THE FINANCES

Hokitika Guardian, 15 December 1931, Page 5

THE FINANCES

REVIEW BY MINISTER.

DECREASING REVENUE.

(Per Favour of Government)

WELLINGTON, December 14

The Minister of Finance (Hon. Downie Stewart) to-chiy issued the following 'statement on the position oi the public finances:— The revenue and expenditure figures of the Consolidated Fund for the eight months ended on 30th Novembei have just been completed, and, before leaving the Dominion to meet the Canadian Minister of Industries and Commerce at Honolulu, I would like to take this opportunity of placing the position, as i now find it, before the people of the Dominion. The revenue for the eight months amounted to £9,4(0,018 compared with £12,233,814 for the corresponding period of the previous year, but a considerable falling off was allowed for in the Budget for the current year. Hie receipts from taxation amounted to £7,360,011, including £3,639,000 from customs, £1,691,720 from stamp and death duties, and £1,284,422 from the motor vehicles duties and licenses. The customs receipts were approximately £470,030 short of the appropriate proportion of the estimates for the year, The position of this item is neatly £1.00,000 worse thaii it wa3 at the end of the seven months, and. as two-thirds of the financial year has now gone the prospects of reaching even the ainended Budget esti* mate are certainly not promising. In fact, it now appears to be practically certain that there will be a considerable shortage in customs revenue. As I have previously indicated, the position in regard to the stamp and death duties is also very uncertain. The receipts for the eight months are behind hand to the extent of £210,000 on a- proportionate basis. Death duties fluctuate from month to month, and, for obvious reasons, receipts under that heading cannot be estimated with any certainty.

There is little indication of buoyancy in the revenue from racing and amusements and stamp duties generally. Land tax was due at the end of November, but the receipts will not he included in the figures until December. The indications are, however,, that the revenue will fall a little short of the estimate.

Income tax, of course, is not payable until later in the year. The interest receipts, for the eight months amounted to £1,274,099, and other receipts to £1,360,734. As these receipts, for the most part, are not spread evenly over the,year, they cannot be judged on a proportionate basis fj I may say that the railways are having a hard struggle to balance the shrinkages iti revenue by saving in expenditure in order to be able to pay to the Consolidated Fund the amOufit of interest budgeted for; but the thanagomeut is still hopeful of achieving this objective, On the other side of the account, the net expenditure for the eight months including imprests outstanding, compared with the proportionate part of the estimate for the year is as follows :

Debt Services: —Proportion of estimate, £6,953,111; expenditure, £6,591,213 ; under proportion, £361,898.

Other Permanent Appropriations.— Proportion of estimate £4,857.-363; expenditure, £4,299,509; under proportion, £557,854. . . Annual Votes. —Proportion of estimate, £4,607,736; expenditure, £4,343,702; under proportion, £264,034. Totals. —Proportion of estimate, £16,418,210; expenditure, £15,234,424; under proportion, £1,837,786. Unfortunately, the expenditure position is not us favourable us these figures indicate. I'iie under proportion fw debt services is on account of the item lor repayment of tne , public debt, where payments are made at irregular intervals. It is not anticipated that there will be any saving on the debt charges for the financial year. lhe position js much the same in regard to the expenditure under the other permanent appropriations. Accounting liuctuations account for most of the apparent saving, and by the end of the year the expenditure under the items, which include hospital pensions and disbursements of the earmarked motor taxation, will probably reach the Budget estimate. The position of the vote expenditure is down to an absolute minimum.

As to the outlook foMthe public finances generally, new external factors are beginning to operate which will render the position still more difficult, and will necessitate still more drastic measures to cope with the problem, Jt is not yet feasible to make a full statement on this aspect of the matter, but, at the earliest possible date, it will be done. The recovery of the public finances can only come after a recovery in trade and commerce generally. 'i*ie chief factor in this is, of course, the prices obtained for our exports. While there have been some signs of improvement, the extent of the upward movement has been disappointing. Many people hoped for a decided change for the better, following. the abandonment of the gold standard by Great Britain, but, though the indirect effects from this may yet be important and far-reaching fioin the point of view of trade, the hopes have not yet materialised. In other directions, the financial trouble in London, through higher interest and tlie shortage of funds, may quite possibly adversely affect the public finances, and the interests of the Domin-

Tn regard to local conditions, the long continued spell of dry weather, which in some districts, is becoming

increasingly severe, will have a prejudicial effect on the season’s output, and thus militate against offsetting the lower prices by higher quantities. Further, in some districts crops have suffered from hailstorms and cloudbursts. Altogether, in spite of the additional provisions of the Supplementary Budget and the heavy extra burdens the people have been asked to carry, the chances of making ends meet in the ■ Consolidated Fund for this financial year are rapidly disappearing. The prospects are that next financial year will be still more difficult. Under these circumstances, further substantial reductions in public expenditure will he absolutely necessary, and all the State Services including what are commonly known as the Social Services, will again have to bo overhauled and reviewed in the light of preesnt-day conditions. In drawing attention to these hard facts, it is not my intention to discourage people—far from it—but I consider it my' duty to keep the country informed under the present rapidlychanging conditions as to the position.