8.—6

oka M ° dern on §'" ran S e bombers for two squadrons will be delivered shortly while 250 aircraft for training and other purposes have been ordered, and a number o th f. se h ave already been delivered in New Zealand. Stocks of bombs and other munitions have been obtained. As a result of the visit of the United Kingdom Air Mission, arrangements have been made foi the establishment of an aircraft factory at Wellington and an order is to be placed with the de Havilland Aircraft Co., Ltd. fo'r the manufacture of one hundred Tiger Moth fighting planes at a cost of £155 000 The expansion of the flying training organization in Few Zealand is being undertaken £ C oSn at 7W!' ! } e Im P erial Government, who have agreed to accept and pay tor 220 JNew Zealand-trained pilots per annum. During last approval has been given to the establishment of a Flying Training School at Blenheim capable of an output of 140 pilots a year, and to an increase m size of the Flying Training School, Wigram, to ensure a similar output Good progress has been made with the development of the station at Ohakea with th ® provision of additional accommodation at Wigram and Hobsonville,' and with the establishment of the new station at Blenheim. The construction of the operational station at Whenuapai is proceeding satisfactorily, and it is anticipated tiiat the expansion programme will be complete by December 1940 The Railway Workshops Scheme for the training of apprentice personnel is developing m accordance with the initial programme. The'instructional School at the Hutt Workshops commenced training thirty mechanics in July, 1939 and in November mstmctlon Wlll commen ce in the other Railway Workshops Territorial squadrons have been formed at Auckland, Wellington, and Chnstchurch, and it is expected that the squadron at Dunedin will be formed in January, 1940. Capital expenditure involved in the expanded programmes for the three Services will exceed £5,000,000, spread over the next two years. Maintenance costs will be m the vicinity of £3,000,000 per annum. For all purposes the expenditure during this financial year will be about £5,400,000. PUBLIC ACCOUNTS. Of JnQ e n?n bl i C aC 'J or the 7 ear ended 31st March > closed with a surplus ot £809,000, for which buoyant revenue was mamly responsible. It is satisfactory to note that, although there were no increases in rates of taxation, the revenue received from taxation exceeded the previous year's receipts by £642 000 The following is the position :— Revenue. £ £ Taxation .. .. .. .. . . 32, 306,000 f^ erest 2,127,000 Other receipts 2,149,000 36,582,000 Expenditure. Permanent appropriations— £ Debt services .. .. 9,311,000 Exchange .. .. .. 1,422,000 Highways .. .. .. 3,055,000 Other services .. .. 545.000 » i . — 14,333,000 Annual appropriations—Social services .. .. 12,946,000 Other services .. .. 8,494,000 21,440,000 35,773,000 Surplus .. .. .. _ _ £809,000

Defence expenditure.

Surplus 1938-39.

7