8.—6

In New Zealand additional debt to the amount of £3,299,560 was incurred for the following purposes : — £ Investment in Reserve Bank . . . ■ 1 > 000 > 000 Public works (including hydro-electric supply) .. 1,647,400 Land for settlements .. .. •• •• 160,635 Main highways . . .. • • • • • • 431,500 State forests . . . . • • • ■ • • 60,000 Premiums under conversion operations .. . . 25 £3,299,560 Apart from the small amount involved in premium issues, £406,090 was obtained from the public at 3| per cent., while the balance of £2,893,445 was derived from departmental investments. „ Redemptions of long-term debt amounted to £2,653,358, the funds for the purpose i being derived from the following sources. Repayment of the Public Debt Act, 1925 .. .. 93,161 Reparations and war credits .. .. • • 750 Ordinary Revenue Account —Surplus as at 31st March, 1935 .. .. .. •• •• 1,600,212 Separate accounts .. .. • • • • 959,235 £2,653,358 Of the redemptions effected, £724,500 was held in Australia, £37,000 in London, and the balance in New Zealand. The debt operations for last financial year may be summarized as follows ; £ Debt as at 31st March, 1934 .. .. •• 302,791,996 Less net decrease in floating debt .. .. 22,856,981 279,935,015 Plus net increase in long-term debt — £ (a) Due to loan-conversion . . 25 (.b) Due to operations during year .. .. •• 646,177 646,202 £280,581,217 The domicile of the debt on 31st March, 1935, was : — £ London .. .. •• •• 160,972,230 Australia .. .. •• •• •• 2,183,550 New Zealand .. •• •• •• 117,425,437 £280,581,217 The debt total is approximately £1,360,000 less than it was on 31st March, 1932, a fact that will be regarded with satisfaction by taxpayers generally. The disastrous fall in prices which occurred in 1931 automatically increased the burden of all fixed charges, and, as is well known, one of the cardinal points in the Government s policy of readjustment and reconstruction is to lighten that burden in every way possible. So far as the public debt was concerned, obviously the first thing to do was to avoid increasing it. On the other hand, it was realized that a complete cessation of public works and other loan expenditure would increase unemployment and generally accentuate our already serious economic difficulties. In these circumstances loan expenditure was continued, but on a reduced scale and in directions that would increase debt-charges payable out of taxation as little as possible. Fresh debt to the extent of £7,687,000 was incurred during the three years, but was more than ofEset by redemptions to the amount of £9,049,000.

Long-term-debt redemptions.

Debt summary.

Debt domicile.

) Reduced borrowing,

2—B. 6.

9