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Surplus Announced, Another Forecast, In Budget Speech Taxes Remain as They Were, But Decreases Expected in Both Reve-- nue and Outlay--Pre-- mier in Spirited Repar-- toce With Nixon Direct relicf costs for 1934 are esti-- mated at $15,000,000, or about $1.-- 500,000 more than last year. This item forms part of capital paymen«& forecast to total $36,500,000. Public accounts for the year ended Oct 31, last, tabled coincidentally with the Budget, showed an increase of $21,-- ©67,475 in the Province's net debt. The Budget contained an indica-- tion that the Civil Service would be relieved of part of its salary assess-- ment. Mr. Henry's speech was optimistic. exultant and highly partizan. He defined the Province's taxation policy as the sale of services to those who wanted to buy; he answered Opposi-- tion criticism of Provincial borrowing, and in this connection engaged in violet argument with Progressive Lead-- er Harry C. Nixon:; he claimed his Government had the full confidence of the people, and, exhorting Liberals to abandon pcssimism, he waved re-- peatedly beforo the Opposition a slogan cull:d from a Globe editorial: "Optimisnt? ends depression." Tribute to Mr. Dunlop. First, Mr. Henry paid tribute to his dead predecessor as Provincial Treas-- ur. ;. Hon ®E~ A. Dunlop, sa'd the Premier, had betn responsible--~to a very great «xtent for the success of Provincial financial operations during ine last year. "He had been looking forward to presenting this budget," continued Mr. Henry, "especially as i1 health last year had denied him the privilege of addressing the House on budget day. The last time I saw him, he was extremely enthusiastic over the praspoect. I fsel that, in a sense, I am speaking for him today." The main financial operations of the Province already had been made public at that time, said Mr. Henry. It was only necessary for him to touch upon tne more important items m the financial set--up. Two Deaths. ~ He remarked on the trag'c coinci-- dence that the two Ministtrs of the Crown who had died since the begin-- ning of the present year, both had hela the treasury pox:xuio. For him= self, it was the seconda year he had del.verec¢ the Budget Speech, but the first that he had done so as Frov.inc.al Trcasurer. f a Turning to the public accounts, Lie Promier recalled the quoted remmark of M.tchell F Hepburn, M.P., Oniario Liberal Leader, at a meciing in Alex-- andria last July. Mr. Hepburn then, it was reported, had forecast a Provin-- ' clal election before the end of the iis-- cal year, "because Henry dare not fate anothcr Legislature with the def.ci's | accrued up io now." . Says Surplus is Answer. % "That," said Premier Henry, with . a finger pointing at the documents | which Getailed a $476,425 surplus, "That's my answer to the champion | of the Liberal Party, who hasn't dared ! to take a seat in this Legislature, al-- | though it was offered to him, who hasn't taken a seat and settled down to Parliamentary discussion of the Province's affairs." C x:"'x.x;t..e.rjected an appreciation of the Budget Committee eiforts. in co-- nperatioun with the late Mr. Dunlop, | "We have a balanced Budget," : boastecd Mr. Henry, adding an aside | that he was glad to see Dr. Simpson, Liberal financial critic, Gdonning his | glasses, "Our financial statement will | bear scrutiny, and after careful study of it the people of Ontario will en-- dorse it and congratulate us on our success." s | Why a Balanced Budgei? taxed, and all social agencics aug-- mented their demanas for assstance. 'While we have lived with.n our means we have not reduced the stan. dard of living throughout the Pro-- vince," the Premier believed; "that standard had been maintained in spite of the economies in government we have practiced." . He himscif felt like the man of ninety years who found himself "stronger today than when he started in life." That could be said of Old Il\,dan Ontario, and of the Conservative arty. Why, he inquired, need a Govern-- ment Budget be balanced? HMHe recalled that the then--absent S. C. Tweed (Lib-- | eral, Waterloo North) once had put} that question to the Administration.| He could only say that what was| needed by the men on the farm or in | the home was needed as well by the Government. A balanced Budget was the first essential needed to carry on inl an efficient manner, to face the world with confidence, to be able to borrow | for one's needs. No criticissh could attach to borrowing if the funds were needed for a productive purpose, for| the creation of assets. "That's what' we're doing, year by year," he said. "Our assets are producing increased wealth." The key to all success in business, said Mr. Henry, was a watchful eye: on expenditure. For two years the Government had been cutting down expenditure, without starving the services that had to be maintained. Unemployment relief was an immense item, and was charged to capital ac-- count, "as it has been during the last three vears. Following the example March of the other Provinces and of the Do-- | minion, we decided it wouldn't be fit-- ; ting to try to meet expenditures on | behalf of the suffering and destitute| by attempting to raise it from the people. The cost has borne upon us | in increasing amounts; this year it is' $13,000,000. We have n apology to | offer, for none is required to justify this more than ordinary expenditure." Applause for Surplus. Wild applause from Conservative benches greeted the Premier's first announcement of a $476,000 surplus. He recalled that a deficit of $2,000,000, rather than a surplus, first had been forecast. Why the difference? The Premier explained that, "we collected $1,600,000 more than we. expected." Miscellaneous items in the Attorney-- General's Department had been under-- estimated by more than $256,000, he stated as an example; Lands and For-- ests receipts were underestimated by $338,000;: motor vehicles' receipts by $676.000, gasoline tax by $1,000,000. Further, the Government had spent less in some departments than had been foreseen. Against these gains, certain sources of revenue «»had pro-- duced less than was expected. He in. stanced liquor revenue, down by $3,-- ©45.000 from 1932. & "On the whole, it showed a better i picture than we had anticipated,"; said Premier Henry. Greater econo-- | mies cut ordinary expenditure by ; $5,300,000, and capital expenditurei by $9.000,000. On the other hand.} the Labor Department's costs werei $157,000 above estimate, "because of | pressure there. largely as a result of, relief administration." | Seller of Services, ;- Stating the Government's taxation policy, the Premier said: "We are not a taxing body, but a seller of services. If a person doesn't care to use them, he doesn't pay. It is significant that we derive our revenues mainly from luxurics; unlike some other Prov-- inces, we have no Provincial income tax. Dominion subsidy, licenses, foes, liquor profits, payments for privi-- leges, gasoline tax--that is, roughiy, the picture of our sources of revenue. Oout of $51,000,000 less than $5,000,-- 000 can be called direct taxation. The municipalitics are called on to pay $1,250,000 toward mothers' aznouw-- ances, $850,000--0dd toward old--age pensions, highway construction ccosts of $2,655,000, and care of patients in mental hospitals, $160,000, a total of $4,926,000. That's all the direct gaxauon we can be held accountable or.'". There was, he said, an increase in the debt. The financial statement showed the net debt $21,767.475 high-- er than in 1932. But as for capital expenditure. if one excluded unem-- ployment relief--*"which we have to take care of, no matter what hap-- pens'"'--the total was a little over $6,000,000 for the last fiscal year. Reviewing Provincial borrowings, the Premier recalled that last June the Province had sold over the Trea-- sury Department counter a $25,000,.-- 000 issue for debt retirement. The average yield was 4.602, and the cost to the Province was the most favor-- able obtained for an issue of similar term by any Province in Canada, and the best Ontario had received since 1902. Answering the criticism that the demand of the small investor had been overlooked, the Premier cited figures to prove that a large "There is abundant evidence that Mty. Dunlop took advantage of an ex-- cellent market, and that the Province got the cheapest money available," said Mr. Henry. Anozher fAnancial achievement had percentage of the loan had been is-- sued in' denominations of $100 and $500. The spread in price between what the Province received and what the purchaser paid was .86, less than that of any other Province's loan. He instanced a British Columba issue with a spread of 2.56. 9