8.—6.

Deducting the increases for which the war is directly and indirectly responsible—viz., £7,634,218—the net increase is £1,003,854, of which £446,838 is due to growth of population and increased pension liability. Result of the Year's Operations. The rapid fall in the price of our primary products had a marked effect upon the year's operations, but the situation improved with the increase in values. Whilst it would not be prudent to assume that the improvement will continue or that an early return to normal conditions is to be looked for, I am confident that the worst has been passed. It is a matter of congratulation that the difficulty arising out of overimportation, which proved so serious in other parts of the world, has been satisfactorily overcome in New Zealand. The results of the year's operations within the Consolidated Fund, Ordinary Revenue Account, are summarized hereunder : — Receipts during year 1921-22 : — £ Revenue ' .. .. .. .. .. 28,127,007 Expenditure during year :- £ Permanent charges .. .. .. .. 12,874,161 Annual appropriations .. .. .. .. 15,592,677 28,466,838 Excess of expenditure over revenue .. 339,831 Less other receipts : — Repayments by Southland Electric-power Board .. .. 60,000 Net amount required to adjust expenditure and revenue .. .. .. £279,831 The balance of the accumulated surpluses, brought forward at the Ist April, 1921, was £8,591,209, including £2,409,251 held in reserve to meet the inevitable drop in Customs revenue. The balance at 31st March, 1922, was £7,531,367, including the unexpended portion of the excess Customs revenue; the reduction being accounted for by the application of £780,011 to debt-reduction or capital purposes, and of £279,831 to adjusting ordinary revenue and expenditure. ACCUMULATED SURPLUSES. The following statement shows how the accumulated surpluses have been applied:— Statement showing how Accumulated Surpluses have been applied. To Accumulated surplus at £ By transfers— 31st March, 1920 .. 17,5.38,976 To Discharged Soldiers Settlement Accounts— £ £ Surplus for financial year 1920-21 .. .. .. .. 13,330,000 1920-21 .. .. 6,132,233 1921-22 .. .. .. .. 170,000 13,500,000 To Discharged Soldiers Settlement Depreciation Fund Account — 1920-21 .. .. .. .. 50,000 1921-22 .. .. .. .. 50,000 100,000 To Public Works Fund, 1920-21 .. .. 500,000 To Reserve Fund Securities Account, 1920-21 .. 1,200,000 To loans redemption, 1921-22 (war-loan certificates, £560,000) .. .. .. .. 560,011 To balance revenue and expenditure, 1921-22 .. 279,831 Total .. .. .. .. 16,139,842 Balance, 31st March, 1922 .. .. 7,531,367 Total accumulated surplus .. £23,671,209 £23,671,209

IV