N.Z. FINANCES

Hokitika Guardian, 1 May 1928, Page 1

N.Z. FINANCES

SPEECH BY HON. DOWNIE STEWART.

By Telegraph—Press Assn., Copyright.

CAMBRIDGE, April 30

lion. AA’. Downie Stewart. ((Minister of Finance) addressed a public meeting at the Town Hall to-night. He stated that the provisional returns for the financial year, showed a surplus of approximately £IBO,OOO. This, he said, was a smaller surplus than last year, but it was satisfactory under adverse circumstances. The previous year had closed with an adverse trade balance, fluctuating prices, and with 'business' stagnant.

The Minister stated that an extraordinary power of recovery had been in evidence during the year, and was still taking place. The past year’s revenue was approximately £24,075.000, which was about eighty five thousand in excess of his Budget estimate, while the expenditure for the year was about £24.103,000, or about ninety-five, thousand less than his estimate. Tie said the income tax revenue had fallen short of his estimate by £150.000. The land tax revenue fell short of his estimate hy fifty thousand.

Customs duties, the Minister stated, had exceeded his estimate by £170.000.

The Stamp and Death duties were £IOO,OOO above the estimate,.

The year’s expenditure entailed large items for the Singapore base, and there were increased pensions and hospital subsidies. There was rigid control throughout the year, which resulted in the expenditure being £240,000 below the amount appropriated and £25,000 below Hint of the previous year. The figures, he said, showed that the estimates came closer to the actual results than in any year since pre-war, which indicated they were getting hack to a more normal condition of finance. This fact had a real hearing on the country’s financial standing in London. The Alinisler quoted the London “Financial Times” where It stated that no Dominion was more scrupulously careful over its finances than New Zealand.

Mr Downie Stewart said that the public debt was now £251,387,000. This was ail increase of £15.540.000 for the past year. He said this showed the Government policy was one of tapering off borrowing. He hoped that the nett increase in borrowing would not fail to reach the figure where the amount of the war debt or of other debt paid off would equal the now money borrowed for public works. During the past six years the dead weight of war debt bad been reduced by almost one million. This enabled the nett borrowing each year to show a decrease without a curtailment oi necessary public works. Regarding the Dominion’s annual burden of ten millions in interest, of this £3,540,000 was on account of war debt, and £4.778,0)00 was interest bearing debt. Thus, he said, the interest burden for the ordinary debt amounted only to £2,271,000. The Alinister announced that negoiations were almost completed for a new loan of live millions. This was a* million less than was borrowed hy the Government last year.

The Alinisler stated that lie had closely watched the figures of the trade balance and the banking returns. He bad had various interviews with the, banks, and they had agreed 1 hat tlie ’ last- quarter's figures were satisfactory, but they held the view that some further time should elapse in order to ho assured of improved conditions becoming stabilised, before any decisive action should .be taken.

The Afinister defended the Government's attitude regarding the customs tariff. To abandon the system of moderate protection would produce serious and chaotic results for some time with primary and secondary industries. If the customs duties were abolished, millions of pounds would have to he made up by land and income tax. lb, said that a reciprocal trade trentey with Australia bail resulted in an increase of New Zealand’s exports In Australia, from fifty-five thousand a year to nearly a million last year. It had also greatly affected the balance of trade in New Zealand’s lav-

In order to assist local industry and reduce the cost of living and tlie cost of production, the Government bad reduced or abolished the duty on raw materials used in the industry, also on machinery and on many household articles.

In his opinion, the general effect of the tariff was greatly exaggerated. The essential question was not the existence of a tariff, but the efficiency of production. He believed the present Dominion tariff was properly designed to meet the stage of economic development that the country had readied.

Despite its being a fearfully wet and stormy night, a large attendance gave the Minister a sympathetic hearing.

A hearty vote of thanks was accorded him, with cheers.