SMALL SURPLUS

Hokitika Guardian, 22 June 1933, Page 5

SMALL SURPLUS

IN N.Z. BUDGET STATEMENT BY HON. J. G. COATES (Per Press Association Gopyrvjht .) WELLINGTON, Juno 21V Speaking jit, tne opening of the annual Uoi.fcireuee of the iloyai Agricultural Society, Mr Coates said iiiat wie public accounts for the past ft n au_ cuo year disclosed tnat the budget was balanced with a small surplus of i.40,w0, after £2,&Oa,OCK> from reserves hail been taken into account. This result coual not have been possible had not Britain played her part by foregoing payment*, totalling £825,000 upon tne funded war debt after the Hoover moratorium had expired. He was suie New Zealand was deeply grateful for this great and timely i assistance. The budget had provided for reducing a huge ’ prospecti© shortage of £8,500,000, to not more than £i,ioo,ooo, but as a result of the revenue exceeding the expectations by £938,000, and of savings amounting to £112,000 being made, after making provision for additional expenditure on exchange, amounting to £470,000, the gap vt as bridged.. Problems of t-lio past year had been.' creditably disposed cf having regard to difficulties of the period, and yvo have now to face the’position tor the current financial year.

Mr Coates said: “The prospective budgetary position Yvas reviewed in a statement presented to the House in January last. The outlook showed that the gap to be bridged this year Yvas even larger than Yvas faced at the beginning of last financial year, and it amounted to £9,850,000, or not iar short of half of the revenue of a normal year. . Furthermore this position has to b© faced at the time when our resources have been practically strained to the utmost in coping with the budgeting situation in the past years. On one hand, there are definite limits to the increasing of taxation, and on the other hand, there are limits beyond which it is not possible to reduce expenditure unless ■State services are to be ruthlessly abandoned.”' ' , .’ .

Nevertheless, said Mr Coates, substantial progress had been made . toYvards closing the anticipated gap in the current year’s finances. In this connection be mentioned the conversion operations, which would- provide a net saving of about £570,000. Arrangements had been made to liquidate a further £2,000,000. ■ This was practically all that remained of the reserves , pf-1u d.. In addition, the sales tax tad been imposed, and some}' increases had been made in the taxation' on petrol, and one or two items in customs tariff.A Mr' (Juntos said that in January he ihdiwitod those items would bring the deficit down to about £4,500,000. Estimates, however, wer© now being prepared in detail and he was-hope-ful that they would do better than that.' For one thing, the economic outlook had groYvn considerably brighter since January.. The prices of primary products had risen somewhat, and there appeared to be a mor.& confident tone in business. Furthermore the World Economic Conference Yvas sitting at present, and throughout the world there w?>s a general expectation that considerable benefits would result from its deliberations.

INTERNAL LOAN DENIED. GOVERNMENT COUNTER SALES. WELLINGTON,. June 21. Commenting on the rumour being published in the South Island that the Government -is contemplating the floating of a new and substantial internal loan at four and a half per lent., Mr Coates said: “The people of the Dominion can be assured that the policy of the Government is to stabilise low rates 7of interest for long term borrowing. In fact, this is also the policy of the British Empire, as enunciated at Ottawa,, and there is reason to believe that it is likely to be the policy internationally adopted at the London Conference and therefore it is absurd to suggest that the Government will pursue any line of action that will clash witli such policy.” I-Ic added that counter sales of Government .securities were discontinued when the Government’s own internal conversion scheme was launched, and it war,’ decided at that time to suspend such sales until the markets had settled down in relation to new securities. This had now been achieved, and he \the Minister) was happy, to note that the new four per cent, securities were all quoted at a premium. The time was approaching, therefore, for consideration to be given by the Government to a resumption, of over-the-counter sales, which was always one of the avenues by which the Government secured a portion of its requirements each year. When a decision on this had been reached, the Minister stated, he would make a public announcement. .Needless to say the rate of interest to lie offered would not exceed the'basic conversion rate of four per cent. —— l e——Q