Teady for publication at an. early date. As a result of tho work already done by the Commissioners, it is evident that considerable economics can be effected in many Departments, while at the same time efficiency can be increased'. A preliminary report by the Commissioner will be presented to Parliament in duo course. SUPERANNUATION FUNDS. . PUBLIC SERVICE AND TEACHERS. The income during the year ended Dccomb:r 31, 1912, amounted to .£148,990,' including .£23,000 annual subsidy frpm the Government. The amount contributed by members of the fund during tho year was .£107,409, tho balance of the income being made up of interest, .810,258, and fines, .£323. The total outgo for the year was .£65,169. This includes allowances to nwmbars and to widows and children of deceased members, .£50,781, as against .£44,173 for the previous year; contributions refunded, .£10,752; compensation, .£2,493; and expenses, J21144. Tho total value of the fund at tho end of tlio year wa3 .£423,556, an incimso of ~C 81,820 on tho total at tlu| close of the yoar 1911. The number of contributors at the beginning of the year was 9140, and 1471 new contributors have since joined. The number of officers who ceased to contribute* during the year by reason of having left the Service, retired on pension, or died, was '84, leaving a total of 10,027 effective'membeVs of the fund at the end of the yoar. There wero 385 members in receipt of rotiringr flllowincea by reason of ago or length of sarvice, and 104 by reason of medical unfitness, or of injuries received whilst on duty. The number of widows and children on the fund was 104 «,nd BO irespactivvly. An amendment of the law under which the fund is adtost session, orbvs«ori"fe>t' reduction or postponement of allowances to widows and children' in c*eas where compensation is pvd -under thi» Workers' Compensation' 'Act for the death,of * contributor by accident- The new law came into operation from the dato of its passive. At,tho came time Parliamentary sanction ' was given to an increase to the annual subsidy from JC23,000 to .£48,008, as recommended by the Government Actuary in his rapart on the fund for tht> trionnium' ended Droember 31, 1910. The first increased subsidy of .£48,000 was paid over in accordance with the Act in January, 1913, after tli» close of the year's accounts in December. ; Tcachers' Superannuation Fund, The income during .the year ended Deosmbtr 31, 1912, was X' 55,265, made up as follows Contributions of members, £40,130; intwre«t'on outstanding contributions, .£23; interest from Public Trustee, .£8111; and Government subsidy, XVOOO. Tho expenditure for the year was .£26,317, the items being: Allowances to numbers and to widows and children of deceased members, .£21,323; contributions refunded, .£4911; Public Trustee, commission, .£B2. This value of the fund on December 31, 1912, was .£214,298, as against £185,026 on December 31, 1911, an increase of £27,272. The number of contributors increased from 3387 on December 31, 1911, to 3853 at the end of 1912, an increase of 466. Tho number of persons who ceased to contribute to the fund during tli* year by reason of left tho Servioe, retir<xl on pension, or died, was 213, eo that Hie number of contributing members at tho end of'ths year was 3640. There were 240 members in receipt of retiring allowances by reason of ago or' length of service, and 39 by reason of medical unfitness. The number of widows and children on the fund was 52 and 45 respectively. By Section 3 of the. Public Service Classification and Superannuation Amendment Act, 1912, persons in the employ of the Universitv of New Zealand and o.ffiliated institutions on December 31, 1912, were given the irisht of joining the fund, the right of election to be exercised on or before June 30, 1913. Persons first permanently employed by the above institutions subsequent to Decoml»r 31, 1912, were also given the right of joining the fund. By Section 5 of the Amendment Act above referred to, tlioso persons who. being eligible, failed to join tlio fund on ils inception in 1906 were given the right to become members on paying up bnclc contributions, together with compound interest thereon at the rate of 5 per cent. The last day on which tho right of election could be exercised was .Tune 30, 1913. A number of elections have been, made under thew provisions. In accordance with the Actuary's recommendation, this fund, in addition t'o< the annual subsidy of .27000, was during tho past financial yenr snnnlementrd by an efcra prant of xifl.ooo. Both this fund and the Pnblie Service Snwranmiration Fund aro sub- ' iect to triennial investigation by the Actuary The innrwised annual subsidies will 'not be further increased during the next thres yearn Railways Superannuation Fund. As promised' in last year's Budget, .tho Government is obtaining an actuarial report on tho condition of tho Railways Superannuation Fund. Tho import is not yet to hand, but on its receipt careful consideration will bo given to this fund so as to placo it, if need be, on a sound basis. Legislative Council Reform. Further consideration was given to this important matter by the Government during tho recess, anjl fresh legislation has been introduced with the object of bringing tho constitution of the Council more into accord with popular feeling. Electoral Reform. An EUctov.nl Bill will be introduced during tho present session.