The steep rise, and the equally steep fall, in the world prices for
wool, together with higher prices for meat and dairy products, have had
substantial effects on the Government's revenue. The programme of
Government works and social service and administrative expenditure,
and the level of taxation to be maintained for the current financial year,
will necessarily require to be carefully related to anticipated fluctuations
in revenue.

The rapid fluctuations in certain export prices, and notably wool,
have created some taxation injustices in connection with duties payable
in the cases of deceased estates. Unless rectified, these serious
anomalies would have far-reaching and detrimental effects on our
foundation industry of farming. The Taxation Committee, in its
report late last year, referred to the serious nature of this problem,
to which my Ministers have been giving close consideration.
Legislation will be placed before you designed to remove these
injustices and to afford relief in those cases where the present law has
operated inequitably and in a manner never contemplated when the
existing legislation was enacted.

The operation of the Wool Proceeds Retention, or “Wool freeze,”
scheme has proved a most significant factor in combating inflation,
and the retention in the private trading banks of some £33,000,000
in twenty thousand individual accounts has created a reserve which
should prove to be of considerable value to the farmers concerned.
With the fall in wool prices to less than half their peak levels, the
Government, in collaboration with the representatives of the wool-
growers, has decided to release to those farmers who desire it, up
to 20 per cent of that money during the present year and each of the
following four years.

After meeting all expenses, including heavy defence costs, and
making taxation concessions, a surplus of £12,600,000 remained in the
Consolidated Fund last year. As a first step towards removing the
means test for age benefits, my Government increased the universal
superannuation benefit from £37 10s. to £75 per annum. After providing
for these and other increased costs, a surplus of £3,600,000 remained in
the Social Security Fund. With such satisfactory surpluses of revenue
over expenditure, the past year can be reviewed as one of continued
national and social development and sound finance.

The year has been generally favourable for primary production.
Dairy-produce and wool have increased in output. In a country such as
New Zealand, where expansion is still possible, there is an urgent need
for greater production. There is growing demand throughout the world
for food, particularly live-stock products. The legislation passed last
year has encouraged further investment in farm improvement, through
development of pastures, purchase of machinery, and construction of
farm buildings and workers’ houses. The capacity and hard work of
the average New Zealand farmer and farm worker in the management
of grassland pastures and live-stock continue to add to this country’s
growing prosperity. Science is playing its essential part in increasing
production and in maintaining the health of our large live-stock
population.

During the year, as a further step in the utilization of New
Zealand’s softwood resources, my Ministers issued a general invitation
for proposals for the establishment of a newsprint industry. Arising
out of one proposal submitted, authority for the registration of an
operating company has already been given, and consultations are at
present proceeding with financial and technical authorities in various
parts of the world to ensure that the foundations of this great and
promising new enterprise are firmly laid.

The Board of Trade is proceeding with its examination of questions
affecting the importation of goods into New Zealand and allied trade
problems. As a result of its inquiries and hearings from manufacturers,
importers, and other interested groups, many items have been retained
under import licensing until the tariff duties have been reviewed at
public inquiries. The first tariff inquiry for eighteen years has already
commenced, and these inquiries will be continued.