THE FINANCIAL STATEMENT

Akaroa Mail and Banks Peninsula Advertiser, Volume VI, Issue 619, 20 June 1882, Page 2

THE FINANCIAL STATEMENT

The Colonial Tieasu»er delivered the Financial S t a;ement on Friday. The fo'lowhg is a tondensed siaiement. Af.er the pvel'm'na y seaieoces, the first subject spoken of was Expenditure of rras Ordinary EsvenOiS of ths Year 1831-82. The expenditure for the year under permanent Acs of i»e Geno'al Assembly wns es.hnaled at £1,570,919, including £1,499,318. for interest and sinking fundwhi'.e Hie amount voJed for depanmental services was £1,757,660. , I'he total eslunated sanctioned by Parliament was therefore, £3,328,579. Theociual erpeodnure was £3,278,820, being £49,759 less lhan the estimated amount. There are no items of this expenditure which appear to call for special rema-k. Tne outstanding liabiliiies on the 31st March, 18S2, amoan.ed to £164,394. At the close of the preceding financial year the amount was £165,524. I may inform the Committee that included in the liabiliiies on the 31st Ma»cli last is a sum of £24000 for sin ting fund to the 13th March 1882. Ordinary Usvgnue ov Year 1881-82. The estimated revenue of the year, exclusive of revenue derived i'ram the sales of land, was £3,297,650. and the actual amount paid into the public account was £3,488,170, being £190,520 in excess of estimate. Hon members will find on reference to the comparative return which will be appended to tins statement that we ■ aie indebted to the Customs revenue for the larger poriion of this excess, £125,107 having been received from that source. The revenue from stamp duties was £11,115 in excess of the estimate. The miscellaneous receipts also show an excess of £34,243, while from depasturing licenses, rents, etc., we obtained £56,852 more than we anticipa:ed. On the other hand, the amount derived from the property tax fell short of the estimate by £19,025. Of this sum £9270 has yet to come in. £2200 represents the amount esiimated to be received from building societies, which were afterwards rendered exempt, and £7556 is an over estimaie. The revenue from railways proved to be £25,266 less than estimated, bot hon members will gladly learn that the net receipts f'om railways, which were estimated at £364.744, amounted to £368,927, or £4183 more than estimated. Land Sales of the Year 1881 82. Following the course approved by Parliament in the session of 1830-81, a nepirate account dt the land sales has been kept. The expenditure charged against the fond during the year amounted to £338,076, including £136,861 for subsidies paid to j local bodies. The amount voted for departmental services chargeable on the land fund \vas £154,510, aod the amount actually expended L 17,213 lesa than voted. Tho liabilities outstanding on 31st March, 1882, were £25,188, as against £37,561 on 31st March, 1881. The receipts for the year from land sales were estimated at £333,000, and the amount actually received and paid into the public account was £317,063, of which was for lands sold for cash, and £;J4,927 cash instalments for sales on deferred payments. Adding to the receipts of the year the balance at credit of land fund account on 31st March, 1881, amounting to £32,373, . and deducting the expenditure, we have a balance of this account of £11,360 at credit on 31st March, 1882. Public Works Fund. The appropriations on this account for the year ended 31st Marcli last amounted to' £1,892,554. The actual expenditure, iiowever, was only £977,886, including £454,224 for railways. The liabilities outstanding at the close of the year amounted to £380,276. During the year special receipts and recoveries amounting to £42,378 came to the credit of this fund, and on the 31st March, 1882, the balance remaining unexpended, subject however to the liabilities I have just mentioned, was £924,865. consisting of cash in the Bank of. New Zealand, £647,646 ; advances in the hands of offioere of the Government, £60,319 ; debentures of the loan of 1870, guaranteed by the Imperial Government, £135,300; amount invested in debentures of the New Zealand Government, £44,000 ; and temporary advances made on certain other securities, £37,500. Balance at credit of the fund on 31st March, 1881, was £1,860,373, and on 31st March, 1882, it was £924,865. The extent to which it was diminished during the year was therefore £935.508. Honorable members will observe that there was suffioient money in hand on the 31al March, 188-2, to carry on public works without a brook or stoppage until about the end of next February, at the same 'rate with which they have been.prosecuted during last year. Included, in the liabilities of the Public Works Fund at the end of the year is the sum of £338,876, for the purchase of Native Lands. Public Debt. The gros3 public debt of the colony on the 31st of March, 1-81, amounted to £29,165,511, subject. to a deduction of £2,057,242 for accrued sinking funds. On the 31st of March, 1882, the debt was £29,946,711, and the sinking funds had increased to £2,266,418, the not debt beinj,' thus £27,680,203, or £572,024 more than it was the previous year. This, increase of debt is thus explained. Of the Treasury bills, which on 31st March, 1881, formed a portion of the public works fund, sales to tne amount of £431.300 have taken place. These bills had been taken up in 1880, with money standing to the credit of that fund, as there was then a large balance not wanted for immediate expenditure requiring temporary investment. They have now been sold, and the proceeds paid into tne public works fund, as money was required for the works authorised by Parliament. The debt has also, been increased during, the year by further advances, amounting to £364,700, obtained in London on the security of the

lebenturesoi the loaa of 1870, guaranteed >y the Imperial Gove-nmeot. Savings Bβ NK3 and- ©ovisbnment INfeGP.ANCE DEPARTMENT. In 1871, wttii a population of 266,986, ;he amount at the ctedifl of the >pen accounts in the Government Savings Bank was £357,65-1. These accounts were 10,549 in number, and average aitiQii'nt at tl># credit of each was- £33 18« Id. In. the Savings Banks established, under tho. Savings Bank Act!. 1858, the total amount at the credit of depositors on the 31et December. 187.1, was £97,312, distributed over 3726 the averageamount at their credit being £26 2s 4<L There was thus a total sum of £454,961 in the Savings Banks in 1811! at the credit of 14,275 persons, the average amount for each being £31 17s sd. On the- 31st December, 1881, the population oil. the colony was 500,910; there- were SI.OOS open account&in the Government Snvitoga Banks, aggregating the- amount off £1,232,788, or an average ©I £24 3s M at , , the creait of each. In ether Saving* B'aoke there were on the- same' date,, 10,046 open accounts, the total amount at ciedit being £316,727, or an averagie of £31 17s Id for each acconnt. The- total amount of deposits in the Savings Bhnks in the colonyat, the end of the year 1881 was, therefore,. £1,54.9,515. belonging to 61,054 depositors, with an average of £25 7s 7d at the credit of cad*, as • against in 1871, and 14;27fr. depositors, with an average of £31 17s--sd, the population during the ten yoars-imerven-'ng having increased from 266,986-------to 500,910. LIFE ASSURANCE. The business of the- Life Assurance department in the first ten years of it& existence produced a profit of £77,000, asshown by the valuation report of theLondon actuaries, which was laid beforeParliament last session. The business* done has increased from 463 policies issued up to June, 1871, insuring £206,000, to & total of 16,900 policies, issued during theeleven years ending- Jone, 1881. insuring upwards of £5,800.000, being equnl to arv annual average of 1500 policies, insuring fully half a million each year during the period. The business of the year now approaching its close will, I amiinformerd r considerably exceed that average, and probably reach £600,000; The growth of the assurance fund is not less satisfactory than has been the progress of tho annual business. From a sum of £5000 in hand in June, 1871. the accumulated fund byJune, 1881, has expanded to over £557,000 r and now it has leached nearly £650,000. Agreeably t& the wishes of Parliament, as expressed last session, an industrial branch, enabling persons to insore their lives for sums ranging from £3 and upwards, by means of weekly payments, was opened in the early part of March last. During: the thirteen weeks which have since elapsed, 2100 industrial policies have been issued. The average amount insured for I all ages is about £25 per policy ; for adult Uvea about £55. ~ Financial Results of the Year 1881-82. The Cointniitee will remembeir that Parliament finally determined in the session of 1881 that in future the revenue of theyear should be (he actual receipts .paid into-, the Treasury during the yearj arid that tfie year's expenditure should be , the actual money paid nway during the year. Hon.. members will rind, on referring, to the? Financial Statement which I had the honor to make Inst year, that, excluding the land sales from the Consolidated Fund, therewa* b di-firit on the 31st March, 1881, of £5667, but that, including the land there wan a surplus balance of £26,706 to the credit of the Colony upon the actual transactions completed within the year. As I have stated already,, the ordinary revenue of the Consolidated Fund for thepast year amounted to £3.488,170, and! the expenditure to £3,278,820 The ordinary revenue, therefore, exceeded the expenditure by and deducting from this Btuu the deficit of She previous yenr of £5667, we havo a credit balance o§ £203,693 at the close of the financial year 1881-82 on this division of account. Tha Colony now no longer relies upon the land* sales in any way as a means of obtaining: revenue to meet the ordinary services of the Government, and hue thus removed one condition which mnde sound finance? impossible. We find, then, that the totafi moneys received and paid into the public account during the year including land sales, was £3,806,233. and the total expen diture, including'charges on the Land Sales Act, £3,616,895*. The receipta were thus* £188,338 in excess of the expenditure,, and, adeing to this sum the surplue at the close of the year 1880-81, £26,706, we find that we h >ye a credit balance on the 31st March, 1882, of £215,044. Local Finance. The question of local finance has beent again carefully considered during the recess, and the Government have thought it advisable to issue a circular to local bodiesasking for their opinion ®pon the subject, and also upon tome important questions* relating to the constitution of the County Councils and Road Boards. 2 shall shortly ask leave to introduce Bills t& give effecft to..such alterations as the government think necessary in the censtitßtson of th.esej highly useful local bodies,/ atsd also to make sufficient pro vhuco for their financial requirements. I rto not propose to trouble the Committee will* any particeSareof the proposed Bills, ac it will be mor& convenient to do so 'when the Bills ti»iu> S'lvedafe under consideration. I might,, however, say that the piinciples which the, Government have taken for their guidance in preparing these measures are :—(1) That the local bodies should be left as fre& as possible from central control,, (2) that they should have conferred upon them all powers which can be advantageously exercised by such bodies; (3) that their finances should be as distinct as possible from the Colonial finances, and that thefor revenues should be sufficient. The necessity of dealing with this subject during the present session is admitted upon all sides. The question is not one which should be treated as a party question and I venture to hope that the Government will receive the hearty support, of both sides of the House in providing the 3ountry districts with means of performing the important duties which have seen imposed upon them of making and maintaining a large proportion of the *oads of the colony. Estimated Expenditure prom Ordinary Revenue, .1882 83. The permanent charges, amounting to £1,627,512, include pensions, payments mder the civil list, and other acts, and ;he large, item oi interest and einkiog iund,. which this year will amount to £1,554,848. Included in this, however, a the sum of £24,000 due for arrears of

sinking fund upon the Imperial guarantee loan of £1,000,000 of 1870, to which I have already referred. The total present annual charge upon our debt is therefore £1,530,848, nnd not £1,554,848, as might be supposed from a casual inspection of the accounts without this explanation. It must also be borne in nn'nd that qf tin's £1,554,848 no less a sum than £270,000, or nearly one-sixib, is for sinking fund. In other words, we shall pay Ibis year £1,284,848 for interest, and £270,000 for redemption of debt. The esiimaled annual appropriation for ibis year amounts to £1,851,127. Tin's chows an apparent ince.ue upon last year's votes 0££93,468. I say apparent, because the services for which a large portion of this extra £93,468 is required were paid for last year out of loan. Honorable tnem wi'l fiod, on referring to the _ public accounts, that the votes for militia and volunteers and police and constabulary for last year charged" agnitist the coneoHJated- fucds were only £142,015, whereas they are-this year L 214.009; a difference a£< 1/71,994, which pteviously was paid out of Joan. Of the balance of L 21,474,1/10,000 is for abatement, of the rabbit nuisance, which , last year was provided .for.' in the Jand fund estimates. The remainder may be said to be comprised chiefly df increased charges for wo'king some newly opened sections of railways, etc. Estimated Eevenue jtob Year 1882-83. With the propeiuy <ax at one half- , penoy in the £, we shall receive a tolu! oidinary revenue of L 3,393,500, exclusive of Jand sales. To this must be ! added the balance of L 203,683, which e : ood Jo our credit on 31st Match, and we then get the cum of L 3.597,183 as the total amount available for the sei vices of tire yea' , . Now, if from this we take L 3,478,639, the estimated expenditure to which 1 have already referred, theie will remain a balance of L 118,544 at the end of the , current Bnancial year. The'fotal public and known private expenditure upon hospitals and in charity last year waein round numbers LBB,OOO, and for practical purposes W3 may aseume that an equal amount will be required this year. Tliis earn was made up by a contribution from the consolidated fund of L 29,000 [ stoppages from subsidies from I oca bodies,'L37,ooo; contributions from local' Boards and from the public, L 22.000. The piesent system, or want of system, I ought rather to cay, of providing the necessary finds is irritating and unfair io most, if not all, parlies concerned in the charitable adminieliation of the colony. I propose to submit a scheme of national assurance for the consideration of ihe House, which I be'ieve to be thoroughly practicable, within the means of our people, and which wou'd make necessary provision for the sick, the widow and orphan, and the aged. The Government propose, pending further consideration of this subject, to take the whole cost of hospitals upon the consolidated fund. We have now only a suiplua of L 88,544 as a margin—after making the temporary provision I have just proposed for the services of the year, which ore not of a permanent character, amounting.' to about LIOO.OOQ. With such a sue plus we might, if wo did not intend, as'we do, to go upon the London money mat ket early next year for a further loan to continue our public works scheme, safely reduce taxation by at least L 50,000. "But taking all the cii'cumstances of the case inio consideration, I do not think it would be prudent'to reduce taxation at present. Estimated Expenditure and Revenue fbou Land Sales, 1882-1863. The estimated expenditure chargeable agninst the land sales fund is as follows : —For charges fixed by Acts of the General Assembly, L 41.500; for the Crown Land, Survey, and Mines departments, L 163,810. The receipts from land sales are estimated to reach L 354,000 far the current year. Adding to this sum the balance at the beginning of the year LI 1,360, and deducting the estimated expenditure L 195,310, we have a balance remaining of L 170,050. The question of the disposal of this balance must be postponed for the present, until the Legislature has determined what form of aid shall be given to local government bodies. Local Inscribed Stock. It will be in the recollection of some members that last year I intimated to the House the intention of the Government to submit for consideration a Bill authorising the issue at par of a loan of £250,000, the principal and interest of which would be payable in New Zealand only. I propose, as before, that the Joan shall bear interest at a rate notexceeding s'per cent., and that the proceeds eh all be paid into the public works fund, to be appropriated by Parliament. I also propose that the loan shall be issued in the form of inscribed stock, with the right to the subscriber to obtain at any time when desired bonds payable to bearer of £10 and upwards. INCIDENCE OF TAXATION. I should now like, Mr Hamlin, with the permission of the Committee,, to say a few words, about a question which I think isivetl 'worthy of pur', attention at the present,!namely, jtheincidence of pnr taxation. Does our .present taxation press unfairly upon a particular class, and especially upon that class which js the leant able to tear it? Because, if co, although we might not be able to reduce the total amount, we might be called upon to shift the burden from weak to stronger shoulders. I have, Mr Hamlin, been looking into this question of the incidence of. taxation, in order to ascertain the amount borne by the different classes, so that re lief might be given if necessary, to those upon whom the taxes appeared to press the moet heavily. I find that the industrial class, consisting of 312,436 souls, exclusive of 11,903 domestic female servants, pay5L269,751, being at the rate of 17s 3d per head, or including the drapery duties paid by these domestic servants, L 280.062. The intermediate class, consisting of 96,260 souls, pays L 256.272, or L 2 13s, 3d per head; and | the property class, consisting of 68,445 j souls, pays L 439,819, bein& at the rate of L 6 8s 6d per head ; that is with the property tax at one penny. But if we take that tax at one hall penny they pay L 310.719, or at the rate of L 4 10a 10±d per head. These amounts are, as I have already said, exclusive of the duties upon spirits, wine, tobacco, colonial beer, and do not include for obvious reasons that part of our so-called taxation which is paid for by each class in proportion to use for services rendered by the Stale, such *s post office, telegraph, court fees, &c. I will express the hope that this question will receive the careful attention of hop.

' members and of all interested in the public welfaie throughout the colony, _ so that when our financial position permits, we may deal with the subject on broad and intelligible principles. Proposed Loan. I have now, Mr Hamlin, only one more subject to deal wi'.h. But although last, it is by no means least is itnpoi lance, I lefer of course to the question of a new loan. We have first to consider whether a new loan is advisable this year: and secondly, if the fitst question is answered in the affirmative, how much w'll it be desirable io borrow. Now, with regard to the first question, we must, in order '>o auive ot a reasonable conclusion; consider the state of the public works fund, and the amount we can prudently expend per annum. I have already said the balance in the public works fund nn the 31st March last was L 924,865, with outstanding , liabilities at that date of L 541.400, exclusive of liabilities on the land purchase account, for which we must add at least LIOO,OOO ; bo that in addition to the L 541,400 which is in course of expenditure under existing contracts and authorities, there only remained in hand at tlie beginning of the financial year abont L 283,465 for the continuation of the works already begun, and for new works for which liabilities have not been incurred or appropriations made. The question then narrows itself to this : Is it prudent at this present; time, and under the present circumstances of the colony, to borrow again, or ought we to be satisfied with a total expenditure of L 934,865 in the twenty-one months commencing with the current financial year r . Sir the Government think that our ordinary finance being restored to a satisfactory condition, and our main t'-unk line of railway being still incomplete, it is now prudem to raise a ftesh loan for the purpose of completing these railways, or carrying them a stage nearer to completion, and for certain other definite and important public works. In this opinion the Government are strengthened by the fact that railways already made are now paying practically 4 per cent; annually on the amount expended in their construction, and that they are steadily improving in this respect. The Government, therefore, sir, recommend that a loan should be raised, but only if the money can be borrowed at a reasonable rate of interest. It is, in the opinion of the Government, of great importance that the colony should steadily pursue a piogresslve policy, and that our main trunk lines shonld be pushed on as vigoursly as is compatible with the means at disposal. The Government, then, taking into consideration all the circumstances of the colony, and acting upon the principles which I have just laid down, have determined, sir, to propose to Parliament a loan of £3,000,000, to be raised and expended at a rate not exceeding £1,000.000 per annum.