SIX MONTHS' FINANCES.

Taranaki Daily News, Volume LII, Issue 224, 27 October 1909, Page 4

SIX MONTHS' FINANCES.

STATEMENT BY THE PRIME MINISTER. SUCCESSITL CONVERSION OPERATIONS. WAYS AND MEANS TO SEPTEMBER, 1910. The Prime Milliliter (Bight Hon.' Sir Jc-eph Ward) made a detailed statement of the Dominion's finance in Parliament last week, indicating that very successful conversion operations had' been conducted during the past year, and that in regard to future operations it would be necessary to borrow £1,000,000 it puUic works were to be sustained at normal pace until next year's appropriations were made available by Parliament in September, 1910. Sir Joseph set o.it , the position as follows: • ORDINARY REVENUE. • ;C £ • Balance cash April Ist 357.103 \ Advances .. ~ 47,158 434,321 Less Treasury Bills 250,000 „ . —■ — 184,321 Rueipts April Ist to September 30th— Revenue : ._. 3,708.238 Other receipts 07,144 1 Total .. ... ..,£4,049,703 EXPENDITURE.

Expenditure, from April Ist to September 30th .. 3,990,323 Credit balance ... .. 59,380 £■ £ Cash .. , x 229.59S Advances .., 379,782 Treasury bills .. ~ 550,000 Balance .. ~ £59,38,1 PUBLIC VORKS FUND. £ Available ways and means at April Ist, 1»09 433,709 1 & Loan money .. .. 1,000,000 Other receipts .. 043 Total £1,434,052 EXPENDITURE. Annual appropria'ions .. .. !)0,790 Otier charges .. 4,137 Balance Sept. 30th.. £520,719 Cash .. .. 271.010 Advances.. .. 255.07!) Total '..£520,710 FLUCTUATIONS OF REVENUE. Sir Joseph stated that the Customs revenue lor the six months was X. 120,250 lens than tile corresponding period 01 uie ' previous year, while there were decreas 5 also in stamps i £83,300); registration . and other ices (Jf.12,5u0), due to the loss ot Chinese poll-tax consequent upon thi education test. The reduced revenue lrom the Customs needed no explanation, as it must be apparent to members that the stringency which exists in this country would affect the receipts fro;n these sources. Receipts from the railways had more than compensated for the Customs revenue. The total reductions on three items alone amounted to £333,508, being as follows:

£ Cotton goods .. ~ 44,841 Dried fruits ~., '., 53,578 Sugar .. .. ~ 235,389 Then the average concessions on the railways for the period covered were worth £100,500, postal concessions £24.000 and abolition of the sheep-tax £22000' showing a total of £227,100, which made a grand total of concessions £505,008. Bui to prevent the suggestion that be was in any way making an excessive estimate he would put the reductions down to £400,000, although he knew ,t to be very much greater.' TREASURY BILLS.

Treasury bills outstanding on September 30th, 1908, were £OOO,OOO, and th(*e had since been reduced by £50,000. lie wished to explain to members who were unaware of the procedure in regard to Treasury bills that thev were issued in anticipation of revenue arising from such sources as the land and income tax, tile termer of which was due in November The expenditure for the six monfos cwled September 30th, 1009, amounted to £3,990,323, as against £4,002.104 a iietreasc compared with the corresponding six months of £11,781. Permanent '•lii'i'g.-s showed an increase of £2093 wl.de departmental appropriations de-l-cased by £14,479, the respective totals being:— !™ •■ ■■•* •• iA^m IJOB 2,490,859 ITEMS OF EXPENDITURE. The expenditure upon public works for the six mouths emded September 30th totalled £4)07,9331, an increase of £87,544, the principal items being:—. £ Railways .. ~ 403.503 Public buildings .. Roads .. ..; .. 250,251 Telegraph extension.. 50,090 Payments made in purchase of-estates for closer settlement amounted to £333,. IiOO on the 30th September, ami <asl, : n hand totalled £280,000. The total credit balances of the country on September 3rd were:—ln the public account £650,110, other (iovermnent accounts £509,030, making a total credit cash balance in New Zealand on September 30th of £1,165,140, exclusive of the balance in the London • account of over C'. ; 000,000.

PROVISION FOE PUBLIC WORKS. The balance available at the end of the. previous year enabled a sum of .000,000 to lie transferred to the Public Works Fund from the ordinary revenue | account. Bat Cue small surplus brought I forward frwn the beginning of this year, the effect upon the revenue of the large Customs and otliar concessions, and the circumstances -which arose necessitating tac earning mi of public works at a Icgher rnte thua could have been expected under ordinary cireunistanccs. must be considered. M was known, this necessity arose in ■consequence of the dilii I cully of securing employment for labor. I In no case did the Government emplov labor on other than, reproductive works Without the possibility «f any instaln.tnt from the Consolidated Ecvcnuc this .rear—or. indeed, to a verv small extent '-the necessity arose for the country t. «rry on its undertakings until, at' the earliest, September, 1910, and if it was not desired to dtjninish the undertakings, then the ne.eeissitv arose for making provision, to cover the arisencc of the t>'op,ooO/ formerly transferred from the consolidated revenue. Therefore, .tie mii'ion loan proposal ways submitted in ™=ure ways and means (o September. IftlO. The ways and meat* in the Pnbvc v.'or'Ss Fund comprised:--

ftateincc brought forward 4.1(011.1 l>.*u authorised during short session 1,200.000 &'J —.. ' Total amount available .. ,€1 .(184.00n , "" ESTIMATED KXPRNDV,Tt T RE. The probable expenditure, for the currant financial year was (estimated as under:— ,* £ Uepartmental (including Roads Department 41.5.00 Contingent defence .. .. ' 10.1(00 Railways, construction.. ~ SOO.OOO Additions to open lilies .. 350.000 fii'i'dings ~ • 311,750 Lighthouses. ~te. .. .. ■» 20,000 Trurist and Health Resorts .. * 15,000 Immigration .. ~ .. 10.000 K'ads 452,000 Xative lands .. .. *.. 2,000 TJnelopment of goldficlds '"*.. 35,000 Telegraphs .. .. '.. 120.000 Rates on native lands .. rr :-.- 700 Lands improvement .. ▼.. 20,000 Subsidised works .. T .. .5,000 Total ' '-JC2A 02,050

CONVERSION OPERATIONS. Ho wished to indicate to the House, eo far as he was justified, the nature ot some important financial transactions. During the past financial year debentures amounting to £3,133,238 fell due, a;id of this amount no less a sum than C2J4S.4SB was renewed by the holders, having £t)B4,7r>o to be provided for by the sale of new debentures. He was phased to be able to stale that a large • aviug in interest charges was made. Debentures for over CI ,000,000 which previously carried a rate of 4 per cent, were placed at V/-. per cent., the exact position being as follows: — Amount matured — £ ■[ per cent. .. 2,010,800 per cent. .. 1 ; 0.">7.438 r. per cent. .. Gu.OOO ——■ £3,133,238 Renewed or provided for—--4 per cent. .. 010,825 V/ : , prv cent. .. 2,221,703 Outstanding •. 000 l.hn>- effecting a saving in interest ot £.Y200 per annum. Puriiitr the present financial year .1.2,010.023 matured. Of this amount ;C.l,si)2.rt">ft fell due during tile last ?'s months, of which COS4.KHO had been re-tn-wi'd l»v the "holders and £807.830 paid oil'. This had been earned out without any additional charge on the Domini m for interest—in fact, in one instance a parcel of £40,000 on which it had heretofore to pay 6 per cent, was secured at 4 per cent.

. CHEAP MONEY. Early this year £1,5U0,0U0 of debentures were issued at 3% per ccut., the amount realised being JUUii',4 net. Except, that .WM'/i, liiere was no discount | cr brokerage wjialevcr. (Hear, near.) ! Conversion of that £1,500,000 into 3'/s ' per cent, stock had been given at £9i. As to those who had sometimes enqnirjil luicru he got Hie money from, he wou'.i say that he got it as cheaply as possiole, mm was not going to parade it unless He-re was a necessity lor him to do so., (hear, hear.) That was the line iie had a.ways pursued aud which he always Mould pursue. In connection with the million he had obtained in Loudon, he had already stated that there was no brokerage or discount upon it. He had got it at 3% per cent, it was a net advance. (Hear, hear.) He was not goiug into the details of the transactions, exempt to say tnat in anticipation of the loan he had arranged to obtain a million at 3'/ 3 per cent., aud that the country had got it. It would be admitted that the necessity was imposed not only upon himself, but upon other members of the House, to observe a certain amount ol privacy, for a time at least, in connection with their financial undertakings—tiiat was, if they wanted to obtain the best results. In fact, they were bound to observe a very great deal of secrecy about them. That was unavoidable.

Mr. Buchanan: Call it reticence, not secrecy. NECESSARY RETICENCE. 1 lie Prime Minister: Well, "necessity imposed reticence, lie went on to say Ui.u he was often under the necessity of sitting under criticism when lie was not able tu give the particulars asked tor. There might ue very good reasons lor this ease; in other worus, tiicy were boL'nd to respect the position occupied by those in the Uld Country who invested in our stock. This year he had obtained a. portion of the money iu Loudon at the low rate of i'/ 2 per out.,, "For how long?" asked Mr. \V. Eraser. ''For the time that we arranged to take it for," retorted the I'rimo ".Minister, amid laughter. He simply drew attention to the fact that he had obtained a portion of the money by a temporary advance, and that this showed that w'c were in a very good position in the Old Country, otherwise lie would not have been able to do it. If we wanted to carry on public expenditure at the same rate as last year, there were only two ivays in which it could be done. There must cither be from revenue an amount eoual to anything from £500,000 to £BOO,OOO paid into the Public Works Fui.d, or they must give cll'eet to the proposal that he had submitted in the Loi.n Bill.

BORROWING FOR RAILWAYS. They could rest assured that both now and in the future, if the railways were to be completed, money must be borrowed from time to lime. But if would not do to spend it upon railways that, would not return a reasonable rate of iniorcst—(hear, hear)—and the Govern, incut proposed to ask the House during Hie session to pass legislation ill the .Unction of obtaining at least a reasonable contribution towards the cost of e'.ii-lriietioii in such eases, lie did noi think they should impose upon any district anything greater than had been imposed up In the present. Quite possibly there might be some criticism upon his having brought a Loan Hill down before the delivery of the Financial Statement, an,', he wanted to explain that he had hoped to have had an opportunity of introducing the Statement earlier' in the .month. He was not in want of money, b,i|. looking to the requirenftnts of tlie civiiitry. he had to make provision unt.l the end of September, and. did not believe it would be a prudent thing to wait. There might possibly be a genera] election in the Old Country, and as a matter of prudence it was a good thing to obtain the money as far ahead as possible of the disturbances that took place in the liinineial world under such circu'istances.