PUBLIC FINANCE.

Taranaki Daily News, 24 May 1921, Page 7

PUBLIC FINANCE.

THE £6,000,000 SURPLUS. EXPLANATION BY ACTING FINANCE MINISTER. NO MONEY TO SPARE ‘‘The surplus of over £6,000,000 shown in the public accounts for the 1920-21 financial year does not mean that the Government has that much money to spare,” said the Acting-Min-ister of Finance (Sir Francis Bell), to a Dominion reporter on Friday. “I was acquainted with the figures when I explained the financial difficulties of the Government some time ago. Mr. Massey told Parliament during the ■ session in March that the surplus was likely to exceed £5,000,000. The surplus is correctly shown in the accounts of the Consolidated Fund, but much of the money has been used for public works. It has been invested in various public works loans. Part of the money has been invested in London towards the payment of next quarter’s interest on the public debt, and is held here for a similar purpose. Then we have to provide for the anticipated decline of the revenue during the current financial year.”

The Minister mentioned that the Government had not borrowed money for public works. The loan raised last year in New Zealand had been for the support of the discharged soldiers’ settlement scheme. General public works and railway construction had continued by the investment of parts of the surplus in the Consolidated Fund, which had provided money also for land drainage, forestry, and other works involving capital expenditure. The remaining balance of the surplus was not more than sufficient to provide for a falling revenue and for possible expenditure in the relief of unemployment this year. “If we (could have carried forward a cash surplus of £6,000,000 on March 31 -there would have been no trouble,” said Sir Francis Bell.

In a brief survey of the accounts, the Minister said that the Customs revenue last year was phenomenal. It rose from £4,830,000 in 1919-20 to £8,408,000 in 1920-21. The huge increase had been due, as most people were aware, to exceedingly heavy impoxiations, far beyond the actual requirements of the country, and the circumstances that had caused this excess would not arise again. The Customs revenue for the current year was likely to be comparatively small. It would have been very much better for the Dominion if the imports and the Customs revenue last year had both been smaller. The Government had collected a large amount of revenue, but money had been sent out of the country to an abnormal extent to pay for the goods. The income tax, which showed an increase of nearly £2,000,000 last year, was not likely to decline to the same extent as the Customs. Some large landowners would not be paying income tax at the old rates, but he did not anticipate that there would be much falling off in the incomes, for taxation purposes, of large .companies, banks, and trading concerns. Death duties ought not to decline, unless the effect of financial stringency and hard times was to prolong life. Stamp duties on land transfers and commercial transactions would show a decline.

The Minister added that the figures did not modify at all the necessity that he had pointed out already for strict economy in the expenditure of public money. The Government, unfortunately, was nqt in the position of having millions of money to spend wherever the demand for expenditure existed. It was rather in the position of having to count its pence.