FINANCIAL STATEMENT.

Stratford Evening Post, Volume XXX, Issue 62, 17 June 1916, Page 2

FINANCIAL STATEMENT.

THE NEW BUDGET,

GOVERNMENT’S TAXATION PROPOSALS. (Special to "Stratlord Post. 1 ) Wellington. June id. The lit. Hon. Sir Joseph Ward, Minister tor Finance, delivered the Financial Statement, in the House last night. Tito lit. Hon. gentleman said: It is my pleasing duty to lay before honourable members a favourable statement concerning the iinances ol the l Dominion for the year just, concluded, anil to he able to assure the House that, notwithstanding the disturbing influences of the war upon trade am! commerce generally, the country’s finances arc in a very sound condition. It was stated in last year’s Budget that, in view of the anticipated lall in revenue and the increased burdens which would lie cast on the Consolidated Fund by the necessary of providing for war pensions, interest and sinking fund on war loans, and others similar charges,a very considerable increase in taxation would be necessary, and. subsequently, legislation was introduced and pa.ssed by the House to enable the additional revenue to be raised. 1 am pleased to he able to inform the House that, owing to Hie Ireedom of the seas having been maintained between New Zealand and the Motherland and others causes, there has been a verv considerable revival ot trace. The export from this country of meat and other farming produce has been ■ continued at remunerative prices, and the produces of the Dominion have experienced a very favourable year. These circumstances have made it possible for the summnnity to meet the i extra taxation of last year without inconvenience, and I have thus oeerpaji not onlv to’provide for the additional char-res on the Consolidated Fuml, hut to show, in addition, a good siir--1 plus toi the year, amounting to pH on, 077 Deducting from this surplus the sum of £140.047 carried forward Irom me nrevious year, there is left a net surplus of revenue actun y received during the year ot £2,01/,000. . » announcing this largo surp us. I w sh to remind the House and the comitiv that the longer the war continues Ihe creator will become our annual' bullions, and that cruiser, uenily the expenditure of the year just cominded must not be taken as the maximum of the expenditure of the cuvient ~,K feeding years. The payment for »nteiest and sinking fund m respect o\ \< loans will show a very considerahh luc reuse for this and succeeding • over the amount paid tor last >mHTwo items alone will entail an .ac . - uonal expenditure tins year of Qvu one million 1 sterling. KEVKNt-E AN D KXPKN IUI I lUv The ' following figures show the revenue for the year 1915-10, us coinpaicd with the. figures for the previous of the Kevenue for Hie year ended 31*1 March, 1916 compared with the year ended March dl. id • ,in parentheses); Customs b 171 ( £3 107,283); stamp and death dutes £1 470,307 (£1,417.207); postal £157 892 (£12.,0(>0); radtrillion »ml " l;l ' c, P , fS, .Ji whi (0101,020); marine, £40,228 (to ■ '> < -!±s^W«n-ls tional-endowment revenue -U-.bJJ (**7B 770): other receipts, _ “ ,£8120): Totals, 1910, £1 1.a10.1. <) , inis” c)2 151,945. ' If'will be noticed that Hie for 1915-10'exceeded that lot 19' bv £2.058,192. This increase was partly duo of course, to the iiicioast - taxation ami revenue charges |. v )., s i; vear’s legislation, and I - ■ I,' £.l i.. tho «.»l commerce of the Dommum. 'j 1,0 Fxpenditairo tor the yeai °n( et 3f'st March. 1910, compared with f the year ended 31st March, 19l*>, I (in parentheses) Permanent appropriations .--A 1 l/ist £20.280 ( £2l. 9o4); Intenpa ul Sinking Fund, C 3 190.798 (U .118,: Cmler Special Acts, To. 4,000 '■sls ;H1); Subsidies paid to mu ai .-fiioViti,., ei*w>w I*l* >*“> r™' r 1";. :s. ss t\ Liulo ruients, .tiu.o-'-Id-age Pensions, £toO 842 (1430, bo,. I Widows’ Pensions £3b,_bo ■ T3H ill: Military Pensions U*->' I i £l7 H .7) ; War Pensions Act, Al ow ' 71, Total, 1910. £4,093,1 00 ( £ 1,505,117). . . r ■ . Annual Appropriations :-Ceg.slaH,e Departments, £34,480 l j i Department ol Finance, £90.004 If £170.131,; Post and Jeh'grapi 1 - 'partment, £1,291.712 1 £ ,244,0b9) , Working Railways pi, 1,00 i£2,881,087); Public Buikl- ! im-s. Domains, ami Maintenance of Roads. £100,780 (£117.0/0, Native Department, £21.877 (£24,005); »9usl ice Department, £452,227 (T442,4 78,; Mines Department, £28,00‘ DM 170, : Department of Internal A Hairs, £108,058 < £489,207) ; Defence Department, £432,22, (£499,13.); : Customs. Marine, and Inspection o| Machinery Departments, £101,225 (£119,200); Department of Labor, £31,070 £28,112); Department of Lands and Survey, £235,322 (£239,013); Department of Agriculture, Industries, and Commerce, £191.741 ''£200,7311; education Department,* £1,329,100 (£1,207.983); Services not provided lor, £30,860 (£108,512). 'total. 1916, £7.799,952 (£7,874,626). Grand Totals (1910) £12.493,107 , £12.379,803).

In ivforciicc to the expenditure, I doire especially to call attention to the reduction ol !0 1.1)7-1 in the expeadiniiv under the annual appropriations lor the year ll)lo-J6 when compared with that of the previous year, and in this connection i would like to say that this economy is largely, in my opinion, tine to the care with which the administrative heads of departments controlled their expenditure. On two occasions during the year 1 met the permanent, heads of departments in my office and emphasized the necessity for the exercise of economy in the public expenditure, especially at the present time, and I wish to publicly express my appreciation of the zealous manner in which these officers carried out the wishes expressed by me by carefully surpervising the expenditure in their respect ire departments.

KKSn.T OK THK YKAK’S OI'KHATIO.VS. Consolidated Kund: Ordinary l?evenuc account, -I’alance brought forward on I st April, lOld, ti ll),017 ; receipts during year. Cl 1 ~“>!(). 1 :}7 ; e.voendilnre during year. 1 1 2, 190 .1 07 ; balance on lllgt March. J9IG, C2,1G6.077.

ESTIMATES OF REVENGE AND FA PFA DJ'IT R F FOR 1916-17. The revenue for the year oa the basis of tin* existu.g statulo.y limitations, is estimated as R'lloh. aoii.ooo Customs ■” |lino St!'mp‘aud Death ' Duties Postal and leiegraph ••• - Laud and Income lax ... “C Heel- Duty ... ••• Resist ration and other 1() , ( . (1 - I<V ‘ !S Id’ddl) Marine ... ... Miscellaneous ■■■ mkk) Ij'ii-ttoviiil Kevtiiuc ... m.™ Endowment He venue ... ■> “ OtJier receipts ; 11-1,7.91,101 The following figures will show the wavs and means ol the Consolidated Fund for the year i'Jlb-lestimat-ing tin- revenue on the lorogoing .basis;— ~

Balance forward hum 191-j-ld. less investment ( (■'> (100,000) ... ... >• (1 KsimiiiU‘,l ivv. ...... lOUI / -1-1,77,7178 Fslimated expenditure ... 1 i,090.6-6 Balance ... - -~^67,8d2 RESERVE. Since tin- war began the deposits at call will, the Fost Oiliee Savings-bank have increased very rapidly, and a considerable portion of these moneys lias been invested in war debentures and oilier Government securities. In view of tin 1 possibility ol heavy claims being made by the depositors when matters assume a more normal aspect in Europe, i established a rcseive in Condon iiv investing, in Imperial'ireasury bills, funds which are not wanted for immediate requirements. New Zealand has by this means assisted the Imperial Government, and has at the same time established a strong liquid reserve against possible sudden claims in the future. WAR LOANS.

During the session of 1011 authority was granted by this House to enable t:2.()()(),0l)U to be raised tor war unlooses, and during last session additional authority Was grantee! lor raising a sum not exceeding £K',UUU,000 lor the same purposes, making a. total of Cri.OOD.OOO in all. Of this total we had borrowed, up to^ the beriming of .May. 1916. i:SJ,8o0,(K)0, leaving an unexhausted authority ot £s>, 100.000. Honourable members wdl recognise that our war expendituio must oxpuiKl iu proportion to tlio increased number of men we put into the field. The Imperial Government lias advanced I’S.ullo.ooo of the C 9.5511,000 raised, and the balance, •£J ,3o(J;0()0, has been found m New Zealand from Post Office investments. It Will he seen that additional anthoritv to borrow will have to he granted to enable the war .expenditure of the future to he met. and I pro]Hise to ask the House for authority to borrow further amounts for war purposes to the extent of G 12,000,000 tor this sear. With, the unexhausted authority of L'2,i00,00(), this will provide a total of ,G 1 -1,160,000. It is expected that the Avar costs will shortly run into over £‘1,000,000 per month. TRADING WITH THK EX TIM V. To assist the .British Government to prevent supplies reaching the enemy many restrictive regulations midei Orders-iu-Gouncil have been issued during the past year. No goods may be exported to Switzerland, the Netherlands,, Denmark, Norawy or Sweden Avithorn, special application,.to the Minister of .Customs, Hides, leather, wool, talloAv, and fatty supsiamos yielding glycerine can only bi> exported to Britain oj- British dominions. Tom more 1 effectively prevent iipide by enemy linns through neutral (•oitiitries regulations have been issued providing that any company or firm shall he .regarded as an enemy company.,or linn which had. prior to the war, its chief place ot business hi enemy territory, and it is further provided that, where the Attorney-Gen-eral is satisfied that any business is carried on either in or out ot Xoav Zealand for the benefit of enemies, such business may be declared to bean enemy business, and any such business existing in New Zealand at the present time must bo placed in the (hands of the Public Trustee as Custodian of Kneniy Property. There has been reason to believe that small quantities of goods made in Germany have reached the Dominion from time to time through neutral countries in spite of the precaution which lias been taken to obtain the certificate of the British Consular Officers at neutral ports of exportation. Numerous instance's of goods marked ‘‘Made in Germany” have been brought to the notice of the Department of Customs, but full investigation lias frequently shown that such goods either came out of the enemy steamers which were interned in 'neutral ports upon the outbreak of the war or that they had been held in stock in shops and wholesale warehouses long before hostilities commenced. It is consequently unsafe to assume that all goods marked “Made in Germany” have been unlaw hilly imported. .Nothing, howover, has or avj 11 ho left undone to stop the importation of all enemy goods. BKKR DCTY.

The now system of levying duty upon the <ni;iiitity ;iml gravity ol’ tlie worts used in browing on me into force on the Ist December. Lttlo, and the increased returns up to the close of the jiaaancia! year must he regarded as highly satisfactory from a revenue point of view. Calculated according to the old system of collection of the beet duty hy means of revenue stamps, th<' usual estimate for the year was about CliM-,000. The increase lor four months duo to the now system is Ci.'l.OOO, thus making the total revenue for the financial year tlo7,S!t>. It must ijt' remembered, however, that the four months from December to March are the summer months, which yield the largest returns. I am advised that the new system Inis been brought into operation without it hitch of any kind, and is working to the entire satisfaction ol the Customs Department. \ aluahlo assistance in tin* matter of supervision has been rendered by the postmasters and police in various country districts.

LAND-TAX AM) I MCOAI K-TAX. Ihe efleet on the revenue of the increased taxation upon land and income -is very marked. The net receipts in this Department for the past year amounted to .C2, N0,17."> ' made tip of hind-lax Cl ,(1(8,Tod, in-come-tax Cl.TfkJ.I 101, and. compared with the collection tor the previous .’'cars, show an increase of Cl, 100. old.

land-tax. The land-tax receipts Tor the financial 1915-16 eonsideraidy exceeded the estimate, and. compared with those of 1914-15, are as follow; £ Receipts, 1915-1.0 ... ... i,oiS.3of> Receipts, 1911-15 ... ... 799,611 An increase of ... ... £218,715 POST AM) TEL KM HA PH DEPARTMENT.

The Post find Telegraph Department's revenue shows a very materia’! increase, which is largely due to the imposition of the half-penny war-tax on all postal matter excepting newspapers, and to the increase in the telegraph rates. The revenue collected for the year amounted to £1,089.917. '['his exceeds that of the previous year by no less than £936,474. The increased charges were in operation for only six months of the year, and produced, approximately, a sum align: iy below the amount which had boon estimated. The Savings Bank deposits reached a total of £13,706,057. while the withdrawals amounted to £11,294,974. At the end of the year the total amount standing to the credit of depositors was no less than £22.166.365, an increase of £3.118,336. The moneyorder and postal-note business has steadily increased, the total issues for the year amounting to £4,252,813. The revenue from postages amounted to £801,938; from telegrams, £386,138; and from telephone exchanges, £287.5(7; the balance being made up of miscellaneous items. SETTLEMENT OF CROWN LANDS. A total area of approximately 750,000 acres was offered for public application during the year under the various tenures provided by the Land Act and the Lands for Settlements Ac:, etc., and the bulk of this land was readily taken up. Full particulars as fo the present condition of settlement throughout the Dominion will lie laid before you in a separate Parliamentary paper (C.—l). In accordance with the intent ion of the Government to chop I peer}” facility for the Selection of land hv members of our Expeditionary Forces who have r,etu)it^i ‘ and Avho have liee|pho|mFabiy RisehafgE ed. a cmnsideDflm-ai!o,a has b'eeijft pßup claimed fop- :• charged Solrmw Settleijfejffc, A-ci!' Other.suitable areas are under survey;" l and will be made available as early as possible. Already numbers of applicav nous for .hfVVC been, lodged. regulation:;, governing the granting of financial (assistance to soldier settlors have been issued, and money ui> to an amount of £50,000 has been authorised under the Act to provide advances to assist in developing the holdings.

DEFENCE. The work of the military authorities and of the Defence Department has steadily increased. Additional units have been added to the original Expeditionary Force, and continual and ample reinforcements have been regularly despatched without a hitch or serious accident. This is the more creditable owing to the fact that the military authorities have, in ,tlie absence of a naval administration, assumed the function of fitting, equipping, and maintaining a regular trodp transport system for the conveyancers* troqpifj.to the seat of war. It to know that the new VA.dfprccy meats have mat with by the Army Council and tno'd.i)iperia 1' Training Staff at the base in Eg.\pt as regards their physique and (raining. As a natural result of active service abroad, sick and wounded invalided soldiers have been regularly returning to the Dominion. The arrangements for their reception and comfort have been carefully and well carried out by rite Defence and Public Health Departments working in conjunction. Concurrently with the training and forwarding of regular reinforcements, tli<> Territorial or home-defence training system has been carried out. Without (his regular system it is certain that the Expeditionary Force despatched to occupy Samoa, and the main force and reinforcements, could not have been so efficiently and expeditiously despatched and maintained. It is to the lasting credit of the employers within (he Dominion that, despite the inconvenience to which they have been put by the enlistment of many of their employees for service abroad,

they have con turned to support the annual t raining of the Territorial Forces, and have in this manner eonfi-i----buied to tire siiceossl'ui enrolment of the Expcditionary 1' orees and reinforcements. Dining iho past year a Minister of Supplies and Munitions lias been appointed, and under Ids control the co-ordination of inannJ'aciores and supplies throughout the (/■■- minion has been brought about, tints ensuring improvements and sufficiency of equipment to meet the military demands, Tiie expenditure »u; of revenue on account of defence amounted to £432.227, or i.GO.i>lG les* than the estimated requirements.

PURCHASE OF MIETTABY STORED AXO .SUPPLIES FOR THE EX FEDIT’iOXAFY FORCES.

Owing to the fact that the woo! sales are held in Xoveniber-D.-'cembi r yearly, it is found convenient to estimate prices and to review expenditure over the period of a calendar year, rather than over the period of a financial year terminating on the 31st March. The expenditure for the calendar year,

1915, was a's follows:—Stores. £020,450; supplies, £421,593; drugs, £2O, 631; total, £1,062,674. In view of the heavy commitment, to the Army Council in connection with equipping, training, and despatching, say, thirty thousand men during 1916. it is estimated that £1.548,000 will be for the calendar year 1916. This sura is made ur> as follows:

Stoves, £l.lOO 000; supplies. £421,500; drugs, £23,500; total, £1.548,000. it has boon found advisable! in order to create reserves in certain lines of equipment, to place orders for heavy deliveries during the first six months of 1910. These goods will be bold in store under proper custody, and as a result orders for goods will not he so extensive towards the elose of the year as for the first six months. As fay as can he ascertained, the sum of £2

000 has been paid for 1916 svipo'ics. '.Vliifli leaves a balance of €1.300.000 ft bo provided for the remainder of tin calendar year. FA MO AX A DMIXTRTRATTON.

Tin; garrison for Samoa is stiil being provided and eqmppdd by sow /.;-a-la-uu, and the payment bi troops m,« emerge upon tins \S av Kxpem-es Aci iio health of the troops ns ; i^ouu, and no duucukies are laih 6 ex- ; with the admuusualiion. Shortly alter too oeeupatibji! of tho Island b> our ;ro >ps it was deemed necessary l to replace too tvei'rhan currency 'with H-nihli tunehey, and the cany •cscahhdmiiieoiu of a branch of the intuit ol .Now Zealand there grciaity facilitated tho; settieincuL of (the currency and cxeiuiege questions'. ,rhe German currency was purchased hy the issue of notes on the oasis of 20. t>o marks to cite sovereign, i'ne German gold coin and notes have been sold, and the proceeds invested in Mew Zealand Gdverouu at securities. Tho silver and niekeT 1 coin Inn; been forwarded' 'to 1 ' l.onddh' 'lor sale wiiCn a siptiihle opportunity hiceors, im-tp 'owilid'ho tile great iU p'feihi.ioo of German''-currency in tiie ni.-i’kht today, it has been loiuul impossible to obtain a fair offer fur the'com tip l picsent.

WAR RELIEF 1-TsDS. Extremely valuable gaits in money ami in kind for varoVls fclicl purposes jiu connection witu ini? war have been contributed during Urn pas; luiam-ial • year. The monetary g'iis by tho Government, ajniosj, entirely lor purposes outside Sen Zealand, J amounted 10 £.’J id,.‘135. ‘I he i <*.• ponse for Belgian relict-purposes was remarkjable*, not only because it l'ar exceeded . tho amount asked for, inn ;;lso fiom tiie fuel that the com rihulious were recount! during a paried when the public nan contriiniiiug to funds foi llm relief of our own ad; ami w umdc I ' soldiers and their depen hints. Re- ; turns sent in by the various patriotic j societies snow that up to tin* ,'iiDecomber, 1015, tho sum of £Lsß>.;,’'so had heel) raised by them, of which over £980,890 was then in hnn i ; but tho funds of a number of ••oeietiea bn vo been considerably augmented since then, and it is estimated chat the total funds now in me lends, of patriotic organisations amount an proximately to £1,25(),0(,’9. Gifts id the value’of £77,000 have boon nnnibuted for the poor of Belgium, and £3OOO for the poor of the United Kingdom, and £'£o9s So>• Red ( rors purposes in England, and £51,771 lor hospital requisites and comforts for troops in Egypt, eto.

The gifts for Red rVcsr ser hospital requisites, and comforts Id' our troojis m Egypt and oilier pi.:-e,. represent !io„ only the value oi ncaili COO,(HID, bat also many thousands <d hours of devoted iaboi', first m the col lection of money, then in the purchase of material, and finally in the making, up of fbe materia! into various iiiclul articles. Fiery credit is due to _i.be \arious organisations, and especially to the uomeii of the country lor the magnificent work they have performed. AVAR PENSIONS. The War Pensions Act bus been amended during the' present session of Pallia men c, and lias recently been so I nil y discussed in all its aspects Fuat i need do no mote bore than saute Unit b is coream to come up tor hirdiei consideration later on. and that cue country can be reliett upon -o do it dotv in regard to those v.mu nave fought. and will y.-t tight, tor the preservation and freedom at our rnuoire. 'I !ie amount expected to come to eluerge during tms year will D™ 1 ' a hi, approximate £2Ot),OUO : out wmo - ccer amount is required wm oe I ll '- vided tor, imperial government st:pPLIES. Tim arrangement entered into with the imperial Government by “« i,eef mutton, ami lamb available io. export should be. purchased on account of the imperial Government, and which became operative on the frd March, 1910, Ims been coutmuco throughout the year. The. total shipmen is up to the 9th laid, -iti't caVcases mutton, 4,376, add taiia.a. lamb. The payments to freezing companies and producers have amounted a, £9,143,791. The question of the suoplv of insulated ■ tonnage has been a "matter of considerable concern to the Government. Representations have been made to the Imperial Government, with the object el securing additional insulated tonnage. l« re-sponse--.tp these representations, five steamers have been made available from Australia. The number oi insulated steamers 'despatched during the twelve months ending 31st March last yy.a s‘i eighty-one, compared with eighty for the previous year, lluec

steamers engaged as moat-ea-H lei s have. been out out of eoqinnrsion—the ‘■Clan McTavish’; wrs sunk by the onctny, and the. : ‘Mal.atua ,> raid •‘Kangatira” was hist a a the result of marine casualties. A clearance of the freezing-stores was practically eileebod when the new season commenced. At the beginning of May there remained in store approximately two million 0011). carcases at the freezingworks, hut the outlook for the balance of the season is favourable. It i?, satisfactory to note that many of the freezing companies have taken in hand ’the matter of increasing the storage accommodation. In November last a requisition lor 15,000 tons first-grade cheese was made by the imperial Government, the price fixed being 7cl per lb. f.o.b. in order to e mply with this requisition, all fac11.lies ivoro notified (hat approximate

|ly pne-tliird of their output for the I-.Cason'Would be required for Imperial' Army purposes.. A work ng scheme V. : hs • drawn up between the factories qnd 11 the 'Government, and up to the '9th Mtiyi 1910, 10,725 tour, had been shipped, and, the payments to dairy j factories and proO-cers recalled £815,171. A notification was received In September hist to secure for Imperial Government purposes the whole |of the output of selieelite ore.; from I idle Dominion to the 51st December 1 next, the price being fixed at £2 15s per unit of tungstic acid per ton of lore. Arrangements were made with I the mining companies, and a workjin g scheme prepared and put into ioperation, 1 p to date 151 tons have ; been shipped, the payments to min--1 ing companies ami producers totalling I £2S,.dt\k ‘Fund,- to finance tho pur- ■ chases of ore are requisitioned from i the Imperial Government by the : i’leasniy a.s required. The number o* mining companies and producers jo! ore has considerably increased. At Cue inception ol the scheme ou.lv two

mm.ng companies were operating in seiiechce ores, while at the present iime business is done with twenty-six suppliers. At the close of tho year it was ar-

ranged that the Imperial Government Supply Office should take over the management of the ka uri-ginn produced and purchased under the 5v aim-gum Industry Act. 191-1. The value of kauri-gum at present on hand is approximately £27.607, and arrangements are now being made to dispose of this in the United States. Considerable congestion is being experienced in Iho export of general car-

go, owing to the shrinkage m the world’s tonnage. This condition is due, firstly, to the heavy and everincreasing demands of our own and allied Governments for tonnage for wav purposes; secondly, to the sinking of a number of cargo-steamers by the enemy and the loss of two large carriers, and also to the fact that the

output of general cargo is above the normal. There are indications that the tonnage available in the months of dune and duly will clear the accumulation, and the situation should wholly right itself by the end of Au"iisi. Ibe congestion may reasonably be said to have reached its worst in March and April, aful, given the safearrival of steamers now on the wav to load, it should decline by August ; nd become normal by September.

WAR BONUS. Since l!i.’ beginning of the war a '•cry largo amount of additional work has boon oast upon tho officers of all State Departments, and the Government desires to offer some, recognition of the extra services which have been so readily given. It is also recognised that the cost of living has greatly in- < roused during the past two years, and. in consequence, many of the lower-paid officers of the State find it increasingly difficult to maintain their families in ordinary comfort. With a view of offering some recompense to these officers it is proposed to grant a war bonus, fixed in accordance with a specified scale, to those officers of the railways and all other branches of the Public Service, including school teachers, pvhoge{salaries do not exceed £315 per annum. I estimate that a sum of £400,000 will be required to cover, this charge^’ami this amount will be placed oil J the estimates accordingly. As soon as tho Appropriation Bill becomes law the lull bonus will Ire paid in one sum to those entitled to it.

ESTIMATED LOAN EXPENDITURE FOR 1916-17. I estimate that it will bo necessary to provide from sources within the Dominion a sum not exceeding £2,500,000 during the current year to provide for the carrying-on of works and other services which are deemed to be necessary. This amount has been cut down to the lowest figure possible, and care will have to be exorcised in the expenditure, as difficulties are likely to occur if further sums are required.

COST OF LIVING PROBLEM. During the year this matter lias received a great deal of attention from the Government with a view to proj venting high prices being charged i to* ■:!ie people for their idod-supplies* I Every aspect of the matter was .eon-, j siderecl prior to the appointment of the Board of Trade, but difficulties of solution, due to the unparalleled war, presented themselves in almost every direction. The needs of the great war have caused the Imperial Government to requisition a great proportion of the steamers and ships of the mercantile marine, and other countries have also made unusual demands on flu> ships sailing under their own flags. The tonnage remaining for general trade purposes of the British Empire lias proved quite inadequate for carrying on the transport and commerical requirements of the Empire, and the overseas dominions have suffered in consequence. The regrettable but inevitable result was that freights rose to an unparalleled height, and, still remain so. This, with the phenomenal increase in the prices of grtods in outside countries, including Great Britain, added enormously to the cost of goods imported into this country. In this respect, as far as New Zealand is concerned, the Government was powerless to immediately effect a remedy. Firstly, ships could not bo built, chartered, or purchased. Secondly, if they could have been hui'l,, ('hartored, or purchased, the necessities ol the war would have taken precedence of everything else; in fact, the ships would have been rightly commandeered for Inieprial purposes. Thirdly, the first cost of goods of nearly every description in the countries of origin could not be cent lolled from here. The/ Governimnt consequently directed its attention to preventing exploitation, and Hie Board of Trade, when it was sot ci), was specially instructed to leave nothing undone to help in this direction, and it; has been engaged since its constitution in making close inqnines in different portions ' of the conn try. The reports wil he made a valiable _ lor Parliament. It seems almost impossible during war-time, ouiiir to tim world-wide increases in M .°! , its \. ;uk]( ' (l , t 0 general m- ■ umm’ oi the first, cost oi goods in ,ne countries ol origin, to hope for a general lowering of prices until the am is otor. Similar difficulties nre-M-nt themselves regarding our own produce, which is, fortunately, in f”T 1 , denmi . l<! - As prices are' fixed ■ tiu V iln ; o* su l>ply and demand in ; ‘ ot . t,K ' 1 " 0, ; !d it seems appar--.‘it that only the lowering of values tec outside world can effectively ormg about a reduction of prices in • Vu . Jf relief I )V ‘ tho m issi.:n e 4 , , . **- i ‘ unites would have '.‘•f,;:!;,. lll,:: ( ; ro !*', l . ,lave llave been I",;''. ~ !j e seen, however, and'm’; imib al! , ar * lcl * s of food ■ g'nff-ely in use are «{. • ‘ * M . N ‘ ■ ‘>l ui'ly. I .N-v / 'LA -df i) RENTALS. Increased remals since the commencement of tile war, ~M any tom-

plaints have been received regarding the advance in house rents. TbM - e can be no doubt that increase of houserents adds greatly to the cost of living, especially to those of limited salaries or wages. Hon. members will be asked to pass legislation bo restore rents to their pre-war rales and to prevent their being increased during the war period. TAXATION PROPOSALS.

T popose to effect some important changes in taxation. The ordinary land-tax on mortgages will be repealed, and an income-tax substituted .ou the income derived from the mortgages. This change, while giving tali cf to the owners of small sums invested on mortgage, will impose a heavier tax on incomes of those having large investments. I will ash the House to make provision for exempting from assessment of income-tax in New Zealand any income earned elsewhere and which has already been taxed in .the United Kingdom or any British dominion, with the view of avoiding afti far as we can the duplicate taxation of income within the Umpire. There is no room to doubt that the present system is unjust, and acts as a constant harrier to the full and free development of commerce within the British Empire. Amendments of the Land and Income Assessment Aofc te give effect to the foregoing alteration* will be submitted for consideration. WAR PROFITS.

Money for the conduct of tsi© war must be had, and there is no valid reason why those who have surphrt moneys, largely due to war-conditiohft, should not be called upon to provifi* a portion of the capital required. Those who Imve made extra profit* during tho war, either from business or directly from primary predict*, cannot object to provide out of sudfi pofits a share of the finance necessaFt. I will ask the House to give authority , to take by way of taxation 45 per cent of the excess profits earned during tho, last vear. These will he ascertained by taking the average profits realised for each of the three ye'ats prevknifto the war and comparing this aVertf* jvith'tfye returns made since theilWW! commenced, I estimate to receive £2,000.000 from this source... The date of payment will probably he about Oik * end of the current financial year. SPECIAL INCOME-TAX] ‘ ! ‘ *0 Those taxpayers who derive tfabftincomes from other, sources than wnf. profits should likewise at this juuctuf*. he required to contribute further than they are at present called upon to pay. anil I propose to nfek fair authority to levy a special tax of 5 per cent, upon incomes earned last year from all sources, exclusive of war profits which have already been dealt, with. Tins tax will be collected In March next. I calculate that £750,000 will he realised under this heading. INCOME-TAX MINIMUM.

I direct attention to the minimum upon which income-tax is charged in this Dominion. So far as I can ascertain, the amount at which we start to I levy income-tax is the highest in the world—by that I mean we exclude from the payment of any tax all those j who receive wages or salaries, not exceeding £3OO per annum. Nof&ihg 4» proposed in the direction of ! the income tax revenue by reducing | the minimum upon which income tfix i is leviable, hut it will beComb ,*■ lion for sorioUs consideration if tst war continues beyond Die end of iUMti vear whether this should hot he donfi, It is only right that tbosC whiJ &9{ well-to-do or iwssessors of wealth should contribute the greater proportion of the Cost of this wav, the Successful winning of which tnCahv such enormous advantages to them afl well as to every othef section of the comic unity. Even the hiWAhtfeftt ih tha land would p-obnblv ink? ex-ceptitfh to being altogether excluded undef tha law from m a Icing some slight cofetributiou towards helping; to #iP the War and towards assisting to maihisuifr a pensions scheme for the behpßt*of the widows atid doponcltints of those Who are. on behalf of every class, great, or small, throughout the Dominion, fights ing for the freedom of {his country. YEAR’S OPERATIONS.

j For die convenience of honorable j members I now summarise the moat important itenfs relating to the financial operations of the past year:— A loan for £2,000,1KK) for publics works successfully floated within tha Dominion. \ The cstablialppent of a reserve oi £3,325,000 in London. Redemption and renewals of loan# falling clue in London up to 31« b March 1916, amounting to £6,274.953. ' Conversion of loans falling due in New Zealand maiming up to Ist December, 1916, to the amount of £2ofcL--900. Conversion of loans falling due in Now Zealand maturing up to 31st March, 1921, amounting to £1,891,100, into a new currency of twenty-five years. Treasury hills in Dominion paid off, £1,950,000. None have simup been issued. Net surplus of tho year’s revenue, £2,017.030. War loans received up -to the beginning of May from Imperial Government, £8,500,000. PROPOSALS. I also place in concise , form the a«# proposals submitted to honorable memOti’kS ; Reduce public works expenditure. Repeal mortgage-tax, and substient* an iucon e-tax on sums invested oa mortgage by owners. Abolish duplication of income-tex by exempting in New Zealand income* earned elsewhere within the British Empire, and which has already bee*.' t taxed there. Provide for annual bonus out of profits of Public Trust Office to beneficiaries of estates. Provide for war bonus during war to - employees of all branches of ,;he Public Service whose pay does not exceed £315 per annum.

Provide £2,000.000 for infernal expenditure. Provide £500.000 for purchase ol land for soldiers.

Adjust conditions by legislation to meet the changes war has drought about in regard to hanking. Provide for ac(|uiring of 15 per cent, of profits realised by war conditions.

Provide a proportion of moneys required in aid of war finance by issuing war bonds in New Zealand. Provide a tax of 5 per cent, on all incomes, exclusive ol those obtained from war profits. To regulate the transfer of moneys from the Dominion except lor legitimate trade purposes. To regulate the rate of interest chargeable on deposits. Provide for financial assistance to fricndlv societies. Provide for borrowing an additional £12,000,000 for war purposes. CONCLUSION. It now only remains for me to say that I fully realise the tremendous growth of the public debt due chiefly to the great wav, but although oui responsibilities are increasing enormously, there is no need for misgivings as to the future. New Zealand has natural advantages and owing to this fact and the patriotism of the people wo are in the fortunate position ol being able to meet all demands upon on r finances. Individual sacrifices no doubt have to be made, this is inseparable from the conditions that now excist, but the resources of the country as a whole are more than sufficient to hear the increased strain. i remind the country that there is a sinking fund for the repayment of all loans including those raised and to he raised for war purposes. The renewal and conversion of loans completed during the year for some years to come will greatly help in providing further financial requirements. The future financial outlook may lie viewed with confidence, if is not at any time a pleasant task to submit to the country proposals for increased taxation, bnt in view of the justice of the course for which the Motherland with her Allies is now fighting I do so in full confidence that the people of this Ij|)mimion will he in the future as they have ever been in the past ready and willing to shoulder the additional burdens with unflinching courage. I feel sure they will shrink from no sacrifices which will help in the overthrow of an unscrupulous enemy who has forced an unjust war upon the British run pi re and those great countries associated with her. I thank honourable members for the courtesy and patience they have been good enough to extend to me.