THE BUDGET

Rotorua Morning Post, Volume 2, Issue 563, 21 June 1933, Page 5

THE BUDGET

Speeial Commissioner) .

SUlRPRISi^d BALANCE surplus should make anapprrgIAble DIFFMREPiCE THE FIGUREg REVIEWED

("Post"

Wellington, Saturday. , The transformatiqn of a deficit of £700,000 into a surpius of £40,600 in a little over two months is an extreme rarity in these days^ of. unhalanced hudgets, and if there is no fly in the bintment, New iZealand is very fortunate indeed. The Minister of Finance (the Hon. j. G. Coates), attrihutes thie surprise to the buoyancy of the revenue and substahtial economies, and in his staf ement this week he shows that the excess of revenue over the budget estimate was £938,521. These estimates were framed by the Hon. W. Downie Stewart, who has always been noted for his conse.rvatism in this respect, and in view of the extra charges brought about by the raising of the exchange, Mr. Stewart's pessimism has not been untiniely. jThe small surpius should make a substantial difference to this year's budget, "as the deficit of £700,000 was included in the prospective deficit of s£3, 000,000. "On the other hand there may be a few items this year that have not previously been accounted for. O At the end of the details of the ordihai-y revenue account there is a note stating that against the balance iri this account of £6>13,1"64, there are 'Treasury bills outstandin'g amounting to £1,585,000. Further Treasury Bills amounting to £2,380,337 uncjer the Bariks Indemnity (Exchange) Act are also oiitstanding, but £1,530,000 is held against these bills in the New Zealand Government Exchange Account, LdndPn. At the close of the fihancial year ended March 31, 1932!, a "substantial amount of Treasury Bills was converted into long term deht by'Mr. Downie Stev/art, and Mr. Coates might follow that precedent. This practice looks suspiciously lilce horrowing for revenue purposes! Treasury Bills are issued in anticipation of revenUe and one expects that

they will be redeemed at the end of the financial year. The Treasury Bills transactions in the Public Ac-' counts are by no means clear, and are complicated this year by the fact that speeial issues are made in connection with the exchange rate. The Appropriations With few exceptions, the Government departments lived well within their incomes during the last financial year. The following table shows the amounts which were appropriated by Parliament for the various state activities and the actual amount expended: —

The decrease m the Education uepartmerit's vote illustrates the big economies which have been carried out under this heading. The amount is the lowest sinCe 1920 when the sum was £2,544,000. From that year on the annual expenditure grew steadily until 1931 when it reached £4,102,000 or £2 15s per head of population. The amount dropped to £3,410,000 last year, and there is a further ' substantial decrease this year. Customs Taxatlon Although the amount of customs taxation is slightly higher than last year, the income tax figures show that the law of diminishing returns has set in. The rate for the last financial year was practically the same as the previous year, but for the year just ended only £3,556,774 was collected as against £4,447,8i4 for the corresponding period ended March, 193 i. For the present financial year the Minister of Finance has allowed for a further drop of £750,000, although what has been termed the bachelor and spinster tax will be in operatiofi. To the income tax, however the unemployment levy and wages tax should be added as this is also a direct'tax which is levied for a particular purpose. The levy realised £429,003 arid the wages tax £3,591,432. The fines, ptesumably for overdue payments, totalled £808. The total inc'ome of the Unemployment Board was £4,027,999. The estimatfe made by the. Minister of Finance m his statemerit on Janu'ary"27 of the additiona'l 'cost to the budgfet resulting frhin the raiising of the hxchaiige ivas helow the a'ctu'al figure revealed iii the Public Accounts but this may be due to "the fact that the export season reached its peak eablier this fehr. At the beginning bf the year, Mr. Coaths saidf, "Due. to ihe fact that'd cofi'siderahle amount

of the funds required in London for "the cUrrefit financial year were remitted during the closing months of last financial year under the exchange pool arrangements, the expenditure ofi exdhange for this year will not ekce'ed £350,000 /. . . It is to be adde'd that we have no precedent in Nhw Zealand hy "which the possible accumulation of funds in London by fehs'on of the alt'ered exchange rate may be accurately forecast, ahd with the' general uncertainty in external conditiohs it "^ould be hazardous to dttempt 'any pi'ecise estimate.'.' .The figure disclosed iri the. Puhlie Atcounts is £470,000, but this may not necessarily mean that the total estiinate for the pfeserit financial year will be exceeded. The. amount allowdd for in the current budget for the cosf of bxhhange on surpius bank fuiids is £1,000,000, while the extra cost on the external debt will be £1,050,000. / .

Approp. Expd. £ £ Legislative ... ... 89,740 86,786 Prime Minister's ... 21,250 22,181 Treasury ... 31,122 27,259 Custoriis 82,175 78,234 Land & Income Tax 65,375 62,395 Stamp Duties ... ... 84,620 77,965 Audit ... 23,050 19,766 P.S.C. Office 4,933 4,290 Internal Affairs ... 524,812 523,418 External Affairs .. 82,221 83,094 Printing Office ... 149,944 122,565 Marine 103,535 91,753 Labour ... 51,086 42,821 Native 55,557 56,743 Valuation 36,000 29,997 Electoral 6,128 5,924 Justice 164,780 164,257 Crown Law 4,800 4,450 Police ' 439,560 428,988 Prisons ... 89,000 90,528 Naval Defence ... 400,800 362,094 Defence 230,310 207,826 Public Bldgs. ... ... 52,693 35,223 Maintenance and Repairs to Roads 9,000 5,045 Maintenance of Irrigation Works etc 12,500 12,102 Lands and Survey 159,816 144,911 Agriculture 595,562 555,618 Industries, Commerce, Tourist and Publicity 118,916 61,227 Scientific & Industrial Research .. 46,584 51,767 Mines 25,349 20,802 Transport 17,274 17,194 Health 715,659 708,449 Mental Hospitals 260,018 240,046 Education 2701908 2620226 Pensions 3141577 2620226 National Provident and Friendly Societies 90,356 89,265