8.—6

IV

It will be observed that £3,159,960 was applied in redemption of securities of a nominal value of £3,160,030, which were cancelled and discharged from the public debt. I propose to apply a further £500,000 to meet redemption of loans maturing during the coming year. Legislation will also be submitted to you authorizing the transfer of to the Public Works Fund, and £100,000 to Education Loans Account for school buildings, thus providing funds for capital expenditure without borrowing. The total interest-bearing investments from the surpluses amount to £17,260,000, giving an annual income of £712,870, which is permanently relieving taxation to that extent. The advantages of applying the accumulated surpluses to capital purposes in preference to borrowing moneys at high rates of interest, will, I think, be recognized by honourable members. Some objection has been taken to the use of the surplus for soldier-settlement purposes, but owing to the embargo on the London market it was practically impossible at the time the money was most urgently required, to float loans on anything like reasonable terms, if at all. The following statement shows how the accumulated surpluses have been applied: — Statement showing how Accumulated Surpluses save been applied. Tii Accumulated surpluses at £ I By Transfers to £ £ 31st March, 1920 .. 17,538,976 ' Discharged Soldiers Settlement AccountSurplus for financial year 11120 21 .. .. .. .. 13,330,000 1920 21 .. .. 6,132,233 1921-22 .. .. .. .. 170,(KX) Surplus for financial year 13,500,000 1922-23 .. .. 1,315,683 Discharged Soldiers Settlement Depreciation Fund Excess Customs revenue Account restored from Ordinary 1020 21 .. .. .. .. 50,000 Revenue Account .. 2,129,420 IH2I-22.. .. .. .. 50,000 1922-23 50,000 150,000 Public Works Fund, L 920 21 .. .. 500,000 Reserve Fund Securities Account, 1920-21 .. 1,200,000 Loans redemption, 1921-22 .. .. 500,011 Loans redemption, 1922-23 .. .. 3,159,960 3,719,971 Ordinary revenue (excess Customs revenue) To balance revenue and expenditure, 1921 22 .. .. .. 271), 831 To provide for estimated shortage in revenue, 1!>22 2.'i .. .. 2,129,420 2,409,251 Balance, 31st March, 1923 .. .. 5,637,090 £27,116,312 £2^1^312 PUBLIC WORKS FUND. The expenditure upon public works amounted to £3,912,886, or £1,548,521 less than the expenditure for the year 1921-22. Full details will be furnished by my colleague the Hon. Minister for Public Works in his annual .statement. The requirements of the. current year should be adequately met by the loan of £3,000,000 recently raised in London and by the transfer of £1,000.000 from the Surplus Revenue. The obligations imposed by the war make it essential that the country should be developed and expanded and its production increased by a progressive policy of works and settlement. To do this it is necessary to provide outside capital, but our borrowing must be confined to directly and indirectly productive purposes, and in view of the increased interest and debt-reduction charges, its extent must be a matter for very careful consideration, if the war debt be considered apart from the ordinary debt, a considerable portion of which provides its own interest, the public debt is- by no means excessive. If the weight of debt has increased during recent years there are normal forces in operation which tend to diminish the burden. Our prosperity depends almost entirely on our primary products, and in the matter of productivity this favoured land continues to show a. wonderful response to all demands.