PUBLIC FINANCE

Dominion, Volume 14, Issue 56, 30 November 1920, Page 5

PUBLIC FINANCE

MINISTER REPLIES TO CRITICISM

REVENUE AND EXPENDITURE

The Minister of Finance (Mr, Jlassey) mentioned yesterday that he had noticed a newspaper critic suggesting that the ■figures placed before Parliament in the Budget did not disclose accurately the Dominion's financial position. This criticism ignored the fact that the Budget, and the main Estimates were framed and submitted to Parliament early in the session, "and that, as foreshadowed, fresh charges had to be imposed to meet the laTKe increase in expenditure, subsequently authorised by Parliament, and provided for in the Supplementary Estimates. , ■> "After due allowance is made for the abnormal increase in Customs duties, theincreased Post and Telegraph and Kailway charges and expenditure," said tho Minister, "it will be found that the original Departmental estimates are working out much ns anticipated, and there is every reason to believe that at the end of the financial year their accuracy will bfl established. The criticism is based npon a comparison of tho revenue and expenditure for .'the first six months of the current financial year with' the corresponding period of the previous year, but it is by no means safe to assume that the same proportion will be maintained; indeed, it would have been more correct to have shown the proportional increases based on the Estimates for the whole year, viz.:— ' REVENUE. . Estimated Bropartion 1920-1921. for 6 raths £ £ Customs 6DOO.CCO ' 3.0C0.000' ' ■ Railways <.000.000 3,000,000 Post and Telegraph 2,650,000 1J25,0C0 6tamD and death dutieß J,097,000 1,548.500 Miscellaneous 1.070.700 635,250 ' Actualized. I first 6 mthß.' Increase. ' £ £ .Customs .....4,380,730 1.380.730 Railways 3,053,650 53.650 Post and Telegrajjh 1,161,730 163,270 Stamp and death Decrease. , duties. ...... 1,803.828 255,328 Miscellaneous 852.979 317,729 "The reason-for. the large increase inCustoms revenue is bo well known that comment is almost superfluous. It was clearly pointed out in the Financial Statement that owipg to unsettled trado : conditions there-was a great element of ' chance in attempting to estimate the Customs revenue for twelve months. The ability of manufacturers to fulfil outstanding orders, snd \ho increased tonnage which became available! were certainly not foreseen by the mercantile cpmmunity. There has been during the - past few months a remarkable and unexpected increase in our imports, .but at the present moment it appears scarcely reasonable to expect,that this increase will be maintained. "It is also well known that the Post and Telegraph and Railway charges were increased at the beginning and end of August, so that it 13 not surprising to , find- the revenue from these sources for the month of September, 1920,.when compared with the revenue for ' September, 1919, showing increases of—Railways,' .£273,062; Post and Telegraph, .£50,284. This, however, is set off by the increase in expenditure already referred to, and which, in the case of the whole Public Service, includes a retrospective payment of the cost-of-living bonus for the three months of the previous financial year. "With regard to general expenditure, the Supplementary Estimates provide for an additional £2,059,000, which includes the expenditure necessitated by cost-of-living increase in the srale salaries and wages of those employed 'by the State. In the circumstances, a .comparison between the expenditure of the two halfyearly period is riot of much value, and does not affect the fact that the amount appropriated by Parliament and contained in both the Main and Supplementary Estimates, is the correct estimate of expenditure for the year, and, .further, that the, amount disbursed during the first half-year is not out of keeping with that estimate." . .