THE COLONY'S FINANCES

Press, Volume LX, Issue 11508, 14 February 1903, Page 8

THE COLONY'S FINANCES

♦ A!N" INTERESTING INTERVIEW. (SPECIAL TO "Tin! PRESS.") WELLINGTON, February 13. In view of the telegram from London last. night ciating that New Zealand is placing it million and a quarter loan on the market thvrt, I took the opportunity this afternoon of interviewing Mr W. Fraser, M.H.R., on tlie subject of the revenue and expenditure of ».i« past year. Mr Fraser, a* is well known, is <-v very close student oi our finance, and he Jβ moreover a very fair critic, co any remarks he might have to nuike upon the actual position, so far lii it is disc!os-eJ, should be well worthy of consideration. I fuuri that Mr Fraser had 'already gone into the matter thoroughly. THE CONSOLIDATED FUND. Dealing first of all with the Consolidated Fund. Mr Fraser said the expenditure for the nine montlw of the- year ended 31st Decsmber la< t, -was £4,832,000, and the receipts £4,426X00, leaving a debit balance of £405.000. "From that," added Mr Fra-er, "you would have had to deduct £270,000. o:iy that £50,000 was paid from the Consolidated Fund to tbe Public Works Fund during tho September quarter. Therefore you have to deduct from the £406,000 only £220,000, which leaves a debit balance oh .December 31st of £186,000. "For the Martih quarter of 1902 the receipts exceeded the expenditure by £657.0C0. It is, therefore, fair to assume that in the present quarter of the current year there will be a similar nett excera of .receipts. From that, however, has to be deducted £150,000, still owing from the Consolidated Fund l to the Public Works Fund, which will leave a credit for this quarter of £507,0tw. The difference betwtn this and , the debit balance of £186,000 at 3lst December laet would give the ertimated surplus for the year, which would De £321,000. It is, therefore, fair to estimate that the credit balance at oist Mrxch, 1903, will be at least £320,000. ".So far this ie satisfactory, but what is net so satisfactory is that while receipts for the nine months have exceeded the receipts of the similar period' of the former y*iir by £152,000, the expenditure for the same period of uiis year Img increased by £157,000. Jt was admitted that during the last financial year there was abnormal expenditure owing to the Duke's visit and other causes, tyit it this understood that the abnormal, expenditure would not continue. Yet without any abnormal causes, it appears that the expenditure hae gone on increasing from the first nine months of tho year. The increases are:—lnterest and sinking fund/ £7000; under special Acts, £32,000; old age pensions, £11,000: Pcstmaster-General's Department, £27,000; Education Department, £27,000; working railways, £16,000; Defence Department, £97,000. Total, £282,000. Against this, however, there ure several small decreases, and n> decrease of £45,000 in the Colonial Secretary's Department, the latter being accounted for because of the absence oi -the abnormal causes that prevailed cTuring the previous year. Taking the total of these decreases, and placing them against the increases, we have, the. net increase of £157,0C0, as above etated. PUBLIC WORKS FUND. "In regard to the Public Works Fund, £518.600 was borrowed on short-dated debentures during the first nine months of the year, while some £99,000, the balance of the million loan of the previous year, also came to account. These amounts, together with the £50,000 received from the Consolidated Fund, make practically all the new money brought to account. Coming to the expenditure, we find that for the nine months of 1901-02 there wae spent on railways £1,014,878, whereas for the come period of thia year the expenditure was only £452,912, On roads the expenditure in 1901-02 (nine months) was £316,159, and for the sune period of the current year only £185,186. It, therefore, becomes "apparent that nothing like the amounts voted last session can be expended during the twelve months of the financial year, which closes oh the 31st March next. Further, it is quite unlikely that anything like the amounts voted can be spent, even up to the extended time of appropriation—viz., up to the 30th June next. The reason is only too evident. The Government eimply could not get the rponey. The Parliament and' the people had been told that they could afford to enap their flngere at the London money i lender, and that we could get plenty of money in tbe cokmy. The result has proved that we could not get even onethird of what was required during the first nine months, and now, instead of snapping our flngere at the London money lender, we are asking him to lend ua another million and a quarter. THE YEAR'S BORROWING. "The increases in the public debt for the first nine months of the current year were as follows: —Advances to Settlers Loan Account, £249,713; Lands for Settlementa, £76,800; Loane to Local Bodies Account, £127,500; Conversion Account (cay), £7000; Consols Account, £2700; State Coal Mines Act Account, £25,000. total, £488,713. To this 'has to be added the new loon money for public works—viz., £518,600, giving a total increase in our debt for those nine months of £1,007,313. Adding to these figures the new million and a quarter loan now on the market we get a sum of £2,257,313, which will be the increase in our indebtedness "for 'the current financial year to close on the 31st March next. But-this may not be all, for further debentures will probably be issued between now and tho 31st March, on account of the Advances to Settlers Loan Account, Land for Settlements Account, and 'Loans to Local Bodiea,Account. Wβ may, therefore, safely assume that at least two and a half millions will be added to our colonial debt during the financial year about to close. This is a pretty big sum, but the worst feature of it is that the money is not as wisely expended." "THE COST OF BORROWING. I asked Mr Fraser if he had gone into the question ot the cost of recent loans. Ho said he had. It coft £87,917 to raise the last million loan in London. "Last cession," said Mr Frassr, "I stated it would be found that we only received! £91 3s 4d for every £100 of tbnt loan. I find I was wrong. We got £91 45." "But," h« added, with a smite of satisfaction, "I was only •eightpence out." The loan was cold at £94, and -the expenses came to £2 16s, so that we onCy got £94 for every hundred." "What arrangements have been made regarding tbe loan just announced?" "I do not know. Probably it has already been underwritten."