FINANCIAL STATEMENT.
In Committee of Supply m the House on Tuesday evening the Hod Sir H. Atkinson, the Colonial Treasurer, delivered his Financial Statement, of which the following is an abstract. Sir H. Atkinson after referring to the impossibility of sooner bringing down the budget pro posala went on to say, that It would be m the rtcolteotlon of hon members that when the Government took office in' October last the finanolal position and prospects of the colony were aaoh as to require the immediate and earnest attention of Government and of Parliament. So far as time permitted important changes were Introduced during the session and others promised or foreshadowed. Government undertook to largely reduce the loan expenditure upon public works. This has been done, and still further reductions are now both po&aible and desirable Government also undertook to make large redactions m the expenditure charged against the Consolidated Fand and would, no doabt, be able to satisfy Parliament that the reductions they had made and were making, were very substantial m amount, and of a good and permanent character. Government further undertook to oharge against the ordinary revenue oertain works and services the funds for which have hitherto been provided from Joan This also has been done, and hon. members would find m the current ordinary estimates proper provision made for these services. These i salutary changes have not only been immediately and directly beneficial, bat have also been indirectly of great advantage to us m their effect outside the colony. He then stated briefly that io the opinion of Government the chief fioancial work wbioh required to be done this session was : — Firstly, to see that our ordinary expenditure is reduced to the lowest praotioable point, and this bting done : Second ly 4 to devise means to raise sufficient revenue to prevent the recurrence of a deficit, and m doing this we must »s far as can be done, without loss to the community at large, assist our local industries and manufactures ; and lastly we have to reduce the expenditure of borrowed money on our publio works to a much greater extent than was proposed last session. BEVENOB AND EXPENDITURE 1887-8. When the Financial Statement was made last November he was blamed by a high financial authority for having prediced a much larger deficit thau was likely to occur, but he now regretted to say tint the results of the year had been even lees favorabletban he had anticipated, It waß then estimate i that the deficit r a the year's transactions would probably be £253,305 on the ordinary revenue aoaount and land fund account conjoined, The estimate was subsequently increased to £312,653 by the disallowance of some of Government's proposed reduotiona. The reoelpts of the year fell short of the aotual expenditure by £382,047, as against £312,653 anticipated, being £69,394 m excess of the estimated deficit. If £22,104 paid for compensation for loss of office weiru deduoted, because m last year's Statement It was treated as a matter outside the ordinary estimates of expen. ditare, the exaess would be £47,290. He then briefly explained how it was that the deficit exceeded Government's anticipations. The revenue as a whole did not realise the amount estimated by £103,336; the railways fell short by £68,174; land saleß, £29,503 ; revenues from depasturing licenses, ren'B, and other souroes, £7239. The falling off m tbe Railway reoe'p b was due to tbe late harvest and to the low proa of grain causing' farmers to delay their threshing m the hopes of a the. That it was not due to a less quantity being grown was shown by the fact that 28.000 tons more grain are estimated to have been oarrried over our railways daring this month than m the same period m the previous year. The expenditure as a whole was less than the estimate by £33,942, or, including compensation paid for loss of ofl&oe (£22,104) it was £56,046 less than estimated, whloh sum deduoted f torn the revenue short received (£103,336) gives the excess deficit of £47,290 for the year. Tbe defiolt m the preceeding year for the ordinary revenue and land fund aocounts was £146,556 making the defiolt for the two years £528,603. But Parliament having last session, In anticipation of a large defiolt at the cloae of the 1887-88, made provision for £400,000, he had to suggest only a means of meeting the much smaller sum of £128,603. THE PDBLIO DEBT. The gross public debt at 3.lst March, 1887, was £35,741,653. During the year the following reductions m the debt have taken place : — Debentures for £300.000 of the New Zealand Loan of 1856, which matured on 31st January, 1888, have been redeemed, cancelled and returned .to *he coloby. The debt under the Consolidated Loan Ac*, 1867, has been reduced by £42,400 debentures of the " drawing " of 1887 redeemed out of the sink'ng fund. The additions to the debt have been £ GO, OOO under the Consolidated Stock Act, 1887, for expenses of conventions ; £500,000 borrowed on short dated debentures under tha North Island Main Trunk Kail way Loan Act, 1882; £7000 under the New Zealand State Forests Act, 1885 ; £125,000 under the Government Loans to Local Bodies Act, 1886 ; £258,184 under the Consolidated Stock Act, 1884, for the m creases of tbe sinking funds during the year ; and £400.000 under tbe Public Revenues Act, 1887 (No. 3). The debt paid off having amounted to £342,400, and the new debt increased to £1,350,184, the total gross debt at 31st March, 1888, was £36,758,437, and deducting the sinking fund acorued, £1,222,056,, the net publio debt at that date was therefore £$5,356,381. The following loans fall jdue within tbe purrent year, viz.: — £5.00,000. on the 3|lst July, temporarily borrowed under the North Island Main Trunk Railwhy Loan Act, 1882 ; £250,0(J0 on the Ist November, under the Colonial Inscribed Stock Act, 1882 ; and £49,500 on the 15th December, under the General Purposes Loan Act, 1873 It will be necessary to obtain the authority of Parliament to renew the two latter loans. In addition to the loans he had named as falling due within the current year there are £25,000 due on the Ist October, 1888, and £25,000 on the Ist January, 1889, under the New Zealand Loan Act, 1856. These two sums will be repaid out of the accumulated linking funds of that loan. PDBLIO WOKKS FUND, In copse'quenoe of the earmarking of the North Island Mala Trunk Railway loan and the loan authorised m 1886 to speoifio purposes, it beoame neoessary to establish three distinct accounts m the Publio Works Fund, No. 1 being an account of the balance of the loans ralaed before 1886 ; No. 2 the aooount cf the North Island Main Trunk Railway loan ; and No* 3 the account of the loan authorised m 1880, * ' No. 1 Account — The balance at credit of No.. 1 aooount on the 31st Maroh, 1887, wiib £491,245, of which there was expended during the year £440,854, leaving a halanoe of £50,391. During the year it became necessary, m oonßequence of the earmarking already referred to, to create debentures under the Loan Aot, 1887, for £300,000, which were taken up out of funds at credit of No. 3 aooount, whereupon £150,000 w*s carried to oredlt of No. 1 account. This sum, together, with the £50,391 already mentioned as the balanoe of the old loans, made £200,391, the amount whloh atood at oredlt of No. 1 aooount on the 31st March, 1887. The liabilities outstanding »t that date chargeable upon this'acoottnt were £205,323. l ; No-. 2 Account — Up to the 31st March, 1 887, there bad been expended m <
anticipation of ralalng the North Island Main Tronic Railway loan of £1,000,000 £325,685. Daring she past year a farther sum of £152,315 has been expended, mnklng m a'l £478,000, and leaving a ba'aooe of £592,000 unexpended. The liabilities outstanding at the 31st Matoh, 1888, chargeable upon the balance of £522.000 amounted to £75,904. No 3 account— The unexpended balanoe | at 31st March, 1887, of the loan of 1886, was £769,254 Tbe balance at oredit of No 3 account at the 31st March, 1888, was £546,244, subject to liabilities amounting t0£190,467. Summary— Tho actuil balance at credit of the public works fund as a whole en the 31st of March, 1887, was £786,294 13s 9d, subject to a deduction of £242,800 for district railway debentures sold with the loan of 186.6, but not forming part of the public works fund. The balance at the beginning of the year for public works expenditure was therefore only £543,494 13s 9d. During the year we received the balance of the loan of 1886, £391,300, and an advance of £500,000 borrowed by the late Government npon the North ißland Trunk Loan. These sums made together £1,434,794 13s 9d, of which there was expended daring ths year £966,159 12s 6d, leaving an unexpended balance at 31st Marob, 1888, of £468,635 Is 3d. The balance m hand at the 31st March last and the loans authorised but nnraised make together £1,968,635 Is 31, aubjaot to liabilities at 31st Maroh laat of £471.695 6a 3d. GOVERNMENT LOANS TO LOCAL BODIIS. The total amount borrowed to March 31st, 1888, was £125,000. Applications reoeived m response to a, M Gazette ?l notification, oq January 16th, amounted, to £78,330, and a further sum of about £90.000 will have to be borrowed to enable the Treasury to make the loans, whch will bring the total amount borrowed on this account u^ to £216,000. It had been thought that tne oolony oould obtain his money at 4 per cent or one per cent less than it was lent to the local bodies. A3, hoaevcr, the rate of interest beiug paid by tbe Government is 5 per oent, It is probable that with respect to f atare loans the amount payable by looal bodies may have to be Increased, and he would during the present session make a proposal to the House upon the .subject. REDUCTIONS EFFECTED 15 PUBLIC EX* PBNDITOKB. In the last Financial Statement a saving of £300,000 was proposed, but amendments by the House reduced thin to £262,000. The aotna saving so far made is £233,097. Government pioposad to classify the whole of the Civil Service, and striotly limit the numbers of each class by Act, from which no deviation will be allowed without the approval of Parliament;' He might also briefly mention other important changes m the direction of simplicity and economy without tbe sacrifice of effiolenoy. It was proposed to amalgamate tbe Native Department with that of the Colonial Secretary, making It a branch of'that department." The intention was before the end of the year, to abolish the Pablio Works Department. The oonstraotion of such of the railways as are to be proceeded with, would be continued under the staff of the constructed railways, and the whole of the road works would be handed over to the survey department, which is already oharged with a large p»rtof that work, employing local bodies where possible m oarrylog them cut, A large saving will be effected by this arrangement, and it will no doubt be strong and tatisfaotory evidence to the people and the outside world that we are really bringing our large borrow! ag policy to an end when the department which has been Its organ and symbol finally disappears, ESTIMATED EXPENDITURE TOR THJB TXAR 1888 9— ORDINARY REVENUE ACCOUNT. Tbe estimated ordinary expenditure Is £3,953.593. The estimated amount of interest which will be p»id during the year Is £1,838,539, being £72,872 more than the interest paid during the year 1837*88. land ycnm. The estimated expenditure ohargeable agalnat the Land Fund Is £107,245. Laat year the total expenditure was £158,474. Kates on Crown lands it is not Intended to oontlnue this year, exoept m spaoial oases where rights have arisen, TOTAL ESTIMATED EXfENDHUBB, The total estimated expenditure is therefore £4,060 838, being £3,953 593 against ordinary revenue, and £107,245 against the Land Fund. No provision was made for schools and other public buildings, and for subsidies to looal bodies but he would presently submit tbe Government proposals for these, ESTIMATED RESULTS OF THE TEAR 1888-89. Our total estimated revenue is, from all sources, £4,016,400, and the estimated expenditure being £4,060,838, leaves a deficit of £44,438 on the whole revenue; but as the land fund Is estimated no give a small surplus of £11,755, and as we do not now qse any eqrplqs land fund $3 ordinary revenue; we have to provide a sum of £56,193 to make our ordinary expenditure and revenue balanoe. m addition to the amount required for school and other public buildings and for subsidies to local bodies. The amount which the Government estimate will be required for expenditure On public buildings from revenue for the year is £60.000, being £30.000 for school buildings. £17.000 for the general post' office, and £13,000 for other buildings. This added to the estimated defioit of the ordinary revenue, and Including £30,000 subsidies to local bodies, to be referred to presently, makes the total amount to be provided £143,193, if no farther redactions are thought prudent. Before ohowfng how the Government thonght the amount should be raised he would refei to the question of SUBSIDIES TO LOPAZ. BODIK/J. . The Government after c&refal oonr slderatlon had come to the conclusion that the payment of subsidies mast be continued, or the work of focal bodies will be praotioally paralysed, causing serious, inconvenience throughout the gountrp districts, but they thought that the colony should dearly understand that continued pa j ment means additional taxation. The Government are aleo of opinion that If the payment is continued a speolal tax or a portion of tax should be set apart foe subsidies, and that the amount raised should be divided amongst the looal bodies on the same plan as is now m foroe. It was also desirable that the tax set apart should be one which will Increase with the increase of population. They there* fore propose that the tax on tea should be increased by 2d per lb, and that one half of the whole doty received from tea shall be set aside and devoted to the payment of theae subsidies. Through speculative clearances and two months of the year ' having passed, the estimated produce of the tax for thts year with" tne additional duty added will only be £114,000, and one-half of this will be £57,000. This amount will not be enough to pay a subsidy of five shillings In the pound for the current year, and he would askaqthoi'Uy to provide the bilanga this year from general revenue, TARIPP. He now came to the question as to how the £146,193 whiob he had shewn to be wanting could best be raised. After muoh | oareful deliberation the Government have determined to aßk authority to raise the amount reqalred by an increase In the Customs duties, as being, on the whole, the beßt course m the general interests of the community. The Government thought that the sum required should be raised by an increase of a general oharaoter, and recognising the fact that a feeetrade tariff and a prohibition tariff are equally Incompatible with the amount whlph they must raise, and admitting what must be a,d.« mlt'ed that the' imposition 'of heavj Customs duties necfesa&eily affaots tt|e course of trade and industry, they i}»?a
endeavored, while making tbelr first object, bo to adjust the proposed dalles aa to assist our local manufacturers without any more pressure oa the consumer thin is inevitable if they were to raiee by . Customs duties a yearly Bum of not lew than £1,450,000 for the purposes of ordinary, revenue, and it did not ■eem to him that they could prudently reckon to do with less than that uum from the Oaatoms for some years to cms, when they looked at the total amount of revenue which must be raised, and at the other souroes of revenue open to them It was proposed to raise a large number of urticleß from 15 per cent to 20 per ceDt ad valorem, and some to 25 per cent, and to increase specific duties m many oases proportionately, due regard being given m both classes to the requirements of the colony and the conflicting interests involved. Some artioles had been added to the free list and some removed which experience had taught , should not be free. The total amount which those duties will raise is estimated at £173,000. He might point out that £35,000 of this taxation would not be necessary if Parliament saw fit to raise the school age at which capitation is payable to six years instead of five as at present, and to abolish the Education Boards. He felt it- his duty to point out where another £25,000 a year oould be •a red without any injury whatever to oar educational system ; and he asked hon. members again to consider whether the colony can at present afford so large a sum to provide what is 1 ttle more than nurcery accommodation. RXDSMPTIOir OF DKBBNTURJSS ISSUED 10 PAY OIF DEFICIENCY. Last session he pointed out that the - colony was benefittlng to the extent of •bout £40,000 a year by the creation of debentures for the full amount pf the accretions of the sinking fund, and "he r proposed to sat this turn wide yearly to ' pay off the £400,000 4 par cent debentures issued last year to pay off the deficiency. To do so this year would be putting too great a strain upon the taxpayers, but there is a sum or £70,000 known «■ the auuranoe fund under the Land Transfer Act which the Government thought may wisely be applied to the payment of » part of the £400,000 just referred to. T3EB LIABILITY Or THE OOLONT — VKRUBEV LOANS. The errov whloh occurred m the nineteenth section of the Loan Aot of last session rendered it Impossible to float that loan m London until the Aot was amended, and it also raised some doubt of the wisdom of placing the" North Island trunk loan upon the 'market until after the amendment had been made. He had however made satisfactory arrangement as follows Firstly, an agreement with the Colonial Bank of New Zealand for •a adrance of £400,000 at 5 pet cent for three years upon the security of £400,000 of 4 per oent debentures issued under the Fabllo Revenues Act No. 3 of last seuioD, to cover the estimated deficit Secondly, the advance obtained by the late Government from the Bank of New Zealand of £500,000 oponjjtbe security of £600,000 of tbe North Island Trunk Loan short-dated debentures, whioh fell due In April last, was 'renewed; till the 31st July next at the same rate of interest M waa charged on the [original advance, namely, 5 per oent for £400,000, and 6 per oent for £100,000. The only large payments we have to meet m London ■bortiy are £200,000 repayment of defioleucy bills, due m July, and the £600,000 short da*ed debentures of the North Island Tiuak Loan due on the 31st July next. post ornoß savings bank. As promised last session be had invested Post Office Savings Bank deposits to the extent of £200,000 m imperial guarantee debentures. It wasvery gratifying to find that the deposits and number of depositcra continue to increase, and thai even during the first three months of this year the inorease m the deposits had been £87,000 over the withdrawals, and the increase of the depositors 1781. The amount of deposits on credit la the Post Office Savings Bank on the 31st March, 1888, waa £1,861.337, and In the other Savings Banks, whlob are also guaranteed by the colony, was £600,967, making a gracd total of not less than £2,462,304 amongst 99,277 depositors. TJWYIBION FOB THE DEFICIT OF 1887-88. He had now to state now it is proposed to meet the £128,603 standing to our debit on the 31st March last. Their proposal was that a primage duty of one per cent be levied upon all goods imported into the colony, whether free or dutiable, for two years, and that the proceeds be applied to tbe payment of the £128,000. ThU duty, It is estimated, will yield about £6§,000 a year, and the small balance orer may be s&fely left to be met from the ordinary revenue. CROWN ISD NATIVE LANDS BATING AOT. It was the intention of Government to ask Parliament to repeal this Act. GENERAL SOMMABY OF PROPOSALS. To summarise the result of his proposals, it was found that after the reduotlon of the ordinary expenditure by £233,000 the expenditure which was deemed necessary is some £70,000 for the year more than ihe income from their present sources of revenue ; that to provide schools and publio buildings from revenue an additional £60,000 is required ; that to continue the subsidies to local bodies, and to pay them all from revenue, as must be done if they are to be paid at all, another £64,003 is necessary ; and that to pay the balance of last year's deficit of £128,000 a sum of £58,000 must be provided this year, and (;be balance the succeeding year. Adding then these several amounts together It vas found there is required— To balance revenue and expenditure ... ... ... £66,000 Tp provide for sphools and publio buildings , ... 60,000 To provide for subsidies , 64,000 Total ... £180,000 And £58,000 for two years on account of last year's deficit of £128,000. To provide the sum of £190,000 be proposed additional Oustoms duties, estimated to yield £207,000, If the estimate prove oorreot they would have a surplus of £17,000 so that the margin allowed is not too much. Lest year the property tax was Increased by £66.000, but no alterations were made m the Customs duties. He desired to call particular attention to the fmot that of this £180,000 now proposed to be raised by additional taxation, £107,000 is for subsidies and £16,00 D for defenoe. Hon. members would no doubt feel with the government that' the proposed additions to pur taxation are large; -but if, after consideration, it was found necessary to continue these things it is clear the money must be found. His endeavor had b'etra to place ear'y before the Committee wtiat tjielr real wants are j to point out what services are rendering the increased taxation necessary, and to show how the required} funds can be best provided. The matter Is now m the hands of the Committee. Ho had laid before it the material faots relating to the financial position of the colony as dearly, as folly, and as fairly as he oould. If the task had not been the pleasant one it would have been j if instead of providing for a deficit they had to dispose of a handsome surplus, they have the satisfaction of knowing that a searching examination of the material circumstances of the colony would, m spite of adverse facts, show beyond doubt . its substantial prosperity, and he was sure the Committee would agree m the opinion whloh he held strongly that one of the mxxefet means, at' least the necessary condition of increasing that prosperity, is by adhering firmly at whatever present inconvenience to the aober financial policy pflMtHUlon)
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Ashburton Guardian, Volume VII, Issue 1854, 30 May 1888, Page 2
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3,873FINANCIAL STATEMENT. Ashburton Guardian, Volume VII, Issue 1854, 30 May 1888, Page 2
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