FINANCIAL STATEMENT. (In Committee of Supply, 1st August, 1929.) BY THE RIGHT HON, SIR JOSEPH WARD, BART., P.C., K.C.M.G., LL.D., MINISTER OF FINANCE.

Appendix to the Journals of the House of Representatives, 1929 Session I, B-06

B— 6

INDEX. PAGE Accident Insurance Branch (State Fire Insurance Office).. .. .. 25 Additional revenue from taxation proposals .. . . .. .. 27 Administration, economy in . . . . .. .. .. 5 Administrative expenses .. .. . . .. .. .. 5 Advances—State advances .. .. .. .. .. .. 15 Advances to Native Trustee .. .. .. .. .. . . 7 Agriculture .. .. .. .. .. .. .. .. 5, 20 Allocation of 1929 London loan .. .. .. .. .. 12 Appropriation, permanent and annual .. .. .. 3, 4 Arrears of applications for State advances .. .. .. . . 15 Auckland Harbour Bridge . . .. .. .. ... 11 Banking and currency .. .. .. .. .. .. 24 Bank of New Zealand shares .. . . . . . . .. 7 Borrowing-policy .. .. .. .. .. . . .. 14 Branch lines of railway .. . . .. .. .. .. 18 Capital works, expenditure on .. .. .. .. .. 8> Charges on taxation .. .. .. .. .. . . .. 4 Child-welfare .. .. .. . . .. .. .. 22 Classification of debt .. .. .. .. .. .. 14 Comparative increases in expenditure .. .. .. .. . . 3 Comparison of railway revenue and expenditure .. . . .. 16Consolidation of country schools .. .. .. . . .. 21 Control of expenditure . . .. .. .. .. .. 1 Control of loan expenditure .. .. .. . . .. .. & Conversion operations .. .. .. .. .. .. 12 Co-ordination of rail and road transport .. .. .. .. 17 Correspondence School .. .. .. .. .. . . 21 Debt — Charges .. .. .. .. .. .. .. 5 Classification of .. .. .. .. .. .. .. 14 Debt operations, summary of .. .. .. .. .. 14 Increase in .. .. .. .. .. .. .. 12 Public debt .. .. .. .. .. .. .. 12: Redemptions .. .. .. .. .. .. .. 13, 14 Repayment charges .. .. .. .. .. . . 4 Transfer of debt to New Zealand .. .. .. ~ 13 Defence .. .. .. .. .. .. .. .. 5 Direct taxation .. .. .. .. .. .. .. 2 Disposal of profits of Public Trust Office .. .. .. .. 25 Earthquake disaster .. .. .. .. .. .. .. 22 Economic conditions .. .. .. .. .. .. 1 Economy in administration .. .. .. .. .. .. 5 Education .. .. .. .. .. .. .. .. 21 Effect of trade position .. .. .. .. .. ... & Estimates for 1929-30 .. .. .. .. .. .. 27 Expenditure —- Estimated, 1929-30 .. .. .. .. .. .. 27 On public works .. .. .. .. .. .. 8 Ordinary Revenue Account .. .. .. .. .. 3.

I—B. 6.

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II

PAGE Funds of Ordinary Revenue Account .. .. .. .. . . 7 'Government's borrowing-policy .. . . .. . . .. 14 Government Insurance Department . . .. .. .. . . 25 Highways .. .. .. . . .. .. . . .. 5, 10 Hydro-electric supply .. .. .. .. . . .. 10 Immigration . . .. .. .. .. .. .. 11 Income-tax .. .. .. .. .. .. .. .. 2, 26 Exemption for children .. . . .. . - .. .. 26 Increase in— Annual appropriations .. . . .. . . . . .. 4 Public debt . . . . . . . . . . . . . . 12 State services .. .. .. .. .. . . .. 6 Interest .. .. .. .. . . . . .. .. 3, 27 Irrigation and rivers improvement . . .. . . .. .. 11 Land Development Branch of State Advances Office .. .. .. 20 Land-settlement .. .. .. . . .. . . .. 19 Cutting-up large estates .. .. .. .. .. .. 20 Development of selected areas .. . . . . . . .. 19 Waste lands .. . . . . . . . . . .. 19 Land-tax . . . . .. .. . . . - .. . . 2, 26 Reduction of mortgage exemption .. .. .. . . 26 Loan expenditure, control of . . . . . . . . .. .. 8 Loans— London Loan, 1929 .. .. .. . .. .. 11 New loans raised . . .. . . .. .. .. 12 Local authorities —Subsidies for unemployment relief .. .. .. 7 Main-highways policy .. .. . . .. .. .. 17 Mortgage exemption, reduction in .. .. .. .. .. 26 Motor transport .. .. .. .. .. .. .. 17 Napier to Gisborne Railway .. . . .. .. .. .. 9 Nelson to Inangahua Railway-line .. .. .. .. .. 9 New loans raised .. . . . . .. ... .. .. 12 North Auckland Trunk Line Railway . . .. .. .. .. 9 Ordinary Revenue Account— Expenditure .. .. .. . .. .. .. .. 3 Result in funds of .. .. .. .. .. .. 7 Palmerston North Deviation . . .. .. .. .. .. 8 Pensions .. .. . . . . .. .. .. 4, 5 Permanent appropriations . . .. .. .. .. .. 3 Post Office Account ... . . . . .. .. .. . . 3 Post Office Savings-bank .. . . .. .. .. . . 25 Post Office investment certificates .. ... .. .. . . 25 Post and Telegraph Department .. .. .. .. . . 24 Primage duty, increase in . . .. .. .. . . 26 Public buildings, expenditure on . .. .. .. . . 10 Public debt .. .. .. .. .. .. . . 12 Conversion operations .. .. .. . , .. .. 12 New loans raised .. .. .. .. .. . . 12 Redemption .. .. .. .. .. .. . . 13 Summary of operations .... .. .. .. .. 14 Transfer to New Zealand .. .. .. .. .. 13 Public Service salary-adjustments .. . . . . .. .. 24 Public Trust Office . . .. .. .. .. .. .. 25 Public works .. .. .. .. .. .. ~ 8

III

B—6,

PAGE Railway-construction .. .. .. .. .. .. 9 Railway capital, writing-down of .. .. .. .. . . 18 Railways—■ Branch lines .. .. .. .. .. .. .. 18 Capital cost per open mile of line .. .. .. .. 16 Expenditure on capital works .. .. .. .. .. 8 Improvements .. .. .. .. .. .. .. 10 Losses .. .. .. .. .. .. .. 16 Passenger traffic .. .. .. .. .. .. 17 Revenue and expenditure .. .. .. .. .. 16 Revenue, comparison of .. .. .. .. .. .. 16 Rolling-stock, dwellings, &c. .. .. .. .. .. 10 Writing-down capital .. .. .. . . .. .. 18 Railways and road transport .. .. .. .. .. .. 16, 17 Rates of wages, unemployment relief workers .. .. .. .. 22 Redemption of debt .. .. .. .. .. .. .. 13, 14 Reduction of mortgage exemption .. .. .. .. . . 26 Relative burden of debt .. .. .. .. .. . . 14 Relief funds for earthquake distress .. .. .. .. . . 23 Research work .. .. .. .. .. .. .. 21 Revenue— 1928-29 .. .. .. .. .. .. .. 2 Estimates for 1929-30 .. .. .. .. .. .. 27 From taxation .. .. .. .. .. .. .. 2 Other than taxation .. .. .. .. .. .. 2 Post and Telegraph .. .. .. .. .. .. 3 Rivers-improvement .. .. .. .. .. .. .. 11 Roads and highways . . .. .. .. .. .. .. 5, 10 Rural bonds .. .. .. .. .. .. .. 15 Rural Intermediate Credit Board .. .. .. .. .. 7 Salary-adjustments, Public Service .. .. .. .. .. 24 Samoan Military Police .. .. .. .. .. .. 4 Schools, expenditure on .. .. .. .. .. .. 10 Scientific and industrial research .. .. .. .. .. 21 Social services .. .. .. .. .. .. .. 5 South Island Main Trunk Railway-line .. .. .. .. 9 Stamp and death duties .. .. .. .. .. .. 2 State advances — Arrears of applications .. .. .. .. .. .. 15 Land Development Branch .. .. .. .. .. 20 Loans authorized .. .. .. .. .. 15 Lending rates .. .. .. .. . . .. .. 15 State expenditure on unemployment relief .. .. .. .. 22 State Fire Insurance Office .. .. . . .. .. .. 25 State insurance offices .. .. .. .. .. .. 25 State services, increase in . . .. . . .. .. 6 State Superannuation Funds .. .. .. .. .. .. 5, 23 Subsidies to local authorities for relief of unemployment .. .. 7, 22 SummaryDebt operations .. .. . . . . . . . . 14 General .. .. .. .. . .. 29 Government's policy .. .. .. .. .. .. 28 Year's operations .. .. .. . .. .. 6 Taranaki Main Trunk Railway-line .. .. .. .. .. 9 Taupo Railway ... .. .. .. .. .. .. 8 TaxIncome ... .. .. .. .. .. .. 2, 26 Land .. .. .. .. .. .. .. ... 2, 26

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IV

PAO E Taxation .. .. .. .. .. .. .. .. 25 Charges on .. .. .. .. .. .. .. 4 Direct .. .. .. .. .. .. .. .. 2 Proposals .. .. .. .. .. .. .. 6, 27 Receipts .. .. .. .. .. .. .. 2 State trading departments .. .. ~ .. .. 27 Taxation Account .. .. ~ .. .. .. 4 Telegraphs and telephones .. .. .. .. .. .. 10 Trade position, effect of .. .. .. ~ .. .. 6 Transport, policy in regard to .. .. .. .. .. 19 Treasury bills .. .. .. .. . . .. 7 Unemployment —- Rates of wages .. .. .. .. ... .. .. 22 Relief works .. .. .. .. .. .. .. 22. Subsidies for .. .. .. .. .. .. .. 7, 22 Insurance .. .. .. .. .. .. .. 22 Waste lands .. .. .. .. .. .. .. 19 Westport to Inangahua Railway-line .. .. .. .. .. 9 Writing-down of Railway capital .. .. .. .. .. 18 Year's operations, summary of .. .. .. .. .. 6»

8.—6,

1929. NEW ZEALAND.

FINANCIAL STATEMENT. (In Committee of Supply, 1st August, 1929.) BY THE RIGHT HON, SIR JOSEPH WARD, BART., P.C., K.C.M.G., LL.D., MINISTER OF FINANCE.

Mr. Smith,— The honour once again devolves upon me of laying before honourable members and the people of New Zealand a statement of our national finances, and of submitting to this House proposals for meeting the requirements of the Government for carrying on the affairs of State and dealing resolutely with the urgent economic problems facing the country, in order that the Dominion may again be placed on the highroad to general prosperity. As you are aware, the Government assumed office only in December last, and it was then too late in the financial year to make any radical changes so far as the general financial position was concerned. As soon as I was able to investigate matters, however, I was seized with the fact that the year's transactions on the basis of the arrangements made by my predecessor in office would result in a deficit, and, as you are all aware, this unfortunately proved to be the case. I may say, however, that I took immediate steps to institute a careful control of departmental expenditure in order to minimize the deficit as much as possible. A saving of approximately £90,000 in the annual votes resulted from the Government's efforts in this direction. The deficit for the year was £577,252. T must emphasize that this is mainly the outcome of the Budget of my predecessor in office. The principal cause of the trouble was overestimating the revenue from taxation, in addition to which the expenditure was unexpectedly increased by £156,000 for additional interest arising out of the large conversion operations I was called upon to deal with immediately upon assuming office. Fundamentally, the lessened yield from taxation arose out of the tardy recovery of the trading position. Exports from the Dominion in 1927-28 were valued at nearly fifty-five millions, and exceeded imports by ten millions and a half. During the last financial year the position of external trade was better still, exports totalling over fifty - seven millions and exceeding imports by twelve millions. These results are, of course, reflected in the banking figures, where the position shows a recovery from £4,260,000 excess advances for the June quarter, 1927, to £7,520,000 excess deposits for the June quarter, 1928, and £9,640,000 excess deposits for the same quarter of this year. This indicates that the credit position has quite recovered from the depression obtaining in 1926 and 1927, and a healthy revival in business is the natural corollary. A study of the published banking figures, however, will show that the additional funds have gone mostly into fixed deposits, while the total of advances is lower than it has been since 1925, all of which proves that at present a large part of the available banking resources is not being used to finance trade and industry. This is causing many of our troubles. There is, for instance.

Control of expenditure.

Economie conditions.

2—B, 6,

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2

a close connection between idle capital and idle men. The march of science is bringing many changes into our everyday life, and the rapid developments in the post-war years have perhaps temporarily disturbed the economic equilibrium of the Dominion. Want of confidence in rural investments, now happily passing, together with high interest rates, has also contributed in no small measure to the present economic situation. The Government is endeavouring to give the country a strong lead in meeting these difficulties, but of course cannot carry the whole burden. Given a little enterprise on the part of the producers and the business community generally —and they have not been lacking in this respect in the past —I feel assured that all obstacles will be overcome ; unemployment will disappear, and all will be well in this Dominion. It has certainly been slow in coming, but signs are not wanting now that we are on the eve of a big forward movement in business. REVENUE. Details of the year's accounts of the Ordinary Revenue Account of the Consolidated Fund will be found in the published accounts, and are summarized in the comparative tables attached to this statement. The revenue for the year amounted to £23,599,676, of which £17,836,234 was derived from taxation and the balance of £5,763,442 from interest earnings and sundry revenues and recoveries from various State activities. The revenue from taxation includes £1,243,577 on account of petrol-tax, motor license fees, &c., which are specially earmarked for highways purposes, so that the revenue from taxation for general purposes amounted to £16,592,657. In total the revenue is not comparable with that received in 1927-28, as last year the total revenue and expenditure of the Post Office were not comprised in the Consolidated Fund, which included only interest on capital as an item of revenue. Another complication from the point of view of comparison arises from the fact that the petrol-tax operated for only part of 1927-28. Apart from Post Office receipts and motor taxation, last year's revenue represented an increase of £496,497 over that of the previous year. Complete details will be found in Table No. 3 attached hereto. There it will be seen that most of the increase was in the interest receipts, and that the taxation items showed relatively little increase over the previous year. In fact, this lack of buoyancy in the revenue from taxation for general purposes was the principal cause of the deficit, in that the former Minister of Finance had anticipated an increase of approximately £426,000, whereas the results showed an increase of only £108,000. The mainstay of the revenue — Customs duties — showed an increase of £11,663 over the previous year, but fell short of the estimate by £306,748, mostly due, I find, to a marked decline in the duty collected on spirits. Beer duty, however, was well maintained, and slightly exceeded the estimate for the year. Coming next to direct taxation, this also proved disappointing for the most part. The income-tax receipts for 1927-28 were exceeded last year by a relatively small margin of £37,148, but the results for 1928-29 were short of the estimate by £89,123. This, of course, is a reflex of the tardy recovery of the trading position, to which I have already made passing reference. As regards land-tax, this was not only a little short of the estimate, but £14,155 less than was received for the previous financial year, 1927-28. I find that there has been a steady shrinkage in land-tax over the last few years, due to the subdivision of estates and the adjustment of country valuations consequent upon the decline in some of the inflated land-values to a more economic level. Subdivision of estates is in the true interests of the Dominion, and the Government will not complain of loss of revenue from this cause. Stamp and death duties were estimated to produce last year practically the same amount as was received for the previous year. The results, however, showed an increase of £71,353 over the total for 1927- 28. Death duties contributed £17,457 and gift duty £27,686 towards this increase, while adhesive and impressed stamps produced £49,111 more than for the previous year. These increases, however, were partly offset by a fall of £26,711 in totalizator revenue. The revenues other than from taxation, amounting to £5,763,442, fell short of expectations by an amount of £46,808.

Revenue.

Taxation receipts.

Direct taxation.

Land-tax.

Stamp and death duties.

Revenue other than taxation.

3

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It may perhaps be noted that these departmental revenues amounted in the aggregate to considerably less than was received in 1927-28, but the reason for this is that the 1927-28 total included the whole of the Post and Telegraph revenue, amounting to £3,323,260, whereas last year only interest on Post Office capital, amounting to £428,000, was included in the revenue. These changes arise from the Post and Telegraph Amendment Act, 1927, since consolidated, in terms of which the Post Office accounts have been separated from the Consolidated Fund and placed on a commercial basis. As honourable members know, the Consolidated Fund is kept purely on an annual cash basis, which is not suitable for a commercial undertaking which requires continuity of finance in order to build up depreciation and renewal funds, &c. The change in system meant that the Ordinary Revenue Account received considerably less assistance from the Post Office last year than was the case in 1927-28, but the additional receipts formerly received and used for general purposes represented the Post Office Depreciation Reserve, which of course should have been held intact until such time as the moneys were required for the renewal of telephone and telegraph lines and apparatus, all of which are comparatively short-lived assets. Capital expenditure on telephones and automatic exchanges has been very heavy in the last few years, and if the change had not been made to enable a proper Depreciation Fund to be created it would have meant that the excess receipts being wrongly used to relieve the taxpayer in the interim would have had to be made good within a comparatively short period when renewals became necessary. The only other way would have been renewal out of loan-money, and that of course would be quite unsound. Under the circumstances the setting-aside of the Post Office revenue after meeting working-expenses and interest charges was the right and proper thing to do, notwithstanding the temporary inconvenience to the Consolidated Fund. EXPENDITURE. The net expenditure out of the Ordinary Revenue Account for 1928-29 amounted to £24,176,928, an increase of £1,529,082 compared with the previous year after the Post and Telegraph expenditure has been deducted from the 1927-28 figure. It must be explained, however, that this increase includes £877,243 on account of the transfer to Main Highways Account and local bodies of the special taxation earmarked for highways purposes. As previously explained, the large increase under this heading is due to the fact that these items for 1927-28 represented only about three months' revenue. The net increase on other items was thus £651,839, of which £487,976 was under permanent appropriations and £163,863 under annual votes. Details will be found set out in Table No. 8 attached to this Statement. The principal items responsible for these increases are as follows - Under permanent appropriations— £ Interest .. .. .. .. .. .. 278,147 Debt-repayment .. .. .. .. .. 74,992 Pensions .. .. .. .. .. 91,307 Family allowances .. .. .. .. 17,300 Samoan Military Police .. .. .. .. 27,374 Under annual appropriations — Electoral Department .. .. .. .. 80,046 Agriculture .. .. .. .. .. 86,316 Education .. .. .. .. .. 92,681 These last three items with certain other smaller increases are partly offset by decreases under other votes. Concerning the increase in interest payments it may be explained that £156,393 of the increase is due to a change in interest dates, arising out of the recent conversion operations in London, which entailed the payment of interest for a broken period of four months. In the ordinary course this interest would not have been payable until this financial year. The balance of the increase in interest charges comes from the increase in the public debt.

Post and Telegraph revenue.

Post Office Account.

Expenditure.

Comparative increases.

Interest.

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The increase in debt-repayment charges is consequent upon the operation of the Funded Debt Agreement with the British Government and the general debtrepayment system. Apart from the effect of the increase in the aggregate of the public debt, the increasing charges are offset by the saving in interest on the debt redeemed, and therefore impose no additional burdens on the taxpayers. Concerning pensions, it will be seen that old-age and widows' pensions together increased by £59,622. Such pensions bear a fairly definite relationship to population, and increases are to be expected accordingly. War pensions might be expected to decrease, but such is not the case, the increase for the year being £31,691. The reason for this is that many of the men are only now feeling the full effect of their war injuries. Family allowances have shown a substantial increase, which is due to the fact that many who were eligible for allowances did not at once take advantage of the provisions of the Act. The charge for the Samoan Military Police is an entirely new item arising out of the unrest in Samoa. The large increase in the expenditure of the Electoral Department was the result of the general elections held last year, while the increase under the heading of " Agriculture" was principally due to a new item of £25,810 for bonus on export of pork and an increase of £34,791 in the subsidy on the railage of fertilizers for farmers. Expenditure under vote " Education " showed an increase of £92,681. For the most part this is the result of the normal increase in the number of children attending school, added to which there was an increased cost for conveyance of children to school and for boarding out children placed in the care of the State. Before leaving the question of expenditure out of the Consolidated Fund I would like to review briefly the position that has now been reached and the effect on taxation. As I have pointed out, the revenue as shown in the accounts includes £5,763,442 derived from interest-earning assets and sundry departmental receipts apart from taxation, and in order to demonstrate to honourable members where the taxpayers' money goes I have had this revenue other than from taxation deducted from the relative items of expenditure as far as is possible, and I propose now to deal with the net cost figures thus obtained. Further, although over £16,000,000 out of a total expenditure of £24,000,000 is practically fixed by contract — e.g., interest, or by Act of Parliament, such as pensions, for instance, all of which are paid under what are known as permanent appropriations, I propose for this purpose to ignore such distinctions and deal solely with services as such. Proceeding on these lines, we arrive at what might be described as a taxation account, as follows : —

Debt-repayment charges.

Pensions.

Samoan Military Police. Increase in annual appropriations.

Charges on taxation.

Taxation account.

1 ' • " Dealing with, the expenditure, the first item, which exceeds the total receipts from both land and income tax, contains no administrative charges, but represents the dead-weight costs of the war, which costs are practically rigid in the meantime, and will only be reduced with the effluxion of time and the repayment of the war debt. There can be no question of economy under this heading.

Revenue. Expenditure. Percentage. ~~~ £ ~ " ~~ Customs .. .. .. 7,954,252 War pensions and war debt £ Beer duty .. .. .. 611,484 charges .. .. .. 5,023,755 27-2 Stamp and death duties .. 3,575,720 Other debt charges .. .. 2,226,416 12-1 Land-tax .. .. .. 1,140,324 Social services .. .. 6,292,930 34-2 Income-tax.. .. .. 3,310,877 Defence—Land, sea, and air.. 1,043,622 5-7 Motor-vehicles (petrol and tire Justice, law, and order .. 544,976 3-0 tax, &c.) .. .. .. 1,243,577 Agriculture .. .. 464,533 2-5 Non-taxation receipts (not ap- Roads and highways .. 1,536,517 8-3 portionable) .. .. 7,180 General and other administraDeficit for year .. .. 577,252 tion charges .. .. 1,287,917 7-0 £18,420,666 £18,420,666 100-0

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The next item, " Other debt charges," is also fixed. The total debt charges apart from war debt amounted last year to £8,724,742, but the greater part of this is recovered from interest-earning assets, leaving £2,226,416 to be defrayed out of taxation, representing the charges on that proportion of the ordinary debt which is not directly or fully productive. Then we come to " Social services," the largest item of all. It includes £3,224,968 on account of education, £1,209,571 for health, and £1,858,391 for pensions and superannuation. Ido not suppose that any one advocates a reduction of expenditure on education, about 90 per cent, of the money for which goes in grants to the Boards and other local governing authorities to cover the cost of teachers' salaries and administration expenses of such local authorities. As to the health expenditure, this comprises hospital subsidies, £673,689 ; maintenance of our mental hospitals, £302,737 ; and £233,145 to cover the various activities of the Health Department. The charge on taxation for old-age, widows', and other pensions, which cost, with administration, £1,628,737, is an item that I am sure none would wish to see curtailed. Superannuation, with the subsidy and expenses of the National Provident Fund, cost the taxpayer £229,763. As to superannuation, I shall have more to say about the position of the State funds presently. In the meantime I just wish to point out that the expenditure on these items cannot be curtailed. It will be noticed that the first three items of the taxation account to which I am referring absorbed 74 per cent., practically three-quarters, of the revenue from taxation last year, and the charges are either quite rigid or such that very little, if anything, in the way of reduction is feasible. Following on with the charges on taxation, the next items are—" Defence," absorbing 5-7 per cent., and " Justice, law, and order," 3 per cent. The Police Force and the Courts are, of course, essential, and while there are perhaps some who will say that the expenditure of over £1,000,000 a year on defence is unnecessary, the fact remains that war has not yet been completely ruled out, and there must be some preparation for the defence of our country in case the need should arise. In other words, the 5-7 per cent, of taxation spent on defence must be regarded as an insurance against external aggression. The promotion of agriculture cost the taxpayer last year £464,533, about half of which goes in grants and direct subsidies of various kinds. The cost of roads and highways has increased greatly in the last few years, and last year, including the petrol - tax specially imposed for roading purposes, absorbed 8-3 per cent, of the taxation. This is only the direct cost, and does not include the interest charges on the millions of capital expenditure out of the Public Works Fund. Altogether the item is a heavy one, but to meet the demands of modern transport the roads must be kept in good order, and there is little, if any, scope at present for curtailment. The remaining item under the heading of " General and other administration charges " covers the cost of the Legislature, the maintenance of public buildings, the expenses of the revenue Departments, and of Lands, Labour, Internal Affairs, and all the other departments of State not covered in the other items I have mentioned. There are also included numerous small grants and subsidies and other items of a miscellaneous nature. To sum up, it will be seen that the existing charges on the taxpayer are, as I have said, largely of a rigid nature, and the scope for administrative economy is very much smaller than is popularly supposed. Every effort will be made to obtain the utmost economy in administration, but I am satisfied, after an examination of the detailed estimates for the current year, that enough cannot be saved in this way to offset the automatic increases in such items as interest, pensions, education, &c., let alone make good the deficit for last year. So far as interest is concerned, in addition to the increases arising out of loan expenditure for such purposes as schools, public buildings, and other items that are not interest-earning wholly or in part, we must expect increases from the renewal at higher rates of some of the old loans. For instance, by the time the operations are completed it is calculated that the conversion of the £29,000,000 4-per-cent. 1929 Consolidated Stock will increase interest costs by about £220,000 a year.

Debt charges.

Social services.

Pensions and superannuation.

Defence.

Agriculture.

Roads and highways.

General administrative expenses.

Economy in administration.

8.—6.

6

Thus it is clear that the deficit cannot be made good by administrative economy, and, as a matter of fact, the only alternative left is either to reduce the services rendered by the State (and by services I mean not only work done by the Departments, but financial assistance given, which is the larger item), or to obtain more revenue. That is the position in a nutshell. The services rendered by the State have been greatly increased over the last decade, and, generally speaking, it would appear that we have reached a stage when it is advisable, as far as possible, to stabilize the position for a year or two, to enable the increasing population and wealth of the Dominion to lighten the relative burden on the taxpayer. Another important point that should not be overlooked is that the whole trade position of the Dominion is "largely governed by the world prices for our staple exports, over which prices we have no control. For this reason our public finances should not be cut too fine when times are good. To reduce taxation in a prosperous period is easy, but the benefit so derived does not in any way compensate for having to increase it again when times are bad. Further, it is highly desirable that a certain amount of the money for public works should be provided from revenue, and the surpluses from the exceptional revenue of good years should be utilized for this purpose. All will agree on the desirability of keeping rates of taxation as low as possible, but I am not at all sure that the reductions granted in recent years were not greater than were warranted in view of the progressive increases in expenditure on account of extended services. Anyway, the revenue from taxation last year proved insufficient to provide for the existing services, and the year closed with a deficit of £577,000. That is the position which the Government is called upon to deal with. Having once received all the existing services from the State, the people generally do not want to lose them, so, as it is essential that the national accounts for the current year should be balanced, it appears that the Government has no option now but to adjust the taxation to obtain more revenue. The increased rates of taxation will, I hope, only be temporary, as I am sure that when the Government has had time to deal with the seat of the trouble the resulting increase in prosperity will be permanently reflected in increased receipts and reductions in the rates of taxation on a stable basis will be possible. In the meantime immediate action is necessary to rectify the position. I will deal with the Government's proposals in this connection shortly. SUMMARY OF YEAR'S OPERATIONS. The transactions for the year resulted in a deficit, viz. : — Revenue. £ £ Taxation .. .. .. .. .. .. 17,836,234 Other receipts .. .. .. .. .. 5,763,442 Revenue for year .. .. .. .. 23,599,676 Expenditure. £ £ £ Permanent appropriations .. .. 19,083,085 Less credits in reduction .. .. 2,838,488 16,244,597 Annual appropriations .. .. .. 9,115,347 Less credits in aid .. .. .. 1,183,016 7,932,331 Net expenditure chargeable to year's revenue .. 24,176,928 Deficit .. .. .. .. .. £577,252

Increase of State services.

Effect of trade position.

Taxation.

Summary o! year's operations.

7

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In addition to this deficit there were certain other items charged against the balance of the accumulated surpluses of past years and the following shows the result in the funds of the Ordinary Revenue Account at the end of the year : — £ Balance forward Ist April, 1928 .. .. .. .. 3,302,232 Less— £ Deficit for year 1928-29 ~ .. .. 577,252 Final instalment of purchase price of C long-term mortgage shares in Bank of New Zealand .. 58,594 Amortization of debt .. .. .. 50 Subsidies to local authorities in respect of unemployment .. . . . . 68,567 Advances to Native Trustee (net) .. .. 33,000 Advances to Rural Intermediate Credit Board.. 110,100 Sundry charges and expenses of raising loans .. 1,128 848,691 Balance, 31st March, 1929 .. .. .. £2,453,541 This balance was made up as follows £ Cash . . .. .. . . .. .. 2,315,381 Imprests outstanding .. .. .. .. 135,880 Investments . . . . . . 2,280 £2,453,541 The payment to the Bank of New Zealand is the final 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. Concerning the subsidies to local authorities for relief of unemployment, I have to say that in addition to the amount of £68,567 paid over there were also subsidies to the amount of £36,794 to which the State is committed but which had not been claimed by the local authorities up to 31st March last. These unclaimed subsidies will come to charge this year. The advances to the Native Trustee referred to represent the balance outstanding on 31st March for certain temporary advances to the Native Trustee under section 17 of the Native Trustee Act, 1920, whereby the Minister of Finance can be called upon to provide money when the Native Trustee's Account is unable to meet lawful claims thereon. These advances, however, have now been repaid with interest. The advance to the Rural Intermediate Credit Board is a portion of the initial capital which in terms of section 16 of the Rural Intermediate Credit Act, 1927, is to be provided out of the Ordinary Revenue Account up to a total of £400,000 to be free of interest for ten years from the date of the first advance, which was made on 30th June, 1928. TREASURY BILLS. Treasury bills in anticipation of revenue amounting to £200,000 were sold in London on the 19th December, 1928, at a discount rate of 4§ per cent., and were duly redeemed out of revenue on the 31st January, 1929. Redemption Treasury bills totalling £1,050,000 issued during 1927-28 and outstanding on the Ist April, 1928, were redeemed during May, 1928, out of the proceeds of an issue of debentures in New Zealand. Thus no Treasury bills were outstanding on the 31st March, 1929.

Result in funds of Ordinary Revenue Account.

Bank of New Zealand shares.

Subsidies to local authorities.

Advances to Native Trustee.

Rural Intermediate Credit Board.

Treasury biUs.

8.—6

8

PUBLIC WORKS. I would next like to bring under the notice of honourable members the salient features of the present programme of public works in which was sunk the major portion of the loan capital borrowed during the year. As in the case of the Consolidated Fund, the programme of public works for the year was well advanced when the Government assumed office, and for the most part the arrangements made by our predecessors had to be left to run their course. The Government, however, lost no time in investigating the position, and as a result of these inquiries it was deemed advisable immediately to stop the work on the new Taupo Railway and the Palmerston North Deviation. After very careful consideration of all the relevant factors the Government came to the decision that the large capital outlay involved in these works was not justified at present. As regards Taupo, this was not a trunk line, and it was quite clear that the transport needs of the district concerned, which are relatively small and likely to be so for many years, were certainly not of a magnitude to justify the building of a railway. Concerning the Palmerston North Deviation, it was found that transport conditions had altered considerably since the work was placed on the schedule of improvement works, and that the expected increased volume of traffic, which would have justified the deviation, had not materialized. Further, the estimate of the cost had been greatly increased since the work was originally authorized, and not only would the deviation produce no extra revenue to meet the additional interest burden but it would actually increase the working costs of the railways. The work was clearly not justified at present, and should not have been started. It may be added that much of the expenditure, roughly £200,000, already incurred was on account of land-purchases and permanent earthworks, which can be used should it be found necessary to proceed with the work at a later date. Another matter which I attended to as soon as possible was the institution of a better control over the expenditure of loan-moneys on public works. The practice has been for the detailed estimates of the expenditure on the various works to be prepared each year in accordance the requirements of the Engineers without the various proposals being subject to any expert review from the financial aspect. Another difficulty is that often a comparatively small amount is placed on the estimates one year to start a large undertaking without any definite consideration as to the effect on the finances in succeeding years when expenditure becomes heavier. Thus to attain effective financial control the Loan Budget must be considered over several years, and not merely from year to year, as has been largely the case in the past. To remedy these undoubted weaknesses in the system I have arranged for the public-works estimates for this year, and in the future, to be sent to the Treasury for investigation before being finalized for submission to this House. Again, in the case of large works the construction of which is spread over several years, the annual estimates presented to this House have not shown what the completed work is to cost, how much has been expended to date, or how the actual cost compares with the Engineer's estimates on which the work was authorized. To give honourable members all this additional information I have arranged for the form of the public-works estimates to be amended, and the estimates for this year will appear in the new form. The net expenditure on capital works for 1928-29 was £7,659,580, comprising the following main classes of outlay : — £ Railway construction, additions, and improvements 3,179,391 Main highways and roads .. .. .. 1,822,922 Hydro-electric supply .. . . . . .. 965,560 Telegraphs and telephones .. .. .. 624,414 Public buildings, including schools .. .. 602,392 Irrigation, land and river improvements .. .. 282,806 Other public works .. .. .. .. 182,095 £7,659,580

Public-works expenditure.

Taupo Railway.

Palmerston North Deviation.

Control of loan expenditure.

Expenditure on capital works.

8.-—6

9

It will be observed that nearly half the expenditure was incurred on account of railways. On railway-construction, including a proportion of the overhead costs of the Public Works Department, the expenditure was £1,066,454. The policy of the Government in regard to railway-construction, in accordance with the mandate received from the people at the election, is to accelerate the construction work and complete the trunk lines as quickly as possible. This is desirable from all points of view. In the first place, some £4,440,000 has already been sunk in unopened lines, and it is only good business to get lines completed and earning revenue. In the meantime the capital sunk is a dead asset. Then, an acceleration of the construction work means additional employment, and that is very necessary at present. Thirdly, the completion of the lines is going to assist materially in increasing the production and trade of the country, and generally in promoting the prosperity of the Dominion. ■ Of the lines in question, starting from the north, there is the completion of Okaihau-Rangiahua Section, which is an extension of the North Auckland Trunk line to the Hokianga River. Over £420,000 has already been sunk in this section, and the estimated cost of completing it is about £200,000. In the same district there is also the linking-up of the Dargaville isolated section. Considerable work has already been done on this connecting-link, but it will cost some £265,000 to complete it. Next there is the completion of the gaps in the line from Napier to Gisborne. Over £2,000,000 is already invested in the unopened sections of this line, and it is accordingly very desirable that the construction work should be pushed on as fast as possible. There was considerable diversity of opinion as to the location of the line from Wairoa to Gisborne, and after fully investigating the position the Government decided upon the coastal route, and the matter is now definitely settled. To complete the line from Napier to Gisborne will, it is estimated, cost about £1,800,000. A large part of the line to link up Taranaki with the Main Trunk has already been constructed, work having been carried on from both ends. The intervening gap lies through some difficult country, but the whole line should be finished in three or four years. The estimated cost to complete the work is £700,000. Coming now to the South Island, there is the completion of the South Island Main Trunk line by bridging the gap between Wharanui and Parnassus. The Government is satisfied that the construction of this piece of line, estimated to cost about £2,350,000, is necessary to complete the South Island system. About £43,000 has already been expended on preliminary work, and as soon as the surveys now being made can be completed the construction work will be pushed on vigorously. There has been much discussion as to whether this section of line will pay, but the discussion has all been on the basis of treating the new piece of line as an isolated section, instead of a necessary part of the trunk railway system. One could doubtless find many sections of the existing main lines which, considered as isolated sections, could be shown to be hopeless propositions as revenue-producers ; yet no one would suggest that they should not have been built. From the paving-point of view the trunk lines must be regarded as a complete system, and not a series of independent units. I propose later in this Statement to place before honourable members the whole financial position of the railways, and the Government's policy in regard thereto. Returning in the meantime to railway-construction, the remaining sections in the programme are those necessary to complete the lines from Nelson to Inangahua and Westport to Inangahua. Approximately £350,000 has been spent on the uncompleted sections to the end of the last financial year, and the estimated cost of completing them is about £2,170,000. This estimate has probably been upset by the recent earthquake, the full effects of which are not yet known, and the proposed route of these lines will have to be re-examined by the Engineers. With a view to speeding up the construction work all round, the vote for railways-construction for this year will show an increase of more than 60 percent, over the amount spent last year.

Railwayconstruction.

North Auckland Trunk line.

Napier to Gisborne line.

Taranaki Main Trunk line.

South Island Main Trunk line.

Nelson to Inangahua and Westport to Inangahua.

3—B. 6,

8.—6

10

In addition to railway-construction, there was also expended out of the Public Works Fund last year an amount of £213,405 for additions to open lines. This expenditure was for rolling-stock, dwellings, purchase of motor-buses, additions to station buildings, and other facilities. Then, out of the special account under the Railways Improvement Authorization Act, 1914, a total of £1,899,532 was spent on various capital works. Nearly half the amount, or approximately £900,000, was sunk in the new workshops at Otahuhu and Petone, and additions and alterations to the existing workshops at Addington and Hillside. These workshops, when completed, will have cost about £2,450,000, against which there will, however, be credits amounting to approximately £130,000 for land released for other purposes. Other heavy items were the new station and improved approach line at Auckland, the Tawa Flat Deviation at Wellington, and the electrification of the Lyttelton Tunnel. The next largest item in the schedule of public-works expenditure is main highways and roads, which absorbed £1,822,922 of loan-moneys. This, with the amount of £1,530,000 provided out of taxation, to which I referred earlier in this Statement, makes a total of approximately £3,350,000 provided out of public funds for roads last financial year. Of the expenditure out of loan-moneys, £936,496 was expended out of the Main Highways Construction Fund, mainly for the purposes of improving road communication between important centres and to tourist resorts. Considerable sums were also expended in laying down high-class pavements on roads in the vicinity of the main centres, which roads carry heavy traffic. A new road has been made between Te Kuiti and Taumarunui to enable traffic to proceed right through the interior of the North Island from Auckland to Wellington. Other cases of outstanding activity are on the highways between Auckland and Maungaturoto and out of Wanganui. Including overhead costs, the roading expenditure out of the Public Works Fund amounted to £886,426. For the most part, the money was spent on developmental roads in the more remote districts. For this year the vote will be increased to about £950,000, of which £75,000 will be specially reserved for roads to outlying districts, where people are still labouring under hardship through lack of access. Concerning hydro-electric supply, the year's expenditure on capital works was considerably lower than in the previous period, but nevertheless substantial progress resulted. The Waikaremoana scheme was sufficiently forward in January to enable one unit to be used for the relief of the overloaded plant at Mangahao, and as from the Ist April, 1929, Waikaremoana has been regarded as permanently in operation. Since the end of the year, following a vigorous programme at the Arapuni powerhouse, that station has also been brought into partial operation. The Waitaki River scheme has been commenced, and its construction will now be the most important work of this class, with the object of having electricity available from there in 1931. The Government is gradually connecting all the main generating stations in each Island with high-tension lines to ensure more economical and reliable operation of the whole system, and it is intended to proceed with this work. The plant capacity of schemes in operation at the Ist April this year amounted to 96,740 horse-power, and works are at present in hand which, when completed, will bring the capacity up to 232,500 horse-power. The total capital invested in hydro-electric works to date is £8,467,151, of which £6,095,403 is charged to schemes in operation. It is proposed to provide approximately £1,000,000 for expenditure on all construction schemes this year. The expenditure on account of telegraphs and telephones was mostly on account of automatic equipment and extension of the telephone system to meet the demands of the public for these facilities. The most important developmental works undertaken during the year were the introduction of the carrier-current system for the purpose of extending and improving long-distance telephone communications and the extension of the system of direct dialling between exchanges for the purpose of speeding-up long-distance calls. As to public buildings, last year's expenditure of £602,392 included £227,041 for departmental buildings, post-offices, mental hospitals, &c., and £375,351 for schools. The erection of schools in newly settled districts and in areas where the

Rolling-stock, dwell ngs, &c.

Railwayimprovements.

Highways and roads.

Hydro-electric supply.

Telegraphs and telephones.

Putlic buildingsschools.

11

8.—(5

population is increasing rapidly has been given first consideration, andgthese activities absorbed a large proportion of the funds available last year. Nevertheless, a good deal was accomplished in the way of remodelling schools with a view to providing separate class-rooms for each teacher, and incorporating in the buildings more effective lighting, ventilation, and heating. In addition, a few buildings of different open-air types have been erected with a view to discovering whether such buildings are suitable to the climatic conditions of the different parts of the country. Large sums have been required in recent years to provide additional accommodation in our secondary and technical schools, and the past year was no exception to the rule. It is the intention of the Government to proceed with the improvement of school-buildings as fast as financial considerations will permit. It is highly desirable that the children attending school should be housed in well-ventilated, well-lighted, and comfortable schools. The expenditure on irrigation and rivers improvement comprises £58,697 for irrigation in Otago, mostly on the Hawkdun and Arrow schemes, £91,304 for grants and subsidies to Drainage Boards and various river-protection works, and £132,805 for large drainage schemes being carried out by the State. The final item for other public works includes £50,266 for immigration, and the balance of the votes of the Public Works Fund not included in the special items to which I have just referred. Immigration with State assistance was restricted during the year to separated families, single women, domestic servants, and juveniles. The Government proposes to continue the restrictions on immigration until such time as our own unemployment difficulties have been overcome. The Government is being urged to undertake the construction of a bridge across the Auckland Harbour as a national work. Apart from the debatable question of it being a national work the undertaking is a very large one and calls for serious consideration. The Government, however, will provide £1,000 towards the work of exploration and, if required, the advice of the technical officers of the State will also be available in this connection. LONDON LOAN, 1929, In order to provide additional capital for public works, and particularly the acceleration of railway-construction in accordance with the Government's policy, a further loan of £7,000,000 was successfully floated in London on the Bth January last. The issue price of the loan was £95 per cent, with interest at 44 per cent. The loan matures on the Ist March, 1958, but the right is reserved to redeem it at par at any time after the Ist March, 1948, on giving three months' notice to holders of the stock. Over the full period the yield to investors with redemption of the discount is £4 16s. sd. per cent., as compared with £4 19s. Bd. per cent, for the shorter-dated loan issued last year. The cost of the new loan to the State, allowing for the redemption of the discount and expenses over the full period, is £5 os. Id., which is cheaper than the cost of any other loan raised by the Dominion for some years. The issue was very favourably commented upon in the London financial papers, and in the light of subsequent events in the money-market the Dominion is undoubtedly fortunate in having obtained a loan on these terms, which are better, and in most cases considerably better, than those obtained by other borrowing States. The result is further proof of the confidence that London investors have in the financial strength of New Zealand, and shows that this great financial centre has not been misled by the mistaken propaganda concerning the Government's borrowing-policy. Normally a New Zealand issue for the then current year does not appear on the London market until about May, but, in view of the information forwarded by our financial advisers in London as to the general financial outlook for this year, I deemed it advisable to make a. departure from the usual practice and go on the market for our

Irrigation and river* improvement.

Immigration.

Auckland Harbour Bridge.

London Loan, 1929.

8.—6,

12

requirements early in January. Subsequent events have amply justified this decision, and there is no doubt that with the rise of the bank rate, and the general situation that developed in the money-market, a higher price would have had to be paid if we had delayed going on the market until the usual time. As it is, although the capital was not required until this financial year, this fact does not involve the taxpayer in any loss. On the contrary, I have been able to invest the loan proceeds in the short-loan market at an average rate of approximately £5 3s. 9d. per cent, with the most satisfactory result that a profit has been made on these moneys for the period during which they have been held. In accordance with the authorities under which it was raised, the £7,000,000 loan has been allocated as follows : — Public Works Fund, for railway-construction, roads, £ telephone extension, &c. .. .. .. 4,500,000 Hydro-electric-power works .. .. .. 1,000,000 Railways improvement .. .. .. ... 1,500,000 £7,000,000 In conjunction with this issue a further conversion offer was made to holders of 4-per-cent. 1929 New Zealand Consolidated Stock, but I will refer to this transaction presently when dealing with the debt operations. PUBLIC DEBT. The public debt as at the 31st March, 1929, amounted to £264,191,983, a net increase of £12,795,731, during the financial year. Honourable members should understand, however, that this increase included £5,379,105 on account of the £7,000,000 loan to which I have just referred. I must explain that the whole £7,000,000 was not added to the debt as at the 31st March because the last instalment of the loan, was, in terms of the prospectus, not received until the 2nd April. The proceeds of this loan were not drawn upon at all for last year's requirements, so that the loan belongs entirely to this year's finance. The debt increase for this year will, of course, be less by the amount already added to the debt on account of the loan by the 31st March last. Apart from the £7,000,000 loan, the aggregate of additions to the debt for the year was £10,650,750, made up as follows : — Increase from conversion and redemption operations in connection with the 4-per-cent. 1929 Con- £ solidated Stock .. .. .. .. 739,347 liaised for redemption but unused on 31st March last 3,946 New loans for public works, State advances, and other developmental activities .. .. 9,497,910 Charges and expenses of £5,000,000 loan of 1928 .. 409,547 £10,650,750 The first two items were wholly raised in London, and of the new loans and expenses £5,409,547 was raised in London, while the balance of £4,497,910 came from the proceeds of local issues. Of the new capital raised during the year £3,067,910 was for State advances, £200,000 for State forests, and the balance of £6,230,000 for public works, the expenditure on which I have already reviewed. Concerning the 4 - per - cent. Consolidated Stock, honourable members will remember that there was £29,490,852 of it falling due in London on the Ist November next. Although it was obvious that renewal of this stock would have to be at a higher rate of interest, it was equally obvious that there would have been considerable risk in leaving the whole amount to be dealt with at maturity. Accordingly £5,000,000 of it was converted into 4|-per-cent. 1947 stock in May, 1928, at the rate of £104\ of the new stock

Public debt.

New loans raised.

Additions (or year.

Conversion operations.

8.—6,

13

for £100 of the old stock. This still left over £24,000,000 of the 1929 stock outstanding, so after assuming office I deemed it advisable to make a further offer to holders in January last to convert up to £12,000,000 of the stock into 4|-per-cent. 1948-58 stock similar to that issued for the £7,000,000 loan, with which the conversion offer was concurrent. The offer was £104J; of the 1948-58 stock for £100 of the 1929 stock, and on these terms, which returned investors £4 15s. 3d. per cent, over the full period of the new stock £11,729,496 of the 1929 stock was converted. The cost to the State of the new stock, allowing for redemption of the conversion premium and other expenses over the period of the loan, is £4 16s. lid. per cent. This important transaction was successfully carried oiit, and the terms, in the light of the ruling rates of interest, were very satisfactory. In addition to the large conversions, £1,104,500 of the 1929 stock was disposed of by subsidiary operations during last financial year. These operations include repayment of £502,500 of the stock out of Public Debt Repayment Account, conversion of an odd amount of £30,000, and redemption of £572,000 out of the proceeds of further sales of 1947 stock. To sum up the position : £17,833,996 of the 1929 Consolidated Stock has now been cancelled, and further parcels amounting to £382,500 were held by the Treasury, as an investment, awaiting cancellation, so that the total amount held by the public on the 31st March last was £11,274,356. This is a more manageable amount, but I am hopeful of reducing it still further before the maturity date on the Ist "November next. In fact, as local money is relatively plentiful at present, I am raising some of the funds in New Zealand for redemption of this stock, and, including the cancellation of the £382,500 of stock held by the Treasury on 31st March last, have already disposed of some £860,000 of it in this manner. The effect is to transfer so much of the debt to New Zealand, which will be a sound proposition economically. Including the £502,500 of 1929 stock just referred to, repayments of debt during the year amounted to £3,234,124. This debt was domiciled as follows :— £ New Zealand .. .. .. .. .. 2,130,293 Australia .. .. .. .. .. 500 London .. .. .. .. .. 1,103,331 £3,234,124 These reductions in debt were effected as follows £ Under Repayment of Public Debt Act, 1925 .. 1,046,000 Under Funded Debt Agreement with British Government .. .. .. .. .. 386,224 Out of reparations and war credits , .. .. 368,550 From Discharged Soldiers Settlement Account .. 680,250 From sundry other accounts .. .. .. 733,350 Raised for redemption, 1927-28, and applied this year .. .. .. .. .. 19,750 £3,234,124 In addition to all these operations affecting the total of the debt there was also effected during last financial year a considerable volume of renewals, mostly of securities held by Government Departments, together with numerous other transactions appertaining to the management of the debt. Details of all these transactions may be found set out in the published accounts, but as they have, no bearing on the general position of the debt I do not think that it is necessary to enumerate them in this Statement.

Transfer of debt to New Zealand.

Debt redeemed.

8.—6

14

Summary op Debt Operations for Year. The changes in the position of the debt during 1928-29 may be summarized as follows : — £ Debt as at Ist April, 1928 .. .. .. .. 251,396,252 Add— New loans raised for 1928-29— £ Ordinary .. .. .. .. 6,839,547 State Advances .. .. .. 3,067,910 9,907,457 Part £7,000,000 loan carried forward for 1929-30 .. 5,379,105 Increases arising out of conversions and redemptions of 1929 stock .. .. .. .. .. .. 739,347 Raised for redemption but not applied at 31st March, 1929.. 3,946 Less redemptions— £ 267,426,107 Ordinary .. .. .. .. .. 803,537 War .. .. .. .. .. 1,089,367 Discharged soldiers .. .. . . 726,350 State Advances .. .. .. . . 614,870 3,234,124 Debt as at 31st March, 1929 .. .. £264,191,983 Classification of the Debt. £ Ordinary .. .. .. .. .. 151,488,052 War ' .. .. .. .. .. 70,881,269 Discharged soldiers .. .. .. .. 8,287,656 State advances .. .. .. .. 33,535,006 £264,191,983 £264,000,000 of public debt at first sight would appear to be a staggering burden to be carried by our relatively small population, and undoubtedly it would be a very heavy burden for the Dominion if the debt were wholly deadweight like the debts of most of the countries of the Old World. Our war debt, of course, is wholly unproductive, but it now amounts to little more than one-quarter of the total. The greater part of the remainder, raised for public works, land-settlement, and State advances, is self-supporting. The proof of this lies in the expenditure figures. For instance, during the last financial year the actual payments for interest and statutory repayment charges on the debt amounted to £12,779,721, but, as I demonstrated when dealing with the expenditure earlier in this Statement, only £6,024,395 of the burden fell on the taxpayer, and of this amount the greater portion —to wit, £3,797,979 —was on account of war debt. The balance of the interest-payments was provided for out of the earnings of our interestearning assets. State Advances, for instance, provide the whole of the interest on their portion of the debt. Further, in addition to the actual recoveries in cash, it must not be overlooked that the expenditure of the capital which gave rise to the debt has contributed in no small measure to the development of the Dominion, and though it cannot be accurately assessed in pounds shillings and pence it cannot be gainsaid that the railways, roads, bridges, and other public works have been productive to a greater degree even than is indicated by the expenditure figures I have just quoted. The Government is certainly not going to embark on any programme of extravagant expenditure out of loan - money, but is going to see to it that as far as possible further debt is incurred only for the purpose of providing what is essential for the economic development of the resources of the country. So long as this principle is observed, and steps are taken to see that the State obtains full value for its money, the wealth of the community will increase at a greater rate

Summary of debt operations.

Relative burden of the debt.

Government's borrowing-policy.

15

8.—6

than the debt charges, and there will consequently be no increase in the relative burden on the taxpayers. Guided by these principles the Government will have no hesitation in borrowing the additional capital necessary for land-settlement, for State advances, and for the completion of the trunk railway-lines. STATE ADVANCES. This is another matter to which the Government gave immediate attention on assuming office. The previous Administration had restricted the funds available for advances, with the result that settlers and workers had to wait for months and even years for an advance. When the Government took office I found that there were several thousands of applications on hand, involving an amount exceeding £4,000,000. Obviously the first thing to do was to deal with these arrears of applications, and I immediately arranged to place additional capital at the disposal of the State Advances Board, and gave instructions that everything possible was to be done to get properties valued and generally expedite matters. As a result I am pleased to be able to inform honourable members that the accumulation of applications has now been overtaken, and, beyond the time required to attend to the valuation of properties and arrange the necessary formalities, there is now no delay in dealing with applications. Thus settlers desiring loans to assist them in their farming operations, or workers desirous of building homes for themselves, are no longer handicapped by having to wait for long indefinite periods for loans. In addition to assisting the individual applicants, the expediting of the State Advances has undoubtedly stimulated the timber trade, provided work for carpenters, plumbers, and various other tradesmen, and generally assisted materially towards overcoming our unemployment problem. Since 10th December, when the Government assumed office, up to 29th July loans were authorized by the State Advances Board as follows : — £ To 2,006 settlers .. .. .. .. 2,420,790 To 2,749 workers .. .. .. .. 2,384,995 4,755 £4,805,785 —————— # Loans paid over during the same period amounted to £3,319,300. As I indicated when dealing with the public debt, all the additional capital required for State advances was obtained locally. I had no difficulty in obtaining all the money required ; and, while it may be a matter of indifference to the individual applicant where the money for his loan comes from, the fact that the Dominion out of its own savings is able to find the money to finance our settlers and workers is of considerable economic importance. In addition to the proceeds from local sales of public debt securities, additional capital for advances to settlers has been obtained locally from the sale of long-term Rural bonds, securities which are finding increasing favour with the investing public. Since this branch of the State Advances Office was started in April, 1927, approximately £1,900,000 worth of bonds has been taken up. These bonds, bearing interest at 5 per cent., to mature in 194-7, are at present being sold at £94 10s. per cent., giving a return to investors with redemption of the discount over the period of the loan of approximately oj per cent. Having satisfactorily disposed of the more urgent matter of clearing up the arrears of applications, the next step is to concentrate on the question of interest rates. This, of course, is a matter that will be gradual, the governing factors being the rate at which fresh capital can be raised, and the cost of refinancing the existing loans when they fall due. It must also be borne in mind that loans borrowed in recent years have been at relatively high rates, which, of course, have to be paid until the loans in question mature. It is well known, however, by all who have any knowledge of finance that though the nominal rate of interest on our last two London loans was 4-| per cent, the discount price would not permit of lending out on that basis right awav. The break in the old rate of 5 per cent, in May, 1928, indicated that according to circumstances governing world finance rates would

State advances.

Arrears of applications.

Loans authorized.

Rural bonds.

Lending rates.

8.—6

16

gradually work down to 4f per cent, at par, but it is impossible for any one to say when that position will be reached. I am hopeful that the lending rates for new advances can be started on the downward path before long. The Settlers Branch last year made a profit of £30,465, equal to 3s. per cent. 011 the capital invested, and the Workers Branch a profit of £10,887, equal to 2s. Id. per cent, on the capital. RAILWAYS AND ROAD TRANSPORT. The next matter I wish to deal with is the position of our railways, with which is involved practically the whole transport problem of the Dominion. As is also the casejin many other countries, this is one of the major, if not the [foremost problem with which we are faced. The development of road transport is comparatively recent, and I doubt whether the true significance of the problem is generally appreciated throughout the Dominion. The Railway revenue for last year amounted to £8,249,038 and workingexpenses to £6,849,383, leaving a net revenue of £1,399,655. Subsidies on branch lines and isolated sections (paid and accrued) amounted to £498,937, giving a total of £1,898,592 available for interest charges amounting to £2,331,335. The result of the year's working was, therefore, a loss of £432,743 so far as the Railway Department was concerned under present arrangements. The subsidies merely represent losses already borne by the Consolidated Fund, so that the disclosed loss for the year is approximately £930,000, as against £280,000 for 1925-26, the first year of operations under the present system. The real loss is even greater than is indicated by these figures, as there are certain capital charges which the Railways have not been asked to carry. Now, that part of the loss which is at present carried by the Railways must be met out of their working capital and such reserves as they have for renewals and depreciation, &c., and as soon as these are represented only by accumulated losses, the Railways will obviously be unable to carry on without further assistance from the Consolidated Fund. This will mean that the whole of the losses will have to be borne directly by the taxpayers as the same accrue, and I am satisfied that if the present drift is allowed to go*on for only a few years longer the taxpayers of this Dominion will have to find not less than £2,000,000 a year to meet Railway deficits. That is what we are faced with. The heavy construction costs of the lines added to the system in recent years, together with the extensive programme of improvement works authorized by the previous Governments, and better rolling-stock, have together been responsible for raising the average capital cost per open mile of line from £12,106 in 1920 to £17,210 in 1929. This has meant increased interest charges, especially in view of the high rates for money that have ruled in recent years, against which net earnings per open mile have gone down in about the same ratio as the capital cost has gone up —viz., from £551 in 1920 to £353 in 1929. As to the causes of this falling-off in Railways earnings, I would draw honourable members' attention to the following comparison, to obtain which the additional revenue and expenditure in connection with advertising, motor services, and other subsidiary services have been omitted from the 1928-29 figures : — 1919-20. 1928-29. Revenue— £ £ Passenger traffic .. .. 2,594,440 2,502,887 Goods traffic .. .. .. 2,956,237 4,846,125 Miscellaneous .. .. .. 201,810 175,852 Total operating revenue .. 5,752,487 7,524,864 Worlung-expenses .. .. .. 4,105,067 6,374,579 Net operating earnings .. £l, 647,420 £l, 150,285

Railways and road transport.

Railway revenue and expenditure.

Railway losses.

Capital cost per open mile of line.

Comparison of Railway revenue.

17

B.—6,

It will be seen that the seat of the trouble lies in the passenger traffic, where the revenue has declined, notwithstanding the fact that over the period, lines opened for traffic increased by 281 miles, while passenger train-mileage run increased by about 60 per cent. Had the passenger revenue increased in the same ratio as the goods revenue all would have been well. The falling-off in the passenger traffic is undoubtedly due to the development of motor transport, which is becoming a rapidly increasing factor in the transport system of the Dominion as elsewhere. As things are at present there is no possibility of the road transport doing the whole job and superseding railways in the same way as railways displaced the coaches. It seems likely, however, that in certain classes of work, particularly short-distance suburban traffic, the road-motor will prove the most economical form of transport, but for long-distance traffic there is no doubt that when all costs are taken into consideration the railways provide the cheapest and most efficient means of transport. The present long-distance motor competition is profitable to-day because the motor is required to bear only part of the cost of surfacing and maintaining the principal roads, and escapes the interest charge on the capital cost of all roads, as well as many other charges incidental to motor traffic. The irony of the situation is that the heavy losses on the publicly owned railways are being largely brought about by good motor roads being built, also with public money, to facilitate direct competition with the railways. In other words, State capital is being provided to assist in the direct undermining of the earning-power of £57,500,000 of State capital already invested in railways. The trains have to be run to carry the bulk of the traffic, and they could handle the whole of the long-distance traffic practically without any additional cost. Thus the long-distance motor competition amounts to pure economic waste, which the country can ill afford. Good roads are nevertheless necessary, but unless the road-motor is to be made to carry the full cost of the roads so as to force traffic into the most economical channels (and even this would involve economic waste through unnecessary duplication of services) the main-highways policy must be framed as far as possible to bring about not direct competition, but co-ordination with the railways. The amount of borrowed capital available for roading purposes is not unlimited, and roads away from the railways should be the first, consideration in the interests of trade and production. This aspect of the transport question appears to have been largely neglected up to the present. In fact, it has been found in practically all countries that the only solution to the problem lies in co-ordination between the two forms of transport. In countries like Great Britain, where both rail and road transport are in the hands of private enterprise, it would appear that competition itself is forcing a solution through amalgamation and co-operation between the two services. In New Zealand, however, where only the road transport is in private hands and the railways belong to the State, it is clear that nothing will be done in this direction unless the Government takes steps to bring about co-operation. In fact, in view of the serious loss that will certainly result if the present trend of affairs is allowed to continue, I believe that the Government would be failing in its duty if it did not make a determined effort to control transport in the interests of the Dominion as a whole. How best to attain this object is a much more difficult matter to determine. The Government desires to encourage motor transport as feeders to the trunk railway-lines and to and from those districts not directly served by the railways, so it would appear that the desired end must be obtained per medium of some regulating authority, which will direct the flow of transport into channels where it will produce the best results to the Dominion as a whole. The Government has already taken action in the direction of setting up a Ministry of Transport and an advisory Council. It is proposed to broaden the basis of the Council by giving the Railways adequate representation thereon, and by adding representatives of the commercial and farming interests who are also directly interested, in that unnecessary and wasteful duplication of transport facilities can only lead to higher transport costs all round. This Council, representative of all interests concerned, will be asked to fully investigate the whole complex problem and report to the Government as to the best means of eliminating wasteful competition and promoting co-ordination

Passenger traffic.

Motor transport.

Main-highways policy.

Co-ordination of rail and road transport.

4—B. 6.

8.—6

18

between the road and rail transport facilities of the Dominion. In short, some means must be found in the paramount public interest of rationalizing transport, and it is proposed to ask the Council to collate all the information in order to enable the Government to determine the course of action that will best conserve the interests of the community. So far as the railways themselves are concerned, the Government is convinced that the trunk lines must be the backbone of the transport system, and. as I have already stated, every effort will be made to complete the trunk lines as soon as possible. Where the transport needs of any particular district can be met by motor transport on a good motor-road no further branch lines of railway will be built. The existing branch lines, almost without exception, do not pay workingexpenses, let alone interest on the capital cost of construction. At present losses on branch lines and isolated sections are covered by a subsidy from the Consolidated Fund, which last year amounted to approximately £500,000. The isolated sections will for the most part be linked up with the trunk lines when the present construction proposals are complete. The branch lines concerned consist of six short lengths of line in the North Island, on which the working loss, apart from interest, was £32,598 for 1928-29 ; and, including the Otago Central line, twenty-two sections of line in the South Island; working loss for 1928-29, £115,578. The total working loss on branch lines was thus £148,176, from which was deducted £57,592 for the estimated feeder value of these lines. Interest on the capital at 4f per cent, amounted to £273,221, making the total net loss on branch lines £363,805. Subsidy for losses on isolated sections amounted to £132,773, making a grand total of £496,578 paid out of the Consolidated Fund last year. Some of these so-called branch lines —the Otago Central line, for instance — must remain as an integral part of the railway system, but some of the short lengths of line merely tacked on to the main lines have clearly served their purpose from a developmental point of view, and with the development of motor transport such lines have become obsolescent. In such cases any private concern would probably tear up the railway-lines, and it is a matter for consideration as to whether the Government should not do likewise. Clearly it is necessary to have all the facts before us in each case, and this is one of the matters where the proposed Counci] might do good work. The matter will be referred to the Council accordingly. In any such case where private enterprise has already established adequate motor services no further action by the Government would be necessary, but in other cases it might be necessary for the Railway Department to run a motor service. Either way the Government would see to it that the residents of the districts concerned have adequate transport facilities. As to the loss of capital invested in such lines, I have to point out that part of the capital for the Public Works Fund has been provided out of transfers from national revenue, and when an allocation is made it is found that approximately £8,100,000 of the total railway capital has come from surplus revenue. Thus the capital sunk in lines that are done away with can be written off without impairing the total of assets representing loan capital. In any case the Government has decided to go further than this and write down the capital of the railways. At the same time the present subsidy out of the Consolidated Fund will be abolished. The present arrangement is unbusinesslike and confusing, and the proper thing to do (assuming it can be done) if the assets are not worth their cost from the point of view of earning-power, is to write down the capital. That is what any commercial concern would do. The capital cost of track and buildings of the branch lines at present covered by the subsidy arrangement is approximately £6,250,000. Thus when the railways have been relieved from payment of interest on £8,100,000 of their capital, not only will there be no interest payable by the railways on account of branch lines, but there will be an additional saving of interest to them to be set off against the working loss on those branch lines which after investigation it is decided to retain. Writing down the capital in this way will not involve any additional loss to the Consolidated Fund, as at present the interest received on branch-line capital is handed back to the Railways through the subsidy. On the other hand, the Consolidated Fund will not be relieved of any interest charge through the cancellation of the subsidy. The proposals simply mean that the capital derived from surplus revenue will be written off, and that will be the end of it so far as interest is concerned.

Branch lines of railway.

Writing-down of Railway capital.

8.—6

19

To sum up, the Government's policy in regard to transport is—(a) To complete the trunk lines as the backbone of the system : (b) Not to build any more short branch lines where the transport needs can be adequately catered for by motor services on a good motorroad : (c) To investigate the position of the present branch lines with a view to doing away with those that are found to be obsolescent : (d) To write down the Railway capital by the amount contributed thereto from revenue, and cancel the present subsidy from the Consolidated Fund: (e) To co-ordinate the railway and motor-road construction policies : (/) To take steps to bring about co-ordination between road and rail transport services. The benefit of this policy lies in the checking of the present dangerous drift into economic waste, which, if allowed to go on, bids fair to increase the railway losses to be borne by the Consolidated Fund from the present figure of £500,000 to £2,000,000 a year within a few.years; a charge on taxation that, to say the least of it, is most disturbing to contemplate. I am satisfied that when the policy that I have outlined is carried out the drift will be checked, and the operation of the completed trunk railway system of the Dominion will earn full interest on its capital and thus will not entail any burden at all on the taxpayers. LAND-SETTLEMENT. The Government is doing everything it can and spending large sums of money for unemployment relief, all of which is admittedly very necessary because we cannot stand by and see men, women, and children suffer while the breadwinner is unable to obtain work. Such measures are, of course, only temporary expedients to tide over the unfortunate citizens concerned until we can deal with the basic causes of the trouble. Apart from the humane aspects of the problem, unemployment is only the most prominent indication that our economic machinery is out of balance, for no thinking person would assert that there is not sufficient potential wealth in the Dominion to comfortably support a million and a half of people, for such a statement would be ridiculous. What, then, is the cause of the trouble ? I say unhesitatingly that it is the neglect to foster land-settlement. We have secondary industries and they are expanding, but they cannot compete in the world's markets. The prosperity of the whole country is bound up in the products of the land. The widespread effect of a drop in the price of wool or butter is striking evidence of this. Accordingly, the only real cure for our present difficulties lies in the old slogan, " Back to the land." Increase the production of our primary products, and also the number of people on the land, and the market for our secondary industries is widened and stimulated, which means more work and trade for the people in the town. Recognizing these basic facts, the Government placed land-settlement in the forefront of their election programme, and the people endorsed it. The Government accordingly will vigorously foster land-settlement in any and every way that is feasible. It is a matter that will take time, but 1 can assure honourable members that the Government will spare no effort to obtain the desired end. The State holds some millions of acres of waste land, but a great deal of it, for various reasons, is not suitable for immediate settlement. Some of it is inaccessible, and roads will have to be constructed before it can be utilized ; while in other areas the nature of the land is such that considerable developmental work will have to be done before a settler can go on it and make a living for himself and his family. The Minister of Lands, however, has been taking stock of the position, and the Government proposes to take steps to bring some of these waste lands into cultvation. Capital, of course, is required, and in addition to existing authorities I propose to ask the House to authorize the borrowing of up to £5,000,000 for land-settle-ment. In this connection legislation will be submitted to the House to enable the funds of the Lands Department to be used for the preliminary development

Policy in regard to transport.

Land-settlement.

Waste !ands.

Development of selected areas.

8.—6

20

of selected areas, which, will be cut up and offered for selection as soon as the land, with the assistance and co-operation of the experts of the Agriculture Department, has been brought into such a state that settlers can go on to it and get an immediate return from their farming operations. This means that, as an alternative to buying developed lands for settlement, the funds will be used to develop the waste lands that are already in the possession of the State. The cost of such development work will, of course, be capitalized. In addition, it is proposed to provide for special assistance to those energetic and capable men with the pioneer spirit who are willing to take up sections of waste land and do the developmental work themselves. This will be done by setting up a special Land Development Branch of the State Advances Office, the funds of which will be used for advances on special liberal conditions to selected men taking up the class of land to which I have referred. The idea is that in lieu of buying land that is fully developed and loading the settler with the capital cost, the man will be allowed to have the land at a nominal cost and be given the opportunity of making the capital improvements himself, the necessary capital being advanced to him on suitable liberal terms by the State. I may add that using the State Advances Office for this purpose is really a return to the original purpose for which the Office was established by me in 1894 —and a great success it was, too —in conjunction with the land-settlement policy inaugurated at that time. Of late years the State Advances Office has developed overmuch along the lines of a straight-out investment corporation, and the real purpose of assisting new land-settlement has been allowed to fall very much into the background. As well as developing and settling backward land in the ways that I have indicated, the Government also intend to proceed resolutely with the cutting-up of large estates suitable for closer settlement. Such estates will be acquired by voluntary purchase where the land can be obtained at a reasonable price. The Government, however, will not pay more than the true economic value of the land, and if sufficient suitable areas cannot be acquired at a reasonable price the Government will not hesitate in the interests of the Dominion as a whole to use compulsion. To facilitate such action where it is necessary it is proposed to amend and simplify the procedure at present governing the compulsory acquisition of lands under the Land for Settlements Act. The taxation adjustments I will deal with later will also have a bearing on this. A number of suitable properties have already been purchased, and some have actually been cut up and settled. A great number of properties are being investigated by the Land Purchase Board, but it is evident that the prices asked by many of the vendors are above the economic value from a production point of view, and the compulsory provisions may have to be resorted to if such an attitude is going to be maintained. The Government is not out to exploit anybody, and will pay a fair price, but it is not going to put settlers on to land carrying such a heavy loading of capital charges that they will have no hope of making a success of it. Settlers taking up lands that are purchased and cut up will, of course, be able to obtain all the necessary capital for development purposes from the Settlers Branch of the State Advances Office and the Rural Intermediate Credit Board without any delay. As I said before, to get more men on to the land is a matter that takes time, but the policy I have outlined will be steadfastly pursued, and the full effects will be seen in a few years' time, when the increase in production and in the general prosperity of the whole Dominion will have caused unemployment and other present difficulties to disappear. AGRICULTURE. The organization of the Department of Agriculture will be used to assist the men on the land, and particularly the new settlers. To this end, the instructional activities of the Department are being steadily extended by means of personal contact with farmers, local field experiments, lectures, and publicity matter. Research activities are being given special attention, particularly as regards various diseases of dairy cows, certain sheep troubles, and the mineral content of pastures in relation to animal nutrition and deficiency diseases. A Plant Research *

Land Development Branch c f State Advances Office.

Cutting-up of large estates.

Agriculture,

Research work,

21

8.—6

Station has been established at Palmerston North in co-operation with the Research Department, with a field area on part of the Massey Agricultural College farm, and valuable research is being carried out there into plant-diseases, insect pests, and other matters of vital interest to the farming community. The Department of Scientific and Industrial Research, in addition to its other activities for the benefit of our secondary industries, is, in collaboration with the Agriculture Department, investigating problems of wool research, losses due to temporary sterility of cows, and cold-storage problems connected with all perishable exports. Arrangements have also been made for the determination of the amounts of the various vitamins present in New Zealand butter, and for investigation of methods whereby the high vitamin content of butterfat from New Zealand cows may be preserved in the manufacture of butter and cheese. It is satisfactory to note that the production of these commodities shows satisfactory increases, which demonstrate that the increasing use of fertilizers for top-dressing and other farming operations is profitable to the farmer and the Dominion generally. To the improved carrying-capacity of top-dressed grasslands may also be partly traced the remarkable increase of 1,870,000 in the number of sheep, which was disclosed by the interim returns as at the 30th April, 1929. EDUCATION. If the prosperity of the Dominion depends upon the agricultural and pastoral industries —and I do not think that any one will dispute the fact —-it is obvious that our system of education should be designed to provide our children with a good general education with, a bias towards farming : that is to say, in the later stages of the school life the teaching of subjects appertaining to the problems and life of the man on the land should be a prominent feature of the school curriculum. At present it would appear that our education system is out of touch with our economic conditions in giving, if anything, a bias towards the professions. It is the policy of the Government to correct this, and, as already announced, it is intended, to set up a Select Committee to take evidence from the farming, technical, industrial, and professional groups in order to ascertain the best method of attaining the desired end. In many cases where the conditions have been favourable for school consolidation, and local opinion is not antagonistic to the change, small schools are being closed and conveyance of the pupils to larger schools instituted, the children thus obtaining the advantage of instruction in better-equipped, schools and from more highly qualified teachers than would otherwise have been the case ; and, further, it has been possible to provide for secondary instruction in some of the consolidated schools for many country children who under ordinary conditions would have had no opportunity of obtaining more than primary-school instruction. It is gratifying to find that country settlers are learning to appreciate the advantages of the consolidated schools, and. the Government hopes to extend in this way to more and more country pupils some of the privileges in the past enjoyed only by the more fortunate inhabitants of the larger centres. A further method of providing better education facilities for children situated in remote localities is by means of the Correspondence School, the activities of which are being extended to provide courses of secondary-school instruction. Already one hundred pupils have been enrolled in the secondary department. The primary classes of the school have also been extended to deal with over seven hundred pupils. All of these factors are of great value in raising the standard of education in country districts, and when the curriculum has been amended on the lines I have indicated these additional facilities will assist the prospective settlers to obtain the maximum production from the lands which they will take up in due course. The growing recognition of the value of providing special forms of instruction ■ for backward children has brought fresh responsibilities, and has led during the past year to the establishment of further classes and the appointment of additional staff to deal with them.

Department of Scientific and Industrial Research,

Education.

Consolidation of country schools.

Correspondence School.

Backward children.

B.—6

22

.Recent legislation has considerably widened the scope of the social work as carried out by the Child Welfare Branch of the Education Department, necessitating the employment of additional Welfare Officers and better provision in institutions for the classification of the inmates. Two new institutions for girls were established, at Christchurch and Timaru. UNEMPLOYMENT RELIEF. To cure unemployment some far-»reaching changes in our economic conditions must be brought about, and I have already outlined the Government's proposals in this connection. In the meantime, recognizing the urgency of the need of many of our unfortunate citizens, the Government, oh assuming office, gave their immediate attention to the question of unemployment relief. The Act passed during the first short session of the new Parliament increased some of the votes granted in the last Appropriation Act in order that additional relief works could be put in hand without delay. At the same time authority was obtained for the payment of £100,000 additional subsidies to local authorities for relief works in the cities and towns. Instructions were also issued to the various labour-employing Departments, such as the Public Works, Post and Telegraph, and Forestry, to provide work for as many men as possible, and I am pleased to say that these efforts have done much to relieve the position. Although it meant considerable increase in the cost to the State, the Government had no hesitation in increasing the standard rates of pay for relief workers from 9s. and 12s. per day to 14s. per day. The lower rates fixed by the last Administration were considered to be inadequate under present-day conditions, and I feel sure that it is not the wish of the taxpayers that the troubles of these people, on whom has fallen the brunt of our economic misfortunes, should be increased by niggardly rates of pay on relief works put in hand by the State. The special relief works are mostly on roads, highways, and forestry. The expenditure last year on such works totalled £729,034, in addition to which there remained commitments as at the 31st. March last amounting to £45,223. Subsidies to local authorities paid over amounted to £68,567, and at the end of the year there were also commitments amounting to £36,794. The total cost to the State of unemployment relief last year was thus £879,618, which is an indication of the Government's efforts to assist in alleviating distress through unemployment. The local authorities, particularly in the cities, are also alive to their responsibilities in the matter, and during last year unemployment loans amounting to £102,533 were sanctioned by the Local Government Loans Board. The expenditure on wages and transport in connection with approved works put in hand by local authorities is subsidized by the State, firstly to encourage the undertaking of relief works, and secondly to reimburse the local authorities for the additional expense incurred in employing labour unaccustomed, in many cases, to manual work. The money, however, is in all cases expended on useful works, which when completed become assets of the local authority concerned. Admittedly, some local authorities find difficulty in providing useful works on which a relatively high proportion of the cost is for labour, but, even so, it is clearly inequitable that the State should be called upon to subsidize the cost of materials used on such works in cities and boroughs, as has been suggested in some quarters. I may add that T have arranged for the question of unemployment insurance to be fully investigated, and I hope the outcome will enable me to present next session a matured scheme to deal with the problem. EARTHQUAKE DISASTER. I would like next to refer to the serious earthquake that occurred on 17th June last, resulting, I regret to say, in loss of life and heavy material damage. As soon as the extent of the distress and damage was realized, the Government at once got into touch with the authorities at the centres affected with a view to providing transport and other facilities for refugees. Immediate steps were taken

Child-welfare.

Unemployment relief.

Relief works.

Rates of wages.

State expenditure.

Subsidies to local authorities for relief works.

Unemployment insurance.

Earthquake disaster. Immediate relief to sufferers.

23

B. —6

to restore telegraphic communications, and wireless operators were despatched to Westport, with which telegraphic communication was impossible, and communication was thus maintained by radio through ships in port there. Similar action was later taken in the case of Karamea, where it was necessary to establish a transmitting station. Tents and other equipment were supplied by the Government from the Defence Department stores, and refugees were conveyed free of charge by ordinary and special trains where necessary. I also made arrangements for a steamer to proceed to Westport to take away any one desirous of leaving the affected districts, and those who were not in a position to pay were not required to find the passage-money. This service is being continued as long as circumstances warrant. A steamer service was also inaugurated between Westport and Karamea. The public response to relieve distress in the affected areas has been very gratifying. Requests for information as to the disposal of public subscriptions from various parts of the Dominion were made to me, and it seemed evident that the general opinion was that the best results coulcl be obtained by the concentration of effort and the centralization of the funds ; and a Central Earthquake Fund has therefore been established. A central committee has been set up for the purpose of co-ordinating the activities of the relief committees in the affected areas, and applications are being invited from residents and settlers for assistance from the relief funds to restore the damage to property. Tt is impossible at this stage to estimate what amount will be required for this purpose, but it is probable that the relief funds will only touch the fringe of what is necessary to ensure our fellow-citizens in the stricken areas all the help possible to restore their position. In the meantime, until the extent of the assistance required is known, the efforts of the local committees are being confined to preserving the comfort and health of the residents and the care of refugees. Local committees have, in general, aimed at providing at least one fire in each house, thus partially restoring essential comforts. It is recognized that the local relief committees have performed valuable work in this respect. In administering the relief funds so generously subscribed the policy must be that persons in the poorest circumstances shall be assisted first of all. Others may be able to repay the cost of repairs by instalments, but each case will receive careful consideration when all applications are received. It is essential to the equitable distribution of the relief funds to obtain a reliable estimate of the amount of assistance required. It will be realized that the restoration of the districts in roads, bridges, railways, public buildings, &c., will be a work of great magnitude, involving heavy expense to the Government. Attention will first be given to making tracks as temporary means of access to the settlements at present cut off as a result of the calamity. The Main Highways Board is arranging to reopen main roads where possible without delay, and where this cannot be done steps are being taken to open or explore new routes to the main centres in the area affected. The restoration of public buildings will also be carried out as quickly as possible. As a desire has been expressed by local authorities to contribute towards the relief funds, legislation will be introduced to validate such grants by local authorities, including Harbour Boards. Grants by other public institutions, such as savings-banks, &c., will be similarly provided for. STATE SUPERANNUATION FUNDS. As I have previously indicated, the question of investigating the financial position of the State Superannuation Funds —i.e., the Public Service, Railways, and Teachers' Funds—has occupied a great deal of my attention. My investigation showed that the financial position of these funds is even worse than I had thought. The cash shortage on account of current pensions alone, which should have been covered by State subsidies in the past, is over £2,000,000. This huge shortage has arisen from the neglect in the past to pay the subsidies which the Actuary has certified from time to time, in terms of the Superannuation Act, as necessary to make up the amount required to pay the pensions of the public servants who have already retired. The pensions, of course, have been paid, but partly out of the contributions of the

Relief funds.

Restoration-work.

Validating legislation for donations to Relief Fund.

Slate Superannuation Funds.

8.—6

24

officers at present in the Service, which contributions should be accumulating against their own pensions. Through the loss of interest thus entailed, the failure to pay the subsidies required in the past has been cumulative in effect, with the result that a large and permanent increase in the subsidies, with a correspondingadditional charge on taxation, is now required to rehabilitate and maintain the funds on their present basis. The position has been further accentuated by a mistaken policy of early retirements and other concessions granted, apparently without due consideration as to their effect on the Superannuation Funds. It is certain that a change must be made in the policy of automatic early retirement now operating. As a matter of fact, the position of these funds is such that it is a question whether a radical change in the whole basis will not be necessary. The whole matter is so complicated and so far-reaching in effect that, with the short time at my disposal and the general pressure of work, it will be quite impossible for me to deal with it in time for amending legislation to be brought down this session. Moreover, the matter is of such outstanding importance not only to the Public Service but to the taxpayer, that I propose to set up an inquiry as soon as possible to investigate the position thoroughly and report to the Government on the state of the funds, and generally as to what should be done to place superannuation for public servants on a satisfactory footing. In addition to these matters affecting Government employees, I have also under consideration requests regarding salary-adjustments involving heavy liabilities. The superannuation question, however, is in my opinion first in importance, and until the Government can see a clearing-up of the requirements in this connection I find myself unable, in view of the financial position generally, to take any action in the direction of adjusting salaries, other than is brought about by promotion and regrading under the law. BANKING AND CURRENCY. To meet possible war emergencies some of the most important provisions of our permanent banking legislation were suspended by regulations made imder section 44 of the Finance Act, 1916, and the banks were given greater scope in the matter of note-issue, limit of debts, engagements and liabilities, &c. It was originally intended that these regulations should operate only for the war period, but in terms of section 66 of the Finance Act, ]917, they remain in force until a day to be fixed by the Governor-General in Council. No date has yet been fixed for the termination of the regulations. Following the economic upheaval of the war, nearly every country in the world has found it necessary or desirable to amend its currency laws to meet the altered conditions. It is certain that some amendments to the permanent banking legislation will be necessary in New Zealand, as a complete return to pre-war practice is inadvisable, if not impossible. For instance, a return to an internal gold circulation would be a luxury for which there is no need and no demand. Great Britain found she could dispense with it. The only authority for the ten-shilling note is the War Regulations. Since the outbreak of the war successive Proclamations have maintained banknotes as legal tender in New Zealand. The period fixed by the last Proclamation expired on 10th January last, and though I am desirous of repealing all war regulations as soon as possible I considered it advisable in this case to maintain the existing position until such time as the permanent legislation governing banking can be overhauled. Accordingly a further Proclamation was issued making banknotes legal tender until 10th January, 1932. POST AND TELEGRAPH DEPARTMENT. The first year of the Department on the new accounting basis which I referred to earlier in this Statement proved a successful one. Receipts for the year amounted to £3,445,545, and the expenditure, including £428,000 interest paid to the Consolidated Fund, to £2,921,736. The balance of receipts over payments was thus £523,809, and after providing for depreciation and other reserves the net profit for the year was approximately £39,000.

Inquiry to be made.

Salary-adjustments.

Banking and currency.

Post and Telegraph Department.

25

8.—6

The savings-bank business shows a considerable improvement over that of last year. The deposits totalled £27,252,381—which is £358,685 less than the total for last year. The withdrawals amounted to £28,111,940 —being £2,473,056 less than for last year. The excess of withdrawals over deposits for the year was £859,559, compared with £2,973,931 for the previous year. The year's operations disclose an improvement of over £2,100,000. The interest credited to savings-bank depositors for the year was £1,745,050. Thus while there has been an excess of withdrawals, these withdrawals have been met out of interest and not out of principal. The net result is that the accumulated funds at the credit of depositors have increased by £885,491, the total amount standing at £48,644,217. Post Office Investment Certificates continue to be popular with people of small means desiring investment for fixed periods at slightly better rates. Sales of certificates during the year amounted to approximately £550,000. PUBLIC TRUST OFFICE. This useful State institution reports another very successful year in 1928-29, during which the value of estates and funds under administration rose from £44,155,548 to £48,334,790, a record increase of over £4,000,000. The investments made during the year amounted to £3,190,642, consisting largely of loans to local bodies and farmers, and to town dwellers for housing purposes. The net profits for the year were £29,467. Taking into consideration the extensive concessions made to clients in recent years, this must be regarded as a satisfactory result. The Office already pays income-tax, and legislation will be brought down this session to provide that in future the Office will also pay land-tax. In addition, provision will be made for half the net profits of the Public Trust Office to be paid to the Consolidated Fund. In this connection, I may explain to honourable members that the original legislation provided a State guarantee of the Office, and for the whole of the profits going to the Consolidated Fund, but amendments were made later to allow the Office to retain and use its profits for the erection of premises and the building-up of reserves. The Public Trust Office has now reached a position, however, when a partial return to the original intention is warranted. STATE INSURANCE OFFICES. The operations of these institutions also proved successful last year. The < Government Life Insurance Department issued new policies assuring £1,915,465, the ] largest amount ever written by the Department in any one year, and bringing the total insurances in force up to £22,084,471, including bonuses. The annual valuation of liability disclosed a surplus of £212,519, excluding interim profits paid duringthe year. A total of £200,287 has been divided in the form of reversionary bonuses totalling £324,871. This Department already pays both land and income tax. As to the State Fire Insurance Office, the total income received, £252,093, was a record for the Office. Claims were substantially less than in the previous year, and working-expenses the lowest for the last fifteen years. The surplus of £75,600, after allowing for a rebate of 12J per cent, to policyholders, was greater than in any previous year in the history of the Office. The State Fire Office has been for some years now the largest fire-insurance income-tax payer in the Dominion. In future the Office will also be called upon to pay land-tax. The Accident Branch showed excellent increases both in premiums and interest ' received. Claims were higher than for the previous year, but working-expenses were lower, and the surplus of £17,592 was a record one for the Branch. TAXATION. As to this all-important question, honourable members will have gathered i from my remarks earlier in this Statement that, in view of the deficit last year and the general of the country's finances when the Government assumed office, there is no practicable option but to face the facts and obtain additional revenue from taxation if the Budget for this year is to be balanced-- and that; of course, is essential.

Post Office Savings-bank.

Post Office Investment Certificates.

Public Trust Office.

Disposal of profits.

Government Insurance Department.

State Fire Insurance Office.

Accident insurance.

Taxation.

s—B. 6.

B—6

26

In determining how the additional revenue required may best be obtained, I have endeavoured to make a, virtue of necessity, and, while adjusting taxation on an equitable basis, place the added burden in such a way as to assist the Government's land-settlement policy which I have already outlined. At the same time I have had regard to the desirability of creating as little disturbance as possible in business and trade, in order that the economic progress of the Dominion may not be hindered. Attention was first given to the large farming incomes, which I consider have not borne their fair share of taxation in recent years. Accordingly, to adjust this inequity and assist in bringing about the cutting-up of large estates, it is proposed, in the case of farming-lands of an unimproved value in excess of £12,500, that the amount of land-tax assessed on the present graduated scale shall be increased by a supertax calculated on a graduated, percentage basis rising 1 per cent, for each £50 of unimproved value above £12,500 on which such land-tax is assessed, until for an unimproved value of £15,000 the supertax, will be 50 per cent, of the land-tax on the present basis. Thereafter the percentage rate of supertax will continue to increase 1 per cent, for every £300 of unimproved value on which land-tax is based, until for an unimproved value of £30,000 the supertax will be 100 per cent. Above an unimproved value of £30,000 the supertax will be at a flat rate of 100 per cent, of the land-tax as assessed under the present scale. The following examples will show clearly the effect of these proposals : —

Land-tax.

It is further proposed that the mortgage exemption allowed in assessing landtax shall be reduced to £5,000, disappearing £l for every £l of unimproved value in excess of £5,000. The present exemption is £10,000, disappearing £2 for every £l of unimproved value in excess of £10,000. It is a fact that at present, owing to exemptions, many farmers with an unimproved value up to £10,000 pay neither land nor income tax. In addition it is intended to amend the law to make all farmers, including farming partnerships, with holdings (whether owned or leased) of an unimproved value of £12,500 and over at any time during the year ended 31st March, 1929, assessable with income-tax on their farming income, but subject to a set-off of the actual amount paid in land-tax on the land used for farming. In effect, this means the payment of land-tax or income-tax, whichever is the greater. In such cases, however, the 5 per cent, of the capital value of land otherwise deductible from assessable income derived from such land will not be allowed, as normally this is intended to cover land-tax paid. This proposal is intended to ensure that the large farming incomes will contribute to the national revenue in the same ratio as the incomes from other occupations, which is only just and equitable. As I do not anticipate that these land- and income-tax proposals will produce enough additional revenue to ensure a balanced Budget for this financial year, it is proposed to move a resolution to-night increasing the primage duty on imports from 1 per cent, to 2 per cent. Primage is purely a revenue duty imposed upon practically all imports whether dutiable or not, and to obtain the additional revenue required in the manner indicated will not affect any particular industry or class of goods. The duty is so small and so universal in its application that the proposed increase will be the least felt of any possible increase in indirect taxation. Further, as soon as the Budget balance is stabilized, this additional duty can be taken off without disturbing the tariff in any way. To remedy a cause of hardship under the present income-tax provisions relating to children's exemption, it is proposed that the present age-limit of eighteen years shall not apply in cases where the Commissioner of Taxes is satisfied that a child, owing to mental or physical incapacity of a permanent nature, is unable to earn his or her own living, Further, it is proposed, to provide that the exemption on account

Reduction of mortgage exemption.

Income-tax on large farming incomes.

Increase in primage duty.

Income-tax exemption for children.

Dnta „ p , ro iZ""™ *—»=»• "ass" £ £ s. d. £ s. d. £ s. d. Per Cent. 12,550 78 7 5 79 3 1 0 15 8 1 14,000 91 8 9 118 17 4 27 8 7 30 15,000 100 18 9 151 8 1 50 9 4 50 18,000 131 16 3 210 18 0 79 1 9 60 21,000 166 5 0 282 12 6 116 7 6 70 30,000 290 18 9 581 17 6 290 18 9 100

27

8.—6

of children under eighteen years of age shall be apportionable over the twelve months in cases where a child is born or attains the age-limit for exemption during the income-tax year. At present, if a child is born on the 31st March, the full exemption is allowed, and if a child dies or attains the age of eighteen on 30th March the exemption for that year is lost. The available data in connection with farming incomes is meagre, as incometax returns have not been made by farmers since 1923. Moreover, the effect of the steeper land-tax as a set-off against income-tax cannot be readily arrived at. For these reasons it is difficult to estimate how much additional revenue will be derived from the proposals. The matter is further complicated by some uncertainty as to the extent of the increase in imports that will result from the present large favourable balance of trade. The direct cause of the deficit last year was the failure of the revenue from taxation to come up to expectations, and I want to ensure that the same thing does not happen this year. However, after careful consideration of all the circumstances, I am of opinion that the new proposals should produce the additional revenue required. 1929 SO. Before having recourse to additional taxation, I can assure honourable members that the estimates of expenditure for the current year have been most carefully overhauled with a view to reducing them to a minimum consistent with the maintenance of the existing services. Increased debt-charges and other rigid items call for an increase under permanent appropriations of approximately £700,000, but under annual votes the reductions I have effected have kept the increase over last year's expenditure down to £30,000. At the same time the items of revenue, apart from taxation, were also scrutinized with a view to seeing that all legitimate recoveries and departmental receipts will be brought to account. In this connection I may say that in order to place the State trading departments on a basis more comparable with outside organizations, I have decided that in future the State Fire Insurance Office and the Public Trust Office shall be called upon to pay land-tax. In addition, as the Post and Telegraph accounts have been separated from the Consolidated Fund and placed upon a commercial basis, it is proposed that this Department shall, in future, be charged with Customs duty on its imports. In reviewing the interest recoveries from the various separate accounts I find that the Main Highways Account is paying no interest on a portion of the capital borrowed for construction purposes. This I propose to adjust. Then there is due to the Consolidated Fund some accumulated interest on enemy-property moneys, which can be paid in this year, and also certain unclaimed moneys in the hands of the Public Trustee. It was the practice to pay such unclaimed moneys into the Consolidated Fund, but latterly the receipts have been held up owing to a technical defect in the Public Revenues Act, which will be remedied. The net result is that I estimate the revenue for the year as follows: — £ Customs .. ~ .. .. .. 8,400,000 Beer duty . . .. .. .. . 600,000 Motor-vehicles—Duties, licenses, &c. .. .. 1,442,000 Stamp and death duties .. .. 3,614,000 Land-tax .. .. .. .. .. 1,493,000 Income-tax . . .. .. .. .. 3,400,000 Interest on public moneys .. .. .. 820,000 Interest on capital liability— Railways . . .. .. .. . . 2,450,000 Postal and Telegraph . . .. .. 480,000 Interest on Public Debt Redemption Fund .. 995,000 Other receipts .. .. .. .. . . 1,478,000 £25,172,000 The above total includes £1,442,000 to be received on account of "Motor vehicles —Duties, licenses, &c.," but this is earmarked for specific purposes, and is not available to meet general expenditure.

Additional revenue from taxation proposals.

1929-30. Estimates carefully reviewed.

Additional taxation on State trading departments.

Interest recoveries.

Otter receipts.

Estimate of revenue.

8.—6

28

Estimated results.

ESTIMATED RESULTS. To sum up, I estimate the position for the financial year to be— £ Revenue .. .. .. .. .. 25,172,000 Expenditure — £ Permanent appropriations 16,946,000 Annual appropriations .. .. 7,964,000 24,910,000 leaving the amount of .. 262,000 to provide for supplementary estimates and contingencies. In conclusion, I have to thank honourable members for the attentive and patient hearing they have given to my Statement, which covers most important policy questions. The measures proposed to ensure a stable finance for the annual Budget and the more far-reaching measures dealing with railways, land-settlement, and public works will, I consider, give effect to the mandate the people of the Dominion gave to this Government. To sum it all up, the cardinal points of the Government's policy are : — (a) To take immediate steps to obtain a balanced Budget, as this is a matter which cannot wait for the fulfilment of the more far-reaching proposals. (■b) To provide a permanent cure for the unemployment difficulty and pave the way for decreases in the rates of taxation, by increasing the prosperity of the Dominion on a solid basis through vigorously fostering land-settle-ment. (c) To provide all the capital necessary to enable the State Advances Office to cope with the demand for loans for development of farms and the building of houses for workers. (d) To accelerate the completion of the trunk railway-lines, inf order that these unfinished works may be brought into operation and made interestearning and at the same time provide more work. (e) To deal with the present unsatisfactory financial position of the railways and institute a comprehensive system of co-ordination in transport, in order to check the present dangerous drift into economic waste, which otherwise will undoubtedly impose greatly increased burdens on the taxpayers. It will, I think, be generally recognized that there has been little delay in formulating and initiating these reforms, in view of the short period I have had to investigate the country's affairs since taking office in December, but the same industry and application will now be applied to the vigorous administration of the policy measures I have outlined, in order that the beneficial results I confidently expect will be realized at an early date. As regards the financial and economic position generally, I am glad to say that the outlook for our primary industries is good, and ample capital is available to finance trade and industry. Internally, our favourable overseas trade balance has not yet reflected its full value, and this phase, unfortunately, is concomitant with the unemployment difficulty, a difficulty that I venture to predict will be cured only by a vigorous administration of the fundamental reforms the Government has in hand.

Government's policy.

29

B—6

SUMMARY, Consolidated FundOrdinary Revenue Account— £ Expenditure .. .. .. .. .. .. 24,176,928 Revenue .. .. .. .. .. .. 23,599,676 Deficit, 1928-29 .. .. .. .. £577,252 (Deficit due to overestimate of taxation receipts and unexpected expenditure on account of interest.) £ Balance brought forward, Ist April, 1928 .. .. 3,302,232 £ Less deficit for 1928-29 .. .. .. 577,252 Final instalment of purchase price of C longterm mortgage shares in Bank of New Zealand ... .. .. 58,594 Amortization of debt . . .. .. 50 Subsidies to local authorities in respect of unemployment .. .. 68,567 Advances to Native Trustee (net) .. .. 33,000 Advances to Rural Intermediate Credit Board 110,100 Sundry charges and expenses of raising loans 1,128 ■ 848,691 Balance, 31st March, 1929 .. .. .. £2,453,541 This balance was made up as follows : — £ Cash .. .. .. .. .. 2,315,381 Imprest outstanding .. .. .. .. 135,880 Investments .. .. .. ... 2,280 £2,453,541 Summary op Debt Operations. £ Debt as at Ist April, 1928 .. .. .. .. .. 251,396,252 Add— New loans raised for 1928-29 — £ Ordinary .. .. .. 6,839,547 State Advances .. .. .. 3,067,910 9,907,457 Part of £7,000,000 London loan carried forward for 1929-30 .. 5,379,105 Increases arising out of conversions and redemptions of 1929 stock 739,347 Raised for redemption but not applied as at 31st March, 1929 .. 3,946 267,426,107 Less redemptions .. .. .. .. .. 3,234,124 Debt as at 31st March, 1929 .. .. . .£264,191,983 Classification of Debt. £ Ordinary .. .. .. .. .. 151,488,052 War .. .. .. '.. .. .. 70,881,269 Discharged Soldiers . . .. .. .. 8,287,656 State Advances .. .. .. 33,535,006 ' £264,191,983

8.—6

30

Apart from war debt, which is, of course, wholly unproductive, the greater part of the remainder, raised for public works, land-settlement, and State advances, is self-supporting, the interest payments being provided by the interest-earning assets. Government's borrowing policy is to see that as far as possible further debt incurred only for purpose of providing for economic development of resources of Dominion, but no hesitation in providing capital required for State advances, landsettlement, and completion of trunk railway-lines. Comparisons with Previous Year. £ Total revenue, comparative increase .. .. 496,497 Customs, increase .. . . . . .. 11,663 Income-tax, increase .. .. .. 37,148 Land-tax, decrease .. .. .. 14,155 Stamp and death duties, increase .. .. 71,353 Total expenditure, comparative net increase . . 1,529,082 Interest, increase .. .. .. .. 278,147 Pensions, increase .. .. .. .. 91,307 Electoral Department, increase .. .. 80,046 Agriculture, increase .. .. .. 86,316 Education, increase .. . . .. 92,681 Samoan Military Police (new item) .. 27,374 Capital Expenditure on Public Works. £ Railway construction, additions, and improvements 3,179,391 Main highways and roads . . . . .. 1,822,922 Hydro-electric supply .. . . .. .. 965,560 Telegraphs and telephones .. .. .. 624,414 Public buildings (including schools) .. .. 602,392 Irrigation, land, and river improvements .. 282,806 Other public works .. .. .. .. 182,095 £7,659,580 London Loan, 1929. £7,000,000 raised in January for— Public Works Fund (railway construction, roads, £ telegraph and telephone extension, &c.) .. 4,500,000 Hydro-electric-power works .. . . .. 1,000,000 Railways improvement .. .. .. 1,500,000 £7,000,000 Loan very favourably commented upon in London financial papers. Loan obtained on better terms than other borrowing States. Conversion Operations. In addition to £7,000,000 loan, £11,729,496 of 4-per-cent. stock maturing in November, 1929, was converted into 4f-per-cent. stock maturing in 1948-58, on the basis of £lo4j of the new stock for every £100 of the old. £17,833,996 of 1929 4-per-cent. stock dealt with to 31st March last, leaving £11,274,356 still outstanding. Debt deductions during year totalled £3,234,124.

31

8.—6

State Advances Office. Since the loth December, 1928, when Government assumed office, to the 29th July last, loans authorized as follows : — £ To 2,006 settlers .. .. .. .. 2,420,790 2,749 workers .. .. .. .. 2,384,995 4,755 £4,805,785 Loans paid over during same period amounted to £3,319,300. The position does not permit of any reduction in interest rates at present, but it is hoped that lending rates can be started on downward path before long. Railways and Road Transport. Total expenditure on highways and roads for year was approximately £3,350,000. If present drift not checked taxpayer will shortly have to find £2,000,000 a year for railway losses. Summary of Government's policy : — (a) To complete trunk lines as backbone of system : (b) Not to build further short branch lines where transport needs can be adequately catered for by motor services on a good motor-road : (c) To investigate the position of the present branch lines with a view to doing away with those that are found to be obsolescent : (d) To write down the Railway capital by the amount contributed thereto from revenue, and cancel the present subsidy from the Consolidated Fund : (e) To co-ordinate the railway and motor-road construction policies : (/) To take steps to bring about co-ordination between road and rail transport services. Taupo Railway and Palmerston North Deviation stopped as circumstances do not justify the large capital outlay involved. Land Settlement. Vigorous policy essential for return to general prosperity. Loan authority of £5,000,000 to be provided. Certain waste lands to be brought into cultivation. Large estates to be purchased and cut up for closer settlement. Government will pay a fair price, but will use compulsory provisions of Act if necessary. Land-development Branch of State Advances Office to be established to assist in development of waste lands. Agriculture. Resources of Agriculture Department available to assist men on land, particularly new settlers. Special research activities being undertaken in connection with various stockdiseases, mineral content of pastures, &c. Education. System to be amended to give bias towards farming. Country schools being consolidated. Correspondence School being extended to embrace secondary education. Child-welfare work being widened. Immigration. Government proposes to continue the restriction on assisted immigrants to separated families, single women, domestic servants, and juveniles.

8.—6,

32

Unemployment. Standard rates of pay for relief workers increased from 9s. and 12s. per day to 14s. Additional labour employed by Public Works, Post and Telegraph, and Forestry Departments. Total cost to State of unemployment relief during year amounted to £879,618. Earthquake Disaster. Government provided transport and other facilities for refugees. Special committee administering the Central Relief Fund. Restoration of roads, bridges, railways, public buildings, &c., is being carried out. Legislation to be introduced validating grants to Fund by local authorities, including Harbour Boards and private savings-banks, &c. State Superannuation Funds. Total cash shortage, not covered by subsidies in past, amounts to over £2,000,000. Whole position to be investigated. Banking and Currency. Amendments to banking legislation necessary. Existing position to be maintained in the meantime. Post and Telegraph Department. Net profit for year approximately £39,000. Excess of withdrawals over savings-bank deposits for year £859,559. Sales of Post Office Investment Certificates for year approximately £550,000. Public Trust Office. Estates under administration increased by over £4,000,000. Net profit for year £29,467. State Insurance Offices. Government Life Insurance Department issued reversionary bonuses totalling £324,871. Life insurances in force at end of year £22,084,471. State Fire Insurance Office earned surplus of £75,600 after allowing for rebate of 12-| per cent, to policyholders. Accident Branch shows surplus of £17,592. Taxation. Analysis of expenditure shows that charges on taxation largely of a rigid nature, and that Budget cannot be balanced wholly by administrative economy. Government has no practicable option but to increase taxation until causes of economic difficulties can be dealt with. Burden to be placed in such a manner as to assist the Government's land-settle-ment policy, and with a view to disturbing business and trade as little as possible. Proposals : —• Land-tax : Super-tax to be imposed on all farming-lands of an unimproved value in excess of £12,500. Also mortgage exemption to be reduced. Income-tax : Income from farms of an unimproved value of £12,500 or over to be subject to income-tax, but amount paid in land-tax will be allowed as deduction from income-tax otherwise payable. In effect this means payment of land-tax or income-tax, whichever is the greater. Income-tax exemption for children to be adjusted. Present age-limit of eighteen not to apply where child, on account of mental or physical permanent incapacity, unable to earn his or her own living. Also present exemption apportionable over whole income-tax year. Primage duty on imports increased from 1 per cent, to 2 per cent.

B. —6

33

Estimates for 1929-30. Estimates carefully scrutinized and reduced to a minimum consistent with maintenance of existing services. Departmental revenue overhauled. Consolidated Fund— Ordinary Revenue Account— £ Estimated revenue .. .. .. .. 25,172,000 Estimated expenditure .. .. .. 24,910,000 Available for supplementary estimates and contingencies • • • • • • • • £262,000 £ Estimated Customs revenue . . .. . . 8,400,000 Estimated stamp and death duties .. .. 3,614,000 Estimated land and income tax .. . . 4,893,000 Cardinal Points or the Government's Policy. (a) To take immediate steps to obtain a balanced Budget, as this is a matter which cannot wait for the fulfilment of the more far-reaching proposals. (b) To provide a permanent cure for the unemployment difficulty and pave the way for decreases in the rates of taxation, by increasing the prosperity of the Dominion on a solid basis through vigorously fostering land-settlement. (c) To provide all the capital necessary to enable the State Advances Office to cope with the demand for loans for development of farms and the building of houses for workers. (d) To accelerate the completion of the trunk railway-lines, in order that these unfinished works may be brought into operation and made interest earning and at the same time provide more work. (e) To deal with the present unsatisfactory financial position of the railways, and institute a comprehensive system of co-ordination in transport, in order to check the present dangerous drift into economic waste, which otherwise will undoubtedly impose greatly increased burdens on the taxpayers.

6—B. 6.

8.—6

TABLES TO ACCOMPANY THE FOREGOING STATEMENT. Page Table No. 1. —Abstract of Receipts and Expenditure of the Financial Year ended 31st March, 1929, See Parliamentary Paper 8.-l [Part I]. Table No. 2.—-The Public Debt on 31st March, 1929. See Parliamentary Paper 8.-l [Part lII], Table No. 3. —Revenue for the Year ended 31st March, 1929, compared with the Year ended 31st March, 1928 .. .. .. .. .. .. .. .. 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, 1929 .. .. .. .. .. .. .. .. .. .. ii Table No. s.—Estimated Revenue for 1929-30, compared with the Actual Revenue for 1928-29 .. iii Table No. 6.—.Comparative Statement of Stamp and Death Duty Revenue for 1927-28 and 1928-29 iii Table No. 7. —Statement of the Customs Duties collected for 1928-29, compared with 1927-28 .. iv Table No. B.—Statement of the Actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1929, compared with the Year ended 31st March, 1928.. .. .. .. .. 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, 1929 .. . .. .. .. .. vi Table No. 10. —Estimated Net Expenditure for 1929-30, compared with the Actual Net Expenditure for 1928-29 .. .. .. .. .. .. .. • ■ .. 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, 1925 to 1929 inclusive .. .. .. .. .. ix Table No. 13.—Public Works Fund —Statement showing Net Expenditure under Appropriations for the Year ended 31st March, 1929, compared with the Year ended 31st March, 1928 .. 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, 1929 .. xi Table No. 15.—Statement of the Estimated Liabilities of the Public Works Fund, General Purposes Account, outstanding on 31st March, 1925 to 1929 inclusive .. ~ .. xii Table No. 16.—-Statement of the Estimated Liabilities of the various Separate Accounts outstanding on 31st March, 1924 to 1929 inclusive .. .. .. .. xiii Table No. 17. —Receipts and Payments of Accounts, 1928-29, with Balances at Ist April, 1928, and 31st March, 1929 .. .. .. •. ' •• .. xiv Table No. 18.—Statement showing the available Financial Resources of the various Accounts on the 31st March, 1928, as compared with the 31st March, 1929 .. .. xv Table No. 19.—Statement showing the Amount charged to "Unauthorized" in each Financial Year from Ist April, 1910, to 31st March, 1929 .. .. .. .. .. xvi Table No. 20. —Summary of the Public Debt and of the State Assets which may be set off against it, as at 31st March, 1929 .. .. . • • ■ .. .. xvi Table No. 21.—Statement showing Loans falling due in the Seven Years ending with the Year 1936, 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 31st March, 1925 to 1929 •. .. • • • • • • ■ • .. xx Table No. 25. —Statement showing Imports and Exports of the Dominion in each Financial Year ended 31st March, 1320 to 1929 .. .. .. • • • • • • 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. 6.

8.—6.

II

Table No. 3. Revenue for the Year ended 31st March, 1929, compared with the Year ended 31st March, 1928.

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, 1929.

Year ended Year ended 1 31st March, 31st March, ! Increase. [ Decrease. 1929. 1928. I £ £ £ £ Customs .. .. .. .. .. 7,954,252 7,942,589 11,663 Beerduty.. .. .. .. .. 611,484 609,624 1,860 Stamp and death duties .. .. .. 3,575,720 3,504,367 71,353 Land-tax .. .. .. .. .. 1,140,324 1,154,479 V 14,155 Income-tax .. .. .. .. 3,310,877 3,273,729 37,148 Registration and other fees .. .. .. 198,267 200,259 .. 1,992 Marine .. .. .. .. .. 118,250 112,502 5,748 Interest on public moneys .. .. .. 760,035 698,057 61,978 Interest on capital liability—Working railways.. 2,331,335 2,130,867 200,468 Interest on Public Debt Redemption Fund .. 995,202 878,408 116,794 Local Bodies'Loans Act, 1908, sec. 76 .. .. 10,158 .. 10,158 Rents of buildings .. .. .. .. 25,284 32,178 .. 6,894 Tourist and Health Resorts .. .. .. 72,895 66,964 5,931 Miscellaneous .. .. .. .. 99,222 41,939 57,283 Territorial.. .. .. .. .. 198,803 200,915 .. 2,112 Departmental and other receipts .. .. 536,149 574,567 .. "38,418 570,226 73,729 73,729 Totals.. .. .. .. 21,928,099 21,431,602 496,497 Motor-vehicles —Duties, licenses, &c. .. .. 1,243,577 369,118 Postal and Telegraph .. .. .. .. 3,323,260 Interest on capital liability —Postal and Telegraph 428,000 Totals .. .. .. 23,599,676 j 25,123,980 ' I I

Difference. Estimate for Actual for 1928-29. 1928-29. More . ! w £ £ £ £ Customs .. .. .. .. .. 8,261,000 7,954,252 .. 306,748 Beer duty .. .. .. .. .. 600,000 611,484 11,484 Motor-vehicles —Duties, licenses, &c. .. .. 1,147,000 1,243,577 96,577 Stamp and death duties .. .. .. 3,500,000 3,575,720 75,720 Land-tax .. .. .. .. .. 1,150,000 1,140,324 .. 9,676 Income-tax .. .. .. .. 3,400,000 3,310,877 .. 89,123 Registration and other fees .. .. .. 201,000 198,267 .. 2,733 Marine .. .. .. .. 120,000 118,250 .. 1,750 Interest on public moneys .. .. .. 747,000 760,035 13,035 Interest on capital liability — Working railway .. .. .. .. 2,255,000 2,331,335 76,335 Postal and Telegraph .. .. .. 425,000 428,000 3,000 Interest on Public Debt Redei. ption Fund .. 992,250 995,202 2,952 Rents otii'iiimi in .. .. .. .. 26,000 25,284 .. 716 Tourist and Health Resorts .. .. .. 72,000 72,895 895 Miscellaneous .. .. .. .. 167,000 99,222 .. 67.778 Territorial.. .. .. .. .. 200,000 198,803 .. 1,197 Departmental and other receipts .. .. 605,000 536,149 .. 68,851 279,998 548.572 279,998 Totals.. .. .. .. 23,868,250 23,599,676 .. 268,574

8.—6.

III

Table No. 5. Estimated Revenue of the Consolidated Fund (Ordinary Revenue Account) for 1929-30, compared with the Actual Revenue received for 1928-29.

Table No. 6. Comparative Statement of Stamp and Death Duty Revenue for 1927-28 and 1928-29.

Estimate Actual Differences. for for 1929-30. 1928-29. Increase. Decrease. Ordinary Revenue Account. £ £ £ £ Customs .. .. .. .. .. .. 8,400,000 7,954,252 445,748 Beer duty .. .. .. .. .. .. 600,000 611,484 .. 11,484 Motor-vehicles—Duties, licenses, &e. .. .. .. 1,442,000 1,243,577 198,423 Stamp and death duties .. .. .. .. 3,614,000 3,575,720 38,280 Land-tax .. .. .. .. .. .. 1,493,000 1,140,324 352,676 Income-tax.. .. .. .. .. .. 3,400,000 3,310,877 89,123 Registration and other fees .. .. .. .. 220,000 198,267 21,733 Marine .. .. .. .. .. .. 120,000 118,250 1,750 Interest on public moneys .. .. .. .. 820,000 760,035 59,965 Interest on Public Debt Redemption Fund .. ., 995,000 995,202 .. 202 Interest on capital liability—Working Railways .. .. 2,450,000 2,331,335 118,665 Interest on capital liability—Post and Telegraph .. 480,000 428,000 52,000 Rents of buildings .. .. .. .. .. 25,000 25,284 .. 284 Tourist and Health Resorts .. .. .. .. 77,000 72,895 4,105 Miscellaneous .. .. .. .. .. 239,000 99,222 139,778 Territorial .. .. .. .. .. .. 198,000 198,803 .. 803 Departmental receipts .. .. .. .. 539,000 525,063 13,937 Recoveries on account of expenditure of previous years .. 60,000 11,086 48,914 1,585,097 12,773 12,773 Totals .. .. .. .. 25,172,000 23,599,676 j 1,572,324

Item. 1927-28. 1928-29. Increase. Decrease. £ £ £ £ Adhesive stamps .. .. 85,254 124,406 39,152 Duty on instruments .. 428,805 439,452 10,647 Death duty (estate and sue- 1,847,714 1,865,171 17,457 cession duty) Gift duty .. .. ' 51,656 79,342 27,686 Impressed stamps, and duty 187,875 197,834 9,959 on cheques Company licenses .. 70,881 72,327 1,446 Bank-note duty .. .. 195,301 191,221 .. 4,080 Duties payable by racing clubs 567,890 541,179 .. 26,711 Amusements-tax .. .. 63,165 60,586 .. 2,579 Rates, fines, and miscellaneous 5,826 4,202 .. 1,624 106,347 34,994 34,994 Totals .. .. 3,504,367 3,575,720 71,353

B —6.

IV

Table No. 7. Statement showing Customs Duties collected for Year 1928-29, compared with the Year 1927-28.

Table No. 8. Statement of the actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1929, compared with the Financial Year ended 31st March, 1928.

— , 1928-29. 1927-28. i Increase. Deorease. I I £ £ £ £ Spirits, wine, and beer .. .. .. 1,062,152 1,381,909 . . 319,757 Tobacco, cigars, and cigarettes .. .. 1,464,732 1,497,460 .. 32,728 Apparel and textiles 1,726,231 1,698,227 28,004 Motor-vehicles and parts (other than tires) .. 1,141,734 782,019 359,715 Other goods .. .. .. .. 2,142,504 2,176,305 .. 33,801 Primage .. .. .. .. .. 416,899 406,669 10,230 397,949 386,286 386,286 Totals .. .. .. 7,954,252 7,942,589 11,663

Year ended Year ended —— 31st March, 31st March, Increase. Decrease. 1929. 1928. Permanent appropriations— £ £ £ £ Civil List .. .. .. .. 30,167 30,289 .. 122 Interest.. .. ' .. .. .. 8,675,221 8,397,074 278,147 Sinking Fund .. .. .. .. 2,882 Cr. 452 3,334 Repayment of Public Debt .. ..I 1,046,928 993,764 53,164 Reduction of Funded Debt .. .. j 385,710 367,216 18,494 Under special Acts— Advances to other Governments .. .. Cr. 29,246 .. .. 29,246 Contribution to Singapore Naval Base .. , 125,000 125,000 Education purposes .. .. .. 137,233 127,289 9,944 Endowments—New Plymouth Harbour Board 2,525 2,976 .. 451 Maintenance of overseas war graves and war 30,750 23,063 7,687 memorials N.Z. Consolidated Stock —Amount paid Bank 29,844 18,271 11,573 of England for management Pensions — Old-age .. .. .. .. 1,018,353 968,928 49,425 Widows' ... .. .. .. 312,963 302,766 10,197 Military .. .. . .. 13,673 16,377 .. 2,704 War .. ;. .. .. 1,178,646 1,146,955 31,691 Miners' .. .. .. .. 45,725 42,469 3,256 Blind .. .. .. .. 13,339 12,249 1,090 Various .. .. .. .. 20,020 21,668 .. 1,648 Family allowances .. .. .. 54,815 37,515 17,300 Refunds in respect of totalizator-tax .. 26,166 25,209 957 Rural Intermediate Credit Board—Grant 6,000 4,000 2,000 towards expenses of administration Salaries and honoraria (legislative and judicial) 100,260 . 99,780 480 Samoa Military Police — Expenditure in- 27,374 .. 27,374 curred in respect of Subsidies paid to Hospital Boards* .. 673,689 683,149 .. 9,460 Subsidies paid to local authorities on rates .. 216,065 215,679 386 Subsidies to superannuation funds and the 204,716 197,781 6,935 National Provident Fundf Territorial revenue .. .. .. 8,669 7,946 723 Working Railways—Losses on isolated sec- 496,578 484,659 11,919 tions and branch lines Transfer to Discharged Soldiers' Settlement 50,000 50,000 ! Loans Act 1920 Depreciation Fund Account Westport Harbour Board—Repayment on Cr. 30,000 .. j .. 30,000 account of advance Miscellaneous .. .. .. .. 135,516 119,985 15,531 15,009,581 14,521,605 561,607 73,631 Main Highways Revenue Account—Tire-tax, 441,346 225,602 215,744 fees, fines, &c. Motor-spirits tax —Allocation of revenue .. 793,670 132,171 | 661,499 16,244,597 14,879,378 1,438,850 73,631 * Subsidy under Hospital and Charitable Institutions Act for the Jubilee Institute for the Blind is included in "Education purposes." t Includes maternity benefits administered through National Provident Fund Department.

8.—6,

V

Table No. 8 —continued. Statement of the actual Net Expenditure of the Consolidated Fund (Ordinary Revenue Account) for the Financial Year ended 31st March, 1929, compared with the Financial Year ended 31st March, 1928—continued.

Year ended Year ended 31st March, 31at March, Increase. Decrease. 1929. 1928. - Annual Appropriations— £ £ £ ! £ Legislative Departments .. .. .. 95,191 97,637 .. ! 2,446 Prime Minister's Department .. .. 13,084- 12,600 484 j Treasury Department .. .. .. 37,494 37,865 .. 371 National Provident and Friendly Societies Department .. .. .. .. 25,047 24,792 j 255 Land and Income Tax Department .. .. 61,099 58,883 ! 2,216 Stamp Duties Department .. .. 96,580 102,291 •• 5,711 Public Buildings .. .. .. .. 87,073 84,710 2,363 Government and other Domains .. .. 5,299 6,008 •• 709 Maintenance and Repairs to Roads .. .. 85,436 111,701 26,265 Maintenance of Irrigation Works, &c. .. 14,138 17,264 .. 3,126 Native Department .. .. .. 31,677 29,284 j 2,393 Department of External Affairs .. .. 38,433 35,466 | 2,967 ! Cook Islands .. .. .. .. 34,822 49,953 •• 15,131 Department of Industries and Commerce .. 31,419 33,318 j •• 1,899 Department of Justice .. .. .. 132,623 132,645 .. 22 Prisons Department .. .. .. 89,456 94,220 .. 4,764 Crown Law Office .. .. .. 5,934 5,381 ! 553 Police Department .. .. .. 444,970 417,975 1 26,995 : Pensions Department .. .. .. 165,912 169,278 .. 3,366 Mines Department .. .. .. 32,424 33,297 .. 873 Department of Internal Affairs .. .. 359,966 349,717 j 10,249 : Audit Department .. .. .. 24,790 26,917 .. 2,127 Public Service Commissioner's Office .. 7,062 6,362 700 Printing and Stationery Department .. 220,796 226,297 .. 5,501 Mental Hospitals Department .. .. 303,300 274,818 28,482 Department of Health .. .. .. 239,757 246,644 .. 6,887 Naval Defence .. .. .. i. 463,496 486,830 .. | 23,334 Defence Department .. .. .. 464,595 481,759 .. 17,164 Customs Department .. .. .. 117,390 175,023 .. 57,633 Marine Department .. .. .. 110,212 119,078 .. 8,866 Department of Labour .. .. .. 60,893 56,480 4,413 . Department of Lands and Survey .. .. 181,748 186,522 .. 4,774 Scenery-preservation .. .. .. 14,139 6,577 7,562 Valuation Department .. .. .. 53,600 51,610 1,990 Electoral Department .. .. .. 89,773 9,727 80,046 Department of Agriculture .. .. 451,926 365,610 86,316 Department of Tourist and Health Resorts .. 82,987 76,871 6,116 Department of Education .. .. . . 3,092,296 2,999,615 92,681 Department of Scientific and Industrial Research 57,535 44,823 12,712 Services not provided for .. .. .. 7,959 15,943 .. 7,984 Emergency Expenditure Account .. .. .. 6,677 .. 6,677 7,932,331 7,768,468 369,493 205,630 ! 1,808,343 279,261 279,261 Total expenditure .. .. .. 24,176,928 22,647,846 1,529,082

B.—6,

VI

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, 1929.

Net Actual Net Difference. Appropriations, Expenditure, j 1928-29. 1928-29. Permanent appropriations — £ £ £ £ Civil List .. .. .. .. 31,695 30,167 .. 1,528 Interest .. .. .. .. .. 8,539,134 8,675,221 136,087 • .. Sinking Fund .. .. .. .. 2,882 2,882 Repayment of Public Debt .. .. .. 1,053,559 1,046,928 .. 6,631 Reduction of Funded Debt .. .. .. 385,710 385,710 Under Special Acts .. .. .. 5,832,584 6,103,689 271,105 15,845,564 16,244,597 407,192 8,159 Annual appropriations — Legislative Departments .. .. .. 93,175 95,191 2,016 Prime Minister's Department .. .. 13,124 13,084 .. 40 Treasury Department .. .. .. 39,236 37,494 .. 1,742 National Provident and Friendly Societies Department .. .. .. .. 25,525 25,047 .. 478 Land and Income Tax Department .. .. 63,347 61,099 .. 2,248 Stamp Duties Department .. .. .. 96,801 96,580 .. 221 Public Buildings .. .. .. .. 87,600 87,073 ■■ 527 Government and other Domains .. .. 6,400 5,299 .. 1,101 Maintenance and Repairs to Roads .. .. 103,000 85,436 .. 17,564 Maintenance of Irrigation Works, &c. .. 14,200 14,138 .. 62 Native Department .. .. .. 32,374 31,677 .. 697 Department of External Affairs .. .. 38,236 38,433 197 Cook Islands .. .. .. .. 42,687 34,822 .. 7,865 Department of Industries and Commerce .. 31,928 31,419 .. 509 Department, of Justice .. .. .. 135,906 132,623 .. 3,283 Prisons Department .. .. .. 95,659 89,456 .. 6,203 CrownLawOffi.ee .. .. .. .. 5,889 5,934 45 Police Department .. .. .. 450,815 444,970 .. 5,845 Pensions Department .. .. .. 168,168 165,912 .. 2,256 Mines Department .. .. .. 42,747 32,424 .. 10,323 Department of Internal Affairs .. .. 345,164 359,966 14,802 Audit Department .. .. .. 29,617 24,790 .. 4,827 Public Service Commissioner's Office .. .. 7,270 7,062 .. 208 Printing and Stationery Department .. .. 230,487 220,796 .. 9,691 Mental Hospitals Department .. .. 294,910 303,300 8,390 Department of Health .. .. .. 249,046 239,757 .. 9,289 Naval Defence .. .. .. .. 485,861 463,496 .. 22,365 Defence Department .. .. .. 464,191 464,595 404 Customs Department .. .. .. 119,968 117,390 .. 2,578 Marine Department .. .. .. 119,382 110,212 .. 9,170 Department of Labour .. .. .. 63,787 60,893 .. 2,894 Department of Lands and Survey .. .. 188,133 181,748 .. 6,385 Scenery-preservation .. .. .. 17,203 14,139 .. 3,064 Valuation Department .. .. .. 55,108 53,600 .. 1,508 Electoral Department .. .. .. 90,767 89,773 .. 994 Department of Agriculture .. .. .. 443,957 451,926 7,969 Department of Tourist and Health Resorts .. 83,563 82,987 .. 576 Department of Education .. .. .. 3,082,811 3,092,296 9,485 Department of Scientific and Industrial Research 61,916 57,535 .. 4,381 Services not provided for .. .. .. .. 7,959 7,959 8,019,958 7,932,331 51,267 138,894 458,459 147,053 147,053 Total expenditure .. .. 23,865,522 24,176,928 311,406

8.—6

VII

Table No. 10. Estimated Net Expenditure of the Ordinary Revenue Account for 1929-30, compared with Actual Net Expenditure for 1928-29.

n j.- t i ! Difference. Estimate Actual for tor ' 1929-30. 1928-29. Increase. Decrease. Permanent Appropriations,— £ £ £ £ Civil List .. .. .. .. .. .. 31,190 30,167 1,023 Interest .. .. .. .. .. .. 9,003,111 8,675,220 327,891 Sinking Fund .. .. .. .. .. 2,882 2,882 Reduction of Funded Debt .. .. .. .. 405,136 385,710 19,426 Repayment of Public Debt .. .. .. .. 1,156,589 1,046,928 109,661 Under Special Acts .. .. .. .. .. 6,347,287 6,103,689 243,598 16,946,195 16,244,596 701,599 Annual Appropriations,— Legislative Departments .. .. .. .. 89,806 95,191 .. 5,385 Prime Minister's Department .. .. .. 13,990 13,084 906 Treasury Department .. .. .. .. 39,914 37,494 2,420 National Provident and Friendly Societies Department .. 25,391 25,047 344 Land and Income Tax Department .. .. .. 63,981 61,099 2,882 Stamp Duties Department .. .. .. .. 96,410 96,580 .. 170 Public Buildings .. .. .. .. .. 80,000 87,073 .. 7,073 Government and other Domains .. .. .. 6,050 5,299 751 Maintenance and Repairs to Roads .. .. .. 58,500 85,436 •• 26,936 Maintenance of Irrigation Works, &c. .. .. .. 19,500 14,138 5,362 Native Department .. .. .. .. .. 32,266 81,677 589 Department of External Affairs .. .. .. 41,318 38,433 2,885 Cook Islands .. .. .. .. .. 28,273 34,822 .. 6,549 Department of Industries and Oommeroe .. .. 8,301 31,419 23,118 Department of Justice .. .. .. .. 133,769 132,623 1,146 Prisons Department .. .. .. .. .. 92,867 89,456 3,411 Crown Law Office .. .. .. .. .. 6,149 5,934 215 Police Department .. .. .. .. .. 461,688 444,970 16,718 Pensions Department .. .. .. .. 165,360 165,912 .. 552 Mines Department .. .. .. .. .. 42,651 32,424 10,227 Department of Internal Affairs .. .. .. 342,941 359,966 .. 17,025 Audit Department .. .. .. .. .. 28,399 24,790 3,609 Public Service Commissioner's Office .. .. .. 7,818 7,062 756 Printing and Stationery Department .. .. .. 227,700 220,796 6,904 Mental Hospitals Department .. .. .. 309,121 303,300 5,821 Department of Health .. .. .. .. 247,737 239,757 7,980 Naval Defence .. .. .. .. .. 504,967 463,496 41,471 Defence Department.. .. .. .. .. 490,587 464,595 25,992 Customs Department .. .. .. .. 113,307 117,390 .. 4,083 Marine Department .. .. .. .. .. 115,707 110,212 5,495 Department of Labour .. .. .. .. 60,375 60,893 .. 518 Department of Lands and Survey .. .. .. 186,795 181,748 5,047 Scenery-preservation.. .. .. .. .. 3,400 14,1.39 .. 10,739 Valuation Department .. .. .. .. 51,072 53,600 .. 2,528 Electoral Department .. .. .. .. 9,765 89,773 .. 80,008 Department of Agriculture .. .. .. .. 435,383 451,926 .. 16,543 Department of Tourist and Health Resorts .. .. 88,123 82,987 5,136 Department of Education .. .. .. .. 3,170,668 3,092,296 78,372 i Department of Scientific and Industrial Research .. 63,760 i 57,535 6,225 Servicea not provided for .. .. .. .. .. 7,959 .. 7,959 7,963,809 7,932,331 240,664 209,186 942,263 209,186 209,186 Total expenditure .. .. .. £24.910,004 £24,176.927 £733,077 ~ ~ I "

8.—6

Table No. 11. Statement showing how Accumulated Surpluses have been applied. To Accumulated surpluses £ By Transfers to — £ £ at 31st March, 1929 30,246,838 Discharged Soldiers Settlement Advance Ito (Native Account— Trustee repaid .. 28,500 1920-21 .. .. 13,330,000 1921-22 .. .. 170,000 13,500,000 Discharged Soldiers Settlement Loans Act 1920 Depreciation Fund Account — 1920-21 .. .. 50,000 1921-22 .. .. 50,000 1922-23 .. .. 50,000 1923-21 .. .. 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— I 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 1928-29 .. .. 50 6,567,900 Bank of New Zealand Shares Account—■ £ | 1926-27 .. .. 808,594 1927-28 .. .. 117,188 1928-29 .. .. 58,594 984,376 | Education Loans Account, 1923-24 . . 100,000 Subsidies for relief of unemployment .. 143,673 Advance to State Forests Account .. 45,000 Advance to Native Trustee .'. .. 61,500 Advance to Rural Intermediate Credit Board .. .. .. .. 110,100 Charges and expenses of renewing loans. . 2,165 Ordinary revenue — To balance revenue and expenditure— £ 1921-22 .. .. 279,831 1928-29 .. .. 577,252 857,083 Investments at 31st March, 1929 .. 2,280 Balance (cash and imprests) at 31st March, 1929 .. .. ..2,451,261 £30.275,338 £30.275.338 * Includes £151,824 of reparation-moneys received from Germany. f Includes £73,710 of reparationmoneys received from Germany.

VIII

8.—6

IX

Table No. 12. Statement of the Estimated Liabilities chargeable on the Consolidated Fund (Ordinary Revenue Account) outstanding on the 31st March, each Year from 1925 to 1929.

ii—B. 6.

! 1925. 1926. 1927. 1928. 3929. ' Revenue Account. £ £ £ £ £ Permanent Appropriations,— Civil Jjist .. .. .. .. .. .. 161 313 337 335 238 Under Special Acts of the Legislature .. .. .. 15,411 13,435 16,835 16,540 48,830 Pensions .. .. .. .. .. .. 796 701 1,202 898 1,020 16,368 14,449 18,374 17,773 50,088 Annual Appropriations,— Legislative Departments .. .. .. .. 752 1,007 2,751 4,297 4,182 Departments of Minister of Finance* .. .. .. 7,502 11,064 8,226 16,253 18,843 Working Railways .. .. .. .. .. 332,985 II IF If If Post and Telegraph Department .. .. 104,383 93,919 61,876 89,230 Public Buildings, Domains, Maintenance of Roads, and Maintenance of Irrigation Works .. .. .. 15,899 17,315 23,301 19,189 14,858 Justice Department! .. .. .. .. .. 10,462 19,258 15,155 38,603 18,845 Mines Department .. .. .. .. .. 2,087 2,371 3,698 3,961 1,656 Internal Affairs Department} .. .. .. 26,186 61,038 76,784 53,442 69,368 Defence Departments .. .. .. .. 55,459 94,392 41,813 41,541 28,326 Customs Department ) 4,857 9,198 5,520 5,080 5,665 Marine Department .. .. .. .. .. j ' ' Labour Department .. .. .. .. .. 2,200 1,148 2,152 1,417 2,065 Lands Department .. .. .. .. .. 1,971 1,840 3,332 5,024 5,631 Agriculture Department|| .. .. .. .. 11,178 35,103 28,137 44,033 49,819 Education Department .. .. .. .. 10,414 10,405 33,828 41,455 32,577 Valuation and Electoral Departments .. .. .. 1,277 2,337 2,302 1,865 2,588 587,612 360,395 308,875 365,390 254,418 Services not provided for .. .. .. .. .. 112 2,652 419 293 Imprest Supply Act, 1927, Section 4 .. .. .. .. .. .. 843 227 Local Bodies Empowering (Relief of Unemployment) Amendment Act, 1928, Section 3 .. .. .. .. .. •. .• 721 Refunds of Revenue .. .. .. .. .. 37 1,344 5,453 3,052 4,797 Totals .. .. .. .. ..604,017 376,300 335,354 387,477 310,544 * 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. J 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. H Now a separate account (see Table No. 16).

8.—6

X

Table No. 13. PUBLIC WORKS FUND. Statement showing the Net Expenditure under Appropriations for the Year ended 31st March, 1929, compared with the Year ended 31st March, 1928.

Votfi * Year ended Year ended Increase Decrease Vote - 31st March, 1929. 31st March, 1928. increase. decrease. £ £ £ £ Public Works, Departmental .. .. 142,176 130,688 11,488 Railway-construction .. .. 1,002,872 908,669 94,203 j Additions to Open Lines .. .. 213,405 233,153 .. I 19,748 Public Buildings— Genera! .. .. .. .. 4,307 42,554 .. 38,247 Courthouses .. .. .. 8,387 7,531 856 Prison Buildings and Works .. 12,572 22,359 .. 9,787 Police-stations .. .. .. 6,925 5,561 1,364 Postal and Telegraph .. .. 62,087 77,194 .. 15,107 Agricultural .. .. .. 2,808 2,863 .. 55 Mental Hospital Buildings .. .. 96,782 51,119 45,663 Health and Hospital Institutions .. 19,637 14,361 5,276. Timber-supply and Sawmills, &c. .. Cr. 5,115 Cr. 6,997 .. Cr 1,882 Acquisition and Operation of Quarries .. Cr. 6,030 Cr. 9,325 .. Cr. 3,295 Lighthouses .. .. .. 2,638 7,979 .. 5,341 Harbour-worka .. .. .. 14,425 15,891 .. 1,466 Development of Tourist Resorts .. 39,254 36,673 2,581 Department of Immigration .. .. 50,266 67,157 .. 16,891 Roads, &c. .. .. .. .. 780,990 669,832 111,158 Roads on Goldfields .. .. .. 1,005 2,330 .. 1,325 Roads to give Access to Outlying Districts 51,582 33,642 17,940 Telegraph Extension.. .. .. 624,414 625,540 .. 1,126 Contingent Defence .. .. .. 67,652 39,986 27,666 Lands, Miscellaneous .. .. 85,861 72,898 12,963 Irrigation, Water-supply, and Drainage,. 55,197 49,735 5,462 Plant, Material, and Stores .. .. 4,594 Cr. 1,288 5,882 Transfer to Main Highways Account, 200,000 200,000 Construction Fund Services not provided for .. .. 77 264 .. 187 342,502 104,103 104,103 Totals .. .. .. 3,538,768 3,300,369 238,399

8.—6

XI

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, 1929.

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 .. .. .. 000,000 0 0 General Purposes Loan Act, 1873 .. .. .. .. jg§ 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 Stock 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 and 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 .. .. I 1,750,000 0 0 Aid to Public Works and Land Settlement Act, 1914 .. .. 3,000,000 0 0 Aid to Public Works and Land Settlement Act, 1921 .. .. 5,060,613 0 3 Aid to Public Works and Land Settlement Act, 1922 .. .. 4,408,860 12 3 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 .. .. .. .. 4,306,608 17 6 Finance Act, 1924, Section 2 .. .. .. .. 2,065,883 12 6 Finance Act, 1925, Section 2 .. .. .. .. 4,151,450 10 2 Finance Act, 1926, Section 2 .. .. .. .. 5,220,134 10 7 Finance Act, 1927 (No. 2), Section 2 .. .. .. .. 3,393,828 6 6 Post and Telegraph Act, 1908 .. .. .. .. 200,000 0 0 Midland Railway Petitions Settlement Acts, 1902 and 1903 .. 150,000 0 0 Finance Act, 1928, Section 2 .. .. .. .. 1,416,771 8 7 Paeroa-Waihi Railways 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, 1912 .. .. .. 100,000 0 0 96,539,339 17 2 Receipts in Aid : — Amount transferred from Consolidated Fund .. .. .. 14,555,000 0 0 Contributions of Canterbury Province 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 Receipts under Section 16 of the Reserves and other Lands Disposal 21,890 4 5 and Public Bodies Empowering Act, 1912 Special Receipts under Section 9 of the Railways Construction Act, 60,616 3 0 1878 Special Receipts under the Ellesmere Lake Lands Acts, 1888 and 65,324 13 3 1893 " Special Receipts under the Railways Authorization and Manage- 2,257 1 9 ment Act, 1891 Special Receipts under the North Island Main Trunk Railway Loan 114,550 19 6 Application Act, 1886 Sinking Funds released .. .. .. .. .. 506,819 19 3 15,672,043 6 1 £112,211,383 3 3

B.— 6

XII

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, 1929—continued

Table No. 15. Statement of the Estimated Liabilities chargeable on the Public Works Fund (General Purposes Account), outstanding on the 31st March bach Year from 1925 to 1929.

NET EXPENDITURE. Expenditure on— £ s. d. £ a. d. Immigration .. .. .. .. .. .. 3,234,549 3 2 Public Works, Departmental .. .. .. .. .. 2,544,318 7 9 Railways, including Surveys of New Lines and Payment to Midland 52,320,084 5 10 Railway Bondholders Roads .. .. .. .. .. .. .. 17,799,273 19 7 Land-purchases .. .. .. .. .. .. 2,061,147 1 10 Development of Mining .. .. .. .. .. 881,585 0 11 Telegraph Extension .. .. .. .. .. .. 9,916,361 1 11 Public Buildings .. .. .. .. .. .. 10,341,785 14 3 Lighthouses, Harbour-works, and Harbour-defences .. .. 1,266,276 4 7 Contingent Defence .. .. .. .. .. .. 1,347,920 0 9 Rates on Native Lands .. .. .. .. .. 68,671 16 10 Thermal Springs .. .. .. .. .. .. 14,599 13 2 Development of Tourist Resorts .. .. .. .. 499,579 14 3 Lands Improvement .. .. .. .. .. .. 512,380 14 3 Plant, Material, and Stores .. .. .. .. .. 351,769 10 11 Charges and Expenses of raising Loans .. .. .. .. 3,031,051 4 3 Coal-mines .. .. .. .. .. .. .. 10,835 8 0 Interest and Sinking Fund .. .. .. .. .. 218,500 0 0 Irrigation and Water-supply .. .. .. .. .. 836,471 13 2 Timber Supply, Sawmills, &c. .. . . .. .. .. 389 16 10 Acquisition and Operation of Quarries .. .. .. .. 5,113 14 10 Motor Transport Service .. .. .. .. .. 33,635 5 3 Transfer to Main Highways Account, Construction Fund .. .. 1,026,000 0 0 108,322,299 12 4 Balance on 31st March, 1929, — Cash in the Public Account .. .. .. .. .. 2,431,511 14 7 Imprests outstanding .. .. .. .. .. .. 46,247 4 4 Investments.. .. .. .. .. .. .. 1,411,324 12 0 3,889,083 10 11 £112,211,383 3 3

| 1925. ! 1926. 1927. 1928. 1929. Annual Appropriations— £ £ £ £ £ Public Works, Departmental .. .. 1,033 1,768 2,198 2,475 3,935 Railways.. .. .. .. .. .. 455,534 99,592 122,980 114,964 94,721 Irrigation and Water-supply and Drainage .. .. 6,257 2,406 3,478 2,216 5,968 Public Buildings .. .. .. .. .. 19,571 19,521 20,880 15,276 20,488 Timber-supply, &c. .. .. .. .. 557 81 1,367 552 426 Acquisition and Operation of Quarries .. .. 3,228 2,011 1,053 1,997 1,637 Lighthouses, Harbour-works, and Harbour-defences .. 74 591 861 1,423 1,182 Development of Tourist Resorts .. .. .. 1,137 6,697 992 4,590 2,601 Immigration .. .. .. .. .. .. 33,179 20,238 13,216 8,521 Roads .. .. .. .. .. .. 48,734 54,859 74,969 94,445 77,420 Telegraph Extension .. .. .. .. 539,812 214,007 211,700 227,018 206,836 Lands, Miscellaneous .. .. .. .. 1,819 3,621 1,585 3,170 2,172 Plant, Material, and Stores .. .. .. 2,947 4,292 2,610 7,376 4,247 Totals .. .. .. .. .. 1,080,703 442,625 464,911 488,718 430,154

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 1929.

XIII

1924. | 1925. 1926. 1927. j 1928. 1929. s I ; _J £ £ £ £ | £ £ Deteriorated Lands Account .. .. ..I .. .. 117 839 34 258 Discharged Soldiers Settlement Account .. j .. .. .. .. 5,012 168 Education Loans Account .. .. .. 9,274 2,774 2,214 3,962 3,855 7,992 Deposits Account .. .. .. .. .. 222 3 .. 569 Electric Supply Account .. .. .. 37,734 75,743 87,856 141,064 330,055 112,612 Government Accident Insurance Account .. 289 14 956 345 316 388 Government Life Insurance Account .. .. 1,214 2,849 1,142 1,269 1,339 2,031 Hauraki Plains Settlement Account .. .. 2,741 2,099 1,808 4,836 4,160 4,644 Kauri-gum Industry Account .. .. 45 65 441 Land for Settlements Account .. .. 49 1,096 1,143 870 35 2,231 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 Account— Revenue Fund .. .. .. .. 3 15,047 73,703 64,276 66,304 91,699 Construction Fund .. .. .. .. 17,328 81,847 124,746 59,418 130,156 Mining Advances Account .. .. .. .. .. .. .. .. 2 National Endowment Account .. .. .. 1,113 1,005 .. 88 403 National Endowment Trust Account .. .. .. .. .. .. .. 1,273 Native Land Settlement Account .. .. 1,611 1,008 542 4,045 3,881 8,794 Native Trustee's Account .. .. .. 61 20 57 39 53 100 Post Office Account* .. .. .. .. .. .. .. .. 65,963 Public Service Superanuation Fund Account .. 389 345 23 157 171 170 Public Trust Office Account .. .. .. .. .. .. 5,032 6,142 6,696 Railways Improvement Authorization Act 1914 Account .. .. .. .. 22,529 45,992 42,083 50,524 140,866 176,334 Rangit aiki Land Drainage Account .. .. 594 2,621 448 970 1,540 1,746 State Advances Account .. .. .. 4,502 2,648 2,699 4,268 64,939 20,149 State Coal-mines Account .. .. .. 10,631 6,302 4,930 21,130 16,926 15,931 State Fire Insurance Account .. .. 15 503 202 59 2 State Forests Account .. .. .. 3,240 3,152 13,455 11,342 10,487 9,818 Swamp Land Drainage Account .. .. 3,233 864 1,174 3,471 3,670 5,826 Waihou and Ohinemuri Rivers Improvement Account .. .. .. .. 1,522 2,496 2,954 6,403 6,388 8,048 War Expenses Account .. .. .. 182,409 Westport Harbour Account .. .. .. 526 464 612 4,621 647 2,331 Working Railways Account* .. .. .. .. .. 309,278 329,829 358.110 335,101 * Formerly vote under Consolidated Fund.

B.—6,

XIV

Table No. 17. Receipts and Payments of Accounts, 1928-29, with Balances at 1st April, 1928, and 31st March, 1929.

Balance, 31st March, Balance, Credits jx-i. 1929. Account. 1st April, Kecelpts (Net). in UTn«ndltiiiw 1928. Reduction. Jn In Cash. investments. Consolidated Fund— £ £ £ £ £ £ Ordinary revenue .. .. .. 3,302,232 23,599,676 4,021,504 24,448,367 2,451,261 2,280 Conversion .. ... .. 31 .. .. 31 Nauru and Ocean Islands .. .. 3,445 36,193 .. 36,354 84 3,200 Nauru and Ocean Islands Sinking Fund 107 9,915 .. .. 22 10,000 Accounts of Local Bodies .. .. 8,458 32,329 .. 33,438 7,349 Deposits .. .. .. .. 275,995 1,626,175 .. 1,271,621 55,161 575,388 Public Works Fund— General Purposes .. .. .. 1,328,803 6,537,834 779,960 3,977,553 2,477,759 1,411,325 Waihou and Ohinemuri Rivers Improvement .. .. .. .. 12,078 73,388 6,636 73,560 11,906 Electric Supply .. .. .. 72,701 2,619,748 46,404 1,995,361 497,088 200,000 Electric Supply Sinking Fund .. .. 75,716 40,138 .. .. 564 115,290 Advances to other Governments .. 46,566 289,184 .. 320,476 15,274 Bank of New Zealand Shares .. .. 1,800,781 300,391 .. 241,797 .. 1,859,375 Cheviot Estate .. .. .. 191,390 25,833 .. 6,537 9,006 201,680 Deteriorated Lands .. .. .. 15,413 3,298 .. 5,386 13,325 Discharged Soldiers Settlement .. .. 635,377 1,924,692 35,114 2,139,549 121,485 299,035 Discharged Soldiers Settlement Act 1920 Depreciation Fund .. .. .. 417,116 68,640 .. 1,080 27,151 457,525 Education Loans .. .. .. 57,715 356,313 23,112 375,423 38,605 General Purposes .. .. .. 29,537 5,031 .. 9,672 9,896 15,000 Hauraki Plains .. .. .. 10,396 60,675 20,589 41,789 8,282 21,000 Howard Estate .. .. .. .. 213 .. 213 Hunter Soldiers'Assistance Trust .. 4,479 966 .. 152 1,243 4,050 Hutt Valley Lands Settlement .. .. 23,833 75,283 .. 98,500 616 Kauri-gum .. .. .. .. 72 5,188 490 1,924 3,336 Land Assurance .. .. .. 82,401 6,748 .. 3,315 17,234 68,600 Land for Settlements .. .. .. 186,602 871,936 1,433 761,723 34,265 262,550 Land for Settlements (Discharged Soldiers Settlement) .. ... .. 51,890 87,847 789 139,733 4 Land for Settlements (Opening-up Crown lands) .. .. .. .. 8,630 68 .. 8,698 Loans Redemption .. .. .. 32,013 35,775,681 .. 35,742,398 45,415 19,881 Main Highways Revenue .. .. 622,886 1,238,693 41,522 1,339,975 213,704 307,900 Main Highways Construction .. .. 72,571 872,015 34,114 936,496 8,090 Mining Advances .. .. .. 14,616 1,918 .. 1,984 14,550 National Endowment .. .. .. 135,619 139,395 .. 150,128 50,836 74,050 National Endowment Trust .. .. 33,234 6,795 .. 1,301 2,438 36,290 Native Land Settlement .. .. 72,319 325,826 1,526 385,119 3,026 10,000 Public Debt Repayment .. .. 188 1,047,009 .. 1,041,871 5,326 Railways Improvement Authorization Act, 1914 .. .. .. .. 676,770 2,479,495 55,278 1,981,449 1,124,116 50,700 Rangitaiki Land Drainage .. .. 5,808 27,198 4,227 26,595 6,411 Remittances from London .. .. .. 450,000 .. 450,000 Remittances to London .. .. .. 4,625,000 .. 4,625,000 Reserve Fund .. .. .. 2,000,000 .. .. .. .. 2,000,000 Samoan Loan Suspense .. .. .. 21,000 .. 21,000 State Advances Loan .. .. .. 412 4,423,282 .. 3,241,819 1,181,875 State Coal-mines .. .. .. 36,398 296,042 2,299 293,968 5,672 32,800 State Coal-mines Sinking Fund .. .. 62,338 7,516 .. 65,000 4,604 250 State Forests .. .. .. .. 37,784 304,769 2,907 325,306 17,247 Swamp Land Drainage .. .. .. 19,263 54,079 1,001 64,670 8,672 Westport Harbour .. .. .. 57,449 62,867 1,066 100,968 5,848 13,500 Working Railways .. .. .. 642,431 8,461,340 1,563,849 8,418,535 340,236 345,000 Public Account Cash Balance Investment.. .. .. .. .. —6,280,000 6,280,000 13,163,863 99,277,622 6,643,820 95,205,834 2,558,98214,676,669

8.—6

XV

Table No. 18. Statement showing the available Financial Resources of the various Accounts on the 31st March, 1928, as compared with the 31st March, 1929.

1928. 1929. Account. Balance Liabilities BaIanoe Liabilities 31st March, 31st March, Jn lrt Anrl!" 31st March, 31st March, 1928. 1928. 0n 1928. ' 1929. 1929. 0D 1929. I Consolidated Fund— £ £ £ £ £ £ Ordinary Revenue .. .. 3,302,232 387,477 .. 2,453,541 310,545 Nauru and Ocean Islands .. .. 3,445 .. .. 3,284 Nauru and Ocean Islands Sinking Fund 107 .. .. 10,022 Public W orks Fund— General Purposes.. .. .. 1,328,803 488,718 5,561,050 3,889,084 430,154 1,061,050 Waihou and Ohinemuri Rivers Improvement .. .. .. 12,078 6,388 90,000 11,907 8,048 30.000 Electric Supply .. .. .. 72,701 330,055 3,418,990 697,088 112,612 1,243,990 Electric Supply Sinking Fund .. 75,716 1 .. .. 115,854 Advances to other Governments .. 46,567 .. .. 15,274 Bank of New Zealand Shares.. .. 1,800,781 .. .. 1,859,375 Cheviot Estate .. .. .. 191,390 .. .. 210,686 Conversion.. .. .. .. 31 Deteriorated Lands .. .. .. 15,414 34 278,000 13,325 258 278,000 Discharged Soldiers Settlement .. 635,377 5,013 862,750 420,520 168 862,750 Discharged Soldiers Settlement Loans Act 1920 Depreciation Fund .. .. 417,117 | .. .. 484,676 Education Loans .. .. .. 57,714 3,855 1,166,160 38,605 7,992 814,160 General Purposes Relief .. .. 29,537 .. .. 24,896 Hauraki Plains Settlement .. .. 10,395 4,160 160,000 29,282 4,644 125,000 Hunter Soldiers'Assistance Trust .. 4,479 .. .. 5,292 Hutt Valley Lands Settlement .. 23,833 .. .. 616 Kauri-gum Industry .. .. 72 .. .. 3,336 Land Assurance Fund .. .. 82,401 .. .. 85,834 Land for Settlements .. .. 186,602 35 750,000 296,815 2,231 1,000,000 Land for Settlements — Discharged Soldiers Settlement .. 51,890 2,162 1,500,000 4 .. 1,500,000 Opening-up Crown Lands for Settlement 8,630 Loans Redemption .. .. .. 32,013 .. .. 65,296 Main Highways— Revenue Fund .. .. .. 622,886 66,304 .. 521,604 91,699 Construction Fund .. .. 72,571 59,418 2,350,000 8,090 130,156 2,120,000 Mining Advances .. .. .. 14,616 .. 50,000 14,550 2 50,000 National Endowment .. .. 135,619 88 .. 124,886 403 National Endowment Trust .. .. 33,234 .. .. 38,728 1,273 Native Land Settlement .. .. 72,319 3,881 500,000 13,026 8,794 500,000 Public Debt Repayment .. .. 188 .. .. 5,326 Railways Improvement Authorization Act, 1914 .. .. .. 676,769 140,866 2,350,000 1,174,816 176,334 1,515,000 Rangitaiki Land Drainage .. .. 5,808 1,540 15,000 6,411 1,746 7,000 Reserve Fund .. .. 2,000,000 .. .. 2,000,000 Samoan Loan Suspense .. .. .. ■ • 17,800 .. .. 4,800 State Coal-mines .. .. .. 36,398 16,926 130,000 38,472 15,931 55,000 State Coal-mines Sinking Fund .. 62,338 .. .. 4,854 State Forests .. .. .. 37,784 10,487 388,225 17,247 9,818 188,225 Swamp Land Drainage .. .. 19,263 3,670 150,000 8,672 5,826 150,000 Westport Harbour .. .. .. 57,449 647 .. 19,348 2,331 Working Railways .. .. .. 642,431 358,110 .. 685,236 335,101 State Advances .. .. .. 163,181 64,939 10,123,523 1,181,875 20,149 10,116,495 Additional Unexhausted Authorities for raising Loans. Hutt Railway and Road Improvement Acts, 1903, 1905, 1907, 1910 .. .. .. 3,320 .. .. 3,320 Government Railways Act, 1926, section 69 •• •• 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 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 .. .. .. 13,042,179 1,954,773 36,808,048 16,597,753 1,676,215 27,568,020 I

8.—6

XVI

Table No. 19. Statement showing the Amount charged to "Unauthorized" in each Financial Year from 1st April, 1910, to 31st March, 1929.

Table No. 20. SUMMARY OF THE PUBLIC DEBT AND OF THE STATE ASSETS WHICH MAY BE SET OFF AGAINST IT, as at 31 st March, 1929, together with Supporting Schedule showing Details of Assets. Debt. £ Ordinary debt .. .. .. .. .. .. .. .. 151,488,052 War debt .. .. .. .. .. .. .. .. .. 70,881,269 State Advances debt .. .. .. .. .. .. .. .. 33,535,006 Discharged soldiers debt .. .. .. .. .. .. .. 8,287,656 Surplus assets over debt .. .. .. .. .. .. 10,474,283 £274,666,266 Assets. Cash and investments (Reserve Funds, Bank of New Zealand shares, Public Debt Redemption Fund, &c.j .. .. .. .. .. .. .. 38,087,076 Sinking funds accrued .. .. .. .. .. .. .. .. 2,156,561 Loans and advances outstanding (Discharged Soldiers, State Advances, &c.) .. .. 39,997,509 Revenue Earning and Trading Accounts (Railways, Telegraphs, &c.) .. .. .. 83,126,332 Lands and forests (Crown lands, State forests, &c.).. .. .. . .. 71,090,286 Indirectly productive expenditure — £ Roads and public buildings, &c. .. .. .. .. 36,973,953 Immigration .. .. .. .. .. .. 3,234,549 40,208,502 £274,666,266

Consolidated Fund.—Revenue Account. Financial Y E ab. Ac ° c Z S . T °— SerT 4Ted n f°or Pr0 " Exoe88 Yotes ' Total - £ a. d. £ s. d. £ s. d. £ s. d. £ s. d. £ s. d. 1910-1911.. .. 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 13 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 18 7 1,239 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 j 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 30,811 19 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 1928-1929.. .. 7,959 7 3 43,312 14 4 51,272 1 7 11,89114 4 20,639 17 2 83,803 13 1

8.—6

XVII

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. .. .. .. .. .. 2,486,703 fLess liabilities outstanding, ,'slst March, 1929 .. .. 1,625,125 861,578 ♦Investment of cash balances .. .. .. .. .. 10,112,316 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 Debt Redemption Fund .. .. .. .. .. 22,075,645 38,087,076 Sinking funds accrued—• State Advances debt .. .. .. .. .. .. 1,775,183 State Coal-mines .. .. .. .. .. .. 4,854 Westport Harbour loans .. .. .. .. .. 238,502 Samoanloan .. .. .. .. .. .. .. 12,146 Nauru and Ocean Islands Sinking Fund Account .. .. .. 10,022 Electric Supply Sinking Fund Account .'. .. .. .. 115,854 2,156,561 Loans and advances outstanding— Mining purposes .. .. .. .. .. .. 27,859 Local bodies (annuity value of interest receivable; .. .. .. 886,687 Samoan (loan, less sinking fund) .. .. .. .. .. 153,054 Repatriation advances outstanding, 31st March, 1929 .. .. 287,372 £ Discharged soldiers'mortgages and property held .. ..15,198,583 Less amount included in Public Debt Redemption Fund .. 10,850,000 4,348,583 State Advances—Mortgages and property held, less sinking funds and investments included elsewhere • .. .. .. 34,150,324 General purposes relief—Advances outstanding .. .. .. 33,530 Rural Intermediate Credits Board —Advances outstanding .. .. 110,100 39,997,509 Revenue Earning and Trading Accounts — Railways (capital cost, including unopened lines and value of assets taken over from provinces) .. .. .. .. .. 62,276,214 Telephones and Telegraphs (value of assets) .. .. .. 9,119,417 Pacific cable (estimated value of Dominion's interest) .. .. 57,000 Electric-power supply and development (capital expenditure) .. 8,467,151 Westport Harbour-works (value of assets) .. .. .. 497,774 Lighthouses and harbour-works (capital expenditure) .. .. 1,266,276 Tourist and health resorts (capital expenditure) .. .. .. 514,179 State coal-mines (value of assets) .. .. .. .. 324,073 Kauri-gum (trading capital) .. .. .. .. .. 39,208 Nauru and Ocean Islands (purchase price of rights) .. .. 565,040 83,126,332 Lands and forests — Crown lands (estimated value, including settlement lands, Native lands, and education reserves) .. .. .. .. 28,775,558 Land-drainage schemes (capital invested) .. .. .. .. 1,837,203 Irrigation and water-supply (capital expenditure) .. .. .. 836,472 Waihou and Ohinemuri Rivers improvement (capital expenditure) .. 660,299 Lands improvements (capital expenditure) .. .. .. 512,381 New Zealand Reparation Estates (value of Dominion's interest) .. 662,360 Howard Estate .. .. .. .. .. .. 88,000 State forests (estimated value of forests, reserves, plantations, and nurseries) .. .. .. .. .. .. 37,718,013 71,090,286 Indirectly productive expenditure— Public buildings (including school buildings) .. .. .. 14,100,094 Roads (including roads on Crown lands and main highways).. .. 21,986,770 Timber-supply, sawmills, &c. (capital invested) .. .. .. 390 Quarries (acquisition and working) .. .. .. .. 5,114 Development of mining (capital expenditure) .. .. .. 881,585 Immigration (capital expenditure) . . . .. 3,234,549 ■ 40,208,502 274,666,266

* Does not include trust, deposit, or sinking funds, or oertain other accounts included elsewhere. t After deducting £30,941, credits due from other Governments, from the total liabilities. J Includes £10,850,000 previously included under discharged soldiers mortgages, and £11,225,645 of accumulated sinking funds.

iii—B 6.

8.—6

XVIII

Table No. 21. PUBLIC DEBT. Statement showing Loans falling due in the next Seven Years, ending with the Year 1936, 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.

I I Year ending 31st March, London. Australia. New Zealand. Total. I I £ £ £ £ 1930 .. .. .. .. 11,666,133 .. 12,265,828 23,931,961 1931 .. .. .. .. .. 59,400 21,579,786 21,639,186 1932 .. .. .. .. 200 334,900 6,675,956 7,011,056 1933 .. .. .. .. .. 410,850 5,050,993 5,461,843 1934 .. .. .. .. 12,900 52,000 19.626,565 19,691,465 1935 .. .. .. .. .. 1,275,000 55,000 1,330,000 1936 .. .. .. .. .. 248,400 4,716,960 4,965,360 Totals .. .. .. 11,679,233 2,380,550 69,971,088 84,030,871

Date Instalments paid. Interest. Principal. Balance of Debt 1 outstanding. £ £ £ 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 1st June, 1928 .. .. .. .. 635,225 190,740 25,348,502 1st December, 1928 .. .. .. 630,481 195,484 25,153,018 * 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.

B.- 6

XIX

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 1928-29.

In addition, secondary schools and University colleges derive direct income (amounting for 1928-29 to £76,621) 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 1928-29 .• •. .. .. .. 12,197

iv—B. 6.

Loan-money: Erection Consolidated Fund. of School Buildings and Residences. i . _ _ _. . Per Head of Year Administra- Subsidies Total. Mean a • 1 a, ,r al v°+ ' Revenue 1 ? , Public Education opulaSpecial Endow- Vote, f Teachers Works tion. "• sn «-—• iru *-* *-«*«• other Charges. Eund. £ £ £ £ £ £ £ £ £ 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 19 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 .. 1,987,639 114 1 1919-20 .. 79,747 78,988 2,031,825 99,352 43,000 195,500 .. 2,528,412 2 110 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 2,974,615| 123,247* 71,497 .. 369,134 3,756,300 2 12 1 1928-29 .. 137,233 94,934 3,067,296f 127,444* 71,749 .. 375,423 3,874,079 2 13 1 * Net revenue after deducting expenses and cost of collection. t Excluding £25,000 for teachers' superannuation, included under that heading.

8.—6.

XX

Table No. 24. PENSIONS. Statement of Amounts paid on account of Pensions for the Financial Years ended 31st March, 1925 to 1929.

Table No. 25. EXTERNAL TRADE. Statement showing Imports and Exports of the Dominion in each Financial Year ended 31st March, 1920 to 1929.

Year ended 31st March, 1925. 1926. ! 1927. I 1928. 1929. i _J I I ; " £ £ ! £ £ £ War .. .. .. 1,242,182 1,179,552 1,122,741 1,146,955 1,178,646 Old-age* .. .. .. 804,969 901,256 979,296 1,007,722 1.059,039 Widows' .. .. .. 235,959 285,654 301,080 302,766 312,963 Miners' .. .. .. 38,477 40,204 41,947 45.083 48,102 Maori War .. .. .. 26,836 23,087 19,446 16,377 13,673 Epidemic .. .. .. 22,938 14,420 10,935 8,757 7,981 Civil Service Act, 1908 .. 19,115 16,767 16,724 13,206 12,192 Defence Act, 1909 .. .. 3,071 2,898. 2,628 2,695 2,715 Judicature Act, 1908 .. 3,548 2,703 3,556 4,204 3,429 Police .. .. .. 586 552 406 457 671 Blind .. .. .. 1,036 8,040; 10,304 12,249 13,339 Family Allowance .. .. .. .. .. I 37.515 54,815 Sundry .. .. .. 4,897 5,022 1 5,945 ! 6,273 5,698 Totals .. .. 2,403,614 2,480,155 2,515,008 2,604,259 2,713,263 I * Includes payments of old-age pensions paid out of national-endowment revenue.

Year ended 31st March, ' Imports. Exports. i Excess of Excess of 1 r | Exports. Imports. £ £ £ £ 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 1929 .. .. .. .. 45,105,865 57,154,343 12,048,478 69,651,430 26,082,198 26,082,198 Totals 457,690,736 501,259,968 43,569,232

8.—6.

XXI

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. Skinnek, Government Printer, Wellington.—l 929.

Including Australian Commonwealth. peXZn. '"KSI?'' Zealand. Great Britain. New South Wales. Victoria. Queensland. South Australia. £ s. d. £ s. d. £ s. d. £ s. d. £ s. d. £ s. d. f None .. 2 12 6 5 15 3 4 18 1 6 5 6 11 0 4 10 18 0 £400«( Two .. Nil 0 10 7 0 18 9 0 6 7 6 12 3 Nil I Three .. Nil Nil Nil Nil 5 10 7 Nil f None .. 10 18 0 20 1 3 20 18 3 22 13 9 26 1 9 32 10 0 £600 <| Two .. 7 4 5 12 17 1 13 4 5 13 14 10 19 16 8 16 10 0 I Three .. 5 18 2 9 12 5 10 17 6 9 16 8 17 0 7 11 10 0 f None .. 28 17 6 38 8 4 34 14 1 47 7 8 47 9 3 65 18 0 £800<; Two .. 22 10 0 29 5 9 27 10 2 33 1 10 42 19 6 43 18 0 I Three .. 19 11 11 25 1 2 24 2 6 27 14 4 40 18 11 33 18 0 f None .. 52 10 0 60 17 9 54 15 7 87 5 7 71 16 2 99 2 0 £1,000<J Two .. 43 17 6 49 16 4 49 2 0 81 12 0 66 2 7 77 2 0 L Three .. 39 16 11 44 12 1 46 9 3 78 19 3 63 9 10 67 2 0 f None .. 77 6 11 93 17 0 80 3 0 127 12 3 107 12 5 140 18 0 £1,250<| Two .. 66 16 11 81 4 9 73 17 5 121 6 8 101 6 10 118 18 0 I Three .. 61 17 6 74 16 0 70 9 6 117 18 9 97 18 11 108 18 0 f None .. 106 17 6 128 8 3 104 18 8 170 14 4 145 14 4 182 10 0 £1,500<J Two .. 94 10 0 114 18 0 98 13 10 164 9 6 139 9 6 160 10 0 I Three .. 88 11 11 108 7 8 95 13 9 161 9 5 136 9 5 150 10 0 f None .. 170 12 6 211 15 0 161 11 8 274 10 0 237 19 9 282 10 0 £2,000<| Two .. 156 15 0 194 13 6 152 13 0 266 11 4 230 1 1 260 10 0 I Three .. 150 0 6 186 7 9 149 16 2 262 14 6 226 4 3 250 10 0 f None .. 2,205 0 0 3,483 12 8 2,152 7 8 3,405 6 0 3,272 3 6 3,013 15 0 Two .. 2,182 10 0 3,431 12 8 2,125 7 8 3,378 6 0 3,245 3 6 2,991 15 0 I Three .. 2,171 5 0 3,405 12 8 2,111 17 8 3,364 16 0 3,231 13 6 2,981 15 0