NOT BRIGHT

Rotorua Morning Post, Volume 1, Issue 97, 15 December 1931, Page 5

NOT BRIGHT

(Press Assn.—

MINISTER REVIEWS FIGURES FOR EIGHT MONTHS OF YEAR DEFICIT ALMOST CERTAIN

-By Telegraph — Copyright.)

WELLINGTON, Monday. The Minister of Finance, the Hon. W. Downie Stewart, to-day issued the following statement on the position of the . public finances. "The revenue and expenditure fig--ures of the Consolidated Fund for the eight months ended on November 30 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 £9,400,018 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. 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 motor vehicles duties and licenses. The Customs receipts were approximately £470,000 short of the appropriate proportion of the estimates for the

year. The position of this item is nearly £100,000 worse than it was at the end of the seven months, *and as twothirds of the finaneial year has riow gone, the prospects of reaching even the amended Budget estimate 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 stamp and death duties is also very uncertain. Receipts for the eight months are behindhand 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 indicaton of buoyancy in the revenue from racing and amusements and stamp duties generally. Land and Income Taz "Land tax was due at the end of November, but the receipts will not be included in the figures until December. 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. "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 he judged on a proportionate basis. "I may say that the railways are having a hard struggle to balance shrinkage in revenue by savings in expenditure in order to be able to pay to the Consolidated Fund the amount of interest Budgeted for, but the management 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, £4,857,363, £4,299,509, £557,854. Annual votes £4,607,736, £4,343,702, £260,034. Totals £16,418,210, £15,234,424, £1,183,786. "Unfortunately the expenditure posi ition is not as favourable as these figures indicate. The under-propor-tions for debt services is on account of the item for repayment of the public debt where payments are made at irregular intervals. It is not anticipated that there will be any saving on debt charges for the finaneial year. The position is much the same in regard to the expenditure under other permanent appropriations. Accounting fluctuations account for most of the apparent saving and by the end of the year the expenditure under these items, which include hospital subsidies, unemployment subsidy, pensions and disbursements of the earmarked motor taxation, will probably reach the Budget estimate. Efforts to Economise "The position of the vote expenditure is satisfactory and refleets the efforts being made to keep expenditure down to an absolute minimum. "As to the outlook for the public finances generally, new external factors are beginning to operate which will render the position still more difficult and nccessitate still more drastic measures to cope with the problem. It is not yet feasible to make a full statement on this aspect of the mat1 ter, but at the earliest possible date , it will be done. "Recovery of the public finances ' can only come after a recovery in L trade and commerce generally. The chief factor in this is, of course, the } prices obtained for our exports. ^ While there have been some signs o'f $ improvement the extent of the upward movement has been disappointj ing. Many people hoped for a decidl ed change for the better following the abandonment of the gold standard by i Great Britain, but though the indirs ect effeets from this may yet he im1 portant and far-reaching from the c point of view of trade, the hopes have - not yet materialised in other directr irvns. The. finaneial trouble in Lon-

don through higher interest and shortage of funds may quite possibly adversely affect the public finances and the interests of the Dominion. "In regard to- local conditions, the long continued spell of dry weather which in some districts is becpming increasingly severe will undouhtedly have a prejudicial effect on the season's output and thus militate against offsetting lower prices by higher quantities., Further, in some 'districts crops have suffered from hailstorms and cloudbursts. "Altogether, in spite . of the additionah provisions of the Supplementary Budget and the heavy extra burdens the people have heen asked to carry, the chances of making ends meet in the Consolidated Fund for this finaneial year are rapidly disappear-

ing. The prospects are that next finaneial year will he still more difficult. Under these circumstances further substantial reductions in public expenditure will be absolutely necessary and all State services, including what are commonly known as the social seryices, will again have to he overhauled and reviewed in the light of present-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 rapidly changing conditions as to the posi-