MAJOR ATKINSON AT HAWERA.

Ashburton Guardian, Volume V, Issue 1297, 4 July 1884, Page 2

MAJOR ATKINSON AT HAWERA.

Major Atkinson addressed a meeting of his constituents at Hawera last night and was well received. After detailing the reasons which, from his point of view, were responsible for the dissolution, ho went on to say that the great question for the pSople to consider was that of finance, and this must be considered as her two heads. First, ordinary revenue and expenditure ; and secondly, public works finance. In other words, current revenue and expenditure, and revenue and expenditure on loan account. As to ordinary revenue and expenditure, the deficit last year was Ll-i2,00l), which had been temporarily made up by the issue of deficiency bills. In raising money by means of deficiency bills, the object was to enable the Treasurer, when large payments had to be made on a certain date, to anticipate revenue. The limit to which that could be done in. Now Zsdand was L 400,000, but in England the Chancellor of the Exchequer had power to raise in this way any sum up to amount expected to bo received in any one quarter of the year, the deficiency bills to be paid in the quarter following that in which the money had been raised. In New Zealand the authority to raise suoh a proportion of the revenue in that way had never been given. The limit was L 400.000, and usually whatever amount was temporarily borrowed lyas repaid within the year, but last year there was a deficit of L 152,000, that was to say, there were deficiency bills unpaid to the amount of L 398,00), but to meet them there was cash in hand to the amount of L 245,000, He made this explanation, because Sir Ju'lus Vogel had said the Government had left a floating debt of L 1,080,000, of which the deficiency bills formed part, and he did not see how it was to bo mat. There was no such floating debt at all. Had the bills been Treasury bills haying a currency of years then the term might have been applied to the deficiency bills. To meet £he LV52,000 temporarily, to give further necessary powp.r to anticipate revenue in this way, and to provide money for carrying on the public works authorised in the schedule of the Loan Act, Government had taken power to raise L 700.000 on deficiency bills, but none of this could be regarded |as a floating debt. The bills would be met as the revenue came in, anl some revenue, like the Property tax, came in but twice a year. The money borrowed for public works would of course

be repaid as soon as the loan was raised. This sort of thing mutt go on so long as the country was a colony, and the term “ floating debt ” used in connection with such an operation was misapplied. In reference to taxation, it would be very easy to bring down an attractive budget if anyone chose to do it; it would be easy enough to abolish the property tax and raise from Customs sufficient to meet requirements, but it could only bo done by dealing with the Public Works Fund in a manner different to ths present method. He defended the property tax not only as a fair moans .of raising revenue, but because as a direct tax | it brought homo to the people the close connection between borrowing and taxa--1 tion, and therefore acted as a chock upon lavish borrowing and lavish expenditure. It seemed to him that direct taxation, especially in a country like this, was very desirable. Let a man pay directly any sum—no matter how small—in indirect taxation, and he would have to agree that it would be very unwise not to keep to direct taxation in some form or other. It was quite possible that in the next session there would bo a proposal to abolish this taxation, and to increase direct taxation, about which the people would not likely say anything at all. However, ho hoped that the people would look into the question, and not allow direct taxation to be done away with. Direct taxation meant that they would have lively elections, lively Parliaments, and lively Governments. He believed that the property tax was the best tax that could be levied in the way of direct taxation. It had bean said that it wag antagonistic to local industries, but he pointed to the example of America as refuting the idea. In no country had local industries flourished more than in America, while in ho country was the property tax more popular, notwithstanding the fact that it was levied in a much more offensive form than in New Zealand. He denied that it had the effect of keeping away borrowed capital; for as a matter of fact there was more foreign capital in the colony for investment now than there had ever been in any previous period in the |history of the colony. He also claimed that the effect of direct taxation to the colony had bean to give confidence to investors in colonial securities. In proof of which he instanced the fact that whereas the 4 per cent, debentures in 1879 only brought LBO per LLOO bond, on the occasion of the List loan being floated they had brought LIOO 6s 6d per LIOO bond. Unless they kept to, some form of direct taxation, he was very much afraid that they would have a repitition of that extravagance which spread over the land some yoirs ago. He had said it would be easy to bring down a satisfactory budget, it Ministers consented to deal with the public,works fund in a different way. A great mistake was likely to be made in this matter, am* people were likely to be led away unless they were very careful. The idea was not a new one ; it had bean often thought of by needy Treasurers, and that was the idea of capitalising interest. When a company borrowed money t» construct a railway it charged interest to c ipiral until the line was opened, and then treated the amount borrcwedaud the interest paid in the meantime as capital. There was a good deal to be said for that in the case of a company. It is the only way a company could do. If had not revenue with which to pay interest; but it was very different with a colony. The colony had always paid interest out of revenue, and he hoped it would continue to do so. However, if the other system were adopted, and three or four or five millions were borrowed at once, under it everything would receive an enormous lift for the present. Instead of having to find L 150,000 or 1.200,000 out of the consolidated revenue for interest, that claim would be met out of capital, and no one would feel the. burden of increased indebtedness. The effect would be wonderful. Good times would come immediately and would last until the monay was spent, but the burden would eventually fall with crushing weight, and the colony would be in a far worse position than it was at present or ever had been. There would also be this result —as soon as money lenders at Home had learnt that the colony was capitalising its interest bur credit would sink to the lowest, our bonds would not fetch more than L 94 or L 95 per LIOO, and the private borrower would soon find that he was compelled to give more for the money he wanted than at present. Such financing would, to a certs'aty, bo “burning the candle at both ends,” and although there might be great temptariou to resort to it, he hoped that • the electors of the colony would as one man say that they would not enter into such a scheme, but would s'mply continue to borrow from time to tune ho much as they could pay interest upon out of ordinary revenue. Major Atkinson then spoke of the depression and its causes, and, in conclusion, he repeated the defence of the Government made in the Bouse during last session, that there was redly no charge made a ;ninst them by (he Opposition ; no complaints against their native, financial or land auminiatrati m. The real causa of offence was that the Government dared to tay that the railways belonged to the people of ihe colony, and not to the peop'e of any particular parts of the colony, and Idiat jobbery in native lands should cease. .No one had denied that statement in the House, and no one could deny it now. The result of turning the Government out was immense expense to theJcolony,of which the double honorarium was*an item. It wouldaho render impossible reductions in expenditure during the current year which would have been made had the Government remained in office. Ho claimed that while they had beeu in office they had restored the credit of the colony. They had been highly successful with their native policy ; they had carried on public works with as much speed as was prudent.; they had helped and encouraged local industries, in connection with which GDecia*. reference was made to the manufacture of tobacco and the startmg of and butter factories, and they had put the taxation on uho shoulders best able to bear it. It, was time to say that the colony was suf fering because of the burdens put upon it, but there was need for more economy among the people. Last year the 500,009 people who composed the population of the colony spent three and a quarter millions upon tobacco and spirituous bquors. In contrast to this, he mentioned that the contributions to Friendly Societies amounted to only L70,0u0. Speaking on the subject of immigration, ho strongly favored the maintenance of the nominated system, and tlie adoption of means to attract small capitalists, many of whom, he was glad to say, wore qow coming to ! the colony by means of the direct steamers. There was nothing in the financial position to make colonists despair. Although there was a necessity for caution, there was no need for fresh taxation to meet the cost of the services of the year. The reyenue of tho year would be sufficient for that.

After Major Atkinson had answered a number of questions a vote of thanks and confidence was carried by an overwhelming majority.