FINANCE. MEMORANDUM BY THE RIGHT HON. THE MINISTER OF FINANCE.

Appendix to the Journals of the House of Representatives, 1923 Session I-II, B-06-part01

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Session I. 1923. NEW ZEALAND.

FINANCE. MEMORANDUM BY THE RIGHT HON. THE MINISTER OF FINANCE.

Laid on the Table of the House of Representatives by Leave.

I have the honour to furnish, for the information of honourable members, statements showing (a) revenue and expenditure of the Consolidated Fund, Ordinary Revenue Account, for the ten months ended 31st January, 1923, compared with ten months ended 31st January, 1922 ; (b) statement showing the position of the public debt ; (c) statement showing the position of the Public Works Fund on the 31st January, 1923. consolidated fund. Revenue, For the ten months ended 31st January, 1923, the revenue collected under the various headings was £19,095,670, as compared with £17,649,722 for the same period of last financial year, as follows: —

Statement of the Revenue for the Ten Months ended 31st January, 1923, compared with the Ten Months ended 31st January, 1922.

Ten Months ended 31st January, 1923. Ten Months ended 31st January, 1922. Increase. Decrease. Customs Beer duty Stamp and deatb eludes Postal and Telegraph Land-tax Income-lax Railways .. Registration and other fees .. Marine Miscellaneous — Interest on public moneys .. .. £799,369 ] Local Bodies' Loans Act. 1908 .. 13,218 Rents .. •■ •• •• 13,158 [ Tourist and Eealth Resorts .. .. 23,390 | Other miscellaneous receipts .. ..153,195 J Territorial National endowment revenue Departmental other reoeipts .. £ 4,08(i, 229 488,727 2,875.313 2,373.07!) 1,453.500 355,57:! 5,272,333 120,817 38.221 £ 4,205,842 340,484 2,491,044 2,178,719 1.510,842 330,192 5,240.503 105,710 40,789 480,387 148,243 384,20(1 194,900 25,381 31,770 15,098 £ 00,3311 2J568 1,002,330 805,854 100.470 123,481 95,157 *210,30l 127,200 102,481 70,1)87 3,725 7,324 131L317 1,525,901 79,953 79,953 : Includes £144,589 Printing Offioe rei 19,095,070 17,049,722 1,445,948 ieipts previous!; credited to the vote.

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Expenditure. The expenditure for the ten months amounted to £21,166,766, as against £23,134,328 for the corresponding period last year, the increases and decreases being shown hereunder : —

Statement showing the Expenditure of the Ordinary Revenue Account for the Ten Months ended 31st January, 1923, compared with that for the Ten Months ended 31st January, 1922.

The sinking-fund payments include £141,171 paid to the Imperial Government for repayment of loans under the War Loans funding scheme. The comparative increase in the Treasury expenditure is of a temporary character, and is due to sundry credits which are now being credited to revenue instead of to the vote.

Ten Months Ten Months ended ' ended Increase 31st January, ' 3lst January, increase. 1923. 1922. I Decrease. 'ermanent Charges— Civil List Interest — Ordinary Debt War Debt Sinking Fund Under special Acts — Education purposes Pensions Subsidies— Superannuation and National Provident Funds Local Authorities Hospital Boards On account of Butter (balance) Miscellaneous £ £ £ 22,872 22,241 631 3,686,157 3,252,656 433,501 3,768,690 3,573,322 195,368 297,886 400,000 152,438 168,521 1,823,897 1,923,642 £ 102,114 16,083 99,745 186,747 182,472 4,275 189,630 187,310 2,320 315,551 358,786 13,161 145,061 205,322 204,727 595 43,235 131,900 Annual Appropriations— Legislative Departments Treasury Department Land and Income Tax Department Stamp Duties Department National Provident and Friendly Societies Department Working Railways Post and Telegraph Working Expenses Public Buildings Government Domains .. Maintenance and Improvement of Roads Maintenance of Irrigation Works Native Department Department of External Affairs Department of Industries and Commerce Department of Justice. Supreme and Magistrates' Courts Prisons Department Crown Law Office Police Department Cook Islands Pensions Department Mines Department Department of Internal Affairs.. Audit Department Public Service Commissioner's Office Printing and Stationery Mental Hospitals Department of Health Naval Defence I tefence Customs Department Marine Department Department of Labour Department of Lands and Survey Valuation Electoral Agriculture Tourists Education Department Services not provided for 10,062,351 10,418,738 630,690 393,077 38,317 27,511 43,661 57,432 15,448 4,047,144 1,551,354 55,476 2,932 39,174 678 19,438 13,301 Cr. 12,094 30,822 70,029 70,150 4,830 243,097 13,510 127,248 20,527 997,380 20,870 4,427 120,575 221,061 213,394 107,909 221,004 82,500 93,802 30,034 149,920 35,870 00,234 180,500 47,170 2,104,047 9,249 40,715 16,896 45,220 87,038 20,383 5,355,227 1,901,413 81,371 2,751 44,269 10,015 2,398 1,559 29,600 4,935 1,308,083 350,059 25,895 181 5,095 26,545 7.989 153,503 35,750 82,028 72,903 5,062 251,373 12,502 100,703 31,393 310,343 24,031 8,557 12,057 241,530 187,559 120,743 350,284 105,109 121,004 35,922 201,123 52,053 4,201 234,490 72,479 2,188,420 08,245 678 7,107 5,372 100.197 1,066 5,399 3,253 1,008 26,545 232 8,270 10,800 12,503 3,755 4,130 107,918 20,469 25,835 12,834 129,280 22,003 27,802 5,888 51,197 16,783 02,033 53,990 25,309 84,373 58,990 10,504,415 12,715,590 244,504 2,455,079 881,194 2,848,756 Total expenditure 881,194 21,100,700 23,134,328 1,907,502

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As regards the apparently increased expenditure of the Pensions Department and Department of Health, there are credits outstanding which should reduce the excess. The fact that Printing Office receipts are now credited to revenue instead of to the vote must also be taken into account. A portion of the decrease in the expenditure of the vote, Industries and Commerce, is, however, nominal owing to the receipt of advances on account of wheat which were previously outstanding. ACCUMULATED SURPLUSES. The following statement shows how the accumulated surpluses have been applied up to the 31st January, 1923 :— To Accumulated surplus at £ By Transfers — 31st March, 1920 .. 17,538,976; To Discharged Soldiers Settlement Account-- £ £ 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, OIK) 1922-23 .. .. .. 1,000,000 1,500,000 To Electric Supply Account, 1922-23 .. .. .250,000 To Reserve Fund Securities Account— 1920-21 .. .. .. 1,200,000 1922-23 (redemptions) .. .. 800,000 2,000,000 To Loans Redemption Account for redemption and cancellation of securities— 1921-22 .. .. .. 560,011 1922-23 .. .. .. 416,481 976,492 By Excess Customs revenue— To balance revenue and expenditure, 1921-22 .. .. .. 279,531 To relieve Ordinary Revenue Account, 1922-23 .. ' .. .. 2,129,420 2,409,251 Total .. .. .. .. 20,735,743 By Balance, 31st January, 1923 .. .. .. 2,935,466 Total accumulated surpluses .. £23,671,209 £23,671,209 RESERVE FUND IN LONDON. Under the Reserve Fund Securities Act, 1907, the sum of £800,000 was borrowed from the Post Office on the 16th August, 1907, and remitted to the High Commissioner, London, to purchase gilt-edged securities as a reserve for the purpose of hypothecation. In order to place the fund upon a sound basis, the debentures issued to the Post Office have been repurchased and cancelled, thus reducing the public debt and effecting a saving of sinking-fund charges of £1,600 per annum. As I applied accumulated surpluses amounting to £1,200,000 to the purchase of additional Reserve Fund securities in 1920-21, the fund now shows a clear £2,000,000, of a nominal value of £2,148,275, of which £1,283,158 is represented by 5-per-cent. British War-loan Stock.

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THE PUBLIC DEBT. £ s. d. The gross public debt as at 31st January, 1923, was 220,527,688 11 4 as against a liability on 31st March, 1922, of 219,054,384 14 8 the increase for the ten months being .. £1,473,303 16 8 The operations for the ten months were — Raised for — Public Works Fund— £ £ s. d. General Purposes Account .. 2,899,790 Electric Supply Account .. 514,000 Education Loans Account . . .. 588,250 Discharged Soldiers Settlement Account 300,950 Native Land Settlement Account .. 255,000 State Forests Account .. .. 214,000 Land for Settlement —Discharged Soldiers Settlement Account .. 84,000 Hauraki Plains Settlement Account .. 78,000 Rangitaiki Land Drainage Account .. 50,900 Swamp Land Drainage Account .. 40,000 Waihou and Ohineiuuri Rivers Improvement Account .. .. 35,000 Scenery Preservation Account .. 7,000 Mining Advances Account .. .. 6,000 5,072,890 0 0 Raised for redemption of loans .. .. .. 2,984,535 0 0 Total raised .. .. .. 8,057,425 0 0 Deduct loans redeemed .. .. .. 6,584,121 3 4 Net increase .. .. .. .. £1,473,303 16 8 KRKK-OF-INCOME-TAX SECURIT] ES. During the ten months the volume of free-of-income-tax securities outstanding has been reduced by £5,234,575, including £2,895,520 under the conversion scheme now in operation. FUNDS FOR REDEMPTION AT 3 PER CENT. Advantage was taken during the ten months of the low rates of interest offering in London to borrow £1,000,000 on the security of Treasury bills at 3 per cent., with nine months' currency. The proceeds were utilized for redemption purposes under section 17 of the New Zealand Loans Act, 1908, and securities lor this amount were cancelled and discharged from the public debt. These transactions represent a saving in interest of about £15,000 during the nine months over securities issued in the ordinary way at 5 per cent. LOANS FALLING DUE IN AUSTRALIA. As the balance of trade with Australia is against the Dominion, I had arranged to redeem the loans falling due in Australia during the current year, but unfortunately the exchange position became so acute that the transfer of the necessary cash either from London or from New Zealand presented some difficulty. In view of the prevailing conditions I deemed it expedient to authorize the issue in the Commonwealth of short-dated redemption securities, amounting to £500,000, on similar terms to those available to investors in Australian State securities—namely, per .cent., with alternative currencies of three, five, or ten years. The securities found a ready sale, and full particulars of the charges and expenses will be submitted in due course. STATE ADVANCES OFFICE. Loans authorized by the State Advances Board during the ten months ended 31st January, 1923, amounted to £2,104,180, of which £1,804,489 was paid over to borrowers.

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PUBLIC WORKS FUND. On the Ist April, 1922, the available ways and means for public-works £ purposes were .. .. .. .. .. .. 429,682 Additional funds have been received as under : — Loan-moneys —Aid to Public Works and Land Settlement Act, 1921 .. .. .. .. .. .. .. 2,897,681 Transfer from the Consolidated Fund (section 5, Finance Act, 1922) 1,000,000 Miscellaneous receipts .. .. .. .. .. 4,466 Making a total for the ten months of .. .. . . 4,331,829 The expenditure under appropriations for the ten months (excluding separate accounts having ways and means of their own) was .. . . £2,673,024 Other expenditure . . .. .. . . 54,623 Total expenditure for ten months ... 2,727,647 Leaving a balance available on the 31st January, 1923 .v .. £1,604,182 At the present rate of expenditure this balance should not be exhausted before the 30th June next. At the 31st January, 1923, the unexhausted authorities for raising loans for public-works purposes were — £ Aid to Public Works and Land Settlement Act, 1921 920 Aid to Public Works and Land Settlement Act, 1922 4,000,000 £4,000,920

Statement showing Expenditure under Appropriations for the Ten Months ended 31st January, 1923, compared with the Ten Months ended 31st January, 1922.

Approximate Cost oj Paper. —Preparation, not given ; printing (600 copies), £9 15s.

By Authority: W. A. G.. Skinner, Government Printer, Wellington.—l 923.

I'rice 6d.\

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