War Deficit To Be Met By Public Loans

Taranaki Daily News, 4 June 1943, Page 4

War Deficit To Be Met By Public Loans

Details of account given Based on the best evidence available, the financial requirements of the War Expenses Account up to March 31 next are estimated by Mr. Nash (in millions of pounds) as follows: — Expenditure. £ Navy Army 68.0 Air 34.0 Civil . 16.0 Reverse lend-lease 20.0 Total '. £148.0 Revenue. War taxation 40.0 Consolidated fund 1942-43 surplus and 1943-44 revenue) 5.7 Miscellaneous 0.3 Tatai £46.0 To be borrowed from United Kingdom under memorandum of security 12.0 Lend-lease 40.0 Total £52.0 Grand-- total ................. £98.0 Deficit .... :v: £50.0 In cggayrji. to the army, the estimated expenditure of £68,000,000 represents a decrease of £20,900,000 compared with last year's .expenditure. This is the result, in the main, of the reduced requirements, tapering off of capital expenditure in New Zealand, and a reduction in personpel, while a saving will also be effected in expenditure overseas due to the fact that last year's expenditure included the cost of initial equipment supplied to the forces in the Middle East. The navy estimate represents an increase of £1,500,000. This is due principally to the purchase of additional ancillary vessel§ and to additional pay and allowances consequent upon increased personcel. Air Force Development. t/JTor the air this year's estimate of £34,000,000 represents an increase of £9,700,0(Kh Substantial development has taken place in the air force. Not only has there been a large increase in the equipment and personnel, but there has been a corresponding increase in pay and allowances. There has been an increase in all headings of air force expenditure, with the main exception of aerodromes and buildings, as the capital programme in this respect is rapidly approaching completion. Reciprocal aid to the United i States is estimated this year at a total of £20,000,000. Thie largest item will be foodstuffs, estimated at £9,000,000. Jn addition, buildLng projects are estimated as follows: — Buildings (mainly- hospitals) £2,000,000, camps £2,000,000, warehouses £1,500,000, and miscellaneous £1,000,000, together with a shipbuilding programme estimated at £2,000,000 for the South Pacific and South-west Pacific areas. An amount of £2,500,000 is estimated to be required to meet payment of rentals, provision ' of services (including wharf labour), and purchase of miscellaneous goods to meet United States forces' requirements. The full cost of buildings is met in the first place by the war expenses account, but the charge against reverse lend-lease depends upon whether such buildings will be of use to New Zealand for post-war purposes. If such a use is anticipated, then only a rental charge is made; but if the buildings will be of no practical use, then the full cost is charged against i reverse lend-lease, j Usual Transfer. . The estimated revenue of the war expenses account includes taxation at the existing rates amounting to £40,000,000, together with the usual transfer of £1,500,000 from the consolidated fund and last year's Budget surplus of £4.200,000. Transactions under the memorandum of security agreement with the United Kingdom Government are estimated at £12,000,000, compared with last year's gross total of £15,400,000. The principal item under the lendlease heading of £40,000,000 is the provision of aeroplanes, while oil fuel, equip- j ment, and supplies for the armed ser- ' vices and other essential purposes account for the balance. It is proposed to finance the deficit to the extent of £10,000,000 from departmental funds estimated to become available for investment, leaving £40,000,000 to be raised by public war loans, including national savings, Mr. Nash said. In view of the necessity to obtain this huge amount to finance our war effort I have to announce a tHird liberty loan for £35,000,000 open for -subscription from Tuegday, June 1. It is anticipated that the balance of £5,000,000 required can be obtained later in the financial year through over-counter saies of stock or advance subscriptions to the next loan.