JUNE 28] THE NEW ZEALAND GAZETTE 1419

occasion strive for the preservation of peace. They are bound,
however, to recognize the necessity for adequate defence preparations,
the existence of which, under existing circumstances, they regard as
an indispensable safeguard of peace.

Effect is already being given to plans for the development of
the New Zealand Naval and Air Forces and, within the last few
months, some of the frigates for the New Zealand Naval Forces have
arrived on the New Zealand Station. Consideration has been given
to the necessity for a system of compulsory military training to
enable New Zealand to provide the land forces for the defence of
her interests in the event of emergency. The detailed review of the
position that has been made by my Government discloses that
compulsory military training is the only effective means of producing
the land forces which will be required immediately should an emer-
gency arise. Legislation to provide for the taking of a referendum
on the introduction of this form of training will be placed before you.

MR. SPEAKER, AND MEMBERS OF THE HOUSE OF REPRESENTATIVES,—

The finances of New Zealand have continued to increase in
strength. As a result of the continued buoyancy in the revenue, the
public accounts for the past financial year reveal a surplus of
£2,631,000. Despite record disbursements of £44,400,000, the position
of the Social Security Fund has been improved during the year by
£1,400,000, bringing the balance of the Fund to £8,700,000, the
highest since the Fund was set up in 1939. My Government propose
to improve the conditions of war pensioners and of social security
beneficiaries by increasing the monetary benefits of the aged, invalids,
and widows.

A sum of £1,600,000 has been set aside in a special Air Force
Trust Fund to provide for the re-equipment of the Royal New Zealand
Air Force.

During the year New Zealand has endeavoured in all possible
ways to aid the people of Great Britain in their economic difficulties.
To this end, my Ministers have consistently followed policies of
conserving dollar funds; of containing imports within the limits of
New Zealand’s current export income, while at the same time
encouraging the highest proportion of imports from the United
Kingdom; and of exporting to the United Kingdom the maximum
amount of food. In pursuing these policies my Ministers have
continued to act in the closest collaboration with the United Kingdom
authorities.

It is gratifying to record that the beneficial effects of the revalu-
ation of the New Zealand currency—by adjusting the exchange rate
to parity with sterling—have been reflected in reductions in the prices
of producers’ and consumers’ goods, depending, directly or indirectly,
on imports.

HONOURABLE MEMBERS OF THE LEGISLATIVE COUNCIL AND MEMBERS OF
THE HOUSE OF REPRESENTATIVES,—

The economic soundness of the country over the past year has
been accompanied by high production in almost all important fields of
industry, and many new records have been established. Meat and
dairy production have been maintained at very high levels, and New
Zealand has now become the chief supplier to Britain of meat as well
as of butter and cheese.

Long-term contracts and stabilized marketing procedures have
given economic security to primary producers, who have shared in the
general prosperity with the rest of the community. My Advisers hold
firmly to the view that the welfare of all sections of the people can
only be maintained on the foundations of high production, together
with economic stabilization, and they fully recognize their responsi-
bility to promote conditions of prosperity in which all may share.

For this reason, equally with their desire to help the people of
Britain, my Ministers have given close study to the measures required
to achieve a still greater expansion of food exports, and plans are
now being formulated to extend the area and productivity of pasture
land and to encourage the increased production of fertilizer.