PRIMAGE DUTY TO BE DOUBLED

Nelson Evening Mail, Volume LXIII, 2 August 1929, Page 5

PRIMAGE DUTY TO BE DOUBLED

The honour once again devolves • upon me of laying before honourable members ' and the people of New Zealand a statement of our' national finances, and of submitting to this House proposals for meeting the requirements of the Gov;.erninent'for carrying on the affairs of State and dealing resolutely with the urgent economic problems facing the country, in order that the Dominion may 1 again be placed on the highroad to gen- • era! prosperity. ' . As you are aware, The Government ' assumed office only in December last, and it was then too late* in the financial year to make any radical changes eo far as the general financial position was con"Cerhed. As soon as I was able to investigate matters, however, I was seized with the fact that the year's transaction* on the basis, of the arrangements made by my predecessor in office" would result in a deficit, and, as you are .all aware, this, unfortunately proved to bo the 'case. I may say, how- . * ever, that I took immediate steps to invstitutei a careful control of departmen- ■'■ tal expenditure in order to minimise the deficit ;as much as possible.; A saving of approximately £90,000 in'the annual votes resulted from the government s i •; efforts in:this direction. „>.__,..„ . The deficit for the" year was S,oll,dii. I must emphasise ' that this is maiily the 'outcome of the Budget of my-pre. decessor in office. The principal cause ' of : the trouble was overestimating the . revenue from taxation, in addition to which the expenditure was unexpectedly increased by £156,000 for additional interest arising out of the largo conversion operfltionsl was called. upon to deal ■ with immediately upori assuming office. Fundamentally, the lessened yield from taxation arose out of the tardy recovery of the'trading position. Exports from the Dominion in were valued at ' ' nearly fifty-five millions, and exceeded 0 imports by ten millions and a half. During the last financial ;year the position of external trade was better, still, ex- . port* totalling over fifty-seven millions and exceeding imports by twelve millions. These results are. of course, reflected in the banking,!'figures, where the position shows a reec/very from £4,260,000 excess advances for the June quarter, 1927. to £7,520,000 -excess deposits for ;the June quarter, ISJ2B, and £9,640,000 . -excess deposits for the same quarter of this year. This indicates that the credit position has quite recovered from the depression , obtaining; in 1926 and 1927, and a healthV revival in business is the natural corollary. A study of the published banking figures, however, will libow that the additional funds have gone mostly into fixed'deposits, while the total of advance :'s lower than it has been since 1925, all of which proves that at present a largo part of the available banking resources is not being used * to finance trade and industry. This is causing many of our troubles. There i>, for instance, a close connection between idle fbpital and idle men. The march of science is bringing many changes into our everyday life, and the rapid developments in the post-.war years have perhaps temporarily disturbed the economic equilibrium of the Dominion. Want of confidence in 'rural investments, now happily passing, together with high interest rates, has also contributed in no small measure to the present economic situation. The Government is en- ! deavouring to givte the country a strong lead in meeting these difficulties, but ' of course cannot earn' the whole bur den. Give-i a Ettla enterprise on the part of the producers and the business community generally—and they have not been lacking in this respect m the past —I feel assured tlltit all obstacles will be overcome; unemployment will disappear, and all will be well in this Dominion. It has certainly been slow in coming, but signs are not wanting now that we are on the eve of a big forward movement in business.

CRITICISM OF PREVIOUS MINISTER OF FINANCE TAXATION REVENUE OVER-ESTIMATED BY £300,000 Certain taxation increases that will primarily affect the big land-holders are foreshadowed in the Financial Statement brought down by the Prime Minister (the Right Hon. Sir Joseph Ward) in the House of Representatives last night. It is also proposed to increase the primage on imported goods from 1 per cent, to 2 percent. i The Prime Minister maintains that the deficit of £577,252 is due chiefly to his predecessor's overestimating the revenue for the past financial year by £318,000 and by the unexpected increase'of £156,000 in the expenditure for additional interest arising out of the large loan conversion operations Sir Joseph was called upon to deal with immediately upon assuming office. The Government's intention to complete the main lines of the Dominions railway system and to embark upon a scheme of land settlement are mentioned in the Statement which contains a general reiteration of the Government's policy as expressed in election speeches and subsequent Ministerial utterances. No immediate drop in interest rates is mentioned- The Prime Minister stated there were indications that rates would gradually work down to 4£ per cent, at par but it was impossible for anyone to say when that position would be reached.