PUBLIC FINANCE

Dominion, Volume 14, Issue 150, 21 March 1921, Page 5

PUBLIC FINANCE

A SURVEY OF THE POSITION FIGURES FOR THE LAST ELEVEN MONTHS THE NEED FOR ECONOMY

THE YEAR’S SURPLUS

A memorandum prepared by the Minister of Finance (Mr. Massey) relating to public finance hoa been circulated. It Rives returns of revenue and expenditure for the first eleven months of the current financial year, and makes some references to the need for economy in national expenditure.

The statement is as follows: — REVENUE. Tor the eleven months ended February 28, 1921, the revenue collected under the various headings was £26,880,887, as follows: — £ Ordinary Revenue Account — Customs 7,861,731 Stamps and death duties 3,384,482 Postal and Telegraph 2,283,964 Land tax 1,657,587 Income tax 3,541,974 Beer duty 326,192 Railways 6,098,572 Registration and other fees... 194,522 Marine 50,199 Miscellaneous 1,135,182 Territorial revenue 178,110 National-endowment revenue.,. 100,448 Other receipts 67,924 Total 1£26,880,887 EXPENDITURE. The expenditure brought to charge for the eleven months as above waa as follows: — £ Ordinary Revenue Account Civil List - 25,495 Interest and sinking fund ... 7,544,140 Under special Acts of the Legislature 3,396,652 Legislative Departments 59,055 Departments of Finance 490.9,56 Pest and Telegraph Department 2,120,516 Working Railways Department 5,061,998 Public buildings, domains, and maintenance of roads 153,087 Cook Islands 11,720' Native Department . 31,426 Justice Department 587,760 Mines Department 34,498 Department of Internal Affairs 570,958 Mental Hospitals, Public. Health, Hospitals and Charitable Aid Depart- • ments 422.884 Tourist Department 78.655 Defence Department 459.134 Customs, Marine and Harbours. and Inspection of Machinery Departments ... 238,251 Department,, of Labour 40.655 Department of and Survey ; 287.998 Valuation and Electoral Departments 70.091 Department of Agriculture ... 252,078 Education Department 2,256.062 Services not provided for ... 16,663 Total J 124.210.741 PUBLIC WORKS FUND. On March 31, 1920, the available ways and moans for public works purposes were -6219.502, and additional funds have been received as under: —Finance Act, 1918 (No. 2), section 29, .£200,000; Finance Act, 1919. section 5, £750,000; Finance Acl, 1920, section 15, .£1,590,000; transfer from Consolidated Fund, £360,000; miscellaneous receipts, £21.008: making a total for the eleven months of Vf1.140,510. A further transfer will be made from the Consolidated Fund jf £140,000, and fur-' then sums are being raised under the Finance Act, 1920, £250,000; making a gross total available for the year 1920-21 of £3.530,510.

The expenditure under appropriations far the eleven months' (excluding separate accounts having ways and means of their own) was £2.160,669; the • estimated expenditure for the remainder of the year is £1,099,715; total £3,260,384 The estimated balance on March 31. 1921, is £270,126.

It will thus be seen that a large suin has been found for public works during the past eleven months, but it will be necessary to confine the expenditure during the coining year under this heading to urgent and pressing works only. ' TWELVE MONTHS’ FIGURES. The following is a statement of the revenue and expenditure for the twelve months ended February 28, 1921:— ■ REVENUE. £ Customs 8,485,965 Stamp and death duties 3,797,473 Postal and Telegraph 2,811,743 Band-tax 1,669,884 Income-tax 6,308,994 Beer duty 368,418 Railways 6,934,904 Registration and other fees 233,329 Marine 55,662 Miscellaneous 1,361,248 Territorial I 223,498 National endowment revenue ... 100,448 Other receipts 68,000 £32,419,566 EXPENDITURE. £ Permanent Charges— Civil List 31,275 Interest and sinking fund ... 7,991,812 Special Acts 4,388,142 £12,411,229 Annual Appropriations— Legislative 64,550 Finance i 520,559 Post and Telegraph .. 2,786,387 Railways 5.042,185 Public Buildings 199,174 Native 34,963 Justice 721,503 Mines 41,074 Internal Affairs 1,200,580 Defence 546,426 Customs and Marine 279,739 labour 45,188 lands and Survey 371,354 Agriculture 483,789 Education 2,362,920 Services not provided for 80,153 .615,383,5-14 £27,794,773 The increase in Customs revenue is due largely .to the fact that overseas manufacturers were able to fulfil outstanding and current orders with a rapidity which was not anticipated by importers, many of whom are now overstocked. It is therefore certain that imports will be greatly reduced during the coining year, and that the Customs revenue will be reduced in proportion. The Post and Telegraph and the Railway revenues show increases on account of the additional charges imposed in order to meet the payment of higher wages and bonuses arising out of the increased coat of living. A. close oversight has been maintained over the expenditure, which is within the appropriations, but with- the prospect of reduced revenues it is necessary that the utmost economy should be practised in connection with all State oativltUw and administration.

ACCUMULATED SURPLUS. At March 31 last theaccumulated surplus amounted to £17,500,000. This surplus is being utilised for discharged soldiers' settlement and other purposes for which loans would otherwise have been necessary. The public debt has thus been saved a very large increase, and the taxpayer has been relieved of annual interest and sinking-fund charges which would amount to, roughly, £1,000,000 per annum. The allocation of the accumulated surplus in this manner also provides an investment which produces interest at the rate of 4 per cent, per annum. SURPLUS FOR CURRENT YEAR. I anticipate there will be a surplus at March 31 next, but the excess Customs revenue will to a great extent account for this. .It is certain that the Customs revenue will show a large drop next year. I propose to carry as much as possible of the surplus forward to assist in tiding over that portion of the year when even under normal conditions the expenditure usually largely exceeds the revenue. ECONOMIES AND SAVINGS. Heads of Departments have been instructed that they must make savings wherever possible. Large savings have already been made, and further economies are being effected. For instance, the temporary staff, which at April 1, 1919, totalled 1069, had been reduced to 388 at December 31, 1920, while as a result of the legislation passed last session, which authorised the transfers from the accumulated surplus referred to above, our annual interest and sinking-fund charges will be con- • siderably reduced. The investment of floating cash balances held in London and the banking legislation of last session also provide an addition Io our revenues.

A board consisting of the permanent heads of Departments has been established to co-ordinate and standardise the whole system of purchasing and issuing Government stores and supplies, and in this connection I anticipate being able' later to announce a substantial reduction in expenditure. CONCLUSION. In the last Budget I issued a warning as to the necessity for caution in both public and private finance, and pointed out that we must be prepared to face the troubles and difficulties with which an inevitable reduction in the volume of money would be attended. Conditions have changed as anticipated and the position has to bo .laced. I do not, however, regard the outlook ,as a cause for discouragement, but rather as an opportunity to exerc.se the virtues of prudence and good judgment. The figures I have placed before you indicate that the financial position of the Dominion is quite sound, and our ability to meet all obligations is unquestioned. Special measures are not so much required as the practise of economy, hard work, and co-operation. If all classes of society co-operate intelligently in maintaining the productive activities of this country, the temporary difficulties to which I have referred will, I feel sure, be easily overcome.

(Signed) W. F. MASSEY, Minister of Finance.

COMPARATIVE TABLES

The following comparative tables are attached to the memorandum: — Statement of the revenue for the eleven months ended February 28, 1921, compared with the eleven months ended February I 29. 1920. Eleven Eleven

TVUb „ 5.f6b.«59 1AM.754 795,916 •Signifies a decreMa.

months months ended ended Feb. Feb. 28,1921. 29, 1920. Inc. £ £ £ Customs 7,8611731 4,206,090 3,655,641 Stamp and death duties 3,334,482 2,931,942 45B,5h5 Postal and telegraph 2,283,964 1.568,978 714,986 Land tax 1,657.587 1,545,606 111,981 Income tax 3,541.974 3,602,745 *60.771 Beer duty 326.192 313 177 13,015 Railways 6,098.572 4.92.9,683 1,168,889 Registration and other fees 194,522 136,949 -57.573 Marine 50,199 37.193 13 006 Miscellaneous ... 1,135.182 978,601 156,381 Territorial 178,110 173.369 4,741 National endowment revenue.. 100.448 112.840 •12,392 Other receipts .. 67 924 5.288 62.636 Totals . 26,880,887 20,542.661 6,4.11.389 •73,163 £6,338,206 CONSOLIDATED FUND. Ordinary Revenue Account.—Statement showing the expenditure for the eleven months ended February 28, 1921, compared with that for the elevon months ended February 29, 1920. Eleven Eleven months months ended ended Feb. Feb. 28,1921. 29,1920. Inc. £ £ £ Permanent chargee— Civil list 25,495 00,769 , 4,726 Interest and Sinking Fund 7.544.140 6.801,754 742,386 Under special Acts 3.396.652 3,121.896 275,066 10 966.287 9,944.119 1,022,168 Annual appropriations— Legislative 59.085 39.005 20,050 Finance 490,956 159,459 331,497 Post and telegraph 2.120.516 1.275.623 844.893 Railways 5,061.998 3 ’25.778 1,336,220 Public . build- • ings. etc 153.087 118 055 35. Conk Islands ... 11.709 10.704 1.805 Native 31.406 24.9’0 6.506 .lustier 580.760 4'5.272 132,488 Mines 54 30.('61 4 4 T 7 Internal affairs 570 WB Mental hospitals 422.884 553 Ml '*110.517 Tourists 78.655 56.992 21 C6.3 Defence .... ... 459,134 415,173 43,961 Customs and marine 238.251 185,986 5’2M /Labour 40,655 35,483 5,172 Lands and survey 287,998 218,602 69,396 Valuation and doctoral 70.091 155 967 '886.870 Agriculture .... 252.078 586 fW> *334.778 iTducatlno 2,256,062 1 924.957 331,095 Services not provlded for 16663 13.660 3.003 13,244.454 10,253.374 3.523.251 Totals 24,210,741 20.197.493 4 '45419 •532.171 £4.013.248 PUBLIC WORKS FUND. Statement showing ’expenditure under appropriations for the eleven month# ended February 28. 1921. compared with that for the eleven months ended February 29, 1920. Eleven Lieven months months ended ended Feb. Feb. 29, 1921. 29.1920. Inc. £ £ £ Public works, De pnrtmontnl 145,675 117.649 28.026 Railway® Public buildings 930,395 406,641 650,174 342.845 3®, 232 6A096

Lighthouses, herhour works, and harbour defence!* 4,572 3,011 1,561 Tourist and health 15,407 3.873 11.614 Immigration GY . 64,552 Cr. 64,954 402 Constiuiction maintenance, and supervision of roads, bridges, and other pubHe -works 337,181 209,164 128,917 Development of mining 2,163 1,173 980 Telegraph exten216,307 125,335 89,972 Contingent de6,480 7,520 *1,040 Lande improve1,473 2,033 *550 Irrigation and water supply ... 37,726 17,799 19,927 Plant, material, and stores Services not pro121,807 243 49.442 72,445 vided for ...j..— — 243 797.505 *1 590