FINANCIAL STATEMENT. (In Committee of Supply, 7th August, 1928.) BY THE HON. W. DOWNTE STEWART, MINISTER OF FINANCE.

Appendix to the Journals of the House of Representatives, 1928 Session I, B-06

B.—o,

INDEX. tiOK Administration Expenses, Reduction in .. .. .. .. .. /. 4 Administrative Reforms .. .. .. .. .. .. .. 14 Allocation of Public Debt Increases .. .. .. .. .. .. .. 7 Annual Appropriations .. .. . . .. . . .. .. .. ' 3 Assets set off against Public Debt .. .. .. . . .. .. .. 10 Bank of New Zealand Shares Account . . . . . . . . . . . . 5 Capital Expenditure .. .. . . . . . . . . . . .. . . 6 Charges on Taxation.. . . . . . . . . . . . . . . 15 Customs— Beer Duty .. . . .. . . .. . . . . .. 2 Concessions in .. . . .. . . .. . . . . .. 10 Estimated, 1928-29 . . .. .. . . .. .. .. . . 16 Revenue .. .. .. .. . . . . . . . . . . 2 Debt (see Public Debt). Direct Taxation' .. . . .. . . .. . . . . . . . . 10 Discharged Soldiers Settlement . . . . . . .. . . .. . . 12 Economic Conditions .. .. * .. .. .. .. .. . . 1 Economy in Public Expenditure .. .. .. .. .. .. .. 14 Estimates — 1928-29 .. .. .. .. .. 17 Expenditure compared with .. .. .. .. .. .. 1 Expenditure— Annual Appropriations . . . . .. .. .. .. .. 3 Capital .. . . .. . . . . .. . . . . . . 6 Comparative Decreases .. .. .. .. .. .. . . 4 Comparative Increases . . .. . . . . . . . . . . 2, 3 Estimated, 1928-29 . . . . .. .. . . . . .. . . 17 Hydro-electric Supply .. .. .. . . .. .. .. .. 6 Pensions .. .. .. .. .. . . .. .. . . 3 Permanent Appropriations . . . . .. . . . . .. . . 2 Post and Telegraph Department . . . . . . . . . . . . . 13 Public Debt Charges .. .. .. . . . . 2, 9 Public Works .. .. . . .. . . .. .. .. 5 Roads and Highways .. .. .. .. .. .. . . .. 6 Subsidies to Hospital Boards .. .. .. .. .. .. .. 3 Railways .. .. .. .. .. .. .. .. .. 12 Under Special Acts .. .. .. .. .. .. .. .. 3 Unemployment Relief .. .. .. .. . . .. .. . . 13 Free-of-income-tax Securities .. .. .. .. .. .. .. . . 9 Highways and Roads .. .. . . . . .. .. .. • • 6 Hydro-electric Supply .. .. . . . . .. .. .. . • 6 Indirect Taxation .. .. . . . . . . . . .. .. . . 2 Interest on Public Debt .. .. .. .. . . .. . • ■ • 9 Land-tax .. .. .. .. . . . . . . . ■ .. .. 2, 10 Loans (see also Public Debt) — Conversions and Renewals .. . . .. .. . . .. • ■ 9 Falling due .. .. .. .. .. .. .. .. • ■ 9 London, 1928 .. .. .. .. .. .. .. .. . ■ 6 Paid off .. .. 7 Raised .. .. .. .. .. .. . . .. . • • 7 State Advances .. .. .... .. ... .. .. . 11 Motor-vehicles—Duties, Licenses, &c. .. .. . ■ .. .. .. . . 1 Net Charges on the Taxpayer .. . . .. .. . . ■ • ■ ■ 15

I—B. 6.

B.— 6

PAGE Pensions . . .. .. .. .. .. .. .. .. . ■ 3 Permanent Appropriations, Expenditure under .. .. .. .. .. .. 2 Post and Telegraph Department .. ~ .. .. .. .. -. 13 Post Office Certificates . . . . .. .. .. .. .. 13 Post Office Savings-bank . . . . .. .. .. .. .. 13 Public Accounts Committee . . .. .. .. .. .. .. 1 Public Debt — Assets set off against .. . . .. .. .. .. .. .. 10 Classification of .. . . .. .. .. .. .. .. 8 Domicile of .. .. .. .. .. .. .. .. 9 Free-of-income-tax Securities . . .. .. .. .. ~ .. 9 Charges on account of .. .. .. .. .. .. 9 New Loans raised .. .. .. .. .. .. 7 Redemptions . . .. .. .. .. .. .. 7 Reductions during Year .. .. .. .. .. .. .. .. 7 Renewals and Conversions .. .. .. .. .. .. .. 9 Reparation-moneys applied in Reduction of .. .. .. .. .. 7 Repayment Scheme .. .. .. .. .. .. .. .. 3 Summary of Year's Operations .. .. .. .. .. .. .. 8 War-debt Charges .. .. .. .. .. .. .. .. 8 Public Works Expenditure .. .. .. .. .. .. .. .. 5 Racing Taxation . . . . .. .. .. .. .. .. .. 11 Railways . . .. .. .. .. .. .. ~ .. .. 12 Revenue — 1927-28 .. .. .. .. .. .. . .. .v 1 Estimates, 1928—29 .. .. .. .. .. .. .. .. 16 Review of Financial Position .. .. .. .. .. .. .. .. 14, 16 Roads and Highways .. .. .. .. .. .. .. .. 6 Rural Advances Bonds . . .. .. .. .. .. . . .. 12 Rural Intermediate Credit .. .. .. .. .. .. .. .. 14 Social Services, Extensions of .. .. .. .. .. .. .. 15 Stamp and Death Duties .. .. .. .. . .. .. . . 2 State Advances .. .. .. .. .. .. . . . . . 11 Summary of Year's Operations .. .. .. . . .. . . . . 4, 18 Supplementary Estimates .. . . .. . . .. . . 17 Surplus, 1927-28 .. .. .. .. .. .. .. .. 4 Taxation— Charges on .. .. .. .. .. .. .. .. .. 15 Customs Duties .. .. .. .. .. .. .. .. .. 10 Direct . . .. .. .. . . .. . . . . . . .. 10 Indirect . . .. .. .. .. .. .. . , .. 2 Land-tax . . .. .. .. .. .. .. .. .. 10 Racing Clubs .. .. .. .. .. .. . » ... .. 11 Receipts from .. .. .. .. .. .. .. .... 2 Reductions and Remissions .. .. .. .. .. . . .. 11 Review of . . . . .. . . . . . . . . .. . . 11 Reparation-moneys applied in Reduction of Public Debt . . . . .. .. 7 Revaluations under Discharged Soldiers Settlement Acts . . .. .. .. 12 Treasury Bills .. .. . . .. .. .. 5 Unemployment Relief Subsidies .. . . .. .. .. .. 5, 13 War-debt Charges . . .. .. ' .. . . . , . . .. 8, 15

II

Economic conditions during year.

Financial results,

Revenue,

B.—fi

1928. NEW ZEALAND

FINANCIAL STATEMENT. (In Committee of Supply, 7th August, 1928.) BY THE HON. W. DOWNTE STEWART, MINISTER OF FINANCE.

Mr. Hockly,— It will be remembered that in the last Financial Statement the opinion was expressed that the year would prove a difficult one in public finance. The year had opened with an adverse trade balance; industry was still depressed, and there was unemployment. In May the overdraft rate was increased, the withdrawals from the Post Office Savings-bank exceeded deposits, and generally difficult economic conditions temporarily prevailed. These factors were reflected in falling revenues and added financial burdens for the State, and a decrease in the two principal sources of revenue, Customs and Tncome-tax, was inevitable. But the extent of the falling-off, complicated as it was by changes in the rates, was difficult to estimate, and very doubtful until well on in the financial year. That part of the expenditure which is within the scope of administrative control had to be very carefully supervised throughout the year. As a result of a rigid control the expenditure for the year under annual appropriations was £240,000 below the amount appropriated. This must be regarded as satisfactory when it is remembered that the estimates had previously been drastically overhauled, first by an expert departmental committee, and later by the Public Accounts Committee. The total expenditure under both permanent and annual appropriations fell short of the Budget estimate by about £90,000 (after excluding certain changes arising out of legislation passed last session), while the revenue for the year slightly exceeded the estimate. The deviation from the Budget estimate, however, was less than \ per cent, either way, and the result was a surplus of approximately £180,000, which is as close to a balance as could be hoped for, considering the magnitude of the figures dealt with and the many uncertain factors involved. It is contended in some quarters that the Government deliberately and consistently budgets for a large surplus by underestimating revenue and overestimating expenditure. I can assure honourable members that such is not the case, and last year's results bear out my statement. REVENUE. The revenue for the year amounted to £25,123,980 (as shown by the accounts : published in 8.-l, Part I, and the tables attached to this Statement), but this total includes a new item — viz., " Motor-Vehicles — duties, licenses, &c., £369,118." Excluding this for comparative purposes, the revenue totalled £24,754,862, as against £24,943,107 received in the previous year, a decrease of £188,245.

2—B. 6.

B—6

The new item " Motor-vehicles — duties, licenses, &c.," inchides a portion of the year's receipts for tire-tax, license fees, and fines, together with the amount received from the tax on motor-spirits for the three months during which the tax was collectable. Prior to the passing of section 24 of the Finance Act, 1927 (No. 2), the receipts from tire-tax, license fees, and fines were credited direct to Main Highways Account. Details of the total amounts received under the several headings will be found in the accounts for the Main Highways Revenue Fund published in 8.-l, Part. T. Though brought into the Consolidated Fund in the first instance, the revenues collected from these items are not available for general purposes, but, less costs of collection, must be transferred to the Main Highways Account, or distributed among local bodies in accordance with the Acts of Parliament governing the same. Although applicable for a special purpose, the aforesaid revenues are, nevertheless, part of the proceeds of taxation. The taxation receipts available for general purposes amounted to £.16,484,788. a decrease of £419,899 in comparison with receipts for the previous year. The net decrease in the yield from direct taxation was £97,724. Income-tax receipts, notwithstanding the anticipated additional revenue incidental to the adjustment in rates made last session, fell short of the previous year's figure by £148,487, but for reasons already stated this was expected and was allowed for in the estimate. Land-tax showed a comparative decrease of £74,588. This decrease is attributable mainly to the annual shrinkage due to subdivision of holdings, to the reduced amount of arrears to be collected, and to the fall in values of country lands on revision. Due to these reasons there has been a steady fall in land-tax over the last few years. The decreases in land and income tax were largely 'offset by a comparative increase of £125,351 in the revenue from stamp and death duties. The greater part of the fall in the revenue from taxation was on account of indirect taxation, Customs revenue showing a comparative decrease of £309,986 and beer duty of £12,189. The decrease in the former case arises out of the falling-off of approximately £3,750,000 in imports which followed the adverse trade balance of 1926-27. An analysis of the Customs duties collected during the last two years will be found in the Appendix (Table No. 7) of this Statement. In addition to the receipts from taxation, there is also included in the year's revenue the receipts derived from interest-earnings, sundry revenues, and recoveries from different State activities, amounting to £8,270,074, and representing a net increase of £231,654 over the previous year. This result arose mainly out of an increase in the following items: Post and Telegraph receipts, £96,702 ; interest earned on investment of public moneys, £96,837 ; interest on railway capital liability, £87,434: which increases were, however, partly offset by decreases in other items. EXPENDITURE. The net expenditure of the Ordinary Revenue Account for the year amounted in the aggregate to £24,944,904, as against £24,355,965 for the previous year. The year's total, however, included £357,773 for the petrol-tax, tire-tax, licenses, &c., which was offset by the new revenue item referred to above. The true comparative net increase was thus £231,166, made up of an increase of £256,660 under permanent appropriations, and a decrease of £25,494 under annual appropriations. The principal items of expenditure will be found set out in Table No. 8 attached to this Statement. Permanent Appropriations. The expenditure under this heading, which covers debt charges and payments made in pursuance of various Acts of Parliament, amounted last year to £14,879,378. This total includes £9,757,602 for debt charges, as follows : — £ Interest .. .. . . .. .. 8,397,074 Debt repayment .. .. .. .. 1,360,528 Total .. .. .. .. .. £9,757,602 Fi •sii

Motor-vehicles — duties and licenses.

Taxation receipts Direct taxation.

Land-tax.

Stamp and death duties. Indirect taxation.

Revenue other than taxation.

Expenditure.

Permanent appropriations. Debt charges.

2

Debt-repayment system.

Expenditure under special Aets of Parliament.

Comparative increases.

Pensions.

Annual appropriations,

3

8.—6.

The new loans raised during the year led to an increase in the gross amount of interest paid, but this was more than met by increased recoveries from interestearning accounts, with the result that the net expenditure on this item showed' a comparative decrease of £53,720. This satisfactory result demonstrates the soundness of the Government's policy of restricting the use of borrowed capital as far as possible to expenditure on productive assets. The expenditure on debt-repayment showed an increase of £65,390. I would like to emphasize the fact that though the statutory repayment system provides for a steadily increasing annual repayment of debt, the increases are not an additional burden on taxation, but represent part of the saving of interest on the debt redeemed. The same remark applies to the funded-debt agreement with the British Government. Thus the steadily increasing amount for debt-repayment is provided without increasing the annual burden on the taxpayer. Moreover, the greater part of the original annual charge under the Repayment of the Public Debt Act, 1925, does not come from taxation, but from interest on the Public Debt Redemption Fund. That Fund consists of the old Sinking Fund accumulations and the amount of the accumulated surpluses invested in the Discharged Soldiers Settlement Account. This debt-repayment system, and also the funded-debt agreement with the British Government, operate on the same principle as a table mortgage ; and it is interesting to note that the Chancellor of the Exchequer in Great Britain proposed in his last Budget to introduce a somewhat similar scheme in connection with the repayment of the British public debt. The balance of the expenditure under permanent appropriations, amounting to £5,121,776, consists of payments, mostly recurring, made in terms of various Acts of Parliament, the chief items being pensions, subsidies to local bodies and hospital boards, and losses on isolated sections and branch lines of the railways. In total this is an increase of £602,763 in comparison with the expenditure for 1926-27, but it includes the £357,773 petrol-tax, tire-tax, &c., mentioned above, and also another new item of £125,000 for the first instalment of the Dominion's contribution to the Singapore Base. Apart from these two new items, the comparative net increase is £119,990. Principal increases are : — £ Subsidies to Hospital Boards .. .. .. 72,651 Pensions .. .. .. .. .. 90,526 Railways (losses on isolated sections and branch lines) .. 55,591 Against these increases there are sundry decreases, among which might be mentioned fruit guarantee claims, £82,642. There was no expenditure under this item last year. Concerning pensions, a steady increase each year is to be expected in the case of old-age and other pensions governed largely by population. Of the increase for last year, however, £24,214 was on account of war pensions, which up till then had been steadily declining at the rate of over £50,000 a year. The main reason for the change is that many of the ex-soldiers are only now feeling the full effect of their war injuries, and this liability is likely to increase. Other countries have had a similar experience. Annual Appropriations. The net expenditure under annual appropriations amounted to £10,065,526, a decrease of £25,494 in comparison with the previous year. An examination o the comparative tables attached to this Statement will show that there was relatively little variation in the expenditure under the various votes. An increase of £41,776 is shown for "Scientific and Industrial Research," but the bulk of this is nominal, being the cost of activities previously charged to other votes. An increase of £43,540 for vote Agriculture "is mainly due to the increased amount of the subsidy on the carriage of fertilizers for far ners. The expense? of the Lands and Survey Department increased by £17,159, chiefly on account of activities in connection with deteriorated lands.

Principal decreases.

Administrative expenses.

Summary of year's operations.

Result in funds of Ordinary Revenue Account.

B.- 6.

4

The principal decreases in votes are as follows £ Post and Telegraph Department .. .. .. 46,380 Naval Defence .. .. .. .. .. 40,193 Maintenance of Public Buildings .. .. .. 28,534 Internal Affairs .. .. .. .. ..53,137 The last named was partly nominal, being offset by the increase under •' Scientific and Industrial Research," but otherwise was due to the fact that last year's expenditure included the cost of tin census and the expenses of the visit of T.R.H. the Duke and Duchess of York. An analysis of the total expenditure under annual appropriations shows that, compared with the previous year, there was a decrease of approximately £90,000 in administrative expenses. Against this there was an increase of £65,000 in grants, subsidies, and other miscellaneous payments, leaving a net decrease of £25,000 in the total expenditure, as stated above. SUMMARY OF YEAR'S OPERATIONS. Transactions for the year resulted in a surplus, viz. : — Revenue. £ £ Revenue (proper) .. .. .. .. .. 24,549,413 Departmental receipts .. .. . . . . 560,803 Recoveries on account of expenditure of previous years 13,764 Revenue for year .. .. .. 25,123,980 Expenditure. £ Permanent appropriations .. .. 17,508,985 Less credits in reduction .. .. 2,629,607 14,879,378 Annual appropriations .. .. .. 11,883,900 Less credits in aid .. . . .. 1, 818, 374 10,065,526 Net expenditure chargeable to year's revenue 24,944,904 Surplus .. .. .. .. £179,076 The following shows the result in the funds of the Ordinary Revenue Account at the end of the year : —• £ Balance forward, Ist April, 1927 .. .. .. 3,681,466 Add— Surplus, 1927-28 .. .. .. .. .. 179,076 Temporary transfers to other accounts repaid .. 26,000 3,886,542 Less — £ Used for reduction of debt .. .. 95,979 Instalments csf purchase price of C long-term mortgage shares in Bank of New Zealand 117,188 Transfer to Public Works Fund — General Purposes Account .. .. 250,000 Advance to State Forests Account .. .. 45,000 Sundry charges and expenses of renewing loans 1,037 Subsidies to local bodies for relief of unemployment .. .. .. 75,106 — 584,310 Balance, 31st March, 1928 .. .. .. £3,302,232

8.—6

The balance was held as follows £ Cash .. .. .. .. .. .. 1,729,392 Imprests outstanding .. .. .. .. 255,039 Investments .. .. .. .. .. 1,317,801 £3,302, 232 The amount of £117,188 shown above as a payment to the Bank of New Zealand represents a further instalment of the purchase price of the 234,375 C long-term mortgage shares allotted to the New Zealand Government in terms of section 6 of the Bank of New Zealand Act, 1926. A total of £175,781 had been paid up on these shares to 31st March last. Regarding the transfer of £250,000 to the Public Works Fund, the use of surplus revenues for this purpose, and also for debt-repayment, has resulted in the debt charges being £1,000,000 per annum less than they would have been had this policy not been adopted. In particular the transfer was required last year to offset the additional work provided by the Public Works Department for relief of unemployment. The £75,106 paid to local bodies for relief of unemployment represents subsidies on wages and voluntary contributions paid in terms of section 4 of the Imprest Supply Act, 1927. The subsidies earned for last year amounted to £113,000, but the balance of this amount had not been claimed up to the 31st March last, and will be included in this year's expenditure. Unemployment usually coincides with falling revenue, and in times like the present we are fortunate in having an accumulated fund out of which such extraordinary payments can be made. Otherwise there might be no alternative but to increase taxation to meet the increased expenditure. The balance of the Ordinary Revenue Account is now down to approximately £3,300,000, and there has yet to be paid out a sum of £400,000 to the Rural Intermediate Credit Board in terms of the Act passed last session. It is often urged that this balance should be used for reducing taxation; but this would mean that a normal year's expenditure would be in excess of that year's revenue, or, in other words, we would be budgeting for a deficit. Such a course would undermine our reputation for sound and safe finance, which to a borrowing country means savings of a permanent nature in cheaper money that far outweigh any temporary respite that might be obtained by disregarding this principle. This is especially so at present when we are faced with the task of re-financing a considerable portion of the public debt. TREASURY BILLS. Treasury bills in anticipation of revenue, amounting to £250,000, were sold in New Zealand during December at 5-| per cent, discount, and were duly redeemed out of revenue at the beginning of February, 1928. In consequence of the heavy excess of withdrawals from the Post Office Savingsbank which was one of the results of the temporary financial stringency of last year, it was found necessary to sell £1,050,000 worth of redemption Treasury bills in London during November last. Bills to this amount were outstanding at the end of the financial year, but have since been redeemed at maturity out of the proceeds of an issue of debentures in New Zealand. The transactions, of course, had no effect on the amount of the Public Debt. PUBLIC WORKS. The programme of public works was proceeded with last year, and substantial : progress was made towards completion of the large undertakings at present in ' hand. Details of these works will be set out for honourable members in the

Bank of New Zealand shares.

Transfer to Public Works Fund.

Unemployment subsidies.

Balance of Ordinary Revenue Account.

Treasury Bills.

Public works expenditure.

5

8.—6

Statement to be brought down later by my colleague the Hon. the Minister of Public Works. I am at present only concerned with the finance of the several undertakings. The expenditure on capital works for the last financial year may be summarized as follows — £ Railway construction, additions, and improvements .. 2,573,252 Main highways and roads .. .. .. 1,297,141 Hydro-electric supply .. .. .. .. 1,272,575 Telegraphs and telephones . . . . 625,540 Public buildings . . . . . . 605,747 Irrigation, land and river improvement .. .. 273,452 Other public works .. .. .. .. 177,983 £6,825,690 The expenditure on public buildings includes £368,479 for schools. In regard to expenditure on highways and roads, it was necessary to enlarge the scope of operations in the last two years in order to provide employment for additional men. Even so, the State expenditure for roading purposes out of both revenue and capital has risen from about £700,000 in 1923 to £1,945,000 in 1928. The expenditure out of loan accounts, which, as sbown above, amounted to £1,297,000 for last year, has almost exactly doubled in this period. The capita] expenditure on electric supply last year amounted to £1,272,575. which is a record for the account. It was, however, the peak year of the construction programme ; and after the current financial year, when the large works at Arapuni and Waikaremoana will be nearing completion, there should be a considerable decline in capital requirements, although a start is being made on a new scheme on the Waitaki River. LONDON LOAN, 1928. A further loan of £5,000,000 to be expended on public works during the current year was successfully floated in London on the Ist May last. The issue price was £94 10s. per cent., with interest at 4-|- per cent, per annum, which with a full halfyear's interest payment on the Ist November gave a return to investors of £4 19s. Bd. per cent., as compared with £5 os. lOd. from last year's loan, which was 5 per cent, at £99 10s. The cost of the new loan to the State, allowing for redemption of the discount and expenses over the period of 19| years, is £5 3s. sd. per cent, as compared with £5 4s. 7d. for the 1927 loan. The loan was subscribed nearly sixfold ; and this, in conjunction with the fact that the issue at 4| per cent, inaugurated a definite break from the 5-per-cent. rate which had obtained in London for some time, was a striking indication of our financial reputation in that great money-market. The comment on the issue in the London financial papers was very favourable. In terms of the authorities under which it was raised, the loan-money has been allocated as follows : — Public Works Fund, for railway-construction, tele- £ graph and telephone extension, &c. . . . . 3 ,000,000 Hydro-electric-power works . . . . 1,000,000 Railways improvement . . . . . . 1,000,000 £5,000,000 Along with this issue there was a conversion offer, to which I will refer later when dealing with the debt transactions.

Highways and roads.

Hydro-electric suppy.

London Loan, 1928.

6

8.-6

PUBLIC DEBT. The gross public debt as at the 31st March, 1928, amounted to £251,396,252, a net increase of £5,545,363 during the last financial year. In round figures, the net increase in the debt for each of the last three financial years was as follows : £11,000,000 in 1925-26, £7,000,000 in 1926-27, and £5,500,000 in 1927-28. These figures clearly demonstrate that the Government is proceeding resolutely with its declared policy of steadily reducing the annual net increase in the debt, without, however, in any way hindering the progress of the large capital works at present under construction. The new loans raised during the year totalled £8,022,499, of which £6,166,749 was raised in London, while the balance represents the proceeds of the usual local sales. A total of £6,996,749 was allocated to the Public Works Fund (General Purposes Account), Electric Supply Account, Railways Improvement Authorization Act 1914 Account, and other accounts from which the capital works previously referred to were financed. A sum of £890,000 was made available for the State Advances Office, part of the amount being used to start the new Rural Advances Branch. The balance of the new loan-money was raised for afforestation and other purposes. As a set-off against the new loans raised, debt to the amount of £2,477,136 was redeemed during the year. This debt was domiciled as follows : — £ New Zealand .. .. .. .. 1,960,620 Australia .. .. .. .. .. 48,600 London .. .. .. .. .. 467,916 Total . . .. .. .. . . £2,477,136 The London redemptions include £100,211 in addition to the funded-debt payment to the British Government. These additional redemptions are a new departure carried out in accordance with an undertaking contained in the prospectus of the 1927 loan. A more definite undertaking to apply not less than 50 per cent, of the annual amount available under the public-debt-repayment system to London redemptions, provided the same can be effected to advantage and New Zealand maturities do not make it inadvisable to do so, was contained in the prospectus of the last London loan. It was considered advisable to take these steps in view of the increased attention being given by London investors to the matter of debt - repayment generally. Incidentally their concern on this point serves to emphasize the importance of a comprehensive scheme of debt-repayment in maintaining the credit of the State. Concerning local public debt, I would like to draw attention to the fact that the redemptions exceeded new loans raised in the Dominion by approximately £100,000. This means that, instead of absorbing any portion of the local capital supplies, the debt-repayment policy had the effect of augmenting the resources of the local market. The reductions of debt during the year were effected as follows : — £ Under Repayment of Public Debt Act, 1925.. .. 999, 811 Under funded-debt agreement wkh British Government 367, 705 Accumulated surplus moneys from Ordinary Revenue Account .. -.. . . . . .. 94,500 German reparation-moneys .. .. .. 366,370 Prom Discharged Soldiers Settlement Account . . 533, 620 From Lands for Settlement Account — Discharged Soldiers Settlement Account .. .. .. 100,000 From other accounts .. .. . . 15,130 £2,477,136

Public debt.

New loans raised.

Debt redeemed.

London redemptions,

Local redemptions.

7

P.—6

The first two items totalling £1,367,516 represent the statutory debt repayment, the money for which is provided out of the Consolidated Fund as a charge upon the year's revenue; but, as I have already explained, only a small proportion of the amount comes from taxation. The major portion of the redemptions for the year were concentrated on the war debt, which was reduced by £1,607,525, bringing the total redemption of war debt for six years up to £9,887,887. The difference between war debt and ordinary debt is very clearly shown by an examination of relative interest burdens on the taxpayer. Of the 1927-28 net charges on the taxpayers, interest on approximately £72,000,000 of war debt amounted to £3,489,334, as against £2,104,672 for the remainder of the debt, amounting to £179,000,000. In other words, the ordinary debt is about two and a half times as large as the war debt, but it costs the taxpayer about £1,250,000 less than the war debt annually. These figures are a significant indication of the measure of relief to be obtained from the repayment of dead-weight war debt, and the soundness of the Government's policy of using all available resources for the purpose. Even though the redeemed dead-weight debt is replaced by fresh borrowing, this will in no way diminish the relief in charges provided the new loans are expended on productive purposes. Further, most of the loans raised for war purposes will mature in the next few years, and for the most part will have to be renewed, probably at slightly higher rates of interest. One of these war loans, amounting to £2,564,460, and bearing interest at 5 per cent., matured in November, 1927. Tt was the largest local war loan that has matured to date. Money from reparations and the Public Debt Repayment Account enabled a total of £861,730, or approximately one-third, to be repaid, and, of the balance, £1,655,620 was met by further issues in renewal or in redemption, leaving £47,110 still outstanding at the end of the financial year. The debt repaid out of the Public Debt Repayment Account is subject to an annual charge of 4 per cent, for further redemptions, but on the whole the maturing loan was disposed of with a small saving in charges to the taxpayer. Over the whole war debt the charges showed a decrease of approximately £50,000 during the year. Summary of Debt Operations for Year. £ Debt as at Ist April, 1927 .. .. .. .. .. 245,850,889 Add new loans raised — £ £ Ordinary .. .. .. 7,112,749 State Advances .. .. 890,000 8,002,749 Balances in Loans Redemption Account raised for redemption but not used as at 31st March, 1928 19,750 8,022,499 253,873,388 Less redemptionsOrdinary .. . . . . .. 208,891 Discharged soldiers . . 660,720 War . . . . . . 1,607,525 2,477,136 Debt at 31st March, 1928 .. .. .. ..£251,396,252 Classification of Debt. Ordinary .. .. . . . . . 139,329,644 War..' .. • . 71,970,636 State advances 31,081,966 Discharged soldiers .. .. .. 9,014,006 £251,396,252

Statutory debt repayment.

Redemptions of war debt.

Comparative weight of war debt and ordinary debt.

Local war loan matured.

War-debt charges.

Summary of debt operations.

8

8.—6

Apart from new loans and reductions affecting the total of the debt, securities amounting to £5,804,736 were renewed, £307,700 debentures converted into inscribed stock, £357,000 inscribed stock converted into debentures, while other conversions amounted to £25,050. Further debentures and inscribed stock to the value of £5,383,720 were redeemed out of the proceeds of the issue of new securities of an equal face value. The last figure includes the £1,050,000 redemption Treasury bills and the redemptions on account of the matured war loan previously referred to in this Statement. A further reduction of £151,725 in the amount of the free-of-income-tax securities was effected during the year, leaving the amount of such securities outstanding on the 31st March, 1928, at £37,574,874. The loans falling due in the next seven years are set out in Table No. 21 attached to this Statement. It will be seen that nearly a third of the public debt will mature during this and the next two financial years. This year's maturities are almost wholly held in the Dominion, and I do not anticipate any difficulties in dealing with them. The first transaction of magnitude to be faced is the 4-per-cent. Consolidated Stock which matures in London in November, 1929. At the end of last year the amount outstanding was £29,490,852, but concurrently with, the issue of the £5,000,000 loan for new money in May last an. offer was made to holders to convert £5,000,000 of this stock into 4-J-per-cent. stock to mature in 1947 at the rate of £104 10s. of the new stock for £100 of the old. This is equivalent to an issue price of approximately £95 14s. for the new stock, giving a return to investors with redemption of the discount over the period of £4 16s. lOd. per cent. After making an allowance for expenses and redemption of the premium over the period of the new loan, the cost to the State works out at £4 18s. 3d. per cent., so that the cost of this portion of the debt has been increased by £45,625 per annum, although the interest bill in the meantime is only increased by £35,125 per annum. As the stock did not mature until next year, it may be said that we could have saved the increase in interest charges for one year. There would, however, have been considerable risk in leaving the whole £29,000,000 to be dealt with at maturity, and the policy followed should result in the placing of the whole of the stock on a more favourable basis than if left to be attempted in one sum at maturity date. Gross debt as at the 31st March, 1928, was held as under :— Where held. Amo £ Ullt New Zealand :. .. .. .. 107,470,429 Australia . . . . .. .. . . 4,168,850 London .. .. .. .. .. 139,756,973 £251,396,252 Gross Annual Charge. £ Interest .. .. .. .. .. 11,070,353 Annual sinking funds .. .. .. .. 7,000 Repayment of funded debt . . .. .. 386,224 Public Debt Repayment .. .. .. 1,053,559 Total gross charges .. .. £12,517,136 The last-mentioned amount, £12,500,000, represents the total gross charges payable in respect of the debt as at the 31st March last, but I would again emphasize that the greater part of it, about £6,750,000, will come from interest-earning accounts, leaving only £5,750,000 to be borne by the taxpayer as such. Of the latter amount approximately £3,750,000 is for war debt.

Renewals and conversions.

Free-of-income-tax securities.

Loans falling due.

4-per-cent. Consolidated Stock, 1929.

Domicile of debt.

Debt charges.

3—B. 6.

9

8.—6

Capital set-off against debt.

As a direct set-off against the total debt there is the Public Debt Redemption Fund which, less the amount written off in connection with the settlement of discharged soldiers, now amounts to £23,125,645, and also certain special sinking funds amounting to £2,635,766 as at 31st March last. Apart from the investments of the special sinking funds referred to, debt securities to the value of £4,813,587 were held by Treasury accounts as at 31st March last. Tn the course of the year's financial transactions securities are bought and sold by Treasury accounts, and the investments held as at 31st March in each year, while forming part of tlie debt, do not represent amounts due directly or indirectly to the public. The £4,813,587 of investments can accordingly be directly set-off against the debt, bringing the total capital set-off as at 31st March last up to £30,574,998. Tn addition, there are, of course, the assets of the Railways, Post Office, State Advances, &c., representing the investment of the productive portion of the public debt. Details of the assets are set out in Table No. 20 attached to this Statement. TAXATION. On questions of taxation and its incidence I endeavour to give careful consideration to the various views and criticisms put forward by chambers of commerce, farmers' unions, and other organizations whose members are brought into close and constant contact with the effect of taxation on business and enterprise. During the recess I discussed publicly the allegation that taxation in New Zealand is unduly heavy. I contend that, in comparison with other countries, this is not so, except in the cases I shall mention hereafter. In my opinion, it is fallacious to divide the total tax revenue by the population and draw any inference therefrom as to whether taxation per head is high or low. We have a large Customs revenue in New Zealand, but Customs taxation is not high —in fact, our rates of Customs taxation are moderate compared with most countries. The large revenue is due to large importations, and not to high rates of duty. Turning to direct taxation, the income-tax on the individual in New Zealand is, admittedly, one of the lowest in the world. On the other hand, the company income-tax is high, and I am of opinion that when the state of national revenue warrants a general reduction in taxation this fact should not be lost sight of. The graduated land-tax is high, but that is for the express purpose of preventing aggregation and enforcing subdivision. In other respects, however, the land-tax is by no means burdensome, as is evidenced by the fact that 55,000 farmers out of 80,000 pay none at all. In one respect the graduated land-tax often operates harshly —namely, where a business has branches in many urban centres. All its sites are aggregated for land-tax, although there is no real aggregation, and in each centre that business has to compete with local rivals who pay no graduated land-tax. But in the two chief sources of revenue, which are also the ones most frequently criticized —namely, Customs and income-tax (apart from company tax) —in my opinion, taxation in New Zealand is low compared with most countries at a similar stage of development. The concessions in Customs duties last year represented a very large sum, affecting items of household use, such as crockery, china, linen, linoleums, cotton goods, and other items. In addition to this, the duty on corrugated iron and British-made silks was removed. Concessions were also made on various classes of industrial machinery and appliances. From the Customs returns during the first few months of this year it would appear that the effect of these concessions in depressing the revenue has been more marked than was anticipated ; in fact, there has been a heavy fall in the revenue. It must be remembered, moreover, that, so far, not only has the revenue from Customs fallen substantially, but receipts from income-tax are estimated to show relatively little increase over last year; and, therefore, the improved conditions in trade and commerce will not reflect themselves to the extent that might be expected in this year's public finances. The liabilities on account of unemployment have also to be taken into account.

Taxation.

Direct taxation.

Land-tax.

Concessions in Customs duties.

10

8.—6

I agree with those who hold that taxation-reduction is one effective method of checking inordinate demands for more expenditure by the Government ; but even after the utmost curtailment of departmental estimates and refusing many urgent and reasonable public requests for further expenditure I can find no sufficient margin that would render a tax-reduction for this year either practicable or safe. On a review of the whole position, I am convinced that we may look forward with confidence to increasing prosperity. That prosperity will reflect itself in the public revenues. These increased revenues should enable a reduction in taxation to be made in the near future. Racing Taxation. 1 have carefully examined the frequent statements by racing deputations that they are being crushed by heavy taxation, i am unable to find any warrant for these statements. In fact, the racing clubs do not ask that the taxation imposed on the public should be reduced, but merely that they should receive a larger share of it. While it is clear that some clubs are in financial difficulties, it is equally clear that these difficulties do not arise from Government taxation. The main source of the racing clubs' revenue is the totalizator-tax, a levy of 10 per cent, on the money put through the machine. The clubs take 7-, per cent, and the Government only 2-| per cent. This tax has not been altered since 1910, so that the frequent statement that the clubs suffer from increased war taxation has no foundation. The 2i per cent, which is handed over to the Government is merely collected by the racing clubs as agents for the Crown, and in no way renders them the poorer. The dividend-tax was increased in 1921 from per cent, to 5 per cent. This is also levied on the investor's money, and the dividend-winner pays it, not the club. It is, like the totalizator-tax, collected by the racing clubs as agent for the Crown, and does not in any way tax the revenues of the club. These remarks also apply to the stakes duty and amusement-tax. It must not be forgotten, too, that although for a short period in 1921 the unpaid fractions of dividends were taken by the Government they were shortly afterwards again conceded to the clubs. These amount approximately to between £35,000 and £40,000 a year. In 1925 1 4 per cent, of the totalizator duty on the first £20,000 (equivalent to £250) was rebated to each club for improvements effected to grounds. This meant a further concession to the clubs of £26,000 per annum of the Government's small share of the totalizator-tax. The clubs also benefited considerably from the general abolition of income-tax on income derived from the use of lands. The stakes duty was reduced from 10 per cent, to 5 per cent, in 1924, a concession valued at £30,000; and the tax of 2| per cent, on payments for admission to the course, valued at £6,500, was repealed last year. To sum up, the remissions and concessions to racing in the last few years are worth over £100,000 a year. My reason for recapitulating these facts is to show that financial difficulties of the racing clubs are due to causes which have nothing to do with taxation. I would suggest for consideration that the most practicable way in which assistance can be given to the smaller clubs is to fix the totalizator-tax on a ( graduated scale, so as to practically exempt the small clubs from taxation. So far the metropolitan clubs have not received this proposal with favour. If, however, there is any assistance within reason that can be granted to the country clubs, I feel sure that when the opportunity occurs Parliament will support it, as it is highly undesirable that all the racing facilities should be concentrated in the cities. STATE ADVANCES. This office continued to render substantial assistance to those in need of capital. < Including £751,900 under the Rural Advances Act, the Department paid over loans amounting to £2,793,030 during the year. In the last five years the Department has paid over to 26,312 applicants loans j amounting in the aggregate to the large sum of £26,692,969. Of this total £11,849,676 has been lent for the erection and purchase —mostly the former —of dwellings.

Taxation position generally.

Racing taxation.

Totalizator-tax.

Dividend-tax.

Stakes duty and amusement-tax. Taxation remissions and concessions to racing.

Suggested means ol assisting small clubs.

State advances.

Loans paid over.

11

Rural Advances bonds.

Discharged soldiers settlement.

Capital reductions and remissions to settlers.

Writing-oil of losses

Railways,

8.—6.

12

In spite of the huge sums that have been advanced, the pressure on the Office still continues, and in many cases applicants have to wait some time before their applications can be dealt with. Though the Department pays its way and the borrowed capital is no burden on the taxpayer, we cannot go on adding unlimited millions to the public debt without damaging our national credit. Further, in my opinion, it is certainly not in the interests of the country that the State should become the only money-lender in the Dominion. Rural Advances bonds for long-term mortgages to the amount of £543,300 were sold last financial year. Loans paid over to farmer borrowers amounted to £751,900, the additional funds having been provided by means of temporary transfers from the other branches of the State Advances Office, which had been provided with additional funds specialty for this purpose. DISCHARGED SOLDIERS SETTLEMENT. As honourable members a,re aware, large numbers of revaluations and writingsoff of accumulated revenue debts to the Crown have been made in the last few years in connection with the discharged soldiers settlement scheme. The writing-down of capital to its economic price-level and the wiping-off of arrears of interest has established the settlers on a sounder footing, and in most cases they are now in a position to make some headway. Last year most of the settlers were able to meet their obligations, and from the financial point of view the year was the best one to date. The extensive capital reductions and the remission of arrears of interest, &c., granted to settlers had of necessity to be written off in the various public accounts concerned. Power to make the necessary adjustment of accounts was contained in section 22 of the Finance Act, 1927 (No. 2). Revaluation Board reductions amounted in the aggregate to £3,424,584, while accumulated revenue losses and other items to be written off brought the total up to £5,164,636. These losses have been written off as far as possible against revenue items. In particular, liabilities to the Consolidated Fund for interest, &c., to the amount of £1,886,756 were cancelled, £1,600,000 was written off the £13,500,000 advance from the Consolidated Fund now forming part of the Public Debt Redemption Fund. In addition, the Land for Settlements Discharged Soldiers Settlement Account was relieved from payment of interest on £1,011,000 of loan capital, while the balance of £666,880 was written off against reserves. With the exception of the last-mentioned it mi the losses have thus been borne by the Consolidated Fund. RAILWAYS. The railway revenue was £8,034,970, and the working-expenses £6,685,123, leaving a net revenue of £1,349,847. Assistance to developmental lines (paid and accrued) amounted to £489,568, making £1,839,415 available to meet interest charges of £2,130,867. The result of the year's operations was, therefore, a loss of £291,452. In comparison with the previous year the revenue showed a net increase of £45,537, a decrease in passenger traffic receipts of £158,884, being more than offset by increased revenue from carriage of goods and other items. Working-expenses showed a comparative increase of £194,243, the principal contributing factors being the greater mileage of line worked, the increase in goods traffic, and the improvements and additions to passenger services by rail and road. The net earnings of the railways, apart from the assistance to certain lines, thus decreased by £148,706, while interest charges increased by £87,434. Unless these opposite tendencies can be checked it is evident that the taxpayer will have to bear increased burdens in the future. The assistance to branch lines and isolated sections has increased from £359,540 in 1925-26 to £489,568 for 1927-28.

8.—6

POST AND TELEGRAPH DEPARTMENT. This Department paid into the Consolidated Fund as revenue for the year the amount of £3,323,260, which was £96,702 more than for the previous year. Workingexpenses under the vote amounted to £2,297,058, maintenance of Post Office buildings cost £19,774, and, after allowing for interest and depreciation charges, the Department was able to close the year with a net profit of approximately £20,000. In order to give the Department continuity of finance, and establish it upon a complete commercial basis, legislation was passed last session to separate the Post Office accounts from the Consolidated Fund. Henceforth these accounts will be shown in a separate account, which will enable honourable members and the public generally to obtain a better idea of the operations of this large Department. There will be brought into the Consolidated Fund as revenue full interest on the amount of loan capital sunk in the assets of the Department. The Government's policy in regard to the Post Office Savings-bank was outlined by me in the House last session. In pursuance of that policy steps have been taken to reduce the maximum amount of deposits on which interest is payable from £5,000 to £2,000, while making an exception in the case of deposits in excess of £2,000 at the time for so long as they remain on deposit. The change operated as from the Ist April last. The function of a savings-bank is to provide facilities for the safe investment of the small savings of the people. The manner in which the funds of a savingsbank are invested is quite unsuited for handling commercial deposits and large floating balances. Any considerable amount of floating balances practically at call is, in fact, a danger to the stability of a savings-bank. On this account the maximum amount of individual deposits in savings-banks in all countries is severely restricted. In Australia, I understand, the maximum for the Commonwealth Savings-bank is £1,300, and for the other banks less than that. These restrictions not only practically exclude commercial deposits, but provide an additional safeguard, in that a large number of depositors must be simultaneously seized with the desire to withdraw their money before there is any appreciable chance of straining the liquid resources of the bank concerned. At the same time, in order to provide facilities for the investment of savings for fixed periods and any amount, arrangements were made to issue Post Office Investment Certificates on attractive terms. These provide for investment of any amount for periods of one, two, and five years at rates of interest varying from approximately 4-| per cent, to 5] per cent. These certificates, lam pleased to say, are proving popular, and in the six months to the end of the last financial year investments amounted to £541,790. National saving certificates on similar lines are issued in Great Britain, where they have proved a very popular instrument of thrift, the holdings of the people amounting to the sum of £360,000,000. UNEMPLOYMENT. In order to provide work for those who had the misfortune to be out of employment, the Government arranged for additional works, mostly on roads and tree-planting, to be put in hand during 1927-28. The expenditure on such works amounted to approximately £397,000. In addition, subsidies earned on works undertaken by local authorities during the year totalled £113,000, so that the total cost of unemployment works to the State was £510,000. As unemployment is again prevalent this winter, steps were taken, as soon as the House met, to further extend the life of the legislation empowering local authorities to raise loans expeditiously for unemployment works without taking a poll of ratepayers. In the same Act —Local Authorities Empowering (Relief of Unemployment) Amendment Act, 1928 —the provision for payment of subsidies out of the Consolidated Fund on wages and voluntary contributions was extended to £300,000, inclusive of the amount paid over last year.

Post and Telegraph Department.

Accounting changes

Post Office Savingsbank.

Function of a savings-bank.

Post Office Certificates.

Unemployment.

13

8.—6

RURAL INTERMEDIATE CREDIT. The independent organization for bridging the gap between the long-term mortgage finance and the facilities offered by commercial banks, provided for under the legislation passed last session, is now in full operation. Briefly, the object is to enable farmers to obtain credit on the security of stock and chattels at reasonable rates of interest, principally by encouraging the application of the co-operative principle through the formation of rural intermediate credit associations. Eleven such associations have already been formed, and committees are actively at work with the object of forming others. Those provisions of the Act which enable loans to be granted direct to farmers with the collateral guarantee of some substantial person or company are being utilized by dairy companies as a means of assisting their suppliers to obtain the benefits of the system. In addition, applicants will receive every assistance from the sixteen District Boards, composed mostly of practical farmers and business men. The intimate local knowledge of these Boards will also react for the protection of the interests of debenture-holders. The Government have assisted the inauguration of the system, which is purely a commercial concern, by lending £400,000, free of interest for ten years. Onethird of this amount must be invested in Government securities, as the nucleus of a redemption fund for the debentures from the sale of which the necessary capital will be provided. A substantial amount of debentures has already been disposed of without resort to a public issue. It should be clearly understood, however, that the intermediate credit organization, administered by the Public Trustee, is [quite separate from the Rural Advances Branch of the State Advances Office, which deals solely with long-term first mortgages of land. ft REVIEW OF FINANCIAL POSITION. The decrease of £90,000 in departmental expenses last year was the result of a continuous and rigid supervision over practically every item of expenditure subject to administrative control. Many reforms have been introduced in the last few years. Merit and efficiency have been made the chief considerations for the promotion of officers of the Service, who have been encouraged to qualify themselves in every way for the better performance of their duties. Modern methods of accountancy have been adopted throughout the Departments of State, and commercial balancesheets are now produced annually for all State activities. Steps have also been taken to ensure that all stores are accounted for in the same manner as cash, and a Stores Control Board has been set up to arrange for the purchase of supplies in bulk. Where the nature of the service permits of it, every effort is being made to make services self-supporting as far as possible, and no opportunity is lost of introducing better methods, eliminating waste, and preventing extravagance. Experience has shown that in a very large organization like the Public Service true economy in administration is not attained by spectacular reforms, but by continual and gradual improvements, and this is the course that is being followed. By far the greater part of the expenditure consists of fixed payments in which no curtailment is possible unless some of the services at present rendered by the State are to be eliminated or restricted. It is easy to indulge in rhetorical platitudes about economy, but I am convinced that this virtue is practised by the heads of Departments to an extent little realized by the public. They are not responsible for policy questions, and if they are called upon to carry out new or more extended services it is the Government that must meet public approval or condemnation, and not the administrative heads.

Rural intermediate credit.

Review of financial position.

Administrative reforms.

Economy.

14

8.—6.

The 1926 Budget contained a statement setting out the net charges on taxation for the various services provided for out of the Consolidated Fund in 1925-26, compared with the charges in 1914, after the figures for the latter had been adjusted to a comparable basis. Bringing the table up to date, the allocation per head of the taxation receipts for 1927-28, amounting to £16,484,788, compare as follows : —

Net charges on taxpayer.

Charges on Taxation.

In tlie first place, it will be noticed that war pensions and war-debt charges absorb about a third of the present taxation receipts, and account for the whole of the increase in the taxation burden since 1914. Relief can only be obtained by repayment of the war debt, hence my anxiety to concentrate on this matter. As already stated, we have paid off about £10,000,000 in six years. Social services, including health and hospitals, pensions, and education, absorb at least another one-third of the State's annual revenue from taxation. These services must expand automatically as the population grows, and, except in so far as the national wealth grows proportionately, further extensions of these services can only be met by diving deeper into the pockets of the taxpayers. The remaining third of the taxation receipts is expended on ordinafy debt charges, defence, and general administrative charges. The relative burden of these items has decreased by £l per head in comparison with 1914. It was advocated by the late Lord Oxford and others in England that the Treasury should ration the Departments of State : in other words, should decide the maximum revenue to be raised and apportion it as equitably as possible. To a great extent this is already done in New Zealand, but if we are to call a halt in the growth of national expenditure, are we to tell the Education Department and the school dental services and other similar beneficent activities that they are not to expand ? Ido not think this is the wish of the public or the taxpayers. All that they ask of the Government is to see that these services are efficiently and economically administered. I am therefore averse from making any promises of great economies, as I cannot see how any substantial savings can be effected while the demand for increased social services is so insistent. It is not the extravagance of the Government that is at fault, but the almost universal belief that the resources of the Treasury are bottomless. For example, there is a widespread demand for invalidity and pensioninsurance schemes, and these have the strong sympathy of the Government. But it has often been pointed out that a wise expenditure on such social services should follow a revival of national prosperity, and not precede it. Otherwise the country is being made to spend money which does not exist within its current resources, and this can result only in an increased burden of debt or taxation, and an aggravation of the position which such expenditure is mistakenly designed to remedy. For this reason the Government has been compelled to postpone consideration of invalidity insurance this year, as the excellent recovery in Dominion trade and finance is not yet reflected in the public revenues.

War pensions and war-debt charges.

Social services.

Other services.

Growth of expenditure.

Further social services.

15

Allocation of Taxation Receipts per Head of Mean Population. — 1913-14 (Adjusted to a 1927-28 comparable basis). £ s. d. £ s. d. War pensions and war-debt charges .. .. .. .. .. 3 7 10 Other debt charges .. .. .. .. .. .. 117 3 178 Social services (health and hospitals, pensions, and education) .. 2 16 6 4 2 8 Defence (land, sea, and air) .. .. .. . . .. 0 14 5 0 14 8 Other charges (general and administrative) .. .. .. 237 1 13 1 Surplus for year .. .. .. .. .. .. 0 10 9 0 2 6 8 2 6 11 8 5

R.—6.

The duty of the Government is, in fact, to reconcile as best it may the widespread demand for reduced Government expenditure with the equally insistent cry for extended social services, increased pensions, and further grants and subsidies of every description. Exactly the same dilemma can be observed facing the Governments in England, Australia, and elsewhere. I regret to see in certain quarters the statement repeated that we are not paying our way. Such a statement has no foundation in fact. If there were any truth in it, our financial critics in London would be the first to draw attention to it, as they display a most intimate knowledge of our public finance. A well known writer on Public Finance says : " The difference between a balanced Budget with a surplus and an unbalanced Budget with a deficit means in the long-run the difference between national solvency and national bankruptcy. ' Balance your Budget' is a maxim which bankers, financiers, and practical economists ever since the war have been trying to impress upon the impecunious but extravagant Governments of Europe." The International Financial Conference held in Brussels in 1920 laid it down that balanced Budgets are the sine qua non of recovery from war difficulties. I claim that New Zealand answers to this test; and, indeed, her enviable reputation for balancing her Budget has much to do with our high credit abroad. Secondly, as to the public debt, I am of opinion that our loan expenditure would be rightly regarded as unduly heavy were it not for the fact that we are at the same time making substantial repayments each year of our war debt. It is also to be observed that, if part of this loan expenditure is unproductive, we have made large transfers of revenue to capital expenditure. While in times like the present I agree that we should be content with a bare balancing of accounts, I am strongly of opinion that when and so long as trade and conditions are normal we should, as a matter of sound finance, aim at providing each year a certain amount of revenue for capital purposes to cover the cost of works that, while necessary, are only very indirectly productive. In fact, if we are to maintain the policy of development while reducing loan expenditure, such provision must increase as the years go by. In visualizing the problem of national expenditure it should also be kept in mind that over £107,000,000 of the public debt is owned in New Zealand and the debt charge goes back to the taxpayer in the form of interest. Taking a general survey of the position, it seems to me that when the present heavy programme of capital expenditure is completed in the next few years the then Minister of Finance should find himself in the happy position of being able to more rapidly reduce our war debt and also taxation, provide more funds for land settlement, and view with a less reluctant eye reasonable demands for improved social services. 1928 1929. ESTIMATE OF REVENUE. In estimating the revenue of the current year's operations, as will be gathered from my foregoing remarks, I cannot place any great reliance on increasing buoyancy of revenue before the year closes. I estimate the revenue receipts under the respective headings as follows £ Customs .. .. .. .. .. 8,261,000 Reer duty .. .. .. , . .. 600,000 Stamp and death duties .. ~ .. 3,500,000 Land-tax .. .. .. .. 1,150 ,000 Income-tax . . .. .. .. 3,400,000 Interest on public moneys .. .. .. 747,000 Interest on capital liability— Railways . . . . . . .. . . 2,255,000 Postal and Telegraph .. .. .. 425,000 Interest on Public Debt Redemption Fund . . 992,250 Motor-vehicles —Duties, licenses, &c. .. .. 1,147,000 Other receipts .. .. ~ 1,391,000 £23,868.250

Balanced budgets

Loan expenditure and public debt.

Survey ot position.

Estimates of revenue.

16

8.—6

This total of £23,868,250, it will be noted, includes "£1,147,000 —Motorvehicles, duties, &c.," which is not available for general services. Income-tax is not expected to show much response to reviving business resulting from the better trade balance, but, as regards Customs, I have allowed for a small increase to be expected for the remainder of the financial year. ESTIMATED RESULTS FOR THE YEAR, £ Revenue .. .. .. .. .. 23,868,250 Expenditure— £ Permanent Appropriations .. 15,827,398 Annual Appropriations .. .. 7,780,706 — 23,608,104 Leaving a balance of .. .. 260,146 to meet supplementary estimates and contingencies. In arriving at these results I have had to allow for the many factors that at present make accurate estimates difficult to forecast. We are in a transition period when the chief sources of revenue are in full bud, but not yet in flower. I have therefore refrained from placing before honourable members proposals that might under the circumstances bring about at the close of the year a result inconsistent with the policy I have striven to adhere to, that of maintaining the reputation of this country for sound finance.

Estimated results, 1928-29.

4—B. 6.

17

B.—6

SUMMARY, 1927-28. Consolidated Fund— Ordinary Revenue Account — £ Revenue ... .... .... .... .... 25,123,980 Expenditure .... .... .... .... .... 24,944,904 Surplus, 1927-28 .... .... .... .... £179,076 £ Balance brought forward, Ist April, 1927 .... .... 3,681,466 Add— ■Surplus, 1927-28 .... .... .... .... 179,076 Temporary transfers to other accounts repaid .... 26,000 3,886,542 Less— £ Used for reduction of debt .... .... 95,979 Instalments of purchase price of "C" long-term mortgage shares in Bank of New Zealand .... .... .... 117,188 Transfer to Public Works Fund — General Purposes Account .... 250,000 Advance to State Forests Account .... 45,000 Sundry charges and expenses of renewing loans .... .... .... .... 1,037 Subsidies to local bodies for relief of unemployment .... .... .... 75,106 584,310 Balance, 31st March, 1928 ... £3,302,232 Comparisons with previous year— £ Total revenue, comparative decrease .... .... .... 188,245 Income-tax, decrease .... .... .... .... .... 148,487 Land-tax, decrease .... .... .... .... .... 74,588 Beer duty, decrease .... .... .... ... .... 12,189 Customs, decrease .... .... .... .... .... 309,986 Stamp and death duties, increase .... .... .... 125,351 Revenue other than from taxation, increase .... .... 231,654 Total expenditure, comparative net increase .... .... 231,166 Subsidies to Hospital Boards, increase .... .... .... 72,651 Pensions, increase .... .... .... .... .... 90,526 Railways (increased losses on isolated sections and branch lines) .... .... .... .... .... .... 55,591 Contribution to Singapore Naval Base (new item).... .... 125,000 Agriculture—carriage of fertilizers for farmers, increase .... 43,540 Capital expenditure on public works— £ Railway-construction, additions and improvements .... 2,573,252 M ain highways and roads .... .... .... .... 1,297,141 Hydro-electric supply.... . . .... .... .... 1,272,575 Telegraphs and telephones .... .... .... .... 625,540 Public buildings (including schools) .... .... .... 605,747 Irrigation, land and river improvement .... .... .... 273,452 Other public works .... .... .... .... .... 177,983 £6,825,690

18

8.—6

Total State expenditure for roading purposes increased from £700,000 in 1923 to £1,946,000 in 1928. <£250,000 transferred from Revenue to Public Works Fund. £1,000,000 in debt charges saved annually through policy of using surplus revenues for capital charges and debt repayment. Gross public debt as at 31st March, 1928— £ Ordinary .... .... .... .... 139,329,644 War .... .... .... .... 71,970,636 State Advances .... .... .... 31,081,966 Discharged soldiers .... .... .... 9,014,006 £251,396,252 New loans raised during the year .... 8,022,499 Loans paid off during the year .... .... 2,477,136 Net increase for year .... .... .... .... £5,545,363 Net increase in debt— £ 1925-26.... .... .... .... .... .... 11,000,000 1926-27.... .... .... .... .... .... 7,000,000 1927-28 .... .... .... .... .... .... 5,500,000 Local debt reduction .... .... .... .... .... £1,960,620 German reparation-moneys applied solely in reduction of war debt, 1927-28 .... .... .... .... ... £366,370 War debt—Repayments in six years .... .... .... £9,887,887 War-debt charges show decrease during year .... .... £50,000 Ordinary debt two-and-a-half times as great as war debt, but costs taxpayer annually £1,250,000 less than war debt. No revenue Treasury Bills outstanding. London Loan, 1928 — £5,000,000 raised for — Public Works Fund (railway construction, telegraph, £ and telephone extension, &c.) .. . .... .... 3,000,000 Hydro-electric-power works .... .... .... 1,000,000 Railways improvement .... .... .... .... 1,000,000 £5,000,000 Loan was very favourably received and heavily oversubscribed. Success of loan a striking indication of the Dominion's financial reputation. In addition £5,000,000 of Consolidated Stock converted on favourable terms. Taxation — New Zealand income-tax on individuals among the lowest in the world. Customs duties —concessions last year represented very large sum. Until increasing productivity of country reflected in revenues, no further reductions of taxation practicable or safe.

19

8.—6

State Advances Office— £ Paid over to borrowers in last five years .... .... .... 26,692,969 Additional loan - moneys made available during the year amounted to .... .... .... .... .... 890,000 K,ural advances bonds sold .... .... .... .... 543,300 Rural advances to farmers .... .... .... .... 751,900 Discharged soldiers settlementFurther revaluations of property and writings-oft of principal and interest totalling £5,164,636 were made for the purpose of establishing the settlers on a sounder footing. Railways— Revenue compared with previous year showed increase of .... 45,537 Working expenses compared with previous year showed increase of .... .... .... .... .... 194,243 Postal and Telegraph— Net profit for year .... .... .... .... .... 20,000 Post-office accounts now separate from the Consolidated Fund. Sales of Post Office Investment Certificates .... .... 541,790 Unemployment relief — Expenditure during year on public works, including £ tree-planting .... .... .... .... 397,000 Subsidies earned on works undertaken by local authorities .... .... .... 113,000 * Total cost to State ... .... .... .... £510,000 Legislation enabling local authorities to raise unemployment loans without a poll extended. Provision extended in respect of subsidies on wages and on voluntary contributions for approved relief works. Rural intermediate credit— Organization now' in full operation. Intermediate credit associations formed and District Boards set up ; the system proving of great benefit to farmers generally. Many reforms introduced in last few years to promote economy in administration. Administration expenses decreased by ,£90,000 last year. £ s. d. Revenue from taxation per head of population .... .... 11 8 5 Charges on taxpayer per head of population — War pensions and war-debt charges.... .... .... 3 7 10 Social services .... .... .... .... .... 4 2 8 All other charges .... .... .... .... 3 17 11 Total .... .... .... .... .... £11 8 5 ESTIMATES FOR 1928-29. Consolidated Fund — Ordinary Revenue Account — £ Estimated revenue .... .... .... .... 23,868,250 Estimated expenditure .... .... .... .... 23,608,104 Available for supplementary estimates and contingencies .... £260,146 £ Estimated Customs revenue .... .... .... .... 8,261,000 Estimated stamp and death duties .... .... .... .... 3,500,000 Estimated land and income tax .... .... .... .... 4,550,000

20

8.—6

TABLES TO ACCOMPANY THE FOREGOING STATEMENT. Page Table No. 1. —Abstract of Receipts and Expenditure of the Financial Year ended 31st March, 1928. See Parliamentary Paper 8.-l [Part I]. Table No. 2.—-The Public Debt on 31st March, 1928. See Parliamentary Paper 8.-l [Part lit]. Table No. 3. —Revenue fob the Year ended 31st March, 1928, compared with the Year ended 31st March, 1927 .. .. .. .. .. .. .. .. ii Table No. 4.—Comparative Statement of the Estimated and Actual Revenue of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1928 .. .. .. .. .. .. .. .. .. .. ii Table No. s.—Estimated Revenue for 1928-29, compared with the Actual Revenue for 1927-28 .. iii Table No. 6.—Comparative Statement of Stamp and Death Duty Revenue for 1926-27 and 1927-28 iii Table No. 7.—Statement of the Customs Duties collected for 1927-28, compared with 1926-27 .. iv Table No. B.—Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1928, compared with the Year ended 31st March, 1927.. .. .. .. .. iv Table No. 9.— Comparative Statement of the Appropriated and Actual Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1928 .. .. .. .. .. .. .. .. .. vi Table No. 10. —Estimated Net Expenditure for 1928-29, compared with the Actual Net Expenditure for 1927-28 .. .. .. .. .. .. .. .. vii Table No. 11. —Statement showing how Accumulated Surpluses have been applied .. .. viii Table No. 12.—Statement of the Estimated Liabilities of the Consolidated Fund outstanding on 31st March, 1924 to 1928 inclusive .. .. .. .. .. .. ix Table No. 13.—Public Works Fund—Statement showing Net Expenditure under Appropriations for the Year ended 31st March, 1928, compared with the Year ended 31st March, 1927 .. x Table No. 14.—Statement showing the Total Ways and Means of the Public Works Fund, General Purposes Account and the Total Net Expenditure to 31st March, 1928 .. xi Table No. 15.—Statement of the Estimated Liabilities of the Public Works Fund, General Purposes Account, outstanding on 31st March, 1924 to 1928 inclusive .. .. .. xii Table No. 16. —Statement of the Estimated Liabilities of the various Separate Accounts outstanding on 31st March, 1924 to 1928 inclusive .. .. .. .. xiii Table No. 17.—Receipts and Payments of Accounts, 1927-28, with Balances at Ist April, 1927, and 31st March, 1928 .. .. .. .. .. .. .. .. xiv Table No. 18.—Statement showing the available Financial Resources of the various Accounts on the March, 1927, as compared with the 31st March, 1928 .. .. xv Table No. 19. —Statement showing the Amount charged to "Unauthorized" in each Financial Year from Ist April, 1910, to 31st March, 1928 .. .. .. .. .. xvi Table No. 20.—Summary of the Public Debt and of the State Assets which may be set off AGAINST IT, AS AT 31ST MaROH, 1928 .. .. .. .. .. .. xvi Table No. 21.—Statement showing Loans falling due in the Seven Years ending with the Year 1934, excluding Imperial Debt Repayments .. .. .. .. .. xviii Table No. 22. —Statement of Half-yearly Instalments of Principal and Interest for Repayment of Debt funded with Imperial Government .. .. .. .. .. xviii Table No. 23. —Education Expenditure—Total Expenditure on Education out of Public Funds since 1913-14 .. .. .. .. • .. •• •• ..six Table No. 24.—Statement of Amounts paid on account of Pensions for the Financial Years ended 3 Ist March, 1924 to 1928 .. .. .. . • • • • • xx Table No. 25. —Statement showing Imports and Exports of the Dominion in each Financial Year ended 31st March, 1920 to 1928 .. .. .. .. • • • • xx Table No. 26. —Comparative Statement showing Amount of Income-tax paid in New Zealand, Australian States, and Great Britain on Selected Incomes up to £10,000 per Annum .. .. .. .. . • • • • • • • • • • • x^i

i—B. (5.

8.—6

Table No. 3. Revenue for the Year ended 31st March, 1928, compared with the Year ended 31st March, 1927.

Table No. 4. Comparative Statement of the Estimated and Actual Revenue of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1928.

II

Year ended Year ended 31st March, 31st March, , Inorease. Decrease. 1928. 1927. £ £ j £ £ Customs .. .. .. .. .. 7,942,589 8,252,575 .. 309,986 Motor-vehicles —Duties, licenses, &c. .. .. 369,118 .. J 369,118 Beer duty .. .. .. .. .. 609,624 621,813 .. 12,189 Stamp and death duties .. .. .. 3,504,367 3,379,016 125,351 Postal and telegraph .. .. .. 3,323,260 3,226,558 96,702 Land-tax .. .. .. . . .. 1,154,479 1,229,067 .. 74,588 Income-tax .. .. .. .. 3,273,729 3,422,216 .. 148,487 Registration and other fees .. .. .. 200,259 : 199,144 1,115 Marine .. .. . . . . . . 112,502 110,834 1,668 Interest on public moneys .. .. .. 698,057 | 601,220 96,837 Interest on Public Debt Redemption Fund .. 878,408 863,942 14,466 Interest on Railway capital liability .. .. 2,130,867 2,043,433 87,434 Local Bodies'Loans Act, 1908, sec. 76 .. 10,158 13,939 .. 3,781 Rents of buildings .. .. .. .. 32,178 26,816 5,362 Tourist and Health Resorts .. .. . . 66,964 63,102 3,862 Miscellaneous .. .. .. ... 41,939 58,121 .. 16,182 Territorial.. .. .. .. .. 200,915 202,187 .. 1,272 Departmental and other receipts .. .. 574,567 629,124 .. 54,557 801,915 621,042 621,042 Totals.. .. .. .. 25,123,980 24,943,107 j 180,873

Difference. Estimate for Actual for 1927-28. 1927-28. Morc . Less . £ £ * £ £ Customs .. .. .. .. 7,775,000 7,942,589 167,589! Motor-vehicles —Duties, licenses, &c. .. .. .. 369,118 369,118 i Beer duty .. .. .. • • 610,000 609,624 I .. \ 376 Stamp and death duties .. .. .. 3,403,100 3,504,367 101,267 Postal and telegraph .. . • .. 3,254,000 3,323,260 69,260 ! Land-tax .. .. .. . • • • 1,205,000 1.154,479 .. 50,521 Income-tax 3,425,000 3,273,729 .. 151,271 Registration and other fees .. .. .. 206,000 200,259 j .. 5,741 Marine .. .. .. •• •• 115,800 IJ2,502 .. 3,298 Interest on public moneys .. .. .. 640,000 698,057 ! 58,057 j Interest on Public Debt Redemption Fund .. 870,000 878,408 8,408 Interest on Railway capital liability .. .. 2,180,000 2,130,867 .. 49,133 Local Bodies'Loans Act, 1908, sec. 76 .. 17,000 10,158 .. 6,842 Rents of buildings .. .. .. .. 30,000 32,178 2,178 Tourist and Health Resorts .. .. .. 62,000 66,964 4,964 Miscellaneous 1. .. .. .. 60,000 41,939 .. 18,061 Territorial .. .. 204,000 200.915 .. 3^085 Departmental and other receipts .. .. 620,000 574,567 .. 45,433 780,841 333,761 . 333,761 Totals.. .. .. .. 24,676,900 25,123,980 447,080

8.—6

Table No. 5. Estimated Revenue of the Consolidated Fund (Ordinary Revenue Account) for 1928-29, compared with the Actual Revenue received for 1927-28.

Table No. 6. Comparative Statement of Stamp and Death Duty Revenue for 1926-27 and 1927-28.

III

Estimate Actual | Differences. 1 for for j 1926-29. 1927-28. j Increafic Decre ase. I I Ordinary Revenue Account. £ £ £ £ Customs .. .. .. .. .. .. J 8,261,000 7,942,589 318,411 Motor-vehicles—Duties, licenses, &c. .. .. .. 1,147,000 369,118 777,882 Beer duty .. .. .. .. .. 600,000 609,624 .. 9,624 Stamp and death duties .. .. .. .. 3,500,000 3,504,367 .. 4,367 Postal and telegraph .. .. .. ..I .. 3,323,260 .. 3,323,260 Land-tax .. .. .. .. .. .. j 1,150,000 1,154,479 .. 4,479 Income-tax.. .. .. .. .. .. 3,400,000 3,273,729 ; 126,271 Registration and other fees .. .. .. .. 201,000 200,259 741 Marine .. .. .. .. .. 120,000 112,502 ; 7,498 Interest on public moneys .. .. . . .. 747,000 698,057 48,943 Interest on Public Debt Redemption Fund .. .. 992,250 878,408 113,842 Interest on Railway capital liability .. .. .. j 2,255,000 2,130,867 ; 124,133 Interest on capital liability—Post and Telegraph .. j 425,000 .. 425,000 Local Bodies',Loans Act, 1908, Section 76 .. .. j .. 10,158 i .. 10,158 Rents of buildings .. .. .. .. .. I 26,000 32,178 .. 6,178 Tourist and Health Resorts .. .. .. . . 72,000 66,964 5,036 Miscellaneous .. .. .. .. .. 167,000 41,939 125,061 Territorial .. .. .. .. .. .. 200,000 200,915 .. 915 Departmental receipts .. .. .. .. 592,000 560,803 , 31,197 Recoveries on account of expenditure of previous years .. 13,000 13,764 j .. 764 2,104,015 3,359,745 2,104,015 Totals .. .. .. .. 23,868,250 J 25,123,980 j .. *1,255,730 * Decrease nominal being due to accounting changes in connection with Post and Telegraph Department. Apart from these items* comparative increase of £1,672,530, of which £777,882 is on account of motor-vehicles (duties and licenses) which are not available for general purposes.

Item. 1926-27. j 1927-28. Increase. Decrease. j j £ £ £ £ Adhesive stamps .. .. 92,427 85,254 .. 7,173 Duty on instruments .. 490,527 428,805 .. 61,722 Death duty (estate and sue- 1,644,798 1,847,714 202,916 cession duty) Gift duty .. .. 45,576 51,656 6,080 Impressed stamps, and duty 181,552 187,875 6,323 on cheques Company licenses .. 69,442 70,881 1,439 Bank-note duty .. .. 201,913 195,301 .. 6,612 Duties payable by racing clubs 583,421 567,890 .. 15,531 Amusements-tax .. .. 63,555 63,165 .. 390 Rates, fines, and miscellaneous 5,805 5,826 21 : ———.— 216,779 91,428 91,428 Totals .. .. 3,379,016 3,504,367 125,351

8.—6

Table No. 7. Statement showing Customs Duties collected for Year 1927-28, compared with the Year 1926-27.

Table No. 8. Statement of the actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1928, compared with the Financial Year ended 31st March, 1927.

IV

1927-28. 1926-27. | Increase, j Deorease. £ £ £ £ Spirits, wine, and beer .. .. .. 1,381,909 1,190,991 190,918 Tobacco, cigars, and cigarettes .. .. 1,497,460 1,393,909 103,551 Apparel and textiles .. .. .. 1,698,227 1,707,385 .. 9,158 Motor-vehicles and parts (other than tires) .. 782,019 936,601 .. 154,582 Other goods .. .. .. 2,176,305 2,570,924 .. 394,619 Primage .. .. .. .. 406,669 452,765 .. 46,096 Totals .. .. .. 7,942,589 8,252,575 294,469 604,455

( Year ended Year ended | 31st March, 31st March, Increase. Decrease. 1928. | 1927. Permanent appropriations—• £ £ £ £ Civil List .. .. .. .. 30,289 31,054 .. 765 Interest.. .. .. .. .. 8,397,074 8,450,794 .. 53,720 Funded debt repayment .. .. .. 367,216 349,609 17,607 Sinking fund .. .. .. .. Gr. 4-52 4,000 .. 4,452 Repayment of public debt .. .. .. 993,764 941,529 52,235 Under special Acts — Advances to other Governments .. .. .. 30,000 .. 30,000 Contribution to Singapore Naval Base .. 125,000 .. 125,000 Education purposes .. .. .. 127,289 115,499 11,790 Endowments —New Plymouth Harbour Board 2,976 4,154- .. 1,178 Fruit-guarantee claims .. .. .. Cr. 23 82,619 .. 82,642 Maintenance of overseas war graves and war 23,063 36,655 .. 13,592 memorials Miscellaneous .. .. .. .. 124,008 100,828 23,180 Main Highways Revenue Account—Transfer 225,602 .. 225,602 of tire-tax, fees, fines, &c. Motor-spirits tax —Allocation of revenue .. 132,171 .. 132,171 N.Z. Consolidated Stock —Amount paid Bank 18,271 26,816 .. 8,545 of England for management Pensions — Old-age .. .. .. .. 968,928 941,348 27,580 Widows' .. .. .. .. 302,766 301,080 1,686 Military .. .. .. .. 16,377 19,446 .. 3,069 War .. .. .. .. 1,146,955 1,122,741 24,214 Miners' .. .. .. .. 42,469 39,465 3,004 Blind .. .. .. .. 12,249 10,304 1,945 Various .. .. .. .. 21,668 24,017 i .. 2,349 Family allowances .. .. .. 37,515 .. 37,515 Refunds in respect of totalizator-tax .. 25,209 31,174 .. 5,965 Salaries and honoraria .. .. .. 99,780 98,007 1,773 Subsidies paid to Hospital Boards* .. 683,149 610,498 72,651 Subsidies paid tr local authorities on rates.. 215,679 212,018 3,661 Subsidies to superannuation funds and the 197,781 189,990 7,791 National Provident Fund Territorial revenue .. .. .. 7,946 12,232 .. 4,286 Working Railways —Losses on isolated sec- 484,659 429,068 55,591 tions and branch lines Transfer to Discharged Soldiers' Settlement 50,000 50,000 Loans Act 1920 Depreciation Fund Account 14,879,378 14,264,945 824,996 210,563 ♦Subsidy under Hospital and Charitable Institutions Acts for Jubilee Institute for the Blind is included under Eduoation purposes.

8.—(5,

Table No. 8 —continued. Statement of the actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1928, compared with the Financial Year ended 31st March, 1927—continued.

V

Year ended Year ended ! 31st- March, 31st March, i Increase. Deorease. 1928. 1927. Annual Appropriations— £ £ ! £ | £ Legislative Departments .. .. .. 97,637 89,192 8,445 Prime Minister's Department .. .. 12,600 I 2,467 ; 10,133 Treasury Department .. .. .. 37,865 34,586 j 3,279 National Provident and Friendly Societies Department .. .. .. .. 24,792 23,789 ! 1,003 | Land and # Income Tax Department .. .. 58,883 55,461 ; 3,422 I Stamp Duties Department .. .. 102,291 101,356 i 935 Post and Telegraph working-expenses .. 2,297,058 2,343,438 .. 46,380 Public buildings .. .. .. 84,710 113,244 .. 28,534 Government and other domains .. .. 6,008 6,859 .. 851 Maintenance and repairs to roads .. .. 111,701 100,211 11,490 i Maintenance of irrigation-works, &c. .. 17,264 8,087 9,177 Native Department .. .. .. 29,284 28,404 880 Department of External Affairs .. .. 35,466 30,982 4,484 Cook Islands .. .. .. .. 49,953 38,056 11,897 Department of Industries and Commerce .. 33,318 48,780 .. 15,462 Department of Justice .. .. .. 132,645 135,482. .. 2,837 Prisons Department .. .. .. 94,220 77,851 16,369 Crown Law Office .. .. .. 5,381 , 5,693 .. 312 Police Department .. .. .. 417,975 410,506 7,469 Pensions Department .. .. .. 169,278 173,204 .. 3,926 Mines Department .. .. .. 33,297 44,784 .. 11,487 Department of Internal Affairs .. .. 349,717 402,854 .. 53,137 Audit Department .. .. .. 26,917 25,806 1,111 Public Service Commissioner's Office .. 6,362 7,025 .. 663 Printing and Stationery Department . . 226,297 233,204 .. 6,907 Mental Hospitals Department .. .. 274,818 275,125 .. 307 Department of Health .. .. .. 246,644 251,001 .. 4,357 Naval Defence .. .. .. .. 486,830 527,023 .. 40,193 Defence Department .. .. .. 481,759 493,274 .. 11,515 Customs Department .. .. .. 175,023 170,495 4,528 Marine Department .. .. .. 119,078 125,817 .. 6,739 Department of Labour .. .. .. 56,480 55,726 754 Department of Lands and Survey .. .. 186,522 169,363 17,159 Scenery-preservation .. .. .. 6,577 3,789 2,788 Valuation Department .. .. .. 51,610 48,007 3,603 Electoral Department .. .. .. 9,727 10,299 .. 572 Department of Agriculture .. .. 365,610 322,070 43,540 Department of Tourist and Health Resorts .. 76,871 76,378 493 Department of Education .. .. .. 2,999,615 2,979,597 20,018 Department of Scientific and Industrial Research 44,823 3,047 41,776 Services not provided for .. .. .. 15,943 27,914 .. 11,971 Emergency Expenditure Account .. .. 6,677 10,774 .. 4,097 10,065,526 10,091,020 224,753 250,247 1,049,749 460,810 460,810 Total expenditure (permanent and annual 24,944,904 24,355,965 588,939 appropriations)

B. —G.

Table No. 9. NET EXPENDITURE. Comparative Statement of the Appropriated and Actual Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1928.

VI

Net Actual Net Difference. — Appropriations, Expenditure, 1927-28 1927-28. More Permanent appropriations— £ £ £ £ Civil List .. .. .. .. 31,170 30,289 .. 881 Interest .. .. .. .. .. 8,371,202 8,397,074 25,872 Sinking Fund .. .. .. .. 2,882 Gr. 452 .. 3,334 Reduction of funded debt .. .. .. 367,216 367,216 Repayment of Public Debt Act, 1925 .. 998,839 993,764 .. 5,075 Under special Acts .. .. .. 4,385,191 5,091,487 706,296 14,156,500 14,879,378 732,168 9,290 Annual appropriations — Legislative Departments .. .. .. 83,197 97,637 14,440 Prime Minister's Department .. .. 12,591 12,600 9 Treasury Department .. .. .. 36,438 37,865 1,427 National Provident and Friendly Societies Department .. .. .. .. 24,795 24,792 .. 3 Land and Income Tax Department .. .. 57,432 58,883 1,451 Stamp Duties Department .. .. .. 95,739 102,291 6,552 Post and Telegraph working-expenses .. 2,397,837 2,297,058 .. 100,779 Public buildings .. .. .. .. 101,445 84,710 .. 16,735 Government and other domains .. .. 6,383 6,008 .. 375 Maintenance and repairs to roads .. .. 137,096 111,701 .. 25,395 Maintenance of irrigation-works, &c. .. .. 20,400 17,264 .. 3,136 Native Department .. .. .. 31,216 29,284 .. 1,932 Department of External Affairs .. .. 45,413 35,466 .. 9,947 Cook Islands .. .. .. .. 60,461 49,953 .. 10,508 Department of Industries and Commerce .. 35,066 33,318 .. 1,748 Department of Justice .. .. .. 131,118 132,645 1,527 Prisons Department .. .. .. 91,459 94,220 2,761 Crown Law Office .. .. .. .. 5,955 5,381 .. 574 Police Department .. .. .. 426,431 417,975 .. 8,456 Pensions Department .. .. .. 167,594 169,278 1,684 Mines Department .. .. .. 35,741 33,297 .. 2,444 Department of Internal Affairs .. .. 342,306 349,717 7,411 Audit Department .. .. .. 29,628 26,917 .. 2,711 Public Service Commissioner's Office .. .. 6,886 6,362 .. 524 Printing and Stationery Department .. .. 238,966 226,297 .. 12,669 Mental Hospitals Department .. .. 286,559 274,818 .. 11,741 Department of Health .. .. .. 266,925 246,644 .. 20,281 Naval defence .. .. .. .. 494,921 486,830 .. 8,091 Defence Department .. .. .. 472,385 481,759 9,374 Customs Department .. .. .. 178,677 175,023 .. 3,654 Marine Department .. .. .. 124,149 119,078 .. 5,071 Department of Labour .. .. .. 60,686 56,480 .. 4,206 Department of Lands and Survey .. .. 186,917 186,522 .. 395 Scenery-preservation .. .. .. 6,604 6,577 .. 27 Valuation Department .. .. .. 51,774 51,610 .. 164 Electoral Department .. .. .. 9,792 9,727 .. 65 Department of Agriculture .. .. .. 386,855 365,610 .. 21,245 Department of Tourist and Health Resorts .. 77,010 76,871 .. 139 Department of Education .. .. .. 3,036,920 2,999,615 \ .. 37,305 Department of Scientific and Industrial Research 46,829 44,823 .. 2,006 Services not provided for .. .. .. .. 15,943 j 15,943 Emergency Expenditure Account .. .. .. 6,677 I 6,677 10,308,596 10,065,526 69,256 312,326 801,424 321,616 321,616 ■ Total expenditure .. .. 24,465,096 24,944,904 479,808

8.—6

Table No. 10. Estimated Net Expenditure of the Ordinary Revenue Account for 1928-29, compared with Actual Net Expenditure for 1927-28.

VII

Estimate Actual j Differences. for for j j 1928-29. 1927-28. Increase. I Decrease. Revenue Account. Permanent Appropriations,— £ £ £ £ Civil List .. .. .. .. .. 30,990 30,289 701 Interest .. .. .. . .. .. 8,539,134 8,397,074 142,060 Sinking Fund .. .. .. .. .. j 2,882 Cr. 452 3,334 Reduction of Funded Debt .. .. .. .. 385,710 367,216 18,494 Debt Repayment .. .. .. .. .. 1,053,559 993,164 59,795 Under special Acts .. .. .. .. .. 5,815,123 5,091,487 723,636 15,827,398 14,879,378 948,020 Annual Appropriations,— Legislative Departments .. .. .. 85,594 97,637 .. 12,043 Prime Minister's Department .. .. .. 13,049 12,600 449 Treasury Department .. .. .. .. 38,086 37,865 221 National Provident and Friendly Societies Department .. 25,447 24,792 655 Land and Income Tax Department .. .. .. 62,258 58,883 3,375 Stamp Duties Department .. .. .. .. 94,158 102,291 .. 8,133 Post and Telegraph Working-expenses.. .. .. .. 2,297,058 .. 2,297,058 Public Buildings .. .. .. .. .. 75,350 84,710 .. 9,360 Government and other Domains .. .. .. 6,400 6,008 392 Maintenance and repairs to Roads .. .. .. 103,000 111,701 .. 8,701 Maintenance of Irrigation Works, &c. .. .. .. 13,700 17,264 .. 3,564 Native Department .. .. .. .. .. 30,259 29,284 975 Department of External Affairs .. .. .. 39,743 35,466 4,277 Cook Islands .. .. .. .. .. 39,494 49,953 .. 10,459 Department of Industries and Commerce .. .. 31,650 33,318 .. 1,668 Department of Justice .. .. .. .. 131,614 132,645 .. 1,031 Prisons Department .. .. .. .. .. 95,609 94,220 1,389 Crown Law Office .. .. .. .. .. 5,812 5,381 431 Police Department .. .. .. .. .. 428,072 417,975 10,097 Pensions Department .. .. .. .. 168,168 169,278 .. 1,110 Mines Department .. .. .. .. .. 36,783 33,297 3,486 Department of Internal Affairs .. .. .. 318,548 349,717 .. 31,169 Audit Department .. .. .. .. .. 29,459 26,917 2,542 Public Service Commissioner's Office .. .. .. 7,270 6,362 908 Printing and Stationery Department .. .. .. 230,293 226,297 3,996 Mental Hospitals Department .. .. .. 290,868 274,818 16,050 Department of Health .. .. .. .. 240,773 246,644 .. 5,871 Naval Defence .. .. .. .. .. 449,011 486,830 .. 37,819 Defence Department.. .. .. .. .. 461,816 481,759 .. 19,943 Customs Department .. .. .. .. 118,573 175,023 .. 56,450 Marine Department .. .. .. .. .. 115,683 119,078 .. 3,395 Department of Labour .. .. .. .. 60,295 56,480 3,815 Department of Lands and Survey .. .. .. 176,790 186,522 j .. 9,732 | Scenery-preservation.. .. .. .. .. 15,550 6,577 j 8,973 j Valuation Department .. .. .. .. 54,713 51,610 j 3,103 j Electoral Department .. .. .. .. 90,209 9,727 80,482 1 Department of Agriculture .. .. .. .. 1 396,550 365,610 30,940 . Department of Tourist and Health Resorts .. .. 80,416 76,871 3,545 Department of Education .. .. .. .. 3,060,462 2,999,615 i 60,847 Department of Scientific and Industrial Research .. 59,181 44,823 14,358 Services not provided for .. .. .. .. .. 15,943 .. 15,943 Emergency Expenditure Account .. .. .. .. 6,677 .. 6,677 7,780,706 10,065,526 255,306 2,540,126 1,203,326 2,540,126 1,203,326 Total expenditure .. .. .. |£23,608, 104 £24,944,904 .. £1,336,800* * Decrease nominal toeing due to accounting changes in connection with Post and Telegraph Department. Excluding Post and Telegraph working-expenses there is a comparative increase of £960,259, of which £753,227 represents increased transfers of petrol-tax, tire-tax, &c., to Main Highways Account.

B— 6.

Table No. 11. Statement showing how Accumulated Surpluses have been applied. To Accumulated surpluses £ , -By Transfers to — £ £ at 31st March, 1927 30,067,762 Discharged Soldiers Settlement Surplus for financial Account —• year 1927 28 .. 179,076 1920-21 .. .. 13,330,000 1921-22 .. 170,000 13,500,000 Discharged Soldiers Settlement Depreciation Fund Account — 1920-21 .. .. 50,000 1921-22 .. .. 50,000 1922-23 .. 50,000 1923-24 .. .. 50,000 200,000 Public Works Fund—• 1920-21 .. .. 500,000 1923-24 .. .. 1,000,000 1924-25 .. .. 1,000,000 1925-26 .. 500,000 1927-28 .. .. 250,000 3,250,000 Reserve Fund Securities Account— For purchase of securities, 1920-21 .. .. 1,200,000 For redemption of loan, 1922-23 .. .. 800,000 2,000,000 Loans redemption — 1921-22 .. .. 560,011 1922-23 .. .. 2,337,360 1923-24 .. .. 1,367,341 1924-25 .. .. 1,052,130 1925-26 .. .. 566,161* 1926-27 .. .. 588,868f 1927-28 .. .. 95,979 6,567,850 Bank of New Zealand Shares Account— 1926-27 .. .. .. .. 808,594 1927-28 .. .. .. .. 117,188 Education Loans Account, 1923-24 . . 100,000 Subsidies for relief of unemployment .. 75,106 Advance to State Forests Account .. 45,000 Charges and expenses of renewing loans.. 1,037 Ordinary revenue— To balance revenue and expenditure, 1921-22 .. .. .. 279,831 Investments at 31st March, 1928 .. 1,207,801 Temporary transfers to other accounts .. 110,000 Balance (cash and imprests) at 31st March, 1928 .. .. 1,984,431 £30.246,838 ! £30,246,838 * Includes £151.824 of reparation-moneys received from Germany. f Includes £73,710 of reparationmoneys received from Germany.

VIII

8.—6

Table No. 12. Statement of the Estimated Liabilities chargeable on the Consolidated Fund (Ordinary Revenue Account) outstanding on the 31st March, each Year from 1924 to 1928.

ii— B. 6.

IX

J 924. ' J 925. | 1926. j 1927. i 1928. Revenue Account. £ £ £ £ £ Permanent Appropriations,— Civil List .. .. .. .. .. .. 185 161 313 337 335 Under Special Acts of the Legislature .. .. .. 13,667 15,411 13,435 16,835 16,540 Pensions .. .. .. .. .. .. 2,756 796 701 1,202 898 16,608 16,368 14,449 18,374 17,773 Annual Appropriations,— Legislative Departments .. .. .. .. ! 349 752 1,007 2,751 4,297 Departments of Minister of Finance* .. .. 3,744 7,502 11,064 8,226 16,253 Working Railways .. .. .. .. .. 263,254 332,985 II IF II Post and Telegraph Department .. .. .. 114,961 104,383 93,919 61,876 89,230 Public Buildings, Domains, Maintenance of Roads, and 1K Qno no QA1 in 10n Maintenance of Irrigation Works .. .. .. 14 - db4 15,899 17,315 23,301 19,18J Justice Department .. .. .. .. .. 11,498 10,462 19,258 15,155 38,603 Mines Department .. .. .. .. 868 2,087 2,371 3,698 3,961 Internal Affairs Department} .. .. .. 29,525 26,186 61,038 76,784 53,442 Defence Department!} .. .. . 28,715 55,459 94,392 41,813 41,541 2»SSKr:: :: :: :: :: I ».>•» «•» «.<*> Labour Department .. .. .. .. .. 961 2,200 1,148 2,152 1,417 Lands Department .. .. .. .. 2,686 1,971 1,840 3,332 5,024 Agriculture Department|| •• •• 48,830 11,178 35,103 28,137 44,033 Education Department .. .. .. 22,200 10,414 10,405 33,828 41,455 Valuation and Electoral Departments .. .. .. 1,897 1,277 2,337 2,302 1,865 547,879 587,612 360,395 308,875 365,390 Services not provided for .. .. .. .. j .. .. 112 2,652 419 Imprest Supply Act, 1927, Section 4 .. .. . .. .. .. .. 843 Refunds of Revenue .. .. .. .. .. .. 37 1,344 5,453 3,052 Totals .. .. .. .. .. 564,487 | 604,017 376,300 335,354 387,477 * Includes Treasury, Land and Income Tax, Stamp Duties, and National Provident Fund and Friendly Societies Departments. f Includes Native. External Affairs, Supreme and Magistrates' Courts, Prisons, Police, Cook Islands, and Cr wn Law. t Includes Audit. Printing and Stationery, Public Service Commissioner's Office, Mental Hospitals, Pensions, Scenery Preservation (from 1924-25), Health, Prime Minister's, and Scientific and Industrial Research Departments. § Includes Naval Defence. || Includes Industries and Commerce and Tourists Departments. U Now a separate account (see Table No. 16).

8.—6

Table No. 13. PUBLIC WORKS FUND. Statement showing the Net Expenditure under Appropriations for the Year ended 31st March, 1928, compared with the Year ended 31st March, 1927.

X

I | I " ! " ~ ! Vote - 31st'March? 1928. | 31st March?1027. Increase. Decrease. £ £ I £ I £ Public Works, Departmental .. .. 130,688 115,444 15,244 Railway-construction .. .. 908,669 1,096,368 .. 187,699 Additions to Open Lines .. ... 233,153 384,439 .. 151,286 ! Public Buildings—General .. .. .. .. 42,554 119,864 .. 77,310 Courthouses .. .. .. 7,531 1,261 6,270 Prison Buildings and Works.. .. 22,359 22,812 .. 453 Police-stations .. .. .. 5,561 7,411 .. 1,850 Postal and Telegraph.. .. .. 77,194 86,052 ! .. 8,858 Agricultural .. .. ■■ 2,863 4,164 .. 1,301 Mental Hospital Buildings .. .. 51,119 68,635 .. 17,516 Health and Hospital Institutions .. 14,361 15,840 .. 1,479 Timber-supply and Sawmills, &c. .. j Cr. 6,997 8,512 .. 15,509 Acquisition and Operation of Quarries .. : Cr. 9,325 6,302 .. 15,627 Lighthouses.. .. .. •• 7,979 5,758 2,221 Harbour-works .. .. •• 15,891 13,262 2,629 Development of Tourist Resorts 36.673 31,981 4,692 Department of Immigration .. 67,157 184,918 .. 117,761 Roads, &c. .. .. .. 669,832 575,131 94,701 | Roads on Ooldfields .. .. 2,330 2.230 100 Roads to give access to outlying districts 33,642 .. 33,642 Telegraph Ext -nsion .. .. .. 625,540 558,041 67,499 Contingent Defence .. 39,986 : 34,014 5,972 i Lands, Miscellaneous .. .. 72,898 j 56,267 16,631 Irrigation, Water-supply, and Drainage.. ! 49,735 56,937 .. 7,202 Plant. Material, and Stores .. .. Cr. 1,288 i Cr. 24,148 22,860 Transfer to Main Highways Account, 200,000 ' 400,000 .. j 200,000 Construction Fund S'rvices not provided for .. .. 264 1,190 .. 926 272,461 804,777 272,461 Totals .. . . j 3,300,369 j 3.832,685 , .. 532,316

8.—6.

Table No. 14. Statement showing the Total Ways and Means of the Public Works Fund, General Purposes Account, and the Total Net Expenditure to the 31st March, 1928.

XI

WAYS AND MEANS. Loans:— £ s. d. £ s. d. Immigration and Public Works Loan, 1870 .. .. .. 4,000,000 0 0 Immigration and Public Works Loan, 1873 .. .. .. 2,000,000 0 0 Immigration and Public Works Loan, 1874 .. .. .. 4,000,000 0 0 General Purposes Loan Act, 1873 .. .. .. .. 750,000 0 0 New Zealand Loan Act, 1876 .. .. .. .. 750,000 0 0 New Zealand Loan Act, 1877 .. .. • 2,200,000 0 0 New Zealand Loan Act, 1879 .. .. .. .. .. 5,000,000 0 0 New Zealand Loan Act, 1882 .. .. .. .. .. 3,000,000 0 0 New Zealand Colonial Inscribed Stook Loan Act, 1882 .. .. 250,000 0 0 North Island Main Trunk Railway Loan Act, 1882 .. .. 1,000,000 0 0 New Zealand Loan Act, 1884 .. .. .. .. .. 1,500,000 0 0 New Zealand Loan Act, 1886 .. .. .. .. .. 1,325,000 0 0 District Railways Purchasing Acts, 1885 and 1886 .. .. 479,487 7 11 New Zealand Loan Act, 1888 .. .. .. .. .. 1,000,000 0 0 Native Land Purchase Act, 1892 .. .. .. .. 149,700 0 0 Lands Improvement and Native Lands Acquisition Act, 1894 .. 500,000 0 0 Aid to Public Works and Land Settlement Act, 1896 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Amendment Act, 1897 .. 250,000 0 0 Aid to Public Works and Land Settlement Amendment Act, 1898 .. 500,000 0 0 Aid to Public Works and Land Settlement Act, 1899 .. .. 1,000,000 0 0 Aid to Public Works aud Land Settlement Act, 1900 .. .. 1,011,600 0 0 Aid to Public Works and Land Settlement Act, 1901 .. .. 1,250,000 0 0 Aid to Public Works and Land Settlement Act, 1902 .. .. 1,750,000 0 0 Aid to Public Works and Land Settlement Act, 1903 .. 997,690 0 0 Aid to Public Works and Land Settlement Act, 1904 .. .. 750,000 0 0 Aid to Public Works and Land Settlement Act, 1905 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Act, 1906 .. .. 989,700 0 0 Aid to Public Works and Land Settlement Act, 1907 .. 1,000,000 0 0 Aid to Public Works and Land Settlement Act, 1908 .. 1,250,000 0 0 Aid to Public Works and Land Settlement Act, 1909 .. .. 1,000,000 0 0 Aid to Public Works and Land Settlement Act, 1910 .. .. 1,750,000 0 0 Aid to Public Works and Land Settlement Act, 1911 .. .. 1,500,000 0 0 Aid to Public Works and Land Settlement Act, 1912 .. 1,748,900 0 0 Aid to Public Works and Land Settlement Act, 1913 .. 1,750,000 0 0 Aid to Public Works and Land Settlement Ant, 1914 .. 3,000,000 0 0 Aid to Public Works and Land Settlement Act, 1921 .. .. 5,061,081 18 2 Aid to Public Works and Land Settlement Act, 1922 .. .. 4,403,904 7 6 Finance Act, 1909 .. .. .. .. .. .. 1,250,000 0 0 Finance Act, 1915, and New Zealand Loans Act. 1915 .. .. 2,000,000 0 0 Finance Act, 1916 .. .. .. 1,000,000 0 0 Finance Act, 1917 .. .. .. .. .. 850,000 0 0 Finance Act, 1918 (No. 2) .. .. .. .. .. 2,500,000 0 0 Finance Act, 1919, Section 5 .. .. .. .. .. 750,000 0 0 Finance Act, 1920, Section 15 .. .. .. .. .. 2,500,000 0 0 Finance Act, 1921, Section 10 .. .. .. 2,673,111 10 11 Finance Act, 1923, Section 2 .. .. .. .. .. 4,306,626 17 7 Finance Act, 1924, Section 2 .. .. .. 2,065,893 1 11 Finance Act, 1925, Section 2 .. .. .. .. .. 4,152,990 12 0 Finance Act, 1926, Section 2 .. .. .. .. ..I 3,599,001 2 3 Post and Telegraph Act, 1908 .. .. .. .. .. 200,000 0 0 Midland Railway Petitions Settlement Acts, 1902 and 1903 .. 150,000 0 0 Paeroa-Waihi Railway Act, 1903 .. .. .. ... 75,000 0 0 Waikaka Branch Railway Act, 1905 .. .. .. .. 50,000 0 0 Wellington and Manawatu Railway Purchase Act, 1908 .. .. 1,000,000 0 0 Appropriation Act, 1912 .. .. .. .. 15,000 0 0 Irrigation and Water-supply Act, 1913 .. .. .. .. 100,000 0 0 90,109,686 18 3 Receipts in Aid: — Amount transferred from Consolidated Fund .. .. .. 14,555,000 0 0 Contributions of Canterbury Provinoe for Railways .. .. 56,000 0 0 Proceeds of Railway Material handed over to Cook County Council 4,963 7 4 Stamp Duties to 31st December, 1876 .. .. .. .. 264,657 16 4 Transfer from Confiscated Lands Liabilities Account .. .. 19,963 1 3 Reoeipts under Section 16 of the Reserves and other Lands Disposal j and Public Bodies Empowering Act, 1912 .. .. .. 21,890 4 5 Special Receipts under Section 9 of the Railways Construction Act, 1878 •• 60,616 3 0 Special Reoeipts under the ElleBmere Lake Lands Acts, 1888 and 1893 f. .. .. 64,119 16 5 Speoial Receipts under the Railways Authorization and Management Act, 1891 .. .. •• •• 2,257 1 9 Special Receipts under the North Island Main Trunk Railway Loan Application Act, 1886 .. .. • •• 114,550 19 6 Sinking Funds released .. .. .. .. .. 506,819 19 3 j 15,670,838 9 3 £105,780,525 7 6

8.—6

Table No. 14 —continued. Statement showing the Total Ways and Means of the Public Works Fund, General Purposes Account, and the Total Net Expenditure to the 31st March, 1928—continued.

Table No. 15. Statement of the Estimated Liabilities chargeable on the Public Works Fund (General Purposes Account), outstanding on the 31st March each Year from 1924 to 1928.

XII

NET EXPENDITURE. Expenditure oil— £ s. d. , £ s. d. j Immigration .. .. .. .. .. .. .. 3,184,566 3 0 Public Works, Departmental .. .. .. .. .. 2,490,564 14 4 Railways, including Surveys of New Lines and payment to Midland Railway Bondholders.. .. .. .. .. .. 51,106,402 13 2 Roads.. .. .. .. .. .. .. .. 16,966,026 14 4 Land-purchases .. .. .. .. .. .. 2,061,147 1 10 Development of Mining .. .. .. .. .. j 881,845 0 11 Telegraph Extension .. .. .. .. .. .. 9,291,947 1 3 Public Buildings .. .. .. .. .. 10,136,524 2 3 Lighthouses, Harbour Works and Defences .. .. 1,249,213 12 4 Contingent Defence .. .. .. .. .. .. 1,280,916 0 11 Rates on Native Lands .. .. .. .. .. .. 68,671 16 10 ; Thermal Springs .. .. .. 14,599 13 2 Development of Tourist Resorts .. .. . 460,765 17 4 Lands Improvement .. .. .. 426,606 19 11 Plant, Material, and Stores .. .. .. .. 348,217 7 6 Charges and Expenses of raising Loans .. .. .. 2,596,623 14 10 Coal-mines .. .. .. .. .. 10,835 8 0 Interest and Sinking Fund .. .. .. 218,500 0 0 Irrigation and Water-supply .. .. .. .. 781,282 4 10 Timber Supply, Sawmills, &c. .. .. .. .. .. 5,686 15 5 Acquisition and operation of quarries .. .. .. 11,143 12 6 Motor Transport Service .. .. .. .. . 33,635 5 3 Transfer to Main Highways Account, Construction Fund .. 826,000 0 0 104,451,721 19 11 Balance on 31st March, 1928, — Cash in the Public Account .. 668,314 3 2 Imprests outstanding .. .. .. .. .. .. 37,489 4 5 Investments .. .. .. .. .. .. .. 623,000 0 0 — 1,328,803 7 7 £105,780,525 7 6

1924. 1 1925. 1926. 1927. 1928. J 1 I 1 Annual Appropriations— £ £ £ £ £ Public Works, Departmental .. .. .. 503 1,033 1,768 2,198 2,475 Railways .. .. .. .. .. .. 269,090 455,534 99,592 122,980 114,964 Irrigation and Water-supply .. .. .. .. 11,257 6,257 2,406 3,478 2,216 Public Buildings .. .. .. .. .. 18,752 19,571 19,521 20,880 15,276 Timber-supply, &c. .. .. .. .. .. 865 557 81 1,367 552 Acquisition and Operation of Quarries .. .. .. 3,228 2,011 1,053 1,997 Lighthouses, Harbour-works, and Harbour-defences .. 91 74 591 861 1,423 Development of Tourist Resorts .. .. .. 776 1,137 6,697 992 4,590 Immigration .. .. .. .. .. .. .. 33,179 20,238 13,216 Roads .. .. .. .. .. .. 142,565 48,734 54,859 74,969 94,445 Telegraph Extension .. .. .. .. 488,989 539,812 214,007 211,700 227,018 Lands, Miscellaneous .. .. .. .. 1,166 1,819 3,621 1,585 3,170 Plant, Material, and Stores .. .. .. .. 5,638 2,947 4,292 2,610 7,376 Totals .. .. .. .. .. 939,692 1,080,703 442,625 464,911 488,718

8.—6

Table No. 16. Statement of the Estimated Liabilities chargeable on the undermentioned Separate Accounts outstanding on the 31st March each Year from 1924 to 1928.

XIII

1924. ! 1925. ' 1926. | 1927. ! 1928. £ £ £ £ £ Deteriorated Lands Account .. .. .. .. .. ! 117 839 34 Discharged Soldiers Settlement Account .. .. .. .. • .. 5,012 Eduoation Loans Account .. .. .. .. 9,274 2,774 2,214 3,962 3,855 Deposits Account .. .. .. .. .. : .. 222 3 .. 569 Electric Supply Account .. .. .. 37,734 75,743 87,856 141,064 330,055 Government Accident Insurance Account .. .. 289 14 956 345 316 Government Life Insurance Account .. .. .. 1,214 2,849 1,142 1,269 1,339 Hauraki Plains Settlement Aeoount .. .. .. 2,741 2,099 1,808 4,836 4,160 Kauri-gum Industry Account .. .. .. 45 65 441 Land for Settlements Account .. .. .. 49 1,096 1,143 870 35 Land for Settlements Account (Discharged Soldiers Settlement Account) .. .. .. .. .. 136 456 238 74 2,162 Land for Settlements Account (Opening up Crown Lands for Settlement Account) .. .. .. .. 47 20 2,799 Main Highways AccountRevenue Fund .. .. .. .. 3 15,047 73,703 64,276 66,304 Construction Fund.. .. .. .. .. .. 17,328 81,847 124,746 59 418 National Endowment Account .. .. .. .. 1,113 1,005 .. 88 Native Land Settlement Account .. .. .. 1,611 1,008 542 4,045 3,881 Native Trustee's Aeoount .. .. .. .. 61 20 57 39 53 Public Service Superannuation Fund Aocount .. .. 389 345 23 157 171 Public Trust Office Account .. .. .. .. .. .. .. 5,032 6,142 Railways Improvement Authorization Act 1914 Account .. 22,529 45,992 42,083 50,524 140,866 Rangitaiki Land Drainage Account .. .. .. 594 2,621 448 970 1,540 State Advances Aeoount .. .. .. .. 4,502 i 2,648 2,699 4,268 64*939 State Coal-mines Aocount .. .. .. 10,631 6,302 4,930 21,130 16,926 State Fire Insurance Account .. .. .. 15 503 202 59 State Forests Account .. .. .. 3,240 3,152 13,455 11,342 10,487 Swamp Land Drainage Aocount .. .. .. 3,233 864 1,174 3,471 3,670 Waihou and Ohinemuri Rivers Improvement Account .. 1,522 2,496 2,954 6,403 6,388 War Expenses Account .. .. .. .. 182,409 Westport Harbour Aeoount .. .. .. .. 526 464 612 4,621 647 Working Railways Account* .. .. .. .. 309,278 329,829 358,110 * Formerly vote under Consolidated Fund.

8.—6.

Table No. 17. Receipts and Payments of Accounts, 1927-28, with Balances at 1st April, 1927, and 31st March, 1928.

XIV

Balance, 31st March Balance, Credits « * 1928. Account. 1st April, Receipts (net). in Exnanditurp i 1927. Reduction. expenditure. In Cash. j nveatmenta _ Consolidated Fund — £ £ £ £ £ Ordinary revenue .. .. .. 3,681,466 25,399,980 4,447,981 130,227,195 1,984,431 1,317,801 Nauru and Ocean Islands .. .. 3,251 36,548 .. 36,354 245 3,200 Nauru and Ocean Islands Sinking Fund 164 9,373 .. 9,430 7 100 Accounts of Local Bodies .. .. 9,573 32,280 .. 33,395 8,458 Deposits .. .. .. .. 354,566 862,504 .. 941,074! 23,077 252,919 Public Works Fund— General Purposes .. .. .. 839,387 3,890,643 815,286 4,216,513 705,8031 623,000 Waihou and Ohinemuri Rivers Improvement .. .. .. .. 1,667 182,156 7,278 179,023 12,078 Electric Supply .. .. .. 274,190 1,582,070 28,933 1,812,493 72,700 Electric Supply Sinking Fund .. .. 38,663 37,053 .. .. 216 75,500 Advances to other Governments .. 49,637 323,371 .. 326,441 46,567 Bank of New Zealand Shares .. .. 1,683,594 351,953 .. 234,766 .. 1,800,781 Cheviot Estate .. .. . . 172,658 25,340 .. 6,608 710 190,680 Conversion .. .. .. .. 31 .. . . .. 31 Deteriorated Lands .. .. .. 4,722 22,878 .. 12,186 15,414 Discharged Soldiers Settlement .. .. 699,270 1,811,048 8,684 1,883,625 289,133 346,244 Discharged Soldiers Settlement Act 1920 Depreciation Fund .. .. .. 355,967 65,534 .. 4,384 ! 20,242 396,870 Education Loans .. .. .. 56,162 535,000 11,721 545,169 17,714 40,005 General Purposes Relief .. .. 25,963 6,395 .. 2,821 4,537 ; 25,000 Hauraki Plains Settlement .. .. 12,359 72,548 6,115 80,627 10,395 Howard Estate .. .. .. j .. 240 .. 240 Hunter Soldiers' Assistance Trust .. j 3,734 884 .. 139 429 4,050 Hutt Valley Lands Settlement .. .. 27,171 103,689 .. 107,027 23,833 Kauri-gum Industry .. .. .. 2,365 3,280 103 5,676 72 Land Assurance Fund .. .. .. 81,052 4,588 .. 3,239 801 81,600 Land for Settlements .. .. .. 163,453 604,651 15,619 597,121 6,277 180,325 Land for Settlements (Discharged Soldiers Settlement) .. .. .. 118,274 101,402 1,147 168,933 6,890, 45,000 Land for Settlements (Opening-up Crown lands for Settlement).. .. .. 9,060 14,053 238 14,721 8,630! Loans Redemption .. .. .. 239 13,324,547 .. 13,292,773 32,013 Main Highways — Revenue Fund .. .. .. 752,939 774,955 29,880 934,888 379,986 242,900 Construction Fund , 70,559 550,009 60,813 608,810 72,571 Mining Advances .. .. ■■ I 13,612 2,007 .. 1,003 7,616; 7,000 National Endowment .. .. .. 129,312 149,148 .. 142,841 26.989 108,630 National Endowment Trust .. .. 1 25,139 8,562 .. 467 944 32,290 Native Land Settlement .. .. 114,397 96,696 569 139,343 8,319 64,000 Public Debt Repayment .. .. j 4,395 993,981 .. 998,188 188 Railways Improvement Authorization Act, 1914 . .. .. .. 402,655 1,695,257 94,110 1,515,253 102,519 574,250 Rangitaiki Land Drainage .. .. 14,839 10,576 1,344' 20,951 3,808 2,000 Reserve Fund .. .. .. .. 2,000,000 .. .. .. .. 2,000,000 State Advances Loan .. .. .. ] 2,381 1,406,159 .. 1,408,128 412 State Coal-mines .. .. .. 33,704 318,779 1,732 317,817 22,098 14,300 State Coal-mines Sinking Fund .. .. J 55,105 7,233 .. .. 5,313; 57,025 State Forests .. .. .. .. 23,640 332,825 1.536 320,217 17,784; 20,000 Swamp Land Drainage .. .. .. J 4,388 137,596 655 123,376 19,263 Westport Harbour .. .. .. 81,807 181,375 528 206,261 1,449 56,000 Working Railways .. .. .. 864,514 I 8,233,419 1,063,614 9,519,116 247,431 395,000 Public Account Cash Balance Investment.. j .. .. —2,275,OOOj 2,275,000 113,262,024 64,302,585 6,597,886 70,998,632 1,932,393 11,231,470

8.—6

Table No. 18. Statement showing the available Financial Resources of the various Accounts on the 31st March, 1927, as compared with the 31st March, 1928.

XV

1927. 1928. Account. Balance j Liabilities Balance Liabilities 31st March, ; 31st March, i /'""j? 31st March, 31st March, Jj?2? 1927. j 1927. I on 1 1 S * 2^ pri1 ' 1928. 1928. on 1 ' j Consolidated Fund— £ £ £ £ j £ £ Ordinary Revenue .. .. 3,681,466 335,354 j .. 3,302,232 387,477 Nauru and Ocean Islands .. .. 3,251 .. .. 3,445 ! .. ! Nauru and Ocean Islands Sinking Fund 164 .. .. 107 Public Works Fund— General Purposes .. .. .. 839,387 464,911 5,061,050 1,328,803 488,718 5,561,050 Waihou and Ohinemuri Rivers Improvement .. .. .. 1,667 6,403 175,000 12,078 i 6,388 90,000 Electric Supply .. .. .. 274,190 141,064 4,478,990 72,701; 330,055 3,418,990 Electric Supply Sinking Fund .. ! 38,663 .. .. 75,716 j Advances to other Governments .. j 49,637 .. .. 46,567 Bank of New Zealand Shares.. .. 1,683,594 .. .. 1,800,781 Cheviot Estate .. .. .. 172,658 .. .. 191,390 Conversion.... .. .. I 31 .. .. 31 Deteriorated Lands .. .. .. 4,722 839 288,000 15,414 34 278,000 Discharged Soldiers Settlement .. : 699,270 .. 862,750 635,377 ! 5,013 862,750 Discharged Soldiei s Settlement Loans Act 1920 Depreciation Fund .. .. 355,967 .. .. 417,117 Education Loans .. .. .. 56,162 3,962 541,160 57,714 1 3,855 1,166,160 General Purposes Relief .. .. 25,963 .. .. 29,537 .. 160,000 Hauraki Plains Settlement % . .. 12,359 4,836 200,000 10,395 4,160 Hunter Soldiers'Assistance Trust .. 3,734 .. .. 4,479 Hutt Valley Lands Settlement .. 27,171 .. .. 23,833 Kauri-gum Industry .. .. 2,365 .. .. 72 Land Assurance Fund .. .. 81,052 .. .. 82,401 Land for Settlements .. .. 163,453 870 500,000 186,602 35 750,000 Land for Settlements — Discharged Soldiers Settlement .. 118,274 74 1,500,000 51,890 2,162 1,500,000 Opening-up Crown Lands for Settlement 9,060 .. 250,000 8,630 Loans Redemption .. .. .. 239 .. .. 32,013 Main Highways — Revenue Fund .. .. .. 752,939 64,276 .. 622,886 66,304 Construction Fund .. .. 70,559 124,746 2,400,000 72,571 59,418 2,350,000 Mining Advances .. .. .. 13,612 .. 50,000 14,616 .. 50,000 National Endowment .. .. 129,312 .. .. 135,619 88 National Endowment Trust .. .. 25,139 .. .. 33,234 i Native Land Settlement .. .. 114,397 4,045 500,000 72,319 3,881 500,000 Public Debt Repayment .. .. 4,395 .. .. 188 Railways Improvement Authorization Act, 1914 .. .. .. 402,655 50,524 2,000,000 676,769 140,866 2,350,000 Rangitaiki Land Drainage .. .. 14,839 970 15,000 5,808 1,540 15,000 Reserve Fund .. .. .. 2,000,000 .. .. 2,000,000 Samoan Loan Suspense .. .. .. .. 1,000 .. .. 17,800 State Coal-mines .. .. .. 33,704 21.130 55,000 36,398 16,926 130,000 State Coal-mines Sinking Fund .. 55,105 .. .. 62,338 I State Forests .. .. .. 23,640 11,342 503,225 37,784 10,487 388,225 Swamp Land Drainage .. .. 4,388 3,471 150,000 19,263 3,670 150,000 Westport Harbour .. .. .. 81,807 4,621 .. 57,449 ' 647 Working Railways .. .. .. 864,514 329,829 .. 642,431 ! 358,110 State Advances .. .. .. 206,676 4,268 9,964,250 163,181 : 64,939 10,123,523 Additional Unexhausted Authorities for raising Loans. Hutt Railway and Road Improvement Acts, 1903, 1905, 1907, 1910 .. .. .. 3,320 .. .. 3,320 Government Railways Amendment Act, 1910 .. .. .. .. .. .. ! 55,470 .. .. 55,470 Finance Act, 1917, sec. 77 (Discharged Soldiers Employment) .. .. .. .. 1,000,000 .. .. 1,000,000 Naval Defence Act, 1909 (inoperative).. .. .. 299,400 .. | .. 299,400 Land Act, 1924 (waste lands) .. .. .. 1,000,000 .. .. 1,000,000 Government Accident Insurance Act, 1908 .. .. 23,000 .. .. 23,000 State Fire Insurance Act, 1908 .. .. .. 98,000 .. .. 98,000 Finance Act, 1918 (No. 2), Part IV (War .. .. 4,467,360 .. .. 4,467,360 Expenses) Totals .. .. .. 13,102,180 1,577,535 36,441,975 13,042,179 1,954,773 I 36,808,048

8.—6.

Table No. 19. Statement showing the Amount charged to "Unauthorized" in each Financial Year from 1st April, 1910, to 31st March, 1928.

Table No. 20. Summary of the Public Debt and op the State Assets which may be set off against it, as at 31st March, 1928, together with Supporting Schedule showing Details of Assets. Debt. £ Ordinary debt .. ■ • • • • • 139,329,644 War debt .. . 71,970,636 State Advances debt .. .31,081,966 Discharged soldiers debt • 9,014,006 Surplus assets over debt • 11,146,053 £262,542,305 Assets. Cash and investments (Reserve Funds, Bank of New Zealand shares, Public Debt £ Redemption Fund, &c.) .. .. .. .. .. .. .. 35,183,617 Sinking funds accrued .. .. .. .. .. .. •- 2,635,766 Loans and advances outstanding (Discharged Soldiers, State Advances, &c.) .. . . 37,111,525 Revenue Earning and Trading Accounts (Railways, Telegraphs, &c.) .. .. 77,852,274 Lands and forests (Crown lands, State forests, &c.).. .. .. . 71,930,663 Indirectly productive expenditure — £ Roads and public buildings, &c. .. .. .. .. 34,643,894 Immigration .. .. .. .. . • • • 3,184, 566 37,828,460 £262,542,305

XVI

! 1 Consolidated Fund.—Revenue Account. j FT KANnT*T yfah Other Public Workr total FINANCIAL YEAR. ACCOUNTS. FUND. SerT vW e ed n f 0 or Pr °" Exoess of VoteB '! Total - , , : . - — _ . >ii_ £ s. d. £ 8. d. £ s. d. £ s. d. £ s. d. £ s. d. 1910-19X1.. .. 10,427 9 4 27,200 14 6 37,628 3 10 1,009 9 7 12,833 7 5 51,471 0 10 1911-1912.. .. 20,332 3 1 62,950 14 7 83,282 17 8 860 5 4 4,982 8 7 89,125 11 7 1912-1913.. .. 2,506 15 0 115,428 2 5 117,934 17 5 63 15 0 73,404 8 3 191,403 0 8 1913-1914.. .. 4,730 15 8 80,228 10 11 84,959 6 7 137 5 8 16,671 3 3 101,767 15 6 1914-1915.. .. 109,512 12 4 68,004 2 1 177,516 14 5 853 3 5 8,189 3 10 186,559 1 8 1915-1916.. .. 30,865 10 2 47,222 33 9 78,088 3 11 14,742 5 9 2,363 3 9 95,193 13 5 1916-1917.. .. 41,600 17 4 106,454 9 0 148,055 6 4 34,852 5 5 6,636 4 1 189,543 15 10 1917-1918.. .. 17,909 4 7 48,886 8 7 66,795 13 2 26,010 17 11 7,693 0 5 100,499 11 6 1918-1919.. .. 13,519 17 3 66,70119 8 80,22116 11 .. .. 80,22116 11 1919-1920.. .. 77,149 13 2 362,295 0 5 439,444 13 7 1,2.39 5 4 11,072 14 6 451,756 13 5 1920-1921.. .. 108,498 19 2 392,596 5 9 501,095 4 11 1,750 12 6 168,745 11 6 671,591 8 11 1921-1922.. .. 2,455 13 7 105,962 14 10 108,418 8 5 2,982 1 6 292,233 1 4 403,633 11 3 1922-1923.. .. 65,687 7 9 76,710 6 9 142,397 14 6 754 10 10 41 4 2 143,193 9 6 1923-1924.. .. 189,384 15 11 1,983 3 1 191,367 19 0 33,123 3 1 41,944 10 2 266,435 12 3 1924-1925.. .. 22,526 15 9 63,690 15 3 86,217 11 0 27,390 19 0 101,970 16 2 215,579 6 2 1925-1926.. .. 30,265 7 9 26,257 3 7 56,522 11 4 30,81119 2 23,665 13 8 111,000 4 2 1926-1927.. .. 27,913 18 1 45,418 12 4 73,332 10 5 1,58110 7 2,80118 9 77,715 19 9 1927-1928.. .. 15,942 15 4 51,560 10 5 67,503 5 9 10,740 8 2 49,604 6 11 127,848 0 10

8.-C

Details of Assets included above. (Note : Stores or supplies in hand not included in assets.) Cash and Investments :— *Cash in the Public Account and in the hands of officers of the £ £ £ Government .. .. .. .. .. 1,894,821 fLess liabilities outstanding, 31st March, 1928 .. .. 1,919,532 Or. 24,711 ♦Investment of cash balances .. .. .. .. .. 7,045 146 Reserve fund (securities at cost) .. .. .. .. .. 1,928,162 Post Office Savings-bank Reserve Fund .. .. .. .. 1,000,000 Bank of New Zealand shares (nominal value) .. .. .. 2,109,375 {Public Debt Redemption Fund .. .. .. .. .. 23,125,645 — 35,183,617 Sinking funds accrued — State Advances debt .. .. .. .. .. .. 2,268,418 State Coal-mines .. .. .. .. .. .. 62,338 Westport Harbour loans .. .. .. .. .. 220,050 Samoan loan .. .. .. .. .. .. 9,137 Nauru and Ocean Islands Sinking Fund Account .. .. .. 107 Electric Supply Sinking Fund Account .. .. .. .. 75,716 - 2,635,766 Loans and advances outstanding— Mining purposes .. .. .. .. .. .. 26,836 Local bodies (annuity value of interest receivable) .. .. .. 914,315 Samoan (loan, less sinking fund) .. .. .. .. .. 151,063 Repatriation advances outstanding, 31st March, 1928 .. .. 331,356 £ Discharged soldiers'mortgages and property held .. ..16,537,302 Less amount included in Public Debt Redemption Fund . .11,900,000 4,637,302 State Advances—Mortgages and property held, less sinking funds and investments included elsewhere .. .. .. .. 31,019,788 General purposes relief—Advances outstanding .. .. .. 30,865 37,111,525 Revenue Earning and Trading AccountsRailways (capital cost, including unopened b'nes and value of assets taken over from provinces) .. .. .. .. .. 58,591,440 Telegraphs (value of assets) .. .. .. .. .. 8,495,003 Pacific cable (estimated value of Dominion's interest) .. .. 100,000 Electric-power supply and development (capital expenditure) .. 7,523,929 Westport Harbour-works (value of assets) .. .. .. 566,011 Lighthouses and harbour-works (capital expenditure) .. .. 1,249,379 Tourist and health resorts (capital expenditure) .. .. .. 475,881 State coal-mines (value of assets) .. .. .. .. 246,403 Kauri-gum (trading capital) .. .. . . .. .. 39,188 Nauru and Ocean Islands (purchase price of rights) .. .. 565,040 77,852,274 Lands and forests — Crown lands (estimated value, including settlement lands, Native lands, and education reserves) .. .. .. . 30,351,114 Land-drainage schemes (capital invested) .. .. .. .. 1,459,568 Irrigation and water-supply (capital expenditure) .. .. .. 784,080 Waihou and Ohinemuri Rivers improvement (capital expenditure) . . 607,989 Lands improvements (capital expenditure) .. .. 429,181 Samoan Crown Estates (value of Dominion's interest) .. .. 662,360 Howard Estate .. .. .. .. .. .. 75,000 State forests (estimated value of forests, reserves, plantations, and nurseries) .. .. .. .. .. .. 37,561,371 71,930,663 Indirectly productive expenditure— Public buildings (including school buildings) .. .. 13,526,058 Roads (including roads on Crown lands and main highways).. .. 20,218,031 Timber-supply, sawmills, &c. (capital invested) .. .. 5,687 Quarries (acquisition and working) .. .. .. .. 11,143 Development of mining (capital expenditure) .. .. .. 882,975 Immigration (capital expenditure) .. .. .. .. 3,184,566 37,828,460 £262,542,305 * Does not include trust, dsposit, or sinking; funds, or oertain other accounts inoluded elsewhere. f After deducting £38,894, credits due from other Governments, from the total liabilities. J Includes £11,900 5 000 previously included under discharged soldiers mortgages, and £11,225,645 of accumulated sinking funds.

iii—B S.

XVII

8.—6

Table No. 21. PUBLIC DEBT. Statement showing Loans falling due in the next Seven Years, ending with the Year 1935, excluding Imperial Debt Repayments.

Table No. 22. PUBLIC DEBT. Statement of Half-yearly Instalments of Principal and Interest for Repayment of £27,532,164 advanced by the Imperial Government and funded in Terms of the Agreement dated 6th September, 1922.

XVIII

Year ending 31st March, London. Australia. New Zealand. ! Total. £ £ £ £ 1929 .. .. .. .. 13,100 15,500 15,275,345 15,303,945 1930 .. .. .. .. 29,471,029* 2,360 12,405,432 41,878,821 1931 .. .. .. .. 13,250 123,190 21,479,586 21,616,026 1932 .. .. .. .. 3,800 334,900 6,420,106 6,758,806 1933 .. .. .. .. 56,890 477,550 4,675,023 5,209,463 1934 .. .. .. .. 500,000 52,000 2,906,920 3,458,920 1935 .. .. .. .. .. 1,275,000 .. 1,275,000 Totals .. .. .. 30,058,069 2,280,500 63,162,412 95,500,981 * £5,000,000 of this amount has since been converted in 1928 to stock falling due in 1947.

Date Instalments paid. i Interest. Principal. £ £ £ 1st December, 1922 .. .. 684,794 141,171 27,390,993 1st June, 1923 .. .. .. .. 681,282 144,683 27,246,310 1st December, 1923 . . .. .. 677,684 148,281 27,098,029 1st-June, 1924 .. .. .. .. 673,996 151,969 26,946,060 1st December, 1924 .. .. .. 670,216 355,749* 26,590,311 1st June, 1925 .. .. .. .. ! 661,367 164,598 26,425,713 1st December, 1925 .. .. .. 657,274 168,691 26,257,022 1st June, 1926 .. .. .. .. 653,078 172,887 26,084,135 1st December, 1926 .. .. .. 648,778 177,187 25,906,948 1st June, 1927 .. .. .. 644,370 181,595 25,725,353 1st December, 1927 .. .. .. 639,854 ; 186,111 25,539,242 I * Includes £200,000 paid off the Naval Defence Loan in terms of the clause by which New Zealand has the right, on giving three months' notice, to repay at par any part of the principal.

8.—6.

Table No. 23. EDUCATION EXPENDITURE. Total Expenditure on Education out of Public Funds, including University, Primary, Secondary, and Higher Education, Technical and Special Schools, 1913—14 to 1927-28.

In addition, secondary schools and University colleges derive direct income (amounting for 1927-28 to £77,576) from reserves vested in them. The following amounts were also paid out of the Government Fire Insurance Fund for rebuilding school buildings destroyed by fire : — £ 1916-17 .. .. .. .. .. 2,127 1917-18 .. .. .. .. .. 2,658 1919-20 .. .. .. .. ..15,682 1920-21 .. .. .. .. ..16,162 1921-22 .. .. .. .. .. 27,103 1922-23 .. .. .. .. .. 8,542 1923-24 . .. .. .. .. 12,490 1924-25 .. .. .. .. .. 32,829 1925-26 .. .. .. .. ..4,938 1926-27 .. .. .. .. .. 10,337 1927-28 .. .. .. .. .. 12,474

iv— B. 6.

XIX

Loan-money: Erection Consolidated Fund. of School Buildings and Residences. Per Head of Year. Administra- Subsidies Total. Mean s • l National tiori. Revenue ... ! ? , Public Education PopulaSpecial Endow- Vote, , Teachers „ 7 , T tion Acts. ment Education, * rom Super- Works Loans Revenue. Salaries and eserves. annua tj on un • ccoun other Charges. Eund. j —- . . . £ £ £ £ £ £ £ £ £ s. d. 1913-14 .. 27,742 50,681 1,131,756 71,808 17,000 121,954 ., 1,420,941 1 5 3 1914-15 .. 26,128 55,139 1,207,983 70,802 17,000 122,940 . 1,499,992 1 6 2 1915-16 .. 46,874 64,858 1,329,166 84,390 17,000 97,972 .. 1,640,260 1 8 6 1916-17 .. 58,408 60,180 1,406,264 90,535 17,000 70,367 .. 1,702,754 1 9 8 1917-18 .. 59,362 70,345 1,511,256 90,518 17,000 63,082 .. 1,811,563 1 11 5 1918-19 .. 57,716 76,177 1,602,995 92,095 43,000 115,656 .. 1.987,639 1 14 1 1919-20 .. 79,747 78,988 2,031,825 99,352 43,000 195,500 .. 2,528,412 2 1 10 1920-21 .. 101,972 70,313 2,460,116 100,758 43,000 244,722 214,571 3,235.452 2 11 8 1921-22 .. 96,217 71,737 2,580,562 105,448 43,000 2,469 563,411 3,462,844 2 13 10 1922-23 .. 90,393 66,610 2,514,991 112,378* 68,000 .. 361,976 3,214,348 2 9 0 1923-24 .. 96,506 77,788 2,604,508 116,808*68,000 .. 295,681 3,259,291 2 8 11 1924-25 .. 128,844 86,746 2,752,271f 118,973* 68,000 .. 462,212 3,617,046 2 13 2 1925-26 .. 111,389 87,512 2,854,719f 119,978* 70,952 .. 564,946 3,809,496 2 14 9 1926-27 .. 115,499 88,545 2,954,597f 119,073* 71,452 .. 550,954: 3,900,120 2 14 11 1927-28 .. 127,289 90,518 2,974,615f 123,247* 71,497 .. 369,134 3,756,300 2 12 1 * Net revenue after deducting expenses and cost of collection. t Excluding £25,000 for teachers' superannuation, included under that heading.

8.—6,

Table No. 24. PENSIONS. Statement of Amounts paid on account of Pensions for the Financial Years ended 31st March, 1924 to 1928.

Table No. 25. EXTERNAL TRADE. Statement showing Imports and Exports of the Dominion in each Financial Year ended 31st March, 1920 to 1928.

XX

Year ended 31st March, 1924. 1925. 1926. 1927. 1928. . . £ £ £ £ £ War .. .. .. 1,306,652 1,242,182 1,179,552 1,122,741 1,146,955 Old-age .. .. .. 765,392 804,969 901,256 979,296 968,928 Widows' .. .. .. 202,364 235,959 285,654 301,080 302,766 Miners' .. .. .. 36,060 38,477 40,204 41,947 42,469 Maori War .. .. .. 30,326 26,836 23,087 19,446 16,377 Epidemic .. .. .. 32,507 22,938 14,420 10,935 8,757 Civil Service Act, 1908 .. 21,025 19,115 16,767 16,724' 13,206 Defence Act, 1909 .. .. 3,146 3,071 2,898 2,628 2,695 Judicature Act, 1908 .. 2,889 3,548 2,703 3,556 4,204 Police .. .. .. 486 586 552 406 457 Blind .. .. .. .. 1,036 8,040 10,304 12,249 Family Allowance .. .. .. .. .. .. 37,515 Sundry .. .. .. 4,374 4,897 5,022 5,945 6,273 Totals .. .. 2,405,221 2,403,614 2,480,155 2,515,008 2,562,851

Year ended 31st March, | Imports. Exports. Excess of Excess of Jixports. Imports. j i £ £ £ £ 1920 .. .. .. .. 32,162,029 50,776,650 18,614,621 1921 .. .. ... .. 67,463,269 48,219,672 .. 19,243,597 1922 .. .. .. .. 35,986,060 43,794,883 7,808,823 1923 .. .. .. .. 37,112,779 45,548,700 8,435,921 1924 .. .. .. .. 44,401,756 51,652,606 7,250,850 1925 .. .. .. .. 49,821,095 54,771,158 4,950,063 1926 .. .. .. .. 53,025,856 48,697,587 .. 4,328,269 1927 .. .. .. .. 48,192,670 45,682,338 .. 2,510,332 1928 .. .. .. 44,419,357 54,962,031 10,542,674 ! 57,602,952 26,082,198 26,082,198 Totals .. .. .. 412,584,871 444,105,625 31,520,754

8.—6.

Table No. 26. INCOME-TAX. Comparative Statement showing Amount of Income-tax paid in New Zealand, Australian States, and Great Britain on Selected Incomes up to £10,000 per Annum.

Authority: W. A. G. Skinner, Government Printer, Wellington.—l92B.

XXI

Including Australian Commonwealth. per'TnZn. i Ta^t«S! a ' Zealand, j Great Britain. New SouthWales. Victoria. Queensland. South Australia. £ s. d. £ s. d. £ s. d. £ 3. d. £ s. d. £ s. d. f None .. 2 12 6 5 16 10 4 18 1 6 5 6 11 0 4 10 18 0 £400 Two .. Nil Nil 0 18 9 0 6 7 6 12 3 Nil L Three .. Nil Nil Nil Nil 5 10 7 Nil f None .. 10 18 0 19 11 2 20 18 3 22 13 9 26 1 9 32 10 0 £600 <1 Two .. 7 4 5 12 5 3 13 4 5 13 14 10 19 16 8 16 10 0 L Three .. 5 18 2 9 0 0 10 17 6 9 16 8 17 0 7 11 10 0 f None .. 28 17 6 36 5 4 34 14 1 47 7 8 47 9 3 65 18 0 £800-; Two .. 22 10 0 27 12 3 27 10 2 33 1 10 42 19 6 43 18 0 I Three .. 19 11 11 23 10 0 24 2 6 27 14 4 40 18 11 33 18 0 f None .. 52 10 0 56 4 9 54 15 7 87 5 7 71 16 2 99 2 0 £1,000 •{ Two .. 43 17 6 45 19 6 49 2 0 81 12 0 66 2 7 77 2 0 I Three .. 39 16 11 41 0 11 46 9 3 78 19 3 63 9 10 67 2 0 f None .. 77 6 11 84 9 9 80 3 0 127 12 3 107 12 5 140 18 0 £1,250<| Two .. 66 16 11 73 4 2 73 17 5 121 6 8 101 6 10 118 18 0 L Three .. 61 17 6 67 6 3 70 9 6 117 18 9 97 18 11 108 18 0 f None .. 106 17 6 112 16 0 104 18 8 170 14 4 145 14 4 182 10 0 £1,500<| Two .. 94 10 0 101 2 10 98 13 10 164 9 6 139 9 6 160 10 0 I Three .. 88 11 11 95 8 7 95 13 9 161 9 5 136 9 5 150 10 0 f None .. 170 12 6 179 14 2 161 11 8 274 10 0 237 19 9 282 10 0 £2,000<! Two .. 156 15 0 165 2 2 152 13 0 266 11 4 230 1 1 260 10 0 [ Three .. 150 0 6 157 18 8 149 16 2 262 14 6 226 4 3 250 10 0 f None .. 2,205 0 0 2,786 11 0 2,152 7 8 3,405 6 0 3,272 3 6 3,013 15 0 £10,000<J Two .. 2,182 10 0 2,744 11 0 2,125 7 8 3,378 6 0 3,245 3 6 2,991 15 0 I Three .. 2,171 5 0 2,723 11 0 2,111 17 8 3,364 16 0 3,231 13 6 2,981 15 0