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NEW ZEALAND FINANCES

HOME BANKING REVIEW)

The* July Monthly Review of Barclay’s Bank, Ltd., contains an article on the finances of New Zealand. It was published in connexion with the recent flotation in London of the new loan for the Dominion. New Zealand, the article states, has Been unable to escape the economic deprcssion that has affected all countries of the World, particularly those mainly producing primary products, while tier difficulties must have been aggravated by the deplorable earthquake

which caused much damage and loss of life in the Hawkes Bay district. The present economic situation in the coun. try has necessitated a reduction in the Government’s programme for capital expenditure in the Dominion during the current financial year by about 40 per cent, compared with 1930-31. All Government wages and salaries have been reduced by 10 per cent., and other drastic economy measures

arc being undertaken in order to balance the budget for the present year. For the twelve months ended March 31st., 1931, the ordinary revenue account resulted in a deficit of £1.6 millions, due mainly to the unexpected falling off in revenue during the final quarter, arising out 'of the world-wide'; decline in prices! Budget deficits,-; however, are a rare occurrence in New Zealand, only two others having been experienced since 1892. In the pre-

sent case, the amount has been made good from the,balance of accumulated •surpluses since 1914, totalling about £30,000,000. The gross public debt to the Dominion, including approximately £67.7 millions of war debt, amounting on March 31st. 1931, to about £276.0 millions, compared with £267.4 millions a year earlier. Against this debt, however, the country possesses tangible assets which were valued on March 31st. 1939, at £272.9 millions or £5.5 millions more than the gross debt outstanding at that time.- Of these

assets, £229.8 millions were directly interest bearing and productive, and included railways, telephones, telegraphs. electrical development, advances to settlers and workers. Crown lands. and ( sinking funds; the remaining £45.2 millions were indirectly productive, consisting of assets such as

roads and public buildings. All New Zealand’s receipts from German reparations are being applied to the reduction of the war debt, and this liability lias fallen , from £BI.B millions in 1921 to £67.7 millions in 1931; about £23.5 millions of the war debt, is funded with the Imperial Government on a 6 per cent, annuity hasps, providing for its extinction in about 28 years. New Zealand maintains a sinking fund for redemption of , the public debt, which it is estimated will ont lively .liquidate the present out- • standing amount-in about 69 years’

time, it is intended to liquidate all j future loans within a similar period from the date ol their inception. An indication of the fri ll oi the inliabj itants of New Zealand in the future o£,. j their country is afforded by*tile' f et ■that on March 31-st. 1931.' about 42 i per cent, of the total public -debt was

clomicled in the Dominion, against only 17 per cent, in 1914'. The present world trading depression and the fall in prices have placed a severe strain on the agricultural countries of*" the world, many of winch are new territories in process of development. Fortunately. New Zealand enjoys a good financial reputation, which should assist her recovery, when trade conditions generally improve.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/HOG19310822.2.5

Bibliographic details
Ngā taipitopito pukapuka

Hokitika Guardian, 22 August 1931, Page 2

Word count
Tapeke kupu
551

NEW ZEALAND FINANCES Hokitika Guardian, 22 August 1931, Page 2

NEW ZEALAND FINANCES Hokitika Guardian, 22 August 1931, Page 2

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