FINANCIAL STATEMENT

Cromwell Argus, Volume II, Issue 97, 19 September 1871, Page 7

FINANCIAL STATEMENT

THE COLONIAL TREASURER’S

[By the courtesy of the General Government, wo are enabled to publish the subjoined rosum6 of Mr Vogel’s Budget Speech, delivers 1 in the Honse of Representatives at Wellington on Tuesday evening last. ]

’r Vogel commenced his Financial Statement quarter to S o’clock.—After referring to the w' 'on3 which had been necessary in order to bnnSQtiown the Statement at so early a period after nis return, and indicating the substance of the tables which will be presented to members with the statement, he showed that the position of affairs at the end of 1333-7>) was closely similar to that which he led the Honse last year to expect would be the case when he made his , Statement before the close of the financial year. A reference to the finance measures of last session followed. Tue Government considered that the loans had been favourably negotiated, an 1 that the arrangement by which the guaranteed debentures were practically converted into a reserve fund would be of great value to the Colony. The short date debentures under the Temporary Loan Act had proved serviceable in enabling money to be obtained on favourable terms pending the negotiation of the loans. The payments to Road Boards had created very general satisfaction throughout the country. As to the revenue of the past year, there had been a decrease on every item; that revenue had prove I to be £IIO,OOO less than was estimated, and £32,000 less than was received during the previous year. The Government deplored this falling-off, but disclaimed responsibility for it. The attention of the House was ca'le 1 last year to the condition of the country, and that condition was urged as a reason for hastening on measures for the construction of Public Works, and the promotion of Immigration. The Government certainly had not expe te 1 so large and immediate a re luction in the revenue but that reduction bad, among other things, proved the wisdom of the Assembly in giving effect without delay to the Immigration ami Public Works policy. Many causes doubtless contributed to occasion the falling-off in the revenue. Amongst those causes was the fall in the price of wool, but he was glad to be able to congratulate the Committee upon the recent remarkable rise in the value of that article. The reduction in the value of property and the comparative suspension of public works must be included amongst the contributory causes of the reduction in the revenue ; they limited the expen liture of the people, and therefore diminished the Customs revenue. It was hot, indeed, necessary that a reduction in the Customs receipts should be accented as a consequence of an unhealthy con Ution of the country, since it might he attributed to the exercise of frugality, or might result from a desire to accumulate wca'th ; indeed, the reduction might follow wholly or in part from a larger use of local productions in the country. The Government were of opinion that the depression which had overshadows I the Colonv for a long period was in course of removal. Various causes had led to this change ; such as the increased yield of gol 1, the rise in the price of wool and other products, and the prospects of largely increase 1 settlement throughout tha (.' doay which w ml I follow the introduction of immigrants and the construction of lines of communication.

The Treasurer pnceeled tn compare the other hnnchesof the revenue, ami then showed the further assets available on account of the year hoyon 1 the receipts up to the 30 hj Juno. Si mile rtv he went through the expeu liture during the year, and all the engagements an 1 liabilities on mount of the vear. which rem lined to he discharged. in resnect of the Defence expenditure. He specially drew attention to the fact that instead of the amount provided having been exceeded, there was a surplus on the year, besides that, £IO,OOO had been spent on ammunition, which was available for the future. After taking the assets into account, and defraying all the liahili ies and engagements of the past year, there was i deficiency of £76.000. 1 bin. members would remember that there was an overdraft of £60,000, which had remained unsettled for the last two years, and he consilered that it was necessary now to look at this in the light of a deficit. Adding the amount of the overdraft to the amount of that deficiency before stated, there would be a total of €133,000. He thought it was very important th at this amount should not he adde I to the permanent debt of the Colony, hut should he d grayed out of the revenue ; still, it woul I be straining the resources of the country too much to charge the whole amount upon the present year’s revenue. He propose 1. therefore, that mie-thir I (or €46,00')) should be charged on this year’s revenue, and the balance to the revenue of the succeeding years. There was a precs lent for such a proceeding, in the course adopted in 18' dO by the Assembly, in asking the Committee to consider the provisions to be made for the present yeir. It was worthy of notice that New Zealand did tnt stan I alone as regmlc l a deficiency, for the same deficiency had ocourre I in England, in Victoria, an 1 in New South Wales, ft was clear tint, apart from the deficiency of G43,00i) which he proposed to charge upon the year, if the ordinary expen liture of the c.mntrv was kept up to its present stvle, there would have to be he ivy taxation. The first duty of a Government when the expeu liture excoa led the revenue was to consider whether the expen liture coni I not ha reduce I. The main feature of the present Bvjlget was a material reduction in the expeudie iKi of the country. would be easily understood by hon. raemhsrs th it in determining tn m ike such a reduction the Government could not fail to look in the direction of that expenditure which related to so largo a proportion of the public service—the money sot apart for Provincial purposes and 1 roviucial services. It was fair to consider how fit the Colonial contribution to Provincial revenue should be reduce !: ou account of the On,*y undertaking duties which would otherwise have to he performed by the Provinces, and also seeing that what was now proposed in'o.ved ;i reduction of Provincial duties, how far Provincial institutions could be made less costly than they Lad hitherto been. Much of the expenditure of last -session came under the headin ' oi oap-M-Utaio which it was origin ullv intern’

plated it should be borne by the Provinces. In was right that a corresponding reduction should be made in the contribution from the General Revenue for Provincial purposes. The Government had plainly declared lastyear that if the existence of the Provincial system interfered with the carrying out of the policy of Public Works and Immigration, then Provincial institutions would have to be mo killed ; but, at the same time, until it was proved to be necessary to take action in that direction, they had desired not to do so.

Experience had now shown that in some respects the legislation of last session required amendment. He entirely denied that, either on his part or the part of any of his colleagues, there was some indifference to the subject of Immigration. The whole plans of the Government depended upon the encouragement of Immigration. They felt, however, that it was due to the Provinces to give them an opportunity of co-operating. Now, it had been proved th it the plan of co-operation did not answer. He did not say that this was so because of any fault on the part of the Provinces ; but the Govern raent were convinced that it was necessary ihey should take into their hands the management of Immigration, and that with that assumption of management they should also relieve the Provinces of the expense. Members would recognise that by taking the management of immigration might be meant a looking after.the immigrants on their arrival, as well as a defraying of the whole or part of their passage-money. Other modifications which the Government, might have to propose in the policy of last session would probably tend to alleviate the ordinary burdens of the Provinces.

There was one feature of the policy of last session the success of which could not be exaggerated,—he meant the system of subsidising Road Boards. The expenditure necessary from the adoption of such a system was one which the Government considered might fairly be defrayed out of the loan. The adoption of that course would be proposed, to increase the amount of the subsidy from £50,000, as oaid last year, to £IOO,OOO. By the General Government taking charge of Immigration, and, to a large extent, of Public Works, together with the payment of the subsidy to Road Boards, the Provinces would be saved from a large proportion of their expenditure. The question arose, therefore, whether it was fair to the taxpayers that additional taxation should be imposed in order to maintain Provincial revenues at their present rate, whilst much of tile Provincial expenditure, and some of the principal Provincial responsibilities, were asminol by the Government of the Colony '/ •'he answer must clearly be, N’o. The Government had decided, further, to relieve the Provinces of the cost of the sendees hitherto held by the Assembly as Provincial services and charged against the particular allowance to each Province. After making these pr .visions, the Government proposed to pay to the Provinces, as capitation allowance, fifteen shillings per head of population, and to reduce by one half the special allowance paid last year to the North Island Provinces and to the County of Westland.

The aggregate result of these modifications would he to give the Provinces £25,01)1) less than they receive! last year. In that calculation allowance was made for the payments on Provincial account already explained ; but the expenses of Immigration from which ttio Provinces w mid be relieved were not taken into consideration. Supposing the Provinces would have been prepared to expend a proper amount on Immigration, they would be great gainers by the change ; or, perhaps more correctly speaking, those who live in the respective Provinces would he great gainers, although so much more would not filter through the Provincial Authorities.

When the effect of these proposals upon the Provinces singly avas examined, it would be found to bo somewhat unequal. Auckland appeared, proportionately, to be the largest loser, because its service had been uniformly on a lower scale than those of the .Southern Provinces. Wellington, ou the other hand, was a large g-iiuer, because it had hitherto defrayed the cost of services which lately belonged to the General Government and the Assembly. The Government had it under consideration—by way of adjustment--to make to Auckland a special allowance of £2501). Comparison with last year lid not result altogether unfavourably,—amt last year, it must be remembered, was the Provinces’ leap-year—their year of jubilee.—on ace nint of unprecedented prospects from the Colonial Chest.

Comparing tne results of the proposals now made with the circumstances of the year before last, the Provinces gained £23,000, irrespective of the expeu-liture to be devoted to Immigration. The Government believed that the time had arrived when Provincial Institutions should be mile less costly. It was intended to propose thatSnperintcnlent-sahuuld.be er. ojfido members of their respective Councils, and that, the number of members of the Councils should be very much reduced. In certain cises where Provinces were unable to fulfil their funct ons, it was intended to propose that the General Government S iould take charge of their affairs. If the Assembly desired, tnesa reforms, or some of them, could be made to depend upon the option of existing Superintendents and Councils. V special arrangement as to the County of Westland would be submittel to the House. The object of all these would be to simplify Provincial institutions, and tn reduce their cost. The .Assemble would have submitted for its consideration tho question, What Hallways should ho constructed? The Government thought, that when that question had been prepared there would be no di lioulty in deciding to what extent the proposals of Mr Brogden could bo taken advantage <>f. If it were desired that those proposals should be.divided into separate arrangements for the construction of particular railways, tho Government wore of opini-m that there would he no difficulty in doing so. The whole question would ho left to the Assembly.

A- Hoard of Public Works and Imnii'ration for the whole Colony w.uilil be proposed, with, r.3 far as possible, p iwers independent of the (iovernment, so as to m ike it a nun-political burly. It woubl be the duty of the Hoard to take charge of the construction of Public Works and the management of Immigration. It was to be hoped that the Board would assist in preventing the House from aftjniriiig too much of a Provincial character ss regarded mciultf* deeming it their

duty to scriimWo for public money to bo expended in'their own districts. The Government hoped that in the construction of the board it would be provided that recommendations for the construction of Public Works should come through the Board, instead of being originated in the douse. The quest on of how the cost of Railways should be charged Was one of a very different kind, and some modifications in the proposals of last session would ba submitted. Unlike other Colonies, it is necessary in New Zealand that railways should be commenced in sev era! different localities at once, as otherwise the various portions of the Colony would not agree to any lines being constructed. It therefore became necessary to consider the different features of the country. Two principles, however, the Government had quite determined upon. One was that no railways should be constructed which did not at once promise to p-y working expenses ; and the other was, that, in order to prevent an indiscriminate scramble for railways, a power of local management should under certain contingencies be provided. The Government had also concluded that for the construction of Railways in parts of the North Island, the only course to be adopted was to acquire land representing the value of those railways, but in parts of the Middle Island such a course was most undesirable, as it might interfere too largely with existing Land Laws. As regarded the Middle Island, therefore, the Government would propose to charge the construction of Railways upon the laud funds. It was not proposed to interfere in any way with the Middle Island railway fund, and while powers were given to the Government to take lands required for the purpose of settling immigrants, it was proposed that where the land revenues of a Province, were burdened with the cost of railways, fair provision should he made to give compensation for the lands so taken until a railway was completed. No charge was to be made against a Province. If the revenues arising from the railway, together with the receipts from special contribution wore not sufficient, the balance was to be recovered from the Province within which the railway was constructed ; or, if necessary, a special rate was to be levied upon the persons in the vicinity of a railway, who derived benefit from its construction.

It was proposed to keep the Public Works and Immigration fund entirely distinct, and that all revenues from the lands acquired, as well as all recoveries from the Provinces or from immigrants, should be paid directly into it, as also should one-half of the stamp duties, in accordance with the determination arrived at last session.

On the other hand, it was proposed that all costs and chaiges, including interest and sinking fund, should he paid out of the Public Works and Immigration fund. It mast not be considered that this was to he done in order to receive the revenue ; on the contrary, the payments into the fund this year out of the stamp duties would cover interest and sinking fund which had to be paid, and (as had already been explained) deficiencies after any railways had been completed were to be recoverable from the Provinces

A plan would be proposed by which the Board should be able to construct feeder branches for railways on a s.'stem of guarantee from persons benefited by their construction, to bo recoverable, if necessary, by a special rate. This, however, would only be done at the request of a stated majority of the residents in the vicinity of the railway, representing a majority in value of the lands in the district.

The proposed expenditure for the year showed an immense reduction, hast year, the estimates were for au expenditure of £1,051),000, as including £50,000 for ‘load Boards ; and .COI.OIK) was subsequently added for supplementary estimates. This year, the total estimates, irrespective of the £100.01)0. for Road Boards, which would be transferred to the loan, was £81)3,000, to which would have to be added £40.000, the moiety of the stamp dutks'to be paid to the Public Works and Immigration fund, and £4(5,000 on account of the deficiency from the past year, making in all £982. 01)1) to be provided fur. This showed a very large reduction ; and the Government desired that the present Budget should be fully known as the Retrenchment Bin Iget. A comparison of the various services showed a considerable saving in most of them : the Post O'llicc, including provision for the Californian service, showed a s iving of £llß. Ifc would ask lion, members to recollect that although there was a very great retrenchment, that retrenchment was on unproductive services ; that out of the revenue, large provision was made on account of the deficit of the past year ; and that one-half of the amount of the stamp duties was proposed to be paid in aid of Public Works.

He would now ask the Committee to consider the question of providing for the estimated expenditure of £932,091). i’hc Government wore adverse to proposing fresh taxes, but they considered that the Scamp Duties should he brought into the amount wlueh it was promised they would yield last year. The Government would therefore submit some additions to those Duties ; but those additions would be such only as they really believed ought to have been included in the Duties first proposed.

The House would also bo asked to impose moderate duties upon cereals, rice, and timber.. Ho mentioned this although he did not intend to take credit in the Ways and Means for the amount of such duties ; but those. Ways and Means would make apparent so small au excess that, taking into account the possibility of there being supplementary es invites, and also of somo unauthorised expenditure during the year, ho considered the excess shown would be insufficient. Therefore the House would he recommended to impose duties on all cereals, rice, sail timber, eo as to raise thereby an estimate of amount of £7,500. Whilst that rec .m.aendation would he made on strictly revenue grounds it might with propriety ha urged that the fiscal policy of neighbouring Colonies forced suck a proceeding on New Zealand.

The various items of estimated revenue e.h.nve 1 on the whole a reduction of £(il,00l) upon the revenue estimated last year, and £53,(11)0 more than the actual receipts during that year. The operation of the Distillation Act was produring a very large loss to the revenue. Tin Government did not wish to show any harshness towards those embarked with their capital iu this undertaking ; sti.l, the .result was very unsatisfactory. The revenue would loso £25,000 oa fitftx’uat of. the spirits already manaiaeturod

in the Colony, which manufacture had led to the consumption of 53,000 bushels of grain. Such a loss was rather a large one to be expended by way of encouragement for such a production of cei eals.

In 1807, the Customs Duties amounted to £3 16s 7,jd per head of the European population, whilst at the rate now proposed it would am- -unt to only £2 18s 6d per head. The Government would be glad when the time arrived for making absolute reductions in the Customs Unties, besides the reduction in the contribution per head, consequent upon an increased population. The surplus for the year would he £7500 ; and it most he recollected that this result was arrived at without the imposition of farther taxation, unless the addition which it was proposed to make to the Stamp Duties could be considered in that- light ; and the Estimates, it would be remembered, provided for a payment of £40,000 out of the revenue in aid of public works. He believed that this result was very much more favourable than the majority of iron, members had expected. The Treasurer concluded by expressing his opinion that the depression which had overshadowed New Zealand would do it very much good if the retrenchment which that depression made necessary this year became the rule of the Colony in future.