PUBLIC ACCOUNT

Hokitika Guardian, 14 August 1933, Page 5

PUBLIC ACCOUNT

LITTLE VARIATION HON. J. G. COATES’ STATEMENT. li Psr Press Association — copyright j

WELLINGTON, August 13

Details -of the Public Account for the quarter ended June 30 are announced by the Minister of Finance. The revenue for the'quarter amounted lie said, to £4,215,0ut). Tim Minister continues: “An abridged .summary of the accounts, given beiow, indicates that the principal items show remarkably little variation from the receipts for the first quarter of last financial year so far as taxation is concerned. Particular interest, no doubt, will be taken in the new' items of sales tax and the gold exports duty yield, both of these being well up to expectations . The taxation and revenue figures are as follows, the increase > on the previous year being in parentheses:— Customs and beer duty £l, 5(30,046 (£3,446); sales tax, £448,327; gold export duty, £29,625; highways taxation £577,808 (£331); stamps duty, £648,-’ 499 (£7,328); land, income and miscellaneous taxation, £235,223 (£51,656)) interest £494,284 (£116,959); other receipts, £215,566 (£47)total, £4,214,987 (£650,071). , The substantial increase disclosed under the heading of intorest should be explained. This is solely due to account fluctuations,, and has therefore' no budgetary significance.

“Perhaps the most satisfactory aspect of the revenue position is its stability, there being no indication of any further falling away,” said the Minister. “This I consider, is further evidence' that the worst troubles are behind us.”

The Minister continued: “Turning to the other side of the account, it will be seen ,that the net expenditure for the quarter amounting approximately to £6;470,000, 1 • compares with that for the same period last year, as follows :■ —Debt services £2,329,138 (£131,190); exchauge £2,069,794 (in-' crease £1,759,815V:;. other special acts and services, • £66)73$ (decreaso £43y--. 931); annual apfirdpriaiidusifor social! services ( £1,403,140 (£16,355); other: departmental services, £610;444 (decrease £9,441). T - “The increase of £l3l,ooo'vunder 5 the debt services, arises substantially out of recent conversion operations, these necessitating the payment of interest up to March 31,. on all of the creased payments ,-jnade by .way... .of . discount Treasury bills issued under the Banks Indemnity (Exchange) Act'.' The benefit from the. conversion operations will not be apparent in the figures until later in. the financial year. The operation of that Act is also reflected in the. Item of exchange, involving an inc'roase in expenditure, of £1,760,000. Tho. small increase of £16,000 under social services arises substantially by way of pensions;- but this is more than yoffset bv restricted expenditure totalling £52,00 under other items of general expenditure,' “The exchange is really the only item of expenditure that calls for comment, and the .transactions under the Banks Indemnity Act' will , no doubt be scanned with interest. The , accounts show that the London credits purchased from the banks during the past quarter and passed through the Indemnity Exchange Account amounted to £9,215,000. The exchange paid on this amount is included in the ex* penditure shown. above,. The transfers to the public account amounted to £9,745,000, the difference between tho two sets of figures representing London credits that were taken over in the last financial year. It may be explained that the whole of the London credits purohased does not represent a surplus, for out of it has to be taken approximately £7,500,000 that is required to meet interest and other normal requirements in London. It would have been necessary to. purchase exchange to this extent in any case.' The net surplus to June 30 was thus £1,715,C00. The amount of London credits taken over during the quarter is large, but it should, not be taken as an index of the amount likely to be purchased during the balance of the financial year, for June is really the end of the export season.

‘.‘lmports are normally light during the period of the year in question ,and this year the situation has been accentuated by traders being induced by recurring unfounded rumours, probably spread bv interested parties, to hold back imports in many lines. However I understand that stocks have reached a low level, and, as firms cannot trade without goods, there 'must be increased activity in importing before long. An enterprising firm that has maintained its stock will get business until the general shortage is made good

‘The amount of London credits- that will have to be purchased during the balance of the year is bound up with the trade position, and is as uncertain as is any estimate of trading results for the year. What is oertain, how ever, is that, pending some appreciable recovery of export prices, the general interests of the whole Dominion require a measure of economic adjustment between prices and costs in the basic industries, which is now being effected through the exchange rate; for anything approaching a general collapse of the primary industries must mean ruin for the whole Dominion. As it is the T.'">'don exchang-e requirements of the Government for the financial years have been provided during the

first quarter, and, ,iri .addition*' there is a surplus of £1,715,000/ I may add that the position was much the same last year, when the total requirements for the year were' obtained before the exchange pool was released at the end of .Tune. \V ■' v./ " " “As regards any additional London credit that will be taker "rer; this voar, there will be no difficulty Indisposing of them, and one factor to he taken into consideration is that the Reserve Bank, when it .is established, will require large amounts of London assets.