8.—6.

Following the Hon. Mr. Downie Stewart's personal representations in London in regard to our difficulties, Great Britain has again extended a helping hand by consenting to postpone for another year all payments due on our Funded War Debt and certain other debts due to the British Government. The additional relief to this year's Budget is £825,000, in addition to which a saving of £47,000 will accrue to the State Advances Office. Our grateful thanks are due to the Mother-country for this substantial measure of assistance during the acute period of our troubles. Apart from these postponements, debt charges would have shown an increase of £325,000 due to the last London loan and the extensive use of Treasury bills and and other forms of borrowing to finance the remittances to London, last year's deficit, &c. As it is, there is now an estimated net decrease in debt charges amounting to £500,000. Against all these savings there has to be set various unavoidable increases, estimated at £975,000. This sum is made up as follows : — Reimbursement of State Advances and other Funds £ of amount of reduction in mortgage interest under the National Expenditure Adjustment Act .. 250,000 Additional pensions .. .. .. .. 200,000 Increased cost of lime and fertilizer subsidies to assist farmers .. .. .. .. .. 135,000 Naval defence—Commissioning of second cruiser . . 55,000 Shrinkage in credits-in-aid .. .. .. 115,000 Other miscellaneous items (net) .. .. .. 220,000 £975,000 The first item to cover reductions in mortgage interest is provided for out of the additional stamp duties derived from the 10-per-cent. duty on interest on Government securities. The additional pensions are mostly old-age pensions and family allowances. The increase is considerably more than usual, and reflects the difficult times we are passing through. As to the shrinkage in credits-in-aid, this item is not in itself an increase, but has the effect of increasing the net total of the votes. These credits-in-aid are various recoveries and other receipts not brought in as revenue, but set off against the gross expenditure. They are, however, affected in the same way as revenue by the prevailing economic conditions. All the adjustments made in the expenditure estimates may be summarized as follows: — Reductions. From National Expenditure Commission's £ recommendations .. .. .. .. 2,100,000 Less — Amounts affecting Railways and Post Office reflected in the £ revenue .. .. .. 420,000 Under-expenditure of appropriations last year .. .. 140,000 — 560,000 £ 1,540,000 Motor taxation .. .. .. .. . . 200,000 Hospital subsidies .. .. .. .. 140,000 Unemployment subsidies .. .. .. .. 950,000 Debt charges .. .. .. .. 500^000 3,330,000 Less increases and new items .. .. .. 975,000 Net reduction on last year's expenditure .. £2,355,000

Further postponement of funded debt payments.

Increases in expenditure.

Summary of reductions.

11