FINANCIAL STATEMENT

Hokitika Guardian, 31 July 1931, Page 3

FINANCIAL STATEMENT

(Continued from Page 2). mjnaamxsAmt’i— — ■■ ■ - the Finance Act, 1931, the salaries and allowances ol Cabinet Ministers, members of Parliament, aiidi the whole Public Service have been reduced by Id per cent, while corresponding reductions have been made in the wages ol all temporary men, whether employed by the day or by the hour or otherwise. Provision was also made for the reduction ol various, grants and subsidies that are or could be used, for the payment of wages and salaries. These reductions relieve the expenditure of the Consolidated Fund to the extent of £1,390,000. Apart from salaries the work ol the Economy Committee has enabled substantial reductions to■ be made in the expenditure From its nature, the expenditure under Permanent Appropriations does not offer a great deal of scope for reductions. Of the £17,vAh.OOO expended last year, £15,650,000 was for debt charges, pensions, and transfers of motfir-taxation. Apart from the 10-per-cent, reduction in economic pensions, which are intended to be a cost-of-living allowance, no reductions have been made in pension rates. The balance of the Permanent Appropriations consists largely of various subsidies, the largest item being subsidies to Hospital Boards. Reductions have been made in this item, and also in various grants and subsidies for education pur. poses. It was also found possible to reduce the subsidy to the National Provident! Fund without endangering the financial stability of the Fund. The .reductions which were made under Permanent Appropriations apart, from salaries total approximately £125,000 including a reduction of £25.000 in the annual contribution to the Singapore Base. The economies under annual votes, apart from salaries and wages, amount to approximately £470,000. Savings were effected in nearly every vote, and details to the same were supplied to

the House during the emergency session. The state, of the public finances during the current financial year is probaoly more serious that at any time during the past fifty years, if not during the whole history of the Dominion. Further, the economic position generally is such that it is imperative that increases in taxation be kept down to an absolute minimum. Under the.se circumstances, the Government considers that this is time when any reserves that can be legitimately dr a, upon should be used. Accordingly, it is proposed that the balance of the Reserve Fund in London, over and above the £1,500,000 earmarked for earthquake restoration, shall he realized and paid into the Consolidated Fund, which will benefit to the extent of about £550,000.. I may add that it is proposed to obtain legislative authority to utilize any surplus there may he in the Consolidated Fund from time to time towards the restoration of this Reserve Fund. All these proposals wjill provide towards making good the prospective Budget shortage of £6,850,000, a total of £5,056,00 made up as follows: £ Reductions in salaries and wages 1,390,000 Benefit from suspension of funded-debt payments 870,000 Other economies in expenditure 595,000 Post Office surplus and other additional revenue ... 936,000 Use of reserves 1,140,000 Subsidies to local authorities, etc., to remain a charge on Highways Account 125,000 £5,056,000 This leaves nvoproximately £I,BOO,- ! 000 to he provided, for by additional taxation. TAXATION. Towards the last £1,800,000 required to obtain a, balanced budget, it is proposed to obtain £730,000 from ad- , ditional income-tax. For last financial j year the tax was levied l at certain pro- ! scribed rates, plus 10 per cent., hut for this year the surtax will he in- 1 creased to 30 per cent. Tn addition, > the present general exemption of £3OO. | diminished £1 for every £2 of income between £450 and £750, and £1 for £1 ; between £750 and £9OO, will he can- j celled and replaced by a. general ex- | emption of £260, diminishing £1 for every £3 of income between £260 and £560, and £2 for every £3 between £560 .and £BOO. Tt is proposed to obtain a further amount, estimated at £50,000 from additional stamp duties. A duty of 5 per cent, will be imposed on oversteamer tickets, and a duty of ;10 pei - cent, on art union tickets in | the case of art unions for mineral snot'll mens of a value in excess of j ! £IOO. j The balance of the amount required, J | will come from Customs and Excise , ! duties, and T will give details of i ! these to ho"ourahe members presently 1 when moving tlie necessary resolutions. BUDGET ESTIMATES. Allowing for these increases in tax-' ation, and also for the economies and • adjustments previously enumerated, it is estimated that- the revenue for the year will he as follows: £ , Customs 7,410,000 1 Beer duty 650,000 j Film hire tax ... ... 50,000 I Motor-vehicles —Duties and i licenses ... .... ... ... 1,760,000 ; Stainn and death duties ... .3,140,000 i Land-tax ... 1,100,000 Income, tax 4,230,000 Interest receipts— £ Railway capital 930,000 | Post Office capital 535,000 j Public moneys 745,000 Puble Debt Redemption • J Fund ' 820,000 | Miscellaneous— Post Office surplus 1,090,000 From reserves 1,140,000 Other 1,346,000 | £24,946,000 | The estimated expenditure for the • year is set out in the estimates supplied to honourable members. I The su n dtp, the position on the , basis of the Government’s proposals is estimated to be:— j £ Revenue ... j 24,916,000 Expeniture 24,763,781 Leaving 182,219 to provide for supplementary estimates and contingencies. f referred at the outset to our heavy loss of national income, and just let me explain that in the last analysis, income depends on work, saving, and management. The State has no magic purse out of which the loss of income represented by the heavy decreased values of exports can be made up. Our objective, therefore, must be such a. readjustment- of the relation between costs and prices' as will restore I the main industries of the Dominion to a healthy state. I . Some improvement in prices has already taken olnce, and the indications are that once confidence throughout the world is restored a general imI provement will follow. I Finally, let all sections of the community realize that the 1 simple key ■to the solution of our problems lies ■ in hard and honest toil, in the exercise jof thrift, and in the fostering of a ! spirit of reasoned enterprise. Given 1 these simple factors and stability in Government, it requires no great effort to prophesy that we will soon reach a road that will lead to greater prosperity and happiness. I conclude with the confidence that the Government will receive the assistJ a nee and support of the people to at- , tain that gaol.

SUMMARY. Debt redeemed during year totalled £2,473,685. Government's policy is to reduce further additions to debt to a minimum. > Combined State balance Sheet prepared on commercial lines, showing in concise form position of national finances U N I'D I V L OVA IE NT R ELI EF. Unemployment Board constituted to administer relief on national basis. Necessity for recent additional levy, &C. Objections to institution of dole. Total expenditure on relief for last year approxim; iteiy : £2,000,000. Government recognizes necessity for permanent solution of problem. HAWKES BAY EARTHQUAKE. Successful relief measures.' Public subscriptions to iiiiid-' exceed £381,000 to date. Central Committee appointed to administer relief. Adjustment Court set up to facilitate liquidation of liabilities, Ac. Government utilizing reserve funds amounting to £1,500,000 to enable loans and grants to- be made in affected areas. In addition to use of reserve funds, Government committed to expenditure exceeding £500,000 for repaliss, iroacj-;, public 'buildings, resurveys, Ac. LAND SETTLEMENT. Government prosecuting vigorous policy of land-development and settlement. Since United Government took office to 3,lst. May last, total area of 940,.~ 000 acres Crown lands selected on various tenures involving 4,350 subdivisions. Approximately 3,000 acres unproductive land 'brought* into pasture. j Every unoccupied block of Crown I land specially reported upon, and arrangements being, made to settle 100,000 acres of such land. Government has also acquired fiftyfour properties .involving 110,388 acres, and capable of subdivision into over three hundred and fifty farms. | Also very promising results in con- , nection with. Native-land-settlement schemes a feature being that all labour involved is suppled by the Natives who are eventually to settle on holdings. I 1931-32. i Government’s proposals aim at the lowering of working costs to offset decreased returns received from overseas. 10-per-cent, reduction in salaries and wages of Public Service. - Legislation passed last- session authorising Arbitration Court to review award rates of wages.. After considering all aspects Court decided a 10-per-cent reduction in award rates was necessary to enable trade and industry to function and provide employment. Cost- of living showing substantial do. cli'ne, thus reduction in wages will nut. impair standard of living. Industries and Commerce Department investigating selling-prices of ! standard lines. , V FAIIM ER !>’,FINANCE. , Appeal to mortgagees to grant relief' wherever possible. Commissioners of Crown Lands appointfcfi Adjustment Commissioners to j | mediate between mortgagors and mort- | j gagees. ! Mortgagors Relief Act passed to prevent any exploitation arising out of existing conditions. Special advance to Rural Intermediate Credit Board to assist fanners to purchase fertilizers. i iKoval Commission to investigate system of local government with view ,to reduction in rural rates, j Subsidy on carriage of lime and fertilizers continued at estimated cost of £40.000. TRANSPORT. Object of legislation is to eliminate unnecessary and wasteful competition . between motor-transport and railways. 1 REDUCTION IN INTEREST RATES. j Government successful in arranging | general reduction in interest rates ns from Ist. August. Associated banks have agreed to make reduction in both deposit and j overdraft rates. State savings-bank rate reduced to 3i[ ner cent, per annum. BANKING AND CURRENCY. Return to normal rates of exchange desirable. Sir Otto Niemeyers report—summary of recommendations. PROSPECTIVE BUDGETARY POSITION. Expenditure carefully reviewed by Economy Committee and savings effected. Reductions in revenue, together with unavoidable expenditure, Increases total shortage £6.850,000. REMEDTAL MEASURES. Ten-per-cent, reductions in salaries | of Cabinet Ministers, members of Par. I liament, and: Public Service. | Suspension of war-debt payments following proposals of President Hoover, of United States of America. Annual contribution to Singapore Base reduced to £100.OCX). Sundry reductions in annual votes, in addition to savings by 10-per-cent, i reduction. i Economy Committee on Education to be set up, with view thoroughly to I overhaul financial aspect of problem. | British Government has agreed in future to pay Dominion half profits on silver and bronze coins. Balance to compensate A lint for losses on worn coin, Ac. i Sundry accounts to be abolished and balances transferred to Consolidated Fund. Balance of Reserve Fund held in I London to be utilized. I SUMMARY OF PROPOSALS. Reductions in salaries and i wages ... 1,390,000 Benefit from suspension of | fund-debt payments ... 870.00'

vjtlier economies in expenditure 595,000 Post Office profits and other additional revenue ... 9.16,000 Use of reserves ... 1,140,000 Subsidies to local authorities, Arc., to remain a charge on Highways Account 125,000 j £5,056,000 leaving aproximately £1,800,090 to be provided for by additional taxation. TAXATION PROPOSALS. Government reluctant to impose additional taxation, hut balanced Budget essential to maintain public finances on sound basis. Income-tax —‘Surtax to he incteased from 10 per cent, to 30 per cent. Also present general exemption of £3OO to lie reduced to £260. Estimated to provide additional £730,000. j Stamp duty ol 5 per cent. oii/oveiseas tickets. j Duty of 10 per cent on art union tickets for mineral specimens of value in excess of £IOO. Estimated to produce £50.000.