THE BUDGET.

Hokitika Guardian, 2 August 1917, Page 4

THE BUDGET.

_ (Per Favoui' of Government). REST’ 1/1" OF THE YEAR’S OPERATIONS. Consolidated Fitod, Ordinary Revenue Recount ■ . £2,10.0,0/i Receipts, during yehr— Revenue £18,335,347 Other receipts ... 32,200 18,367,547 Expenditure during year— . Appropriations .. 14,058,/ /0 J,308,77i Credit, balance 31/3/191 7 ... £6,474,85* 'Phis credit balatiee is large, and .wa intended by me to bo so- The Dc minion’s financial war fcquiroriieiits ai eng-mous, hut dol more than the conn try can rinncl. There is considerabl shrinkage in the revenue .tlijs year, am it is imperative that the Consolidate/ Fund should be in such a position tha it can make up any loss of revenue,' ant also, if necessary, contribute a portioi of the means required for carrying o* the war, • RESERVE. I announced in last year’s Budge that a special reserve had been estab fished in London for the purposo o mooting possible/.sudden demands- r.c suiting from the war. 1 felt that tin Reserve Fund of £BOO,OOO ordinaril, maintained in London wu/ insufficien under, the present -umisunl. conditions and I have invested 1» London out o ■surplus revenues a si nil of £3,917,731 fo this .purpose-. \ The public has been placing a larg. amount of its 1 cash at call with the Pos Office, and I feel convineed'/that wliei peace is declared a very considerable pr< liorl ion of these deposits will be claim od. We have been borrowing thesi Post Office deposit money for war’pur poses and other local needs, and it- i probable that the, Consolidated - Finn may after the war have to repiirelias sonic of the securities it has given to'th. Post Office tto enable the Postal Depart ment to meet its obligations Since the war began we have borrow ed approximately £10,000,000 from th Post Office This is apart from the sun raised by the Po%t Office on five-yea war certificates After pence is declare/ it is probable /that increased interna developments and business activities together with the necessity of repairinj the world-wide damage caused by • th war, will create a great demand fo money and it would be cheaper for th Government, to have its own money fo use then than to borrow. I(, must lto be forgotten, however, that the Pos Office eall-monevs are still accurnulatinj and must be invested. At the end o tile current Yoar.fhe total borrowed an/ invested by the Treasury from (the Pos Office, will in all probability, largely oxcoed £10,000,000. I trust honourabl/ members and the country will l-ecog nize bow important it is to have eacl year’s surplus of revenue during tin war invested and held for repayment it the depositors in the Post Office, nnc should events show it is not necesf/arj for that purpose, /then it. should be used for paying off war advances from the Imperial -Government. The above £3,917,731, lias been invested in Imperial Government securities, which can, of. course, be realized if the necessity fco do so should arise The important fact remains that we have a strong Reserve Fund in London, which ?ives a financial stability to the Doiriinon during the war that cannot be overestimated. ’ WAR EXPENDITURE. , Since the commencement of hosiiities the war expenditure of the dominion at 30tli June last lias cached the large sum of £28,439,912, aid as this expenditure is increasing n proportion to the increased number f men we are despatching to the eat of war, it is probable that by the ime the House meets again the experiiture will have reached £50,000,000. nil I need not remind honourable lembers of the Sacrifices which the eople of the Dominion must be pieared to make in order to meet this nge expenditure. It is of paramount nportance that this should be recogised by every one in the country. I am pleased to be, able to intorm anourable members' that not onlj is a considerable amount’of money, >r war jiurposes been raised in New I ealand through the Treasury and I ost Office Departments, but funds J

! have been provided for carrying on ! other hece'ssary services as well. It will be remembered that during • the early stages of the war the Do* J minion Was dependeht irporf the Im* L perial Government for advances to f enable "it to train afid equip its solri diets and maintain them at the seat of war. For a time this was uecesj sary, but as soon as -it was possible 1; for New Zealand ..to provide its own . funds for defraying the expenditure 1 necessary for the conduct of its share of the w’fir it was done. The current expenditure in connection with the war may be estimated at approximately £1,900,000 a month. Fortunately, however, the resources of the country are able to bear the'heavy strain which is being placed upon thein, and though anxious r as to the fiiture I have the utmost 1 confidence that the people of the ' Dominion can be fully relied upon to provide the necessary means. , In addition to the expenses of i training, equipment, transport, &c., 1 of our troops, there are maintenance expenses being continually incurred at the seat of war, Which, for the purposes of convenience, are being defrayed by the -Imperial Governriient.. Claims are subsequently made by the War Office to cover this expenditure, and the claims so made up and provided for to the 81st DeDecember, 19 ’O, amounted to £4,500,000. During last session of Parliament Tasked the Honseto gi'ant the necessary authority to enable the Government to raise a sum of £10,000,000. for the purpose mentioned, and immediate steps were taken to place the prospectus before the public for tlie flotation of a loan c-f „ £8,000,000. i The response to this appeal was most - gratifying, as this sum was largely 5 oversubscribed. , I wish fo thank the bank's and 1 other institutions for their liberal 1 subscriptions, and also the Press ; which' assisted materially in*making the loan a success. ; The public, also | is to .be congratulated upon the liberal manner in which it-snbscribed. • The smaller subscriptions, made chiefly out of the savings of the people ‘ ! through the Post Office Department, amounted to no less a sum. than . ,£l,4’ 5,0&0, and I want to thank the • small investors for the great assist- ; ahee they have given in providing so ; large a portion of the loan. I have mentioned above that during the early stages of the war the Im- . perial Government provided all the j fnnds required ty the Dominion for 1 war purposes. The amount so pro- ’ vided amounted to £14,410,000, but in addition to this amount there was . , .I a sum .of £3,250,000 .advanced for the ; 1 redemption of certain loans which IJ were maturing about the end of 1914, “ - making a total of £17,660,000 advanced since the commencement' cj | the war. The Dqmiuion gave to the Imperial i Government, as. security for these 1 several advances, Treasury bills and memoranda of agreement which were J renewable year by year. While in London I.ari’anged with the Imperial r Government to extend the currency ? of the greater portion of these loans until 1945 and 1947. ‘ i By doing so the necessity for gotng upon the-London market during The war was avoided, and it will be recog- ; nisfed that a great saving to the Dominion has been effected. lam sure that the terms obtainable in the open market would have proved most , costly to ns, and it must be remem bered that the country has saved underwriting, commission, brokerage, 1 and other charges, which are inseparable from the floating of aJoan on the London market. • It is important to . remember that by deferring these heavy liabilities for so many years 1 our financial position after the war will be given greater .stability. ' . LOAN FOR PDlsr.IC WORKS; I The expenditure on public! works during the war lias been greatly tMrtailed, and in consequence it has beeu , possible from time to time to borrow ! sufficient money from the Posh .Office Mo enable provision to be made for this expenditure. During the year '-1,916-17 Amounts .totalling £500,000 were thus borrowed from tlie Post Office, and there” was at the 31st March an unexhausted authority for £745,100 available for further necessities. Although the public works expenditure will be kept as low. as possible during the enrrent year, it will be necessary during this session to ask the House for an additional authority of £750,000. this amount £250,000 will be required for telegraph extension. No public loan will, however, be required for these purposes.