FINANCIAL STATEMENT.

Clutha Leader, Volume IV, Issue 160, 3 August 1877, Page 6

FINANCIAL STATEMENT.

, — o . The Colonial Treasurer (the Hon. Major Atkinson), made his Financial Statement on Tuesday evening*. The hon. member soid that it was true we had reached that point in the scheme of Public Works and Immigration, when THE REVENUE WAS SUFFERING TO THE GREATEST EXTENT POSSIBLE from the large unproductive expenditure upon railways in course of construction. It was also true that there existed a feeling of uneasiness, amounting in some quarters to anxiety, because of the belief that the services of the year could not be provided for except by increased taxation. Knowing the strong desire that therefore arose for early information, he had taken the first opportunity afforded by the rules of the House to state the financial policy of the Government. He meant in his Statement to direct attention to broad features only.- The details would be found in the usual tables. He would first describe what had been done under tho Loan Act of last session, which authorised TUB RAISHvO OF ONE MILLION For defined purposes. When authority was asked for, he stated his belief that the money could be raised in the Colonies, and th it if so the Government would gladly avoid going upon the London market for a year. That belief had been realised. His colleague, Mr M'Lean., had negotiated at Sydney with the Bank of J\'ew South Wales, for an advance of half a million, secured upon short dated debentures, bearing 5 per cent, interest, payable half-yearly in Wellington, and one half per cent, commission, principal repayable in London in three equal instalments at intervals of one month, the first instalment falling due on Ist December, 1878. From the Bank of New Zealand they had obtained L 500.000 secured upon short dated debentures, bearing 5 per cent, interest, payable half-yearly in Wellington, principal repayable in London upon the 15th February, 1879. A further arrangement with the Bank of Mew Zealand had also been made, by which, under the Bank's agreement, an advance of L 400,000 could be obtained upon remittabie securities, instead of L 300,000, making the total advance under that arrangement L 500,000, and fixing the 15th February, 1879, for the repayment of all such advances. The appropriations last session for I-MMIGRATIO-itf AND PUBT.TC WORKS amounted t© L 2,032,286. There had been expended up to June SOth, L 1,480,6 17, so that there had been a savin °* of L 551,688 during the year on the amount voted. The votes on which THE LARGEST SAVINGS HAD BEEN MADE were Railways, on which the expenditure had been L 333,000 less than the estimate ; water supply on Goldfields, LGI,OOO less ; land purchase, North Island, L 40,000 less, and roads, L 30,000 less ; the othor savings included L 22,000 on Immigration, and about the same amount on Public buildings j L 28,000 on Lighthouses, and Ll 2,000 on Telegraph extension. TakTHE PUBLIC WORKS ACCOUNT AS A WHOLE the ways and means had been L1i, 500,000 from loan?, including L 750,000 out of the Loan of 1876, and L 340,620 from receipts in aid, including L 264,657 from stamp duties. Up to December last there was thus a total of Ll 1,840,620 of ways and means. The expenditure up to June 30 amounted to L10,860,43L, so there was on that date a balance of LOS, 189. The principal items of the expenditure had been — Railways, L 6,129,920;, 129,920; Immigration (includinglocatiun), L 1,517,809;, 517,809; Roads, L 894,071 j Land Purchases, Worth Island, L 533,500; Water Supply on Goldfields. L 405,063. The charges of. raising the loans had amounted to L 498,532, and interest and sinking fund represented L 218,500. Of the balance of L 986,189 there would be required L 645,957 for works under contract or about to be let. It was proposed

TO ASK FOR APPROPRIATIONS amounting to about L 1,274,676,, 274,676, and il this were granted, additional ways and means amounting t0ab0utL990,443 would be required for this account during the year. Next as to PROVINCIAL LIABILITIES. Treasury bills for Ll 10,000 had been issued under the power given by the Appropriation Act of last year, and the proceeds had been applied in terms of that Act in making advances to the Provincial Districts of Auckland, Wellington, and West Coast. Out of the 1876 loan a quarter of a million was appropriated to meet Provincial liabilities falling due between Ist January and 20th June. There had been transferred to the several Provincial liabilities accounts for that purpose L 237,500, leaving L 12,500 to defray the appropriation of the cost of raising the loan, the balance being applicable to outstanding liabilities. Taking the PROVINCIAL LIABILITIES ACCOUNT as a whole, the receipts up to June 30 had been L620,Q51, and there was a balance of L 45,888 to be applied. The Government regarded the compensation to Provincial officers whose services had been dispensed with as being properly Provincial liabilities; the amount so paid would, therefore, be included in a statement of unauthorised expenditnre, which the House would be asked to cover by a vote. Before concluding this part ot my subject (continued the Colonial Treasurer)', the Committee will perhaps allow me to say a few words about OUR. PUBLIC DEBT The gross public debt of the Colony, General and Provincial, including Treasury bills, when the balances of [ail loans now authorised are raised, will be L 20,895,311, As against this debt, we have a balance of L 980,189 13s Id at .credit of the Public Works Account on 30th June; L 35,416 18s 9d at credit of the Defence Loan Account ; and Accrued Sinking Fund, amounting to L 1,353,563 2s lOd. OUR TOTAL REVENUE FOR LAST YEAR was L 3,061,594 10s 4d, and excluding land sales, L 2,171,059 13s; that is, after setting apart that portion of our income derived from the sale of land which, in most colonies, is called revenue. Our net puMie debt is eight and a half times our revenue ; or, if we include our income from land sales, our public debt is equal to six times our revenue, while the public debt of Great Britain is more than ten times* the amount of her revenue. This seems to me a far fairer way of comparing our indebtedness than at so much perhead of the population. It should, moreover, be remembered that tbe public debt of England has been incurred for war purposes, while that of New Zealand has mainly been incurred for reproductive works. 1 1 may perhaps be in teres tino* j to state the PURPOSES FOR WHICH THE SEVERAL LOANS, General and Provincial, which constitute our National Debt, have been raised, and the amount applied to each. I have ascertained by an examination of the several Loan Acts, that those purposes and amounts may be classified thus:— About L 8,300,000, 300,000 has been spent upon railways, L 3,500,000 on immigration, L 4,400,000 on harbours, lighthouses, public buildings, roads, and other public works for opening up the country ; L 1,300,000 in the purchase of Native lands, including* the payment of debt to the New Zealand Company ; L 2,000,000 in the suppression of the Native outbreak; and the remaining L 500,000 on miscellaneous purposes. 1876-77. The expenditure for 1876-77, as authorised by Parliament, exclusive of that for railway, was L 1,858,467,, 858,467, and there bad been a saving of Ll 94,084 from the votes. The amalgamation of the ARMED CONSTABULARY WITH THE POLICE FORCE of the Colony had enabled a considerable reduction to be made in the cost of those services ; but owing to the necessity of paying a bonus to the men discharged, the saving for the six months amounted only to about LIO,OOO. The Estimates oi EXPENDITURE ON RAILWAYS, and the revenue from them during the year, were necessarily contingent upon the progress of works, and therefore the item had been omitted. He last session estimated a profit of L 84,000, .the receipts being set down at L 354.000, and the expenditure at L 260,778, but i* was a fact upon which the Colony mm*ht congratulate itself that THE PROFITS FROM RAILWAYS had been L 87,924 during the year, the receipts having been L 5 16 ,220, and the expenditure L 928,295. He would now refer to THE CONSOLIDATED REVENUE. His estimate was that the surplus with which to begin 1867-77 would be L 50.052, hut it had proved to be L 61,027. The total receipts under tbis head were estimated at L 1,671,850,, 671, 850, bufc they had reached L 1,614,583, 614,583 only. The Customs revenue showed a deficiency of L40',621. The Postal revenue appeared to have fallen L 9452 below the estimate, but sums amounting to L 15,923 had to be received from the Imperial and Australian Governments, so that the seeming deficiency would be converted into an excess of more than L6OOO. In incidental receipts there was a deficiency of L 18,447. To the | L 1,614,582, 614,582 received in the Consoli- | dated Fund he added, first, the profits

on the railways (L 87,924), theLlo,ooo transferred from the State Forests Account, the two per cent, recovered from the Land Fund under tho. Financial Arrangements Act (amounting- to L 71,997), the surplus at tho beginning of the year (L 61,027), and the assets yet to be realised. These made a total of L 1,882,249., 882,249. The total revenue for the year as estimated amounted to L 9,1*1-6,909,, 1*1-6,909, or, exclusive of railways, to L 1,801,902, to which must be added the estimated profit on the railways, L 84,244, making*, as estimated, RECEIPTS FOR THE YEAR, L1, 8(36, 144, while the actual receipts were L 1,882,249,, 882,249, being* L 3895 less than the estimate. The TRANSACTIONS OF THE YEAR might be summarised thus: — Actual expenditure, including* liabilities, L 2,024,572 ; actual revenue, including* realisable assets, L 9,172,892 ; leaving a balance of L 248.220 as a surplus with which to beg-in 1877-78. Comparing 1876-77 with 187D-76, the falling* off in the Customs revenue was but small, and notwithstanding* it, the revenue of the Consolidated fund, including- re venue assets ofthe year, showed an increase of L 238,276. The receipts from the Land Fund during* the year (exclusive of g-old duty) were L 1,039,242, or L 419,000 more thau than the average for the preceding seven years. Since the Ist of January (said the Colonial Treasurer), when the Financial Arrangements Act came into force, the receipts have been L 544,454. The estimate was L 322,610, so that the estimate was exceeded by L 221,88 4; but I regret to say that, although there is a very large increase on the whole, the deficiency is larger than was provided by the Financial Arrangements Act. The sales in Canterbury show an enormous excess, while those in Auckland, Taranaki, Hawkes Bay, Nelson, and Otngo have proved to be less by L 83,000 than the sum estimated. In consequence of this, the whole of the Treasury Bills authorised under the Financial Arrangements Ace, amounting to L 13,000, have been issued, and an additional sum of L 53,005 has had to be advanced from the Consolidated Fund in aid of the Land Fund. The business done by the POST-OFFICE SAVINGS BANK has been satisfactory, and the deposits remaining on June' 30 were L 720,000. The year's transactions in tho ANNUITY ASSURANCE DEPARTMENT have been most satisfactory to all connected with the department; but as it was intended to bring in a Bill to establish a Board of Management, instead of leaving the direction in the hands of a Commissioner, he would not trouble the Committee with remarks or details. THE PROPOSED TOTAL -EXPENDITURE for the year 1877-8 was L 3,109,754., 109,754. The cost of most of the departments had been reduced thro ugh am alga ma tion and simplification, although the work bad in many cases nearly doubled. 13 nder the head Public Works Departments, the sum of L30,C00 was included for HOSPITAL AND CHARITABLE AID. This was meant to provide the subsidies, which would probably be payable under the Charitable Institutions Account. Authority would be asked to deduct from the subsidies to Counties, Boroughs, aud Road Boards a sufficient sum to maintain hospitals for the charitable in districts which declined to adopt the Act, or in which it proved insufficient. The House had already been informed of the provision meant to be made for education; The large increase of L 10,983 had been found necessary in the vote for MILITIA AND VOLUNTEERS, but it was chiefly on account of stores and ammunition and capitation for an increased number of Volunteers. The saving* effected by the amalgamation of THE "POLICE AND ARMED CONSTABULARY was equal to L 38,000 a year. Referring next to WAYS AND MEANS FOR TUE CURRENT YEAR, the Colonial Treasurer said : As I have first shown, we have to provide for an aggregate expenditure of L,4109,754 ls 9d for the year. Of this, L 2,394,546 12s 9d is chargeable upon the Consolidated Fund; on the gold revenue, L 72,000, and 1,643,208 upon the Land Fund, being such charges only as each fund should support. Now if all the charges placed upon the Land Fund of -each district could be recovered, the Consolidated Fund would be in a position to bear its legitimate burdens v/ithout difficulty. As a matter of met, however, I do not think that more than L 500.000 of that sura will be practically recoverable, the Land Fund in certain districts being insufficient to meet its liabilities. It will therefore be necessary to supplement the Consolidated Revenue, or to relieve it of some of the charges I have proposed it shall bear. I dismiss, as altogether undesirable, the plan ot charging such services as Police aDd Education upon the Land Fund of those districts which are able to bear them — they are charges which, in the opinion of the Government, should be borne upon the Consolidated Fun.i, aided, if necessary, by local rates. If the Committee agree with me that it would be undesirable to charge against the Land Fund any of the servTces I have proposed to place upon the Consolidated Fund, it follows that the only course open to us is to increase that fund up fco our requirements. I take it for granted that we must, at any rate, temporarily aid the Consolidated ''Fund' and the question is, how is this to be

"•"■"•a 01 '"***-* 31 "*"^^ rlnir done. For my own part, I am very loath to open the question of taxation at present. Our liabilities being what they are, the subject of taxation is not likely to bo touched. When our trunkrailways are approaching completion, when we have had time to consolidate and settle down, and are able to determine our real requirements, then the whole incidence of taxation must be considered. I SHALL NOT PROPOSE ADDITIONAL TAXATION this year, and I venture to hope that additional taxation may be altogether avoided if we obtain from our railways that income which seems now assured, and if we are successful in the inscription of our stock. But here it is necessary that I should recal the attention of the hon. members to two principles which have been clearly recognised as underlying all our legislation relating to waste lands and immigration and public works. These two principles are : First, that the LAND FUND SHALL BE LOCALISED. Second, that the cost of immigration, roads, and railways is a proper charge against the Land Fund. These principles have been constantly recognised, and though it is true that they have not been continually acted upon, yet the recognition of them crops up in our legislation at almost every turn. By the Provincial Governments and Legislatures which have hitherto had the practical control of the land revenue, the second of these principles has always been acted upon. The meaning which I attach to the term localisation of Land Fund is that the money received from tho sale of the Crown lands within a district shall be spent in opening up and peopling that district. Most hon. members will go with me so far— at any rate, those who will, like myself, think that the proceeds of the land should be applied to the end that those who pay fche most receive the greatest facilities for occupation, and that to treat the Land Fund as ordinary revenue is thoroughly bad in principle. Some few will probably try to go even further. But, Sir, further than this in localisation I am not prepared to go, for when the money has been spent in opening* and peopling the district, the object of localiaation is accomplished. Our duty to the land is fulfilled, and therefore my opinion of localisation ends. Holding, then, a& 1 do, the opinion that with the proceeds of the land it is the duty of the State to open and settle the land, it seems to me not only no violation of the principle of localisation, but merely an extension of it, to say that it the State finds the money beforehand for that purpose, such an expenditure should bo made a charge against the Land Fund, and thafc it is in accordance with the principle of localisation to charge against the Land Fund of each district any sum not exceeding the amount expended within that district. in any way which Parliament may determine is the most convenient. Now there has been raised for railways and immigration, a sum in round numbers of L 9,500,000, the whole of which, is fairly A LIABILITY OE THE LAND FUND. The annual charge ou this sum for interest and sinking fund is about L 485,000. Out of this sum there had been expended up to the 31st December, 1876, the day on which the accounts of the late Provinces were closed, a net sum of L 7,183,240. The Colony had paid interest thereon to the amount of L 555,483, but has only recovered from the Provinces L 60,443, so that on account of Land Fund the Consolidated Fund has actually paid L 655 ,139. We recognise that, at the present moment, the refund of these charges is beyond the immediate power of the less wealthy districts, but as respects the Provincial districts of Canterbury and Ota°*o, no such argument can be urged, and we propose to CHARGE THE LAND FUND OF CANTERBURY with a sum of L 58,000, and j THAT OF OTAGO with a sum of L 109,000, being in each ease one moiety ofthe amount by which the land fund of those districts has been aided. With the exception of a small permanent charge, the charge of 2 per cent, for railways, the subsidies payable to Counties and Road Boards, and tho cost of surveys and administration, tho land revenue of Canterbury is absolutely free, and in view of the fact that a sum of L 200,000 of surplus land fund has been distributed within the district during the past six months, and that a further sum of LIOO,OOO is now ready for distribution, we propose to deduct her contribution from the sum in hand. THE CASE OF OTAGO is somewhat different. The district has a very large estate, though it is burdened now with leases just expiring, and which it would bo a waste of public money now to cancel. We propose, therefore, to raise the amount required to meet its contribution, together with the sum of L 36,000 advanced last year in aid of the district Land Fund, treating* the debt as Provincial liability, and making the interest and sinking fund a permanent charge upon its future Land Fund. The whole Land Fund of the Otago district for the year will then be free, excepting only the 2 per cent, under the Financial Arrangements Act, the interest on its Provincial debentures, the cost of surveys, and land administration. The relief to the Land Fund under the proposals of the Government is yery considerable.

*"""* "'" " -j" 1 ' —-^J IN THIS SOUTHERN PROVINCES, EDUCATION was almost entirely borne upon the Land Fund under the Provincia' system, and considering that the whole cost of building and maintenance of schools of Police, of Gaols, of Lunatic Asylums is now borne upon the Consolidated Fund, I do not think thut the inhabitants of Canterbury und Otago will consider the proposition I have made unreasonable. The estimated total revenue for 1877-78 wa? L 3,3 92,685 This total comprised L 2,263,160 of consolidated revenue, L 167,000 of refunds from Otago and Canterbury land funds, L 72,000 goldfields revenue and gold duty, and L 890,525 from land sales, licenses, and rents ; and the Customs revenue was put down at the amount yielded last year, and on other items there was a slight increase. E-ailway receipts were estimated at L 604,000, and the year's profit on the work done by the railways was set down, after very careful consideration, at Ll 70,000. Adding to the estimated revenue the surplus with which the year was begun, L 148,220, there would bea total of L 3,540,905., 540,905. Deducting, then, the estimated expenditure, thero appeared a surplus of L 431,150. Of that | sum. L 329,369 was distributed amonn*st the Counties as surplus land fund, and ! there would remain a balance of L 101,784 available to meet possible deficiencies of the land fund in certain districts. It had beon found impossible to carry out a promise made last year to submit this session ESTIMATES FOR TnE COMPLETION OP THE RAILWAY SYSTEM, and it had been considered that delay was preferable to an incomplete estimate for the purpose. Therefore, the Government would only ask this session for a sum sufficient to unite the already completed sections of the trunk line of 500 miles from Amberley to Kingston, and for extensions of the main lines in other parts of the Colony. The TOTAL PROPOSED EXPENDITURE for tho year on Pnblic Works would he L 1,796,451. Immigration services were estimated to require L 124,182, and there were Provincial liabilities to'be met, amounting* to L259,55G. These sums made a total of L 2,180,189, and after allowing for the balance to credit ofthe Public Works account, L 1,200,000, 200,000 would remain for which ways and means would have to be provided. THE L 300,000 OE GUARANTEED BEBENTUKES had, in estimating ways and means, been treated as cash applicable to publio works. The Government could not recommend that any of the works which would be included in the Public Works Statement should be delayed, but if the Houso should resolve to reduce tho expenditure upon public works by, say, one half, then the agreement with the Rank of New Zealand would probably avoid the necessity for going upon the London market for another 18 months, and next session a complete scheme of works could no doubt be submitted. The Colonial Treasurer, in his peroration, explained why the Government thought it most desirable the country should have TIME ANT) REST for the complete development of the Public Works system, and should not ac present be troubled by proposals for increased taxation, or by questions of Constitutional changes, or the incidence of existing taxation. The proposals of the Government would secure this state of things, and he asked for their early and most careful consideration.