June 26.] THE NEW ZEALAND GAZETTE. 2009

ment of hydro-electric power, a further loan of £5,500,000 was successfully
floated in London in May. The issue price was £99 per cent., bearing
interest at £5 per cent. The price is deemed very satisfactory in view of
the general conditions of the money-market, and the fact that the loan was
largely oversubscribed is striking evidence of the confidence that investors
have in this Dominion and the management of its finances.

Arrangements have also been made to provide out of local resources
additional capital for land-settlement, State advances, forestry, and other
activities being carried on by my Ministers with the object of assisting the
development of the country.

It is regretted that the heavy fall in the prices obtained for our primary
products in the overseas markets has involved a lessened return from the
exports of the Dominion. This contraction in the national income, arising from
causes beyond our control, inevitably means a period of financial stringency
for the whole community.

So far as the national finances are concerned, my Ministers anticipate
during the current financial year a substantial decline in Customs revenue, and
also a falling-off in the yield from land and income tax.

Recognizing that the present is not an opportune time for placing
additional burdens upon the taxpayers, my Ministers propose to meet the
position as far as possible by a drastic curtailment of expenditure. This means
suspending or severely restricting services and monetary assistance given by
the State wherever such action is feasible without upsetting the basic organiza-
tion of the Departments of State or causing undue hardships to the institutions
or sections of the community directly benefiting by particular items of
expenditure.

It is a matter for regret that at a time like the present the difficulties of
the situation should be greatly accentuated by the fact that the railways,
owing to the losses incurred, have now reached the end of their separate finan-
cial resources, and cannot longer meet their obligations without substantial
assistance, which in this instance can only be derived from taxation. In order
that the additional burden to be borne by the taxpayers may be reduced to an
absolute minimum, a Royal Commission has been set up to investigate fully all
branches of the Railway Department’s activities and to advise the Government
where economies can be effected.

Being fully aware that the basic cause of the losses incurred by the railways
is the rapid development of motor transport and the lack of co-ordination in
transport generally, my Ministers will place before you legislative proposals
which it is confidently expected will minimize the wasteful competition which
now greatly increases the burdens of the people.

While it is probable that the present financial difficulties cannot be over-
come without some increases in taxation, the Government are confident that,
given the support and co-operation of the public, the position can be met and
the Budget for the year balanced without economic strain or imposing undue
hardship on any section of the community.

It is a sad fact that unemployment is still a serious problem in this
Dominion. My Government, realizing the hardship imposed upon the unfor-
tunate members of the community who are unable to obtain work, will
continue their endeavours to provide as much employment as possible on
public works and other State activities. To assist in dealing with the special
difficulties of married men who are unable to leave the cities because of their
domestic ties, my Government has decided to pay subsidies on labour costs
at double the former rate to urban and suburban local authorities which
undertake additional approved works.

It is satisfactory to note that the position of the State superannuation
funds is being investigated, and that an increased amount of subsidy was paid
into the funds last year. In due course the proposals of the Government for
improving the financial position of these funds will be submitted for your
consideration.