It affords me particular pleasure to refer to the continued close and happy
relationships existing between the peoples of Australia and New Zealand, who,
in the common peril of the war in the Pacific, have been brought together as
never before. As a result of the discussions held last month in Canberra, in
which my Government was represented by a delegation headed by my Prime
Minister, there have been embodied in an Agreement principles of permanent
co-operation between the countries, both for the present and for the post-war
period. The agreement between the two Governments and the provision of
permanent machinery for consultation should be of great mutual benefit. The
holding of this Conference and the Agreement resulting therefrom are a
logical development of the principles of the British Commonwealth of Nations,
the membership of which is in the very forefront of the policy of this Dominion.
I am convinced that as a result New Zealand will be enabled to play a
progressive and useful part in improving not only the lot of our own peoples,
but of all the peoples of the Pacific, and will take her full share in the
preservation of the future peace of the world.

During the session my Ministers propose to place before Parliament the
question of the adoption of the Statute of Westminster, the enactment of which
would bring New Zealand into line with the other self-governing Dominions.
The adoption of this measure will remove doubts in the eyes of foreign powers
regarding the Sovereign status of New Zealand, and will at the same time
have the practical effect of removing existing legal drafting and administrative
difficulties both in New Zealand and in the United Kingdom.

It is with great pleasure that I refer to my recent visits to the Pacific
Islands, where I was everywhere most hospitably received. I was extremely
gratified to be able to spend some days in the Mandated Territory of
Western Samoa and also to visit the most northern of the territories of this
Dominion, Penrhyn Island. In both places the general atmosphere was very
happy indeed, and nothing could have been more wholehearted than the loyal
welcome accorded to me. My tours also included Norfolk Island, Fiji, Tonga,
American Samoa, New Caledonia, New Georgia, and the Solomon Islands, where
I was able to visit the New Zealand Forces, including the Third Division,
squadrons and other units of the Royal New Zealand Air Force, and ships of
the Royal New Zealand Navy.

My Minister of Armed Forces and War Co-ordination has also visited the
New Zealand Forces serving in the South Pacific, and my Minister of Defence
was able last year to pay a visit to the Second Division then located in North
Africa, as well as to the Third Division in the Pacific and many other units of
the Armed Services throughout the world.

My Ministers have been giving close and constant attention to the welfare
of the peoples of the Island territories. In progress and impending are
gratifying extensions in the educational and medical services of Western Samoa
and the Cook Islands, and at the same time equipment and materials for
expansion of public works and utilities are being supplied in appreciable
quantities.

MR. SPEAKER AND MEMBERS OF THE HOUSE OF REPRESENTATIVES,

The demands of war continue to impose on the Dominion's national economy
heavy burdens, which the people, with a patriotic sense of their responsibilities,
are willingly bearing.

The civil portion of the public accounts reflects a buoyant revenue position,
and the results to date show that expenditure is being maintained within the
revenue available. The War Expenses Account, which is now the principal
of the State's financial responsibilities, indicates the substantial extent to
which the financial resources of New Zealand are being diverted to the
prosecution of the war.

The Third Liberty Loan of £35,000,000, which was offered to the public
for subscription in June last, met with a most gratifying response from all
sections of the community and was substantially oversubscribed. My Government contemplate raising a further war loan early next financial year towards
next year's requirements.