THE BUDGET

Taranaki Daily News, 16 August 1922, Page 3

THE BUDGET

LAST TEAR'S FINANCE. fall in revenue. DECREASE IN CUSTOMS. RESULTS OF ECONOMY. Sy Telegraph.—Press Association. Wellington, Last Night. When the House resumed this evening, a motion to go into committee of supply was agreed to, and when Mr. Massey, as Minister of Finance, rose to read the Financial Statement, he was received with applause from all sides of the Chamber. In the course of the Statement the Premier said: The total revenue of the Consolidated Fund for the year 1921-22 amounted to £28,127,007, whilst the expenditure for the same period totalled £28,466,838, the difference being met by the utilisation of a portion of the excess of Customs revenue collected during the previous year. REVENUE. The revenue for the year was estimated at £28,000.000, but the amount collected was £127,007 in excess of the estimate, or £6,133,955 below the revenue of the previous financial year. The details of the revenue for the year ended March 31, 1922, compared with the year ended March 31, 1921, are:—

of £3,313,290 was anticipated, and justifies the provision made for applying the excess Customs revenue collected during the year 1920-21 towards adjusting the disturbance in the equilibrium, due to over-importation. EXPENDITURE. The expenditure under the permanent and annual appropriations to £28.466.838, or £886.516 less than tne amount appropriated by Parliament. It will be remembered .that after a careful examination by the Public Accounts Committee the estimates as originally submitted were reduced by £260,116. A comparative statement of the appropriated and actual expenditure of the Consolidated Fund (ordinary revenue account) for the financial year ended March 31, 1922, is:—

Total expenditure 29,353,354 28,466,838 It is thus evident that the economies introduced by the Government are beginning to take effect, and I am gltul to be able to announce that the rapid annual increase in expenditure disclosed • has been effectively checked. Interest land sinking fund charges increased .by £610.685. and scale increases to the salaries of State employees amounted to £226.443. The small net . increase for the year is. however, more than set off by an asset in the reserve stock of coal held by the Railway Department. The decrease in the rate of expenditure is definite. Conditions, however, are such as to make it imperative that the present rigorous policy of economv must be adhered to. for safe finance demands that public revenue and expenditure should balance. Future expenditure must be subject to careful review, and constant pressure applied to ensure that money is spent wisely, also that the State receives full value for its expenditure

PERMANENT CHARGES. The expenditure on permanent charges compared with 1913-14 shows an increase of £8,638,072. Most of this increase is due to causes beyond administrative control, such as the late war and the effect it had on the cost of living, and also to normal expansion. Deducting the increases for which the war is directly and indirectly responsible—viz.. £7,634,218—the net increase is £1.003,854. of which £446.838 is due to growth of population and increased pension liability. The rapid,fall of our primary products had a marked effect upon the year's operations, but the situation improved with the increase in values. Whilst it would not be prudent to assume that the improvement will continue or that an early return to normal conditions is to be looked for, I am confident that the worst has been passed. It is a matter of congratulation that the difficulty arising out of over-impor-tation, which proved so serious in other parts of the world, has been satisfactorily overcome in New Zealand. The results of the year’s operations within the Consolidated Fund, ordinary revenue account, are summarised hereunder: Receipts during 1921-22: Revenue, £28,1(27,007; expenditure during year, £28.466,838; excess of expenditure over revenue, £339.831; less other receipts, £60,000; net amount required to adjust expenditure and revenue, £279,AOCUMULATED SURPLUS. The balance of the accumulated surpluses brought forward at April 1, 1921, was £8.591.209, including £2,409,251 held in reserve to meet the inevitable drop in the Customs revenue. The balance at March 31. 1922 was £7,531,367, including the unexpended portion of the excess Customs revenue; the reduction being accounted for by the application of £780.011 to debt reduction or capital purposes, and of £279,881 to adjust ordinary revenue and expenditure. PUBLIC WORKS FUND. The expenditure upon public works amounted to £5,461,407, or £2,320,210 over the expenditure for the year 192021. Advantage was taken of the provisions of section 56 of the Public Revenues Act, 1910, to temporarily transfer £500,000 from the Consolidated Fund in anticipation of the receipt of loan money, whereby a saving of interest amounting to £7500 was effected. The activities of the Tublic Works Department have been very considerable throughout the year. It was not possible in connection with railways to carry out the principle of concentration in its entirety, owing to unemployment throughout the country, which has necessitated the carrying on of works in various parts in order to avoid the expense and dislocation which would have been caused by an endeavor to employ all the men requiring work on a limited number of works. As a result, some lines, which would have otherwise been stopped, have been continued. On the more important lines vigorous work is being carried out. and progress satisfying anticipations has been effected.

In connection with road works, the ordinary programme has been speeded up, and work done this year which, but for the necessity of finding employment, would not have been carried out so soon. The number of men employed has risen to about 6500, one-third of these being what are known as relief workers. The legislation prepared last year in connection with the construction and maintenance of main roads has been re-considered. There has recently been a conference between /the Government and the interests.involved, and it is hoped that the difficulties which appeared will be overcome. The work of developing the backblocks is still proceeding vigorously.

HYDRO-ELECTRIC WORKS. The department’s hydro-electric works have been vigorously pushed on; fresh units have been and are being installed at the Lake Coleridge power-house, which will soon reach its maximum capacity of the first development. The Harper river has been diverted into Lake Coleridge, this being the first stage of a complete duplication of the installation, which will be progressively proceeded with. Work at Mangahao has been speeded up. The reticulation in connection with the Horahora scheme has been extended, so that a large area* of fertile country and a number of towns are supplied with power. The returns from this scheme have been very gratifying. The work of enlarging the power-house, with the consequent extensions elsewhere, is in progress. The development of the first stage at Waikaremoana is so far advanced that power wjll probably be available for Wairoa very shortly. An agreement has been entered into with the Auckland Power Board whereby this body agrees to take the whole of its demand from Arapuni power-house as soon as the ■ supply is available, and the Government has agreed to use every endeavor to have power available by the end of 1928.

The rate of progress so far, and the proposals for the future, are such that the present loan authorities will not be sufficient, and necessary financial proposals will be submitted for your consideration in due course. The expenditure for the year was largely increased in order to provide a substantial measure of relief in connection with the unemployed difficulty. I propose to supplement the public works and development accounts by transferring £1.250.000 of the accumulated surpluses, and thus effect a saving Of £25.000. including sinking fund and flotation charges. CUSTOMS DEPARTMENT. The estimated revenue from Customs i duties, including excise beer duty, during the financial year ended March 31. 1922, as compared with the amount actually realised and with the amount collected for the previous year, is as set forth below, viz:—

ed in New Zealand during the financial year was 13,669.777 gallons. This was a decrease of 1,256.849 gallons from the quantity brewed during the financial year 1920-21. During the last four financial years the values of imports and exports have been as follows: —

market values in the country of exportation, plus 10 per cent. The export values are the f.o.b. values. The value of our imports during the last year"was leas than that of the previous abnormal year by the amount of £31,000,000, and the value of. our exports exceeded that of our imports during the year by over £7,600,000. Owing to the fall in the market prices of our products, the value of our exports decreased nearly £4.500.000 as compared, with the amount of exports for the previous year. ESTIMATED REVENUE. It is estimated that the revenue for the present financial year will be as under: £ Customs duties ...... 5,160,000 •Excise beer duty 650,000 Fees for licensed warehouses and other receipts 15.000 £5,825,000 During last year the savings resulting from economies introduced in this department amounted to £1346. It is estimated that the total annual savings will amount to £3355. The expenditure in 1921-22 amounted to £136,475, and. £108,507 is the current year’s estimated requirement, a reduction of £27,968. LAND AND INCOME TAX. The net receipts in this department for the past year amounted to £7,640,803 (land tax £1,637,816, income tax £6,002,987), which, compared with those for collection for the previous year, show a decrease of £2,297,121. The land tax receipts, compared with those of 1920-21, show a decrease of £51,163. The number of land tax payers who benefited' by the increase in the mortgage exemption granted by the Act of last year was approximately 10,100, and the amount of tax remitted aggregated £lOO,OOO. The income tax receipts, compared with those of 1920-21, show a decrease of £2.245.958. The decrease in income •tax is due to the large shrinkage in the incomes of taxpayers generally, the full effect of which has not yet been realised, but will be shown in the income returns and assessments for the current year. STAMP DUTIES. The revenue for the year amounted to £3,444.504, as compared with £3.745.902 for the previous year, the decrease being due almost entirely to the reduced collections from duty on instruments. The amended provision in the Finance Act, 1920, to increase the rates, and of the Death Duties Act. 1921. to charge interest on duty outstanding, resulted in a considerable increase in . the death duties. The amusement tax is expected to produce additional revenue amounting to £60.600. The amounts collected by way of totalisator. bank note, and amusement taxes are shown hereunder: Totalisator tax, £515.248; bank note tax, £227,080; amusement tax. £103,815. The departmental vote expenditure for 1921-22 was £101,415, but in the estimates for the current year this is reduced by £21,234.

EDUCATION. The expenditure on education services from Government sources during the past financial year has been as follows: Department of Education. £2,580.562: under special Acts, £140,008; primary education reserves revenue, £88.135; national endowment revenue. £71.738; Public Works fund. for buildings, £2469; education loans for buildings, £563.201. Total. £3.446.113. To this should be added the amounts expended from revenue received by the boards from secondarv education and university I reserves. £79.800. making - a total expenditure of about £3.526.000. as compared with £1.420.000 in 1913-14. The increase in the past eight years has therefore been 148 per cent. The increase over last year was due largely to the natural increase in the attendance at the primary, secondary, and technical schools, to an increased expenditure on new buildings of £106,000 (many grants made previously coming to charge during the past year), to arrears of payments for the previous year for technical instruction and other purposes having to be met. and to a considerable increase in the number of students at the training colleges. I have made provision for an amount of £350,000 to be available during the current year for land and school buildings.

Every endeavor has been made to curtail expenditure without seriously affecting essential services. Economies have so far resulted in a total estimated annual saving of £125.000, including £105.000 from the first reduction in the cost of living bonus or increase.

HEALTH DEPARTMENT. Including subsidies, the total expenditure for the year under this heading was £725.810, as against £621,990 in the previous year. The receipts of the department amounted to £64,337, as against £31,628 the previous year. The annual subsidies to hospital boards amounted to £471,711 in 1921-22 as against an estimate of £425.000. Action has been taken in the direction of raising the fees for treatment in State institutions to a figure more nearly approximating the cost of treatment than heretofore, and also to induce hospital boards to do the same. The estimate for the current year is £425,000. For mental hospitals the total expenditure for the year was £384.?315, but the credits, mainly receipts for maintenance and sales of produce and stock, amounted to £115.416, leaving a net expenditure of £269,199, an increase of £7461 over the previous year. THE PUBLIC DEBT. The gross public debt as at March 31, 1922, was £219,054,385, held as follows: • Annual interest charge. Held in £ £ ! New Zealand 110,847,786 5,032,887 Australia 2,287,440 110,314 ■ London 105,919,159 4,461,192 £219,054,385 9,604,393 1 Annual sinking fund charge .... 1,270,792 Total £10,875,185 , ECONOMIES AND SAVINGS. £ Actual in Departments and special Acts from April 1, 1921 2,352,863 Interest and sinking fund charges.. 696,950 Other economies proposed, effected, and in hand a 1,676.000 Total Consolidated Fund 4,725,81" Miscellaneous Departments and accounts 464,606 Grand total £5,l? fir The figures, however, should, I (iU » satisfy honorable members that the 0 tion I am giving to this impor: ter has already brought about results. The estimated saving respsc; a? economies and

course of operation should in the main be realised by the end of the current financial year. I do not suggest that this is a complete programme of what is required to be done, as I am convinced that the most important part of the policy of this country for a considerable time to come (along with energetic development) must be retrenchment and economy. If we profit by the lessons of the last two years, the depression from which we have suffered will not have been an unmixed evil. Every possible effort on the part of the Government, Parliament, and people should be used in the direction of reducing the cost of government, of reducing the cost of production, oi reducing taxation, and consequently keeping the public expenditure within the public income. There will be no satisfaction until this is accomplished, and there should be no slackening-off.

ESTIMATE OF REVENUE. The causes which reduced the revenue of the last financial year will continue to be felt during the current year, especially as regards the land and income tax. I estimate the revenue under the main heads of each of the important departments at: £ Customs 5,160.000 Beer duty 650,000 Railways x 7,200.000 Stamp and death duties 2,726,000 Post and telegraph 2,766,000 Land tax 1.500,000 Income-tax 4,100,000 Registration and other fees 147,000 Marino 52,000 Miscellaneous ~ 1,400,000 Territorial 202,000 National endowment 105,000 departmental and other receipts .. 242,000 Total £26,250,000 ESTIMATED EXPENDITURE. The expenditure for the year is estimated at:— Permanent charges: Civil List 29,831 Interest & sinking fund: Ordinary debt £4,315,667, war debt £4,667,437 8,983,104 Under special Acts: Pensions—civil and military £1,061,096; war £1,650,000 2,711,096 Other Acts, including subsidies for social services .. 1,302,658 13,026,689 Annual appropriations ...x 14,911,526 Total £27,938,215 The estimated expenditure shows a nominal increase of £208,000. ESTIMATED RESULT FOR THE YEAR. To the estimated revenue I propose to add £2,000,000 of the excess Customs revenue of 1920-21, specially reserved for the purpose of meeting the inevitable effect upon the revenue of the years immediately succeeding the period of over-importation. The net surplus brought forward from last | year was £7,531,367, including excess Customs revenue. Securities representing £1,000,000 temporarily invested**- in the railways authorisation improvement account are also included. I propose to transfer £1,250,000 to public works and other developmental accounts, thus reducing our loan requirements for the year( and at the same time making substantial provision for unemployment. The estimated result of the year may be summarised thus:

Balance forward £7,531,367, estimated revenue £26,250,000 —£33,781,367 ; less—estimated expenditure £27,938,215, supplementary estimates £250,000, transfer, public works £1,250,000—£29,438,215; estimated cash balance at March 31, 1923, £4,343,152. This balance will be available during the ensuing year to cover the margin- between expenditure and revenue, and to meet with regularity the Dominion’s commitments without incurring heavy interest charges prior to the receipt of the land and income tax receipts. DEBATE NEXT WEEK. The reading of the Statement, which w r as rather longer than usual, occupied two and a-half hours, and was concluded amidst applause. At the request of Mr. T. M. Wilford (Leader of the Opposition), the Premier agreed to postpone the debate on the Budget until Tuesday evening next, and the House rose at 10.5 p.m.

Tear ended Tear ended March 31, March 31, 1922. £ 1921. £ Customs 5,095,426 8,408.726 Beer duty 458,898. 360,525 Stamp & death duties 3,444,504 3,745,902 Postal and telegraph 2,748,481 2,640,158 Land tax 1,637,816 1,688,978 Income tax 6.002,987 8,248.945 Railways 6.683,236 6,918,492 Registration & other fees 146,548 220,085 Marine 51,849 56,540 Miscellaneous 1,140,478 1,584,995 Territorial National endowment 200,697 219,193 revenue 102,481 100,448 Other receipts 143,596 67,975 Totals 28,127,007 34,260,962 The decrease in the Customs revenue

Appropriated, 1921-22. Actual. 29,884 8,442,278 4,401.999 rermanent vnarges — Civil list Interest and Sinking Fund Under special Acts 31,100 8,512,352 4,640,531 13,183,983 12374,161 Annual appropriations— 82,091 73.843 Legislative Departm's Treasury Department Land and Income Tax 47,330 41,103 Department 66,956 60,533 Stamp Duties Depart117,210 101,415 National Provident and Friendly Societies Department 27,650 24.935 Working railways .. Post & Telegraph 6,492,776 6,473,234 working expenses 2,557,600 2.448,688 Public buildings .... 111,705 109,092 Government domains Maintenance & Im5,748 4,513 pfovanient of roads 64,000 62,280 Maintenance of irrigatlon works .... 2,000 1,295 Native Department .. Department of Ex27,180 22,862 21,478 temal Affairs .... Department of Indus20,716 tries and Commerce 135,758 157,518 Department of Justice Supreme and Magis34,512 45,875 trate’s Courts .... 90,472 101,219 Prisons Department.. 92,815 79,545 Crown Law Office .. 6,550 6,021 Police Department .. 435.910 411,056 Cook Islands 15,256 15,406 Pensions Department Mines Department .. 142.466 138,734 57,779 47,076 Department of Interna! Affairs 408,348 367,062 Audit Department .. Public Service Com25,136 21,685 missioner’3 Office Printing and Sta9,676 8,861 tionery 23.730 Cr.) 10,220 Mental Hospitals .... 301.830 269,199 Department of Health 214,205 223.3R8 Na,val Defence N.Z. Military Forces 342,587 303,517 and Cadets 376.441 373.791 8.426 8,361 12,427 11.982 Non-effective services Rifle Clubs Customs Department Marine Department 21,490 141.228 150,173 39,132 21.316 136,475 151,695 35,762 Department of Labor Department of Lands and Surrey 254,370 215,672 Valuation 62,172 55,278 Electoral 5.950 6,295 Agriculture 331.968 275,176 Tourists 96.404 86,943 Education Department Services not provided 2,659,198 2,580,562 for ■ ■ 2,156 16,169,371 15,592,677 —

Estimated Amount Amount Revenue, realised, collected. 1921-22. 1921-22. 1920-21. £ £ £ . Customs duties 4,900,000 5,095,436 8,408,726 E x c Is e beer duty 500,000 458,898 360,525 Totals ..... 5,400,000 5,554,334 8,769,251 The number of gallons of beer brew-

Imports. Exports. S £ 1918-19 .. .. 26,437,284 32,263,792 1919-20 .. .. 32,162,029 50,776,650 1920-21 .. .. 67,463,269 48,219,672 1921-22 .. .. 36,123,256 43,794,883 The import values represent the