THE FINANCIAL STATEMENT.

Taranaki Daily News, 28 July 1920, Page 3

THE FINANCIAL STATEMENT.

SOUND POSITION REVEALED. Large Loans; Some Compulsion. Public Debt of £201,170,755. Progressive Schemes Outlined. By Telegraph.—Press Association. Wellington, Last Night. Immediately on resuming at 7.30 p.m. the House of Representatives wen ft into Committee of Supply, and Mr. Mrwey, as Minister of Finance, rose, amidst applause, to deliver his first Budget. The statement was, inter alia, as follow.— The total revenues of the Consolidated Fund for the financial year 1910-20 amounted to £20,081,340, whilst the expenditure for the same period totalled £23,781,024, the excess of revenue over expenditure thus being £2,299,410. This result of the year's operations is eminently satisfactory, and furnishes ample evidence of a sound financial position. The effect of the disturbing influences of the war has not been felt so severely in New Zealand as in other countries. There is no lack of employment, trade is generally good, and prices for our staple products are satisfactory. Although sea transport was restricted, the Government succeeded in making arrangements which permitted the export during the year of large quantities of our meat and other produce at remunerative rates thus enabling the country to meet without any great inconvenience, the additional taxation necessitated by the war. REVENUE. The revenue for the year was estimated at £'".2,919,105, hut the amount collected was £20,081,340, being £3.102,175 in excess of the estimate, or £3,725.9CS over the revenue of the pre? viojs financial year as indicated hereunder:—

Year ending March 31,' 1330. 1019 Customs 4,8:1(1,324 3.8:10,081 Stamp and death duties 11,344,031! 2,124,772 Posial and Telegraph .. 2,(1%,7.17 1,9(14,812 land Taj 1,.".17,0(13 1,512,093 Income Tax 0,309,705 0,219,3311 Beer Dniy 3r,n,l((:i 273,334 Railways r,,700,010 4,975,445 Reslr.trr.flnn and other fees 175,750 111,99:', Marine 42,84(1 35.151 Miscellaneous I,2OI,SC<> . niC.oan Territorial 218,757 202,734 National Endowment Itevemie 112,840 108,824 Other receipts 5,374 45,928 Totals £26,081,304 22,352,3^3 EXPENDITURE. The expenditure of the year, which was estimated at £22,441,057, reached £23,781,024, or £5,108,325 in excess of the expenditure of the financial year 1918-19. The details of this excess are as follow: PERMANENT APPROPRIATIONS. Year ending March 31, 1920. 1919 £ £ Civil List 20,54!) 28,009 Interest and«Sinklng Fund 7,249,420 G,080,76fl Under special Acts 1,101,289 726,047 Subsidies paid to ' Local Authorities 101,085 HO, 309 Territorial Revenue .... 24,275 40 570 Endowments 134,991 150|419 Old Aga Tensions 098,570 709 330 Widows' Pensions 136,730 80,670 Military Penslbns 45,000 50,511

War Pensions 1,811,146 1,1991544 11,389,001 9,218,830 ANNUAL APPROPRIATIONS. Legislative Departments 44,500 36 729 Department of Finance 188,061 167 237 Post and Telegraph Department 1,941,494 1,089,701 working Railways Depart- ' n*®** 4,305,963 3,415,595 I Public BulJdines, Domains i and Maintenance of Roads 164,142 121,384 Mtive Department 28,457 25,694 Justice Department ... 587,900 549,794 Mines Department 36,637 40,638 Department of Internal ~ Affairs 336,350 271,216 Mental Hospitals. Public Health, and Hospitals and Charitable Aid Departments 550,899 31S80R Tourists Deprtment .... 68,858 53,656 Defence Department 502,465 416 4»7 Customs, Marine, and Inspection of Machinery Departments '. 227 474 lsil 501 Department of Labor ... 40 016 •ja's-,4 Department of Lands and „ , s «" e ? 238,365 209,403 Valuation and Electoral Departments 196,242 53 070 Department of Asrieulture, Industrie."?, and Commerce Rlft.nflT 240,405 Education Department .. 2,G31,82f» Services not prorided for - TT.IHO ' 12 420 Transfer to Loans Redemption Account of Sinking Funds set free to redeem Debentures 400 „ 12,392,863 9,451,749 Tota 's £23,781,024 18,673^599 The annual charges for interest, sinking funds, and- pensions have larsrelv increased, whilst the expenditure of the departmental services is £2,938,114 above that of the preceding year. PUBLIC WORKS FUND. The expenditure upon public works amounted to £2,021,153, or £513,232 over the expenditure of the year 1918-19. REDEMPTIONS AND RENEWALS. Apart from the liability to the Imperial Government for war expenditure, the total debt falling due during the year amounted to ' £3,707,045; and of this amount £3,530,245 was renewed, £232,100 was redeemed with funds bor-1 rowed from the Post Office. LOANS FALLING DUE. The loans falling due during the seven | years ending with the yeait; 1027 are as follow: Year. ' £ 1921 30,105,457 . 1922 11,361,890 1923 8,862,156 1923 8.862,1511 1924 1#,228.80S ' 1!>25 14,614,047 1926 303,4)0 1927 56,400 The necessary action is being taken in connection with the redemption or renewal of' the large amount which matures during the current financial year, but in view of the higher rate of interest now payable it is estimated that the permanent charges will be increased byi £45,000. COMPULSORY CONTRIBUTIONS TO WAR LOANS. The scrutiny of the li?ts of subscribers to the war loans, and n? taxpayers, has been continued during the year, with the mult tlmt many of those who failed to

iviiitribute their fair proportion to the war loans have been compelled to do so. j CUSTOMS DEPARTMENT. The revenue from Customs, including excise beer duty, for the year ended March .'U, 1020, was £5,185,727. This is the first time in the history of the Dominion that the revenues of Customs and Excise have exceeded £5,000,0(X). The number of gallons of beer brewed totalled 14,550,070. The quantity brewed for the previous financial year was 11,100,020 gallons. The values of imports and exports for the past four financial years arc as follow: Imports. Exports, fi € 1010-17 26,162,700 30,r,38,400 1017-18 .... 20,98.1,012 31,288,270 1918-19 26,437,284 32,263,732 1919-20 32,162,029 50,776,650 It should be noted that the importvalues are based. upon the fair market value in the country of exportation, plus 10 per cent. This is the value for ad valorem and primage duties. The true landed cost is probably 20 per cent, in advance of tlie figures shown, owing to high freights. The export values are the f.o.b. values. An analysis of the value of goods, regarded according to origin, shows that the proportion received from flveat Britain is 37.!) per cent, of the total, as against .'15.0 per pent, last year and sl.fi per cent in 1914. The United States has increased from 11.0 per cent, in 10)4 to 20.3 per cent, in 1010, ?ind Japan has increased for the same periods from 1.1 per cent, to 4.3 per cent.

The estimated revenue from Customs duties is accordingly fiwil at £6,000,000, and the excise beer duty at £360,000, bonded warehouse duty, timber export duty, and other receipts £7000; total, £6j367,000.

LAND AND.INCOME-TAX DEPARTMENT.

The net receipts in this Department for the'past year amounted to £7,-027,-(iGS (land tax £1,557.903, income tax .-66.380.7f1n. including £OO6O penal tax imposed imiler Section 144 of the Land and Income Tax Act, 1910, for evasion), and compared with the collection for the previous year show an increase of £105,630. The land fax receipt?, were £1,557.003. The income'tax receipts were £6,300,765. ' POST AND TELEOKAPH DEPARTMENT. ' The amount of revenue collect-M hy the Department during the year \va* £2,000.757. The principal items were: Postage, •£1,013,020; telegrams, £601.221; telephone exchange receipt', £419.318. The Post Office Pavings bank business was exceptionally Hi rpco, 'the deposits totalling £20,758,448 The withdrawals totalled £25,002,378, leaving an excess of deposit* over withdrawals for the year of £3,706,070. This is over a half-million move than the excess for ,the previous year. The balance remaining to the credit of depositors at the close of the year 1010 was £38,303,130, as compared with £lO,048,020 at the end of 1014. The interest credited to depositors for the year 101!) exceeded a million sterling, the figures being £1,178,035. ! From the Ist April, 1020, the rate of interest credited to deposits in the Post Office Savings bank has been Taised from 3? per cent to 4 per cent/for the amount of each account under, £3OO. and from 3 per cent to 3i per cent far ns much of each account as exceeds £3OO but does not exceed £IOOO.

The postal note business for the year 1010-20 shows a slight decrease, but this is more than made up by increased money-order business. The aggregate number of money-orders and postal notes issued was 2,008,919, and the amount paid out £5,149,714. The sale of war loan certificates by the Post Office has reached the sum of £4,504,675.

It is expected at an early date to establish trial aerial mail services, which will be developed as facilities for the landing, housing, and repairing of machines are completed. "The use of mator vehicles for the expeditious transport of mails has proved an unqualified success and it is intended to extend their use as soon as cars are available.

The experiment of the Government in introducing the Post and Telegraph Department Act, 1918, which provided for the nromofion of officers by merit alone, has proved an unqualified success. LAND SETTLEMENT. During the year 170,836 acres were acquired by the Land Purchase Board at a cost of £1,929,435 for the purposes of the. Discharged Soldiers' Settlement Act, 1915, whilst, 25,001 acres, costing £423,017, were purchased on behalf of individual soldiers under the provisions of section 3 of the Discharged Soldiers' Settlement Amendment Act, 1917. The Government is continuing the promotion of the closer settlement of the fer.tile lands of this Dominion, thereby providing a health-giving occupation in which our settlers continue to develop those enduring qualities which make for national greatness and ensure the future safety of the country. During the- eight years ended the 31st March, 1920, there have been 23,021 subdivisions of land, affecting 4,858,340 acres. g DISCHARGED SOLDIERS' SETTLEMENT ACCOUNT. Twelve thousand four hundred and fifteen returned soldiers have been placed on the land at a cos.t of £12,010,204, whil&t advances made amounted to £B,904,380. The repayment of advances, etc., was £134,000.

Authority was provided to borrow up t<> £14,000,000; and it was anticipated tlmt this would lmvc given ample financial authority until Parliament met and decided to what extent the fund should be further committed. From August, Ml!), until the end of the financial year, applications for loans recommended by the various Land Boards have averaged over £1,000,000 monthly; and up to the end of April last the total commitments for loans amounted to approximately leaving £500,000 available for further issue. As there appeared to be. no diminution in the number of recommendations for loans, the balance available had to be employed mainly for the assistaiipe of soldier settlers in improving and stocking their holdings. Applications for loans considerably in excess of the borrowing powers have been received; and you will be asked to provide further authority. The demand for suitable lands by discharged soldiers continues; and up to the end of tiie financial year 8,402. soldiers were placed on sections, either acquired for itlie purpose, or on ordinary Crown lands, which have become available by Native land purchases or the expiry of existing leases, or on private ' lands. The total area proclaimed under the iDischftreed Soldiers' Settlement Act,

]!)].">, tip .to the 31 At March, 1(120, is 883,301 acres, of which 376,678 acres were proclaimed during the year; and during the same period forty-three estates, comprising 52,022 acres, were offered by ballot and practically all dis-/ posed of. ) The number of forfeitures has been very small. In some cases, where the lessees have not been able to cr.rry on owing to war disabilities, transfers to more suitable discharged soldiers have been allowed.

Already permission has been given to acquire the freehold by men who have selected on lease.

It has teen found necessary in certain oases .to grant remissions of rent, but in the majority of cases, where such men have not been able to meet their liabili tics for good.reasons, relief has been afforded by postponement of rent, free of interest.

Owing to the dearth of houses, applications discharged men for advances to buy or build homes were numerous. Up to the 31st March last 6,363 returned soldiers had been authorised advances.for this purpose, the total amount being £4,137,058. 4 STATE ADVANCES., Since, the war ended, enormous demands have been made by local bodies upon the Department for loans for various public works, and the opinion has been expressed that lafger advances should be made. Whilst careful consideration has been given to this view, I am convinced that it is inadvisable at the present juncture .to extend the limit. The business done during the year was settlers, amounting to £1,031,855; 1,083 to workers, amounting to' £420,465; and 220 to local bodies, amounting to £717,160: in all, £2,160,480. The amount advanced since the Department commenced operations to the 31&t March, 1020, is—to settlers, £lB,765,780; to workers, £3,785,805; and to local bodies, £3,411,745: making a total of £25,063,420. , Since local bodies were empowered last session, by an amendment of the Local Bodies' Loans Act, to borrow money from the State Advances OHice for the purpose of erecting workers' dwellings, thirty-seven applications, amounting to £200,225, have been entertained. Altogether, the amount, granted during the year under the Workers, Settlers, and Local Authorities Branches for the.purpose of building and purchasing homes is £1,274,715. WAR EXPENDITURE.

At (lie end'of the financial year 101020 the war expenditure for this Dominion, including gratuities and advances outstanding, was £76,030,826. The payment of war gratuities at the 31st March. 1020, absorbed £4,017,638 out of £5,552.000 provided for last session, leaving a balance of £034,362 still lo be paid. Retrospective married, children's, widowed mothers', and other dependants allowances have absorbed the sum of £706, SO4. j Although the Soldiers' Financial Assistance Board has practically completed its operations, a few cases- of hardship are still being brought under its notice. The sum of £54,063 was actually disbursed during the year ended 31st .March"; 1020'. while the total assistance granted to the same date was £201,218. REPATRIATION. Up to the 31st March, 1920, ithe expenditure incurred by the Repatriation Department in. re-establishing discharged soldiers in civil life amounted to £l,041,360, of-which sum £088,144 was actually paid to or on behalf of the soldier, the balance, £53,222, representing cos.; of administration.

Collections by the Department in reduction of loans advanced amounted on the 31st March, 1920, to the sum of £117,011, and nil additional £5,178 had been collected as interest.

The above extremely satisfactory results are largely owing, firstly, to the praiseworthy nanner in which the returned soldiers who have been assisted in establishing themselves in small businesses have responded to the efforts on their behalf, and, secondly, to the exertions of the local committees, many of whom have given their services gratuitously, MINING. , The value of minerals entered for exportation and of the coal produced in the Dominion during 1919 amounted to £4,424,089, as against 088,168 during the previous year. Though an increase of £730,521 is shown, with the exception of mercury and kauri-gum a decline was experienced in the production of all minerals. The decline was due to the increased cost of labor and all materials, to shortage of labor, and to the lower grade of minerals won: Tlie State collieries produced 107,595 tons of coal, as against 288,119 tons during the preceding calendar year. The profit on winning coal at the mines was £5,787, and the losses made by the depots was £5,760, thus leaving a credit balance of £2l on the year's transactions. The total output of coal from the' mines of the Dominion for the year 1919 was 1,847,548 itons, a decrease of 180,402 tons as compared with the previous year. The decrease in coal output may be attributed to shortage of labor, industrial and other troubles. DEPARTMENT OF INDUSTRIES AND COMMERCE. Under legislation passed last session this Department has been organised for the purpose of cr.n-ying into effect the policy of the Government to encourage existing industries in every possible way, to create N ncw ones, and to prevent as far possible Hhe exploitation of bath producers and consumers.

COST OF LIVING. I.t would be futile to attempt to review the wliole of the causes of the increased cost of living, which constitutes a world-wide problem which all Governments are at present actively engaged in attempting to solve. Where the supply of goods fall short of the demand higher prices are inevitable; and reduced ' production, from whatever cause it may arise, intensifies the difficulty. The extent to which the Government can successfully arrest rises in prices in such circumstances constitutes a complex question, but active measures for the limitation of profits have been adopted, and these will be continued and strengthened. A wave of extravagance lias undoubtedly followed in the wake of the war, and people must realise that if they spend over-frcely they raise prices against , themselves. By practising thrift one of the important causes of the rise in prices may be cheeked. .

It can still be claimed by this Dominion that we arc better oil than any other part of the world not only in respect of food prices, but in the general level of prices. The chief cause of complaint centres round the enormous increase in the prices of imported goods, over which no control can be exercised beyond ensuring that the profits made in New Zealand are not unreasonable. COAL CONTROL. The maintenance of essential industries and public services was during the year rendered difficult owing to the steady decrease in the output of the Dominion's coal mines; and hatf It not been for the large importation of coal serious? curtailment or complete stoppage of many important industries and public utilities would have occurred.. The i steady decrease in the output of hard coal in the Dominion collieries since the year 1,914 is shown in the following table: BITUMINOUS COAL. Dominion Minos. Importations. Year. Tons. Tors. 1914 1,494,315 SIS, 070 1915 1,404,40(1 353,471 1916 1,422,047 293,956 1917 1,247,989 291,597 1918 1,122,308 235,332 1919 (approximate' only) 921,136 455,494 This table includes only the hard coal produced and imported, as it is on this, class of coal that our principal industries, services, and shipping depend. Taking the output for the years' 1914 .and 1919, there has bete a drop of over 500,000 tons. PENSIONS. ' The annual value, the total number in force at the close of the year, and the amount of the average pension are as follows: — Number. Total. Avpe. Old Age Pensions 19,993 731,735 36 Widows' pensions 3.444 185,968 54 Maori War 939 43,294 46 pensions . 415 23,543 56 24,791 £984,54# The annual values of the pensions in force on March 31. 1920, are as set out hereunder:— % Annual Average i Number. Value. Pension, iS " £ I Permanent pensions to soldiers 2,130 120,510 59 i Temporary pensions to I soldiers 23,144 1,223,342 53 1 Temporarj' pensions to i dependants (including 1452 children) 1,517 88,473 58 i Pensions to widows | (Including 2313 children) 2,075 238,693 115 I Pensions to other de* ! pendants of de- | ceased soldiers .. 5,705 192,347 34 I / 34,571 £1,869,365 £54 ! I The estimated expenditure for the current year is £1,850,000. The pensions granted to date, and the i annual value thereof, are as'follow:— Annual Value Number. £ 1915-19 34,071 2,289.333 1919-20 15,183 872,627

Grand total 49,254 £3,161,960 The total discharges from the Forces to the 31st March numbered 80,802, and the deaths for the same period lfi,7Sl. NATIONAL PROVIDENT FUND. The contributors io the fur.d ai the 31st December last numbered 16,000. The revenue for the year was £90,000, and he accumulated funds amounted to £325,000. During the year the materpity claims paid out through the fund numbered 3,763, the amount to ordinary contributors being £3,838, and to members of approved friendly societies £12,492, a total of £10,330. The number of new contributors enrolled during the year was 4,683, the largest yet recorded, thus indicating a gratifying recovery from war conditions. FRIENDLY SOCIETIES. The Mortality Reinsurance Fund, it is pleasing to state, shows on compilation of the experience a slightly lower mortality rate than was anticipated at the .time the war risk premium was fixed by the Actuary, and in consequence refunds have been made to the societies in respect thereof. The total number of members insured was 11,635, of whom 1,390 died. The one-half subsidies paid by the Government to assist in covering this loss during the whole war period amounted to £40,445. The Government has aiso authorised grants to assjst the Sick and Funeral Funds on account of the contributions dHe while members were with the Expeditionary Forces, find £23,614 has been paid up to the 31st March. DEPARTMENT OF TOURIST AND HEALTH RESORTS.

The revenue exceeded the estimate by £7,519, being £42,219 against £33,680 for the previous year. The Government recognises that there are many developments necessary in connection with (the tourist attractions of this country which have 'been restricted during the last five years, but which would have been carried out under normal conditions. So far as additional buildings are concerned, these will be deferred until the difficulties in connection with the erection of houses and schools have been overcome, or, at all events, greatly relieved. PUBLIC WORKS DEPARTMENT. The principal public works upon which expenditure is concentrated at present lire: —(1) Railway construction; (2) construction and maintenance of main roads; (3) development of hydro-eleotric power. Railway lines of paramount importance to the whole Dominion are being pushed forward, as the necessity is recognised of concentrating all available material, machinery, and staff on certain lines until they are completed. • SUPERANNUATION FUNDS. The total number of contributors to the fund on the 31st December last was 14,229, and the total revenue for the year was £327,297. The total amount expended during the year was £160,705. The total*number of Allowances existing at the end of the year was 1,885, ■representing an aggregate annual payment of £120,470. The amount of the fotal fund invested on the 31st December last was £1,203,408. It jj proposed to bring down legislation authorising the construction of railways of a lighter nature than has been adopted hitherto. Thq Department has been devoting a considerable amount of attention to the question of construction and maintenance of main roads, and has collected valuable data, from which a progressive policy will be evolved and placed before the country. As the basis of any such policy is naturally finance, it is proposed to provide a substantial portion of the funds which will be necessary by the imposition of a tire-tax, the money deriv«d from tuch being deflaitaly alio-

cated for the construction and upkeep of main roads. In the development of hydro-eleotric power the Department has adopted a comprehensive scheme, and is now proceeding to carry out the same. STATE FIRE INSURANCE. The total net income for the year increased by £ll,lO6 —from £99,458 to £llo,s64—and the amount underwritten increased by over two millions and a quarter sterling—to £26,160,000. The accumulated funds increased by £42,317, now totalling £256,337. The fund amounted on the 31st December, 1910, to £520,702, an increase of £68,646 for the year. The amount invested was £509,433. The revenue for the year was £142,247. The expenditure was £73,002. The fund amounted on the 31st March, 1920, to £408,232, as compared with £363,804 on the 31st March, 1919. In accordance with the recommendation of the Actuary an extra contribution of £50,000, making in all £75,000, was_ provided in the estimates for 1919-20, and this sum. was duly paid. An actuarial investigation of the fund is now being made. GOVERNMENT INSURANCE DEPARTMENT. This Department has had a very successful year, 4983 new policies, assuring ithe sum of £1,617,795, being issued, which constitutes a record. The total number of policies in force at the 31st December last was 55,770, assuring with bonus additions £15,546,744, and annuities of £23,195 per annum. PUBLIC TRUST OFFICE. The year ended 31st March has been one of marked progress in the Public Trust Office. At the termination of the year there were 14,679 estates under administration, of a total value of £20,860,686. It was also a record one in respect of profit earned, the amount under this heading being £78,246 —out of which the sum of £38,000 will be appropriated as a bonus to estaites under administration, making the total appropriation under this heading £153,000 l up to the 31st March, 1920.

FINANCE. At the end of the liimnci'al year the loans arranged by the Treasury on account of war expenditure amoimte.l to £80,089,025, of which £53,748,780 was .raised in New Zealand, and £25,840.000 was Advanced by the Mother Countiy mainly for the maintenance of our troops in the field. The annual charge for interest and sinking fund on these loans amounts to £4,489,770.

A sum equal to 1 per cent, of the total capital moneys borrowed for war purposes, and outstanding on the 31st March in the preceding year, is paid to the Public Trustee to hold and invest the same with all accumulations of interest thereon; 4 per cent, per annum is received on the investments of the sinking funds, under which it is calcul i ted that each war loan will be extinguished in approximately forty years. PUBLIC DEBT. At the 31st March, 1014, the gross public debt stood at £99,730,427, or a gross indebtedness per head of the European population of £9l 10s 2d. At the end of the financial year 1919-20, the gross debt amounted to £201,170,755. against which sinking funds amounting to £7,257,564 were held, leaving a net indebtedness per head.of £165 3s. It is true that there has been a large increase in the amount of the public debt since March 31, 1914, but we have the satisfaction of knowing that the greater proportion of the new money was rais>d in the Dominion, and that consequently the interest thereon is circulated locally to the benefit of our own people. We owe the principal to ourselves, and it will be a good thing if in future the money which we require for public purposes can be raised in the same way, even if*we have to pay a slightly higher rate of interest. < A considerable portion of the annual interest and sinking fund on the debt, although paid out of the Consolidated Fund, does not fall upon the taxpayer. The functions of the State include such matters as loans to settlers, workers, local authorities; the repurchase of alienated lands; land for settlements, discharged soldiers, State coal, etc.; put of whose reevnues interest and sinking fund charges are met. The gross payments for interest and asking fund amounted to £8,(>74,139, of which £472,455 was recouped from State Advances Office, and £952,258 from Land for Settlements and other accounts, making, total recoupments £1,424,713, reducing the net charge to the revenue to £7,249,426, or £6 3s 6d per capita.

SURPLUS. I propose that the surplus for 1919-20 be ocarried forward to assist the Consolidated Fund during that portion of. the year when the expenditure largely exceeds thp revenue. LOAN CERTIFICATES. You \fill be asked to sanction the continuous issue of Post Office investment certificates, secured upon the public revenues of the Dominion, receipts from the sale of which will be utilised for the purposes of any loan which may have teen authorised by Parliament. £2,000,000 PUBLIC WORKS LOAN. In response to a fairly constant demand for investment at 5 per cent, of sums in excess of the limit of £SOO imposed in connection with the issue of Post Office 5 per cent, inscribed stock, I decided to make available to the public securities to the extent of £2,(100,000, with n currency of ten years, bearing interest at 5 per cent., which Is not free of income tax. The money so raised is to be applied for public works purposes, including railways improvements and hydro-electric supply. TO* BE PROVIDED BY LOANS. The following table indicates the amounts required to be raised by way of loan during the twelve months commencing July 1, 1920: — £ Discharged Soldiers Settlement Acpount 5,000,000 Land for Settlements Account (on account of discharged soldiers) 2,500,000 Public Works Fund 3,000,000 Electric Supply Account 650,1)00 Education Loans Account 500,00(1 nousins Account 1,000,000 Railways Improvement Authorisation Act Account 450,000 Nauru and Ocean Islands Account 600,009 Total £13,700,009 In addition ,to the above the Treasury will be required to provide approximately £1,000,000 - for other developmental services and State activities, and, as previously pointed out, £10,105,457 for lout falling dut.

COMPULSORY LEVY. In view of the necessity of providing money for such urgent public requirements as housing, discharged soldiers settlement, and loans redemption, you will be askt'd to grant authority for a compulsory levy should the appeal, for voluntary subscriptions at fair and reasonable rates of interest result in a deficiency. I trust, however, that the Government will not find it necessary to make such a levy, and that those who. have loanable capital hvailable and whose wealth has so largely increased during recent years will freely recognise that the claims of the State siiould be met. SHIPPING AND MAIL SERVICES. An accelerated shipping and mail service between New Zealand and Great Britain is essential. Now that the Panama Canal is available, a thirty-days service is not too much to expect, and the Government is endeavouring to bring this about, also to secure improved transport conditions generally. I may add that' particular attention is being given to the development and encouragement of New Zealand trade with the Islands of the Pacific. SCIENTIFIC RESEARCH. During the present session steps will be taken to give effect to the recommendations of the Industries: Commission, the New Zealand Institute, and the New Zealand Hoard of Science and Art regarding scientific research. The Board of Science and Art, which was set up in 1913, will he converted into a Board of Science and Industry, and its powers and scope of action enlarged. By this means it is hoped that scientists will be encouraged to nuke investigations with the object of improving and enlarging our native industries. In the past this hag been done in a spasmodic manner, but in the future the Board will be given greater opportunities. Scientific research may he carried into every branch of industry and by-products turned to commercial profit. In the primary industries of agriculture and mining there is a vast field for scientific research.

TOWN PLANNING. The important question of town planning is being considered. If the Bill cannot be put through in the present session it is proposed to appoint a town planning expert, whose services will be available to all local bodies, and who will be able to advise tfpon the best and latest ideas in this important branch of local government. i TAXATION AND FINANCE. I regret that I am unable to hold out any immediate prospect of an appreciable reduction in taxation; indeed, it may have to continue on the higher basis for some time. The expenditure arising out of the war and the increasing demands of every, branch of the Public Service render it necessary to conserve our revenues. For the last two financial years the expenditure •of the Consolidated Fund shows increases of £3,553,311 and £5,108,325 over the expenditure of the financial year immediately proceding, but the revenue increases were only £2,146,150 and £3,728,(188 respectively. The Government has given serious consideration to the problems of taxation, and measures of reform wil!;he introduced having for their object the distribution of taxation equitably and in accordance with the rapidly changing conditions of life and industry.

A Finance Committee lias been set up in the House of Representatives and the financing proposals of the Government, including Bills dealing with stamp and death duties, land and income tax, and other revenue producing legislation, will be referred to this Committee for consideration and report, even though, as I have indicated, I may not T>e ablg to ask Parliament to reduce taxation or do without any of the aggregate amount of revenue collected at present. There are anomalies which require to he removed, and adjustments may be made which will relieve certain sections of the community who under present conditions feel they are being called upon to pay more than their fair share of taxation. ESTIMATED REVENUE. For the year 1920-21, under the main heads of each of the important departments, I estimate the revenue at:— £ Customs 0,000,000 Railways G,000.001) Stamp and death duties 3,007,0011 Post and Telegraph :. 2,650,000 Lund and Income Tax 7,905,000 Boer duty 360,000 Registration and other fees 180,000 Amusement Tax ÜB,OOO Marine (18,500 Miscellaneous 1,070,700 Territorial revenue 179,300 Endowment revenue 124,200 Other receipts 10,000 £27,712,700 I estimate a surplus for the year 14)20-21 of £819,203, which is available for the supplementary estimates, and is made up as follows: £ Estimated revenue, 1920-21 2J»,712,700 Estimated expenditure 20,893,497 Available for supplementary estimates ( 819,203 DEBATE NEXT WEEK." The reading of the Budget, which occupied just over two hours, was concluded at 9.3'1i, the Premier being warmly applauded at the close of his task. He intimated that the debate on the Statement would commence next Tuesday, and the House adjourned at 9.39 p.m.