THE FINANCIAL STATEMENT.

Evening Star, Issue 3258, 30 July 1873, Page 2

THE FINANCIAL STATEMENT.

The Colonial Treasurer (Hon. J. Vogel) made his Financial Statement last evening. The following is but a brief outline of it:— The Treasurer said he had pleasure in being able to communicate to Parliament information which would prove that New Zealand had never been in a more prosperous condition than at present. The result of the financial operations of 1871-2 proved to be within L3OO of what was estimated when he made his Statement last year. The new I system introduced in connection with the I Treasury and Audit was working exceedingly well. The Controller-General and the Auditor-General were associated as Commissioners of Audit, and there was really a pre-audit as to all expenditure. In order that the accounts in the Treasury and those in the Audit Office might be made identical, he had this year taken into account, not the actual receipts during the year, but only so much as was received at the Treasury in Wellington up to the 30th June. Hitherto the Treasury accounts had been kept open after the end of the financial year, so that all receipts might be included, and by the course now adopted L4,50Q of the revenue received during 1872-3 would not be included in the year’s accounts. The Treasury were, for the year’s purposes,' losers to that amount; but such a thing would only happen this once, and the practical gain from the new system would be a great one. The present temporal indebtedness of the Colony for Colonial loans was L 6,881,261. The indebtedness of the Provinces for Provincial loans was L 3.448,47- The Colony was contingently liable for the latter, and it was no doubt open to those who desired to exaggerate the Colonial indebtedness to treat the contingent liability as one required to be met out of Colonial revenue; but the Provincial loans were primarily charged on Provincial ordinary revenues, including the land revenue, and there was no room to anticipate any difficulty in recovering the amounts. The risk of the Colony, as for the Provincial loans, could certainly be underwritten for a comparatively small sum. Prom the Colonial liability of L 6,881,261 had to be deducted L 415,352 for sinking fund accrued, leaving a net liability of L 6,465,908. During the past year L 45.000 qf Treasury bills was paid off on account of

the deficit from 1869-70. This was the second instalment, and as it was proposed to pay off another L 45,000 during the current year, the deficit would be made good without any addition being made to the permanent debt. He proposed to pay off 1,20,000 of Treasury bills issued on account of confiscated lands. There would then remain a balance of 1 500,000 of Treasury bills outstanding. Those the Government thought could be paid off during a short term of years, arid therefore it was propos-d to renew them tamporarily, instead of making them part of the permanent debt of the Colony. It was stated that several thousands per year of interest might be saved by this course. One matter which he considered of great importance to the Colony was the hold and determined attempt which had been made to reduce the rate of interest. All the Colonies had in fact gone in the same direction. New Zealand had issued certain amounts of four per cent, debentures. The minimum price was fixed at LOO 10s. Of the parcel of L 20.000 offered in New Zealand, nearly the whole had been taken up by the Trust Fund Commissioners. In Australia about L 150,000 of the new loan had been sold. The operation compared favorably with what had been done by other Colonies, and especially by Queensland. That Colony issued four per cent, debentures at LB6, and the result was really a splendid one as compared with previous borrowing at higher rates of interest. After he bad called for tenders for these four per cent, debentures in Australia, he wns glad to receive a telegram from the loan agents announcing their recommending that in future the rate of interest should be made 4,1, and that sinking or drawing funds should be’ abolished. The agents expressed their preference for a 4.[ per cent, rate. 1 hey had now been instructed to use tlr-ir discretion in the matter; but he (the Colonial Treasurer)*had expressed his preference for 4 per cent, instead of 4.L The confiscated lands had yielded well during the year, and bad enabled a considerable 'amount advanced with respect to them to be paid of. Indeed, the receipts during the present month would discharge nearly the whole of the liabilities, executing the L 20,000 of Treasury bills, which would be paid off during the year. The receipts for the year 1872, exclusive of the L 4.50 ' which, as already explained. had not been brought to account at the end of the year, showed a total of LI, 119,402, being an excess of L 43.402 over the estimate, and of LI 11,987 over the receipts during the year 187 i -2. The Customs revenue showed an increase of L.32,144 over the estimate, fand of L 76,960 over the actual receipts of the previous year. After meeting or providing for all the liabilities of the year, there was a balance of L 3.835 left with which to commence the current year, 1873-4. One of the most important matters to be submitted to the Committee was the question of Provincial loans for public works. The Government were determined to recommend to Parliament to allow the Provinces to borrow money for certain public works in a manner similar to that in which the Metropolitan Board of Works and certain other local bodies in England were permitted to borrow. The proposal would be that the Provinces should borrow only on specific security, and that it should he mainly provid’ d that neither the Colony nor the Province concerned should be liable beyond the specific securities given. As far as those specific securities were concerned, however, the security of the lender would be absolute, and there would also be a power of law to enforce it. The works for which it was proposed that Provincial borrowing should be allowed were roads, bridges, harbor works, reclamations, buildings for educational and, in some cases, for charitable purposes, goldfield works, light branch railways, and tramways. The Colony could not possibly execute the main arterial works which it had in charge, if it was to be liable to borrow also for local works. That those local works were much wanted was in no degree questioned, only it was said that the Provinces could better appreciate what was needed, and should be allowed to borrow for them. It was proposed that the securities to he allowed for the works mentioned should be in the shape of tolls, and that with the approval of the inhabitants of any district interested special rates also should be levied. In cases of reclamation, the security would be over the proceeds of the work, and as regarded buildings for educational or charitable purposes, the security would be over the revenue from endowment. It was further proposed that the Assembly should, in some cases, allow loans to be" raised against specific blocks of land, and that 15 per cent, of the whole of the land revenue should be paid into the the Provincial Loan Account, and should afford security for these works. The Bill which it was proposed to introduce into Assembly would stringently provide that neither the ordinary revenues of the Province concerned, nor those of the Colony, were to he liable for any one of these cially authorised loans. In fact, there would be no more liability on the part of the Colony than there was on the part of the Imperial Government for loans raised in I 1 ngland by Local Boards, Of the land which was to be purchased in the North Island, two-thirds of the whole would be retained as security for the cost of railways, and one-third would be handed to the Province interested ; but out of the proceeds of the two-thirds retained for railway construction, 15 per cent, would be paid either to the Provincial Loan Account, or to a separate account in aid of public works withiu the ' rovinco. The progress of public works in the Colony up to the present time had fully answered the expectations held out when the policy was originally announced. Money was being borrowed at a less rate than was anticipated in 1870 It was expected that before the end of the current financial year 125 miles of railway would be opened, in addition to the 31 miles that had been opened in Canterbury, and exclusive of the Port Chalmers line. Land was now being sold in large quantities at what appeared to be less than its value. Indeed, the absolute value of land had very much increased of late, and it would not be right to construct further railways without retaining land as security for their cost. The Government had, in fact, come to the. conclusion that they would not construct-any other railways than those already authorised, except coal lines, without security in land to the nominal value between the estimated (jost \d each case. As |u the North Island lapd security could be provided in the same planner, and as it was desirable that that Island should not be shut out from the benefit of railway construction, it would be proposed that two-thirds of all the lands purchased {pom the Maoris should be set apart as railway reserves as already described. It was peepsgary that a firrp. stapd should be made this year, in presence of the immense demand there was for local works, and of the large sales of land that were taking place; and that was the reason why the Government had come down with their present proposals. The Government would indicate the additional railways for which they meant to ask authority ; but, with one exception, it was not intended to hurry on those lines, for the railways already in course of construction afforded quite sufficient occupation for the available labor in the Colony. I he Government proposed to take authority to fill up the three gaps in the trunk lino between Canterbury and the Bluff, and to ask for authority to spend a further sum of LlO .000 on the line between New Plymouth and Wanganui, the expenditure being carried on slowly, so that the works might

progress concurrently with settlement. The House will be asked to sanction a continuathn of the line from Mercer to the Frontier, and from the Frontier in whatever direction might be found best suited for connecting with the trunk line through the North Island. At present the survey for tlm line bad not been extended farther than Ngaruawahia, but this railway it was considered desirable for public reasons to hurry on, especially as it would enable to be massed on the Frontier a number of men whose presence would afford the best possible guarantees against wanton outrages such as that which had latel occurred. It would be proposed that LSnO.OOO of debentures included in the loan already authorised, being that amount out of the LI 000,00'i guaranteed by the Imperial Government, should be kept at Home as a reserve, to be available in case of need ; but that, if necessary. those debentures should be borrowed against pending sales of unguaranteed debentures. This would necessitate at present further authority to borrow. The Committee would remember that in the original scheme it was intended to construct railways partly by cash payments, partly by way of guarantee, and partly by means of payments in land; but. at the will of the House, the whole weight had now fallen upon cash payments, and the original provision by way of loan would not be sufficient for present purposes It was, however, considered that sufficient provision would be made for some time to come if authority was now given to borrow L 1,500,000 for railway purposes, and half a million for the purchase of Native lands in the North Island. A separate Loan Bill would bo proposed, authorising the borrowing of L300,0()il to cover the cost of interest on works during construction, including the restoration to the Public Works Loan of the amount taken from that loan for this purpose. There would also be included I ..250.000 for the purpose of subsidies to Road Boards, including the restoration to the Public Works 1 oan of the L 150.000 taken from that loan for subsidies. further, there would in this Loan Bill be included LI 15,000 for public build-; ings, L 35.000 for light-houses, and. L 50,0 0 for telegraph extension. During the recess there had been much correspondence and several interviews respecting the line between Foxhill and the Brunner, and it had been proposed to give certain lands as security for the work, in addition to the security of the Province, in the way required in the case of lines in other Provinces. The land which it was proposed to sot apart had been examined, and unless for it* mineral resources, it did not afford an equal security. In order that advantage might be taken of the mineral resources of the district, more must be known of them, and of their position, so that the railway might follow such a course as would be suited to the development of the resources. owever, it would be necessary t»>at the question of connecting Nelson and the West ; ’oast with the main trunk system of the Middle Island should be considered. For the present it would be proposed, with a survey of the Hue between Foxhill and the West Coast, to combine a thorough investigation' of the mineral resources of the district, it would also be proposed to examine as to the best route for connecting the Fast and West Coasts ; and, further, to ascertain whether it would be practicable to connect the Marlborough line with the main trunk system. Respecting coal railways, the Government fully recognised, as they bad done throughout, that those lines did uot come under the category of either main or branch lines; but that their construction ought to be looked upon by the Assembly as Colonial works. A further sum would be asked for towards the construction of the Mount Rochfort line and harbor works, and an additional sum would be required to complete the harbor works connected with the Brunner and Greymouth Railway. Anv lands taken for railway reserves were to be subject to the ordinary laud laws of the Province in which they were instituted ; except that, with the consent of tin .Superintendent, they might be liberally employed fir the purpose of settlement. The Government would he willing, even, that land should be given under a homestead law to the people who would occupy it; and they proposed to introduce a measure by which immigrants who paid their passages to the Colony would receive free grants of land, subject to occupation conditions. The Government fully recognised how desirable it was, as the demand for labor in connection with public works decreased, and as the laboring men of the Colony saved up money, that they should be induced to be settlors upon the land. This object would be promoted in every possible way. r ! here was at present a very large necessity for public buildings in different parts of the Provinces j any loan for such purpose should obviously be made repayable w-thin a not very long term of years, and it was intended so to provide in the Loan Bill which was to be introduced. Coming to the finances of the current year, the estimated expenditure for 1873-4 amounted to LL 131,688. It included the payment of LBB.OOO out of the Consolidated Revenue towards the interest and sinking fund of the Immigration and Public Works Loan, or L 56,000 more than was paid from that loan for the like purpose last year. It included also capitation allowances to the Provinces on the same basis as last year ; and, taking the Registrar-General’s estimate of population, the total capitation payments to Provinces, including special allowances as last year, would amount to L 217,904 ss, or an increase of more than L 9.000, as compared with the payments for 1872-3. The expenditure, as stated, included also 1.45,000 for the last instalment of Treasury Bills representing the deficit of 1869-70, which were to be taken up during the year. He was glad to say that there were no deficiency bills outstanding to be taken up. During the past year uot only had L 45,000 of Treasury bills been taken up, but LIOO.OOO of deficiency bills had been paid off. It was proposed that during the current year L 50,000 should be again divided amongst Road Boards. It was intended to propose to alter the tariff, not because additional revenue was desired, but because the measurement duties were very unfair in their operation. Those duties were introduced here, as well as in Tasmania, by Governor Gore Brown ; and the only other Colony in which they existed, so far as the Government were aware, was Bt. Helena, whence Governor Brown came to this part of the globe. It was desirable to substitute ad valorem duties, not only because they were less objectionable, but because something like uniformity was necessary to the use of the powers fqr intercolonial reciprocity had now been conceded, and because those duties would epahle a thoroughly liberal system of drawbacks to be established. The new duties, with some inconsiderable exceptions, would bo much less than those in force in Victoria ; and the few exceptions made were for the purpose of securing uniformity. The total estimated Customs revenue for 1873-4 under the new duties would amount to L9OO,pK)(), being only L 48,000 over receipts for 1872-3, and if the. system of duties had uot been altered, the same amount would have been estimated as the natural increase during the current year. The total of the estimated revenue for 1873-4 was Ll, 180 500, to whkh must be added the estimated surplus of L 52,000 with which the year was commenced. But there would assuredly be demands upon that surplus for Supplementary Estimates and for unauthorised expenditure. In conclusion, ho might say sat Ibis was the fifth occasion on which

he had made the annual Financial Statement. On previous occasions he had urged the colonists to the work .of colonisation and sought to stimulate them to a sense of the resources of the country, [t was now his duty to urge caution. The settlers were showing their faith in the Colony by industrial enterprises of all descriptions. They were determined to develop the coal, the iron, the flax, the timber, the minerals, and other resources of the Colony- They were ready to advance.their money for Banking and Insurance, for steamships, and for other enterprises ; and they had, with great courage and determination, broken down the shipping monopoly which had so long overshadowed the Colony. The leading features of the Budget were, then, that the Colony should coniine its attention to the great arterial means of communication, leaving to the Provincial Governments the control of necessary local works. Precautions were proposed to keep the Colonial credit intact, and the reservation of land for the settlement of the people had been suggested. In addition, a more convenient, but certainly not a more oppressive, tariff was purposed to be substituted for that which had been so long in existence. The great aim of the colonists, as well as of the Government, should lie to make Now Zealand the home of a large, contented, and prosperous population, It was with that aim that these proposals had been made, and he hoped they would receive from the Assembly and from the Colony earnest yet kindly consideration. The delivery of the statement occupied over two hours and three-quarters.