DOMINION FINANCES.

Hokitika Guardian, 28 April 1924, Page 4

DOMINION FINANCES.

STATEMENT BY AIR MASSEY. WELLINGTON, April 23. ’! he Prime Minister (All- Massey) i= sued the billowing statement to-day:-i have had several enquiries dnriig the last few days as to the finances el the’ Dominion, especially as to whethoi the railways made a profit or not oil the year’s work. On account of the

very large sums which have had to bt converted during recent years, and the higher rates paid during the war. the average rate of interest payable upon , the Public Debt lias increased con- ‘ sitlerably. it is now a little less than > -U per cent. The railways are expected to earn IV' per tent. I have no doubt they did so for the -last financial year, but for each of the three years prior to last year (always taking per cent, as the standard of earnings) there was a deficit. For the year 192021 the deficit was £124,390, and for the vicar 1921-22 the deficit was £285,011.

11l normal years freight and I'aiv- are not enough to meet working onpeases, and the fixed interest rate of per cent, charged on the capita! cost ol open lines. Working expenses, moreover, do not cover all charges, as for instance, interest charges on unopened lines, which in a railway company would immediately become a capital charge. The interest charges are in the Government railways at present borne by the Consolidated Fund until such time as the Railway Department lias taken the lines over for traffic purposes. The loss in interest under this heading at 3J pel cent, for the last ten years is estimated at £1,250,000, the amount ranging from approximately £90.000 in 1915. to £224,000 in 1922-23. If these charges were borne by the Government railways as in commercial railways, together with the superannuation liability. estimated to be at least £170.009 per annum, the present railway revenue, without allowing for any increased expenditure in other directions, would not earn anything like the interest margin required to meet the Public* Debt chargers. It will be seen from the foregoing ; that any additional charge on the rail- j ways cannot be earned in the ordinary way. but must come from the taxpayer through the Consolidated Fund. This mejns additional taxation. i know that most people are looking

anxiously for a reduction of taxation, rather than for an increase.

Here I would like to correct a statement which I am reported to have made when speaking recently in Wellington. It was stated that as Finance Minister 1 said I would ask Parliament to reduce taxation by an amount equivalent to that by which it was reduced last session. What I did say was that I would like to reduce taxation by the same amount as last session, but I don’t want to cause any anxiety about being able to do it. I figures to show some of the additional expenditure which would be expected from the Consolidated Fund during the present year. Penny postage was reinstated at October Ist. last. That meant that half the financial year had gone before the change was made, so that, even allowing for a reasonable increase of business, the loss for the present twelve months is almost certain to he more than for the last six months. Wo with the Customs duty on tea. About five months of last year had gone before the duty was struck out, and the surplus for last year was helped to that extent. Put there is no such help available for this year,

I think most people will have noticed that during the last few days the cables have indicated a considerable drop in the prices of our principal products with the exception of woo! This, of course, means loss revenue. I don’t want to cause anxiety about limincia! matters. The financial position is good at present lull I desire to warn the public against extravagant expenditure either publicly or privately. With economy we shall come through all right and at the same time keen the polity of development gniug but without care and economy there may lie serious trouble.