OUR FINANCES

Dominion, Volume 9, Issue 2669, 15 January 1916, Page 6

OUR FINANCES

THE POSITION SATISFACTORY NO MORE BORROWING YET !.. COMPREHENSIVE STATEMENT BY SIR. JOSEPH WARD. ■An important statement about the : revenuoand tie finances of New Zeai . land generally wasmadc by the' Minis- ; tor. ot-Finance- (the Bight' Hon; Sir |.< Joseph "Ward) in an. interview with a' i Dominion,reporter yesterday. ' k ... : Sir "Joseph Ward . said - that • tho . position at the completion of I tho nine months of the financial year up to December 31, 1915, was upon ' -the \rlolo exceedingly satisfactory. The ■ avenue for the nine months exceeded that for tho nino months of tlio prcvi- ; : ous year ; by £795,520/ and for the month i ; of December, 1915, as against tho month : of December, 1914, there was an inurease of £333,899. The Minister gave ; tho following statement for : the nino months of 1914 and of 1915, which gives tho; position, of the' whole of the rev- ; enue branches in full Nine Months', Revenue. • . Revenue for the. nine months ended December .31, 1915, compared with the : /nine months ended December 31, 1914. \ 9 months 9 months '.ended . ended Dec. 1915; Dec. 1914. Customs , . 2,455,307 2,427,550 Stamp and death : ' . : duties ' . 967,369 : 850,889 . Postal and Tele- , graph 1,116 ; 309 1,013,489 • Land Tax .../ 980,125 637,732 , Income Tax .' 62,355 19,035 , Beer duty.. ...... 103,511 94,543 • Railways 3,083,775 2,888,870 : Registration and Vother fees 69,073 65,069 Marino 33,852 37,396 ; . Miscellaneous :... 240,321 .278,099 Territorial ...... 124,627. 149,626 !• National Endow-* . i; :iiient revenue . 1 ■ 92,655 . 78,770 Other receipts ... ■ ' 12,067 4,75b

.... 9,341,346 8,545,826 Stamp and Death Duties, Post and Telegraph, Land Tax, Income Tax, and ' Railways all show a considerable injt crease, while Customs show for the nine 'months a slight increase, ' namely, i £27,757. The principal decreases are i: in miscellaneous and in Territorial, the ! former £37,778, and the latter" £24,999. .- The decrease in Territorial revenue is - chiefly accounted for by the fact that a •good deal of land has been made freehold, and consequently the.rents are liot : being received. - The. decrease ih miscellaneous iis due to interest payments f'iri London, which last year were credited i to ordinary i. revenue, and subsequently ; were paid out again, , so that the drop :in this branch :s not real.. For the twelve months! ended . December 31, >1 1915, as. against the twelve months endi ed December 31, 1914, there is a net t increase : m the revenue of! £786,278. so f that both for the twelve-moiitlily 'period j, and for the nine-monthly period the imiy p'rovement in revenue.: is very marked. December Figures. , . , . The increase of ' £333,899 for the : montli of December, 1915, as against the . month or. December, 1914, is : as, follows:— : ■!

;:'-V £ Customs 39,970 Stamps and Death Duties 46,378 Post and Telegraph ......... 61,458 ; Land Tax • 55,947 Income Tax 38,715 [■ Beer Duty 8,745 • Railways 100,132 4,990 ;». General: Receipts -...' 2,607 - i that is, a total of increases of -£358,942. : (The decreases are: £ 1; Registration and Other Fees ; • 797 ' Marine* 596 Territorial- ...................... -23,650 1 that is, a total of £25,043, which leaves : a not increase for the! month of . £333,899. The Expenditure. ; In reference to tlio net expenditure • for ,tho nine months euded December . 31, ,1915, it shows an increase of : £169,182 over the expenditure for the | corresponding period in 1914, and this | is v due entirely to the increase in'the' ; interestjand sinking fund charges, which : amount ,to £199,560. The not Departmentalexpenditure j shows a decrease _of £30,000. The decreases in. expenditure are:- | : :Finance Department 41,089 Railways : 48,117 ■ Public Buildings , 8,856 ■ Mines' 1,527 !. Internal Affairs ~... 16,348 - Defence 51,927 - Lands!and Survey ............ - 4,234 ■ : Agriculture .8,296 A total of £180,394. The Departments which show increases are: • .

•■Legislative , 457 .. Post- and Telegraph. .9,704 ■ Justice Department 6,927 • Customs and Marine 5,613 : Labour: 2,662 , Native 164 Education ....... 123,206 not provided for... 1,283 > A' total of £150,016, which, added ; to the increase in the permanent ; charge,s of .interest and sinking fund, ; C] 99,060 gives a total increase 'under ' ill. heads,. permanent charges and . animal appropriations, of £349,576. Deducting'from this the decreases, £180,- , 394, leaves'a net increase of £.169,182. ; Our Financial Position. : ,The cash "-credit balance at end of : December, 1915, was £324,843, as . against a debtor balance at end of Decomber, 1914, of £48,637.' The posi- / tion, therefore, at December 31 last : year was better than at December 31, ; 1914, by £373,480. | The financial position, of the Ordinary Revenuo Account on December 31 / last was in a satisfactory position with . a credit balance of £1,194,000. • Continuing his statement, the MinisI ter" said: "1 am glad to say that i. £750,000 Treasury bills have been paid off, and there will be a further largo amount of Treasury bills paid off at the end of the present moutli.

No Loan This Year. "The Public Works Fund on December 31 was in a strong position. The expenditure for public works for {ho nine jnonths ended December 31 was £1.752,637, all of which has been paid, and there remains a- credit for public works expenditure of £1,801,412. The estimated expenditure up to March 31 ' next under air leadings—railway con- ' struction, publio buildings, harbour defences, and the construction and maintenanco and supervision of roads and bridges and other public works—is £'188,400, and the estimated expendi- " turo from the end of March next to December 31, 1916, £1,001j600. I am therefore in 3 ( position to ho ablo ;■ to stato definitely that wo shall not re- ; quire to borrow any further sums for 1 public works expenditure until well on ■ in the year 1917. This, I think, ought i to be gratifying to the country generally,' and reassuring as to tho position • we iiro likoly to occupy after tho con- ! elusion of the war. I want to say, as I have said before, that it is the time after the war for which tho country niust" now prepare, so that wo shall be able to wmA the now conditions that'

must arise without any great internal dislocation of the public- finance. • An Offer to Debenture Holders. "To enable this,position to be further strengthened, all i'our per cent, debentures payablo locally falling duo up to 1924 will, if tho holders apply to the Treasury, bo converted, into four aud a half por cent, debentures with a currency extending to twenty-five years, and the now debentures will be freo from income tax. I may say that the object in doing this is to avoid having to make provision by local loans for tho repayment of the debentures current and falling due in the respective years between now and 1924, so that the .Minister of Finance may bo in a position, if circumstances necessitate local borrowing lato in 1917, to raise what is required for general purposes without having to borrow further for tho purpose of : making provision for tho repayment of these debentures. I think that tlioso who understand the financial responsibilities under the conditions that exist consequent upon this practically. World-wide ' war will recognise that- this, is a judicious course to follow, and that it will give added strength to the financial position of the country for whatever may be required of it after the war is over. This, of course, applies equally to the conditions that would 6xist if tbo war should continue for a longer period than most of us hope will bo the case. War Expenditure. "So far as tho war loan expenditure for New" Zealand is concerned, I am glad to be able to say that this is defi- • nitely fixed until the end- of December, 1916." Provision has been made for tho amount of. £8,340,000, spread over monthly payments for tltis purpose. The whole amount comes from London through the British Government. It is well to know that the financial arrangements for another year have been definitely made, and they should bo regarded as highly satisfactory by all those who" realise the position of a young country with a limited population. There, is little doubt, in my opinion, that if. we had to raise such a sum as this locally it would alter the whole local money market to an extent that would be, to say the least, more than ambarrassing for all classes who require the use: of borrowed moneys to.enablo them to carry on their businesses, whether in town or country.

The Financial Worries. ".With* the war expenditure provided for, cash in hand for public works until iwell on in 1917, and! the conversion of .debentures falling due up to 1924 for a period of twenty-five years, the financial position of this country, should inspire confidence in our '"people, and they should be able to concentrate their energies more whole-heartedly upon' the war when they feel that there is no need for general uneasiness as to our future financial position, when enormous additional sums-have-to, and are being, raised to meet expediture l —much Df it of a pormanent character—for which this terrible war is responsible. State Advances. "The amounts paid' to settlers, workers, and local authorities. for the nine months up to December 31 last was £1,055,940, made up as follows:—Settlers, £625,000; workers, £241,795; local authorities, £189,145. I may mention that the total amount paid since the inception of the Department is £21,704,690, of which settlers received £16,015,015; Workers, £3,080,120; and local authorities, £2,609,555."

Interest Rate—and a Warning. Sir Joseph Ward said there was ho earthly reason why the rate of interest should go up in this country Anyone attempting to raise it unduly during, the present war .crisis would not be looked upon as a friend of either the country or the people. There was plenty of money in New Zealand, and 1 the object of every well-wisher of the Dominion in a time when war was raging should be to keep the general finance of the country, both public and private, ■steady. He had so far refused to give! authority to_ local public bodies to raiso moneys at high rates of interest, and it was in their interest as well as in that of the people they.-served in their re-! spective localities'that rates should not be allowed to run up. The Government had_ the power under statute of last session to prevent an increase in rates of interest, and, though ho was averse to exorcising powers of the kind, .if there were any attempt to force up the value of money at; such a time as this, then it would) be' a question for serious consideration as to whether the power should not be put into operation. -•