FINANCE IN THE WAR YEAR

Dominion, Volume 8, Issue 2451, 3 May 1915, Page 7

FINANCE IN THE WAR YEAR

SURPLUS OF £147,139 MR. ALLEN REVIEWS THE FIGURES DOMINION'S STRONG POSITION (By Telegraph.—Press Association.) Dunedln, May 2. '-'I had it in my mind to make a speech on the subject of finance, and to state the position of the Dominion at the end ot the.financial year, but, on consideration, I determined not to do so, and 'I now make a statement to ' the Press instead." This remark was addressed by the Hon. Jas. Allen, Minister of Finance, to a "Daily Times" reporter on Saturday night. The. Minister went on to say:- .. . "First of all I wish to deal with the Consolidated Fund, which is ordinary revenue and expenditure for tho year, and does not include loan moneys, nor does the revenue now include moneys derived from the proceeds of sales of land either for cash direct or on tho deferred payment system. There is nothing in the revenue now as far as land is concerned except rents from pastoral runs, other rents, and miscellaneous revenue. The total revenue for the year amounted to ■ £13,133,100 approximately. There may be some slight variations, as the figures I am stating now have not yet been audited. The total expenditure for the year was £12,985,961, leaving a balance at the end of the year of £147,139. . This balance is the result after paying off all Treasury bills in existence at March 31, and after transferring £350,000 to the Public Works Fund, the full amount that the Government stated it would so transfer., Effect of the War. "It will place the position in a • clearer light before the public if I put J tho figures in this way: Revenue for ; the year ended March 31 includes £426,905, balance brought forward from i last year, and £12,443,525 of ordinary 1 revenue. The ordinary revenue shows an increase over the ordinary revenue of the preceding year ,of £219,186. The ■ ordinary expenditure for the year, that is to say, permanent appropriations and ' the annual appropriation amounts to £12,381,711. The total receipts and ' expenditure which I gave first of all include sinking funds set free to redeem debentures and recoveries on ac- ■ count of previous years. Sinking funds set free were used to pay off loans which became due on. July 15., 1914, and January 2, 1915. With regard to receipts tihe effect of the war shows itself 'chiefly in connection with Customs revenue and railway revenue. Customs revenue is £259,460 less than last year, and railway revenue, though it exceeds that of last year by nearly £78,000, is short of the estimate for the year by £143,325. As I have said these two shortages are mainly due, as far as one can judge, to the effects of the war. Fortunately, from the point of view of the Finance Minister, receipts from stamps and death dutieß have exceeded those of last Year b;r about £195,000. Duties on several largo estates came in for payment during the year and these are responsible for the greater part of the increase. The Post and Telegraph revenue has exceeded i that of last year by something like j £96,000, and this may be looked upon j as a- legitimate increase for the year. ] "On tho expenditure side, on account i of permanent appropriations, the in- . crease for this year over last year is approximately £271,000. The increase in interest and sinking funds amounts to. about £185,000'. and included in this interest and sinking funds payment is interest for as much of the war loan as-carried interest up to the end of the financial year. Old age' pensions show an increase for the year of £42,207; widows' pensions an increase of £4537; and military pensions an increase of £18,000. I do not presume that criticism will be levelled against these increases in expenditure. The Post and Telegraph Department's increase in expenditure amounts to some £74,000, but as has been already point- , ed but, the increase in revenue of the Department exceeds this sum. The Justice Department shows an increase in expenditure of about £22,700, but this has been largely due to the increase provided for the pay of police and others belonging. to this Department. The Department of Internal Affairs shows an increase in expenditure of close on £33,000, mostly due to the general election. The Education Department shows an increase in expenditure of £76,000. The alteration made ia the law last year and the naturalincrease in expenditure upon education account for this. "I have already pointed out that the surplus for the year amounts to £147,139, but in order to make the year's finance clear to the public I have to state that the year's Teceipts and expenditure, apart altogether from- any balance brought forward, show that receipts have exceeded expenditure by about £70,234. I cannot but' think that under the circumstances this is a satisfactory position. The Recent Loan. "As Tegards the Publio Works Fund I am not in a position to-night to give the expenditure, but I am pleased to by able to confirm what I have many ■ 'times stated to the publio that not only was New Zealand in a stroiig position as far as its borrowed moneys are concerned when war broke out, but it is in a strong position to-day. Fortunately, also, the Post Office Savings Bank shows very satisfactory results so far as excess of deposits over withdrawals is concerncd. I do not propose to-night to go into details of this excess of deposits, and I only say that if this continues it will givo material assistance in the way of provision for necessary public works and advances in Now Zealand. The only loan money that has been raised in London is £200,000, about which I have already given information to the Press, which was raised recently for the purpose of paying off a loan that is maturing, and I foel it must be extremely gratifying to New Zealanders to realise that this loan was raised at the. rate of 4 per cent, per annum. It is a stock loan, due in 1929, and. the annual cost to the country—including redemption of discounts and other charges—will amount to £4 10s. sd. per cent. That we have been able to raise even this small loan in this war time on such comparatively favourable terms must be | pleasing to the people. Provision has been made to carry, on Public Works at something like the rate that they have 'been carried on for at least the next six months, and should favourable opportunities occur in the London market to still further strengthen our finance and enable us to look further ahead than six months these opportunities will not be neglected. But wo aro -in the fortunate position that we can to a. . certain extent select our time and wait for these favourable opportunities. Crowth of Advances. "As regards tho State Advances Departments I have very great pleasure in stating that they are in a strong position. They have been during the course of this Government's term of office brought into this strong position, and had it not been for the war and the necessity arising from the war carefully to conserve the finance of

country the Government would have continued to advance up to the full amount allowed by law. This tho Government was doing immediately prior to tho war breaking out, but wo deemed it prudent not to advance up to the full amount allowed by law un- , til we could seo whero we sLood. At the present time we aro advancing to settlers up to £1000; to local authorities £2000, and to settlers and workers \ c or the building of homes £400.' I ioeJ justified, after a careful reviow of tho situation as it exists to-day, in informing the Board that finance will ,bo availablo for it to bring the amount available for workers' homes up to the mtirimum allowed _by law, namely, £450. Similarly in regard to the amount available for Homes for Settlors the limit may now be raised from £400 to £450. The Mortgages Extension Act is still in existence, but I deem it advisable to provide money for the Board to deal witJi mortgages that are coming duo up to ,ai limited extent. I think it will be safe> for the Board to open the door and provide money for mortgages coming aue 'Mp to £450. I think it right that the country should know that even with the limitations with regard to advances whic't it was deemed advisable. to impose .when war broke out a considerable amount of business has been done. In the case of advances to settlers the total of actual amounts paid over in 1915 awe as follow: — Jatnuary £31,835 February £57,155 March £63,910 "Witlli regard to advances to workers for the 1 same period the amounts are as follow:— . Janiuary £15,830 February £18,370 March £27,485 ' 'This .gradual progress month by month would no doubt be continued even if the Government did not raise the limits at present imposed, but with the in-, crease of limits-which I have already indicated E presume progress month by month will be still more rapid till a stable coudition is reached. As for advances .to-' local bodies the amounts paid over also 6how progression. They were as under J — January £27,850 February £32,985 March; £37,155 "I do mot at present see my way to provide money to increase the amount of advances to local bodies, but the finances of the country will be carefully watched, .and if it is considered safe to provide means , the Government will not neglect to'do so. "The baJance at the end of the year, though not large, is a perfectly legitimate one. Instructions to the Treasury were to ctiear off all vouchers at the end'of the year, and I am advised that these instructions have been carried out." .