FINANCIAL STATEMENT.

Feilding Star, Volume VI, Issue 41, 18 September 1884, Page 2

FINANCIAL STATEMENT.

■'. ♦- — •- ' The following is a precis of the ; Financial Statement delivered by the Hon. Sir Julius Yogel, Colonial Treasurer, in the House on Tuesday evening last : — Mr Hamlin: The usual yearly Financial Statement maybe somewhat curtailed ill its length and deprived of its dry details, because of my predecessor having already related a history of the year ending the 31st of March

last, with its results. I will briefly j epitomise the position he described, j The year 1883-84 was commenced with a surplus of £'35,549, and it ended with a deficiency of £152,112. On the 31st March, 1883, there was \ in the Public Works Account (I quote my predecessor for the remain er of the sentence) " an unexpended balance of £877,912, bat of this £802,484 was advanced m the hands of officers, and, as honorable members who follow the public accounts know, advances outstanding, although included in the balance in hand, are not usually available for expenditure." The balance included the whole proceeds of the second million of the Three Million Loan, and also the proceeds of that odd little colonial inscribed loan of £250,000, which was taken up by the Post Office. The public debt of the colony on the 31st March, 1884, after deducting the sinking funds accrued, amounted to £29,574,902, the annual charge in respect of which (including the contributions to the sinking funds) amounts to £1,578,799. The Colonial Treasurer (Major Atkinson), after procuring his Excellency's assent to a dissolution, obtained temporary supplies, and in order to pro- i vide for them secured also authority to issue extra deficiency hills to the amount of £300,000, to represent first the deficiency of the past year amounting to £150,000, second £50,000 additional to the £400,000 of bills already authorised for the current wants within each year, and thirdly £100,000 in aid of the Public Works Fund. These aids, the Treasurer stated, would carry him on to the Ist September, and he was about accurate in saying so — but after him the deluge. As regards the Public Works Fund, the estimate showed that at least £100,000 would have to be borrowed in some shape to the end of September, and that the like process would have to be gone through for meeting liabilities until the third million loan was negotiated next year. The loan conversion of last year as described by Major Atkinson, consisted of £3,558,300 5-30 debentures and £1,832,000 short-dated debentures, but the transactions consequent on these conversions are still not completed. I think it will be as well, whilst the subject is in the memory of hon. members, to deal with the question of the deficiency bills. They amount, as the Committee are aware, to £150,000 for last year's deficiency, £450,000 for current purposes on the year's Consolidated Fund Account, and £100,000 for Public Works Account. There are besides the £400,000 contingent liability bills. lam profoundly impressed with the conviction that it is the intricate entanglement of accounts rather than real difficulty with which New Zealand has to contend. I shall ask, then, for authority to add £50,000 to the £450,000, strictly for the purpose of anticipating revenue within the year. The £150,000 for last year's deficiency I shall pay off within the next two years or so. The £100,000 for public works can either be allowed to lapse or continue to rhe used as a means of adjusting public works revenue within tbe year. As to the contingent, £400,000, 1 do not like the arrangement, and shall hope to be able to do away with it shortly. Thus I am not intending to propose that most unpopular of financial operations, the converting of floating into permanent debt. The honorable member for Egmont in his last Financial Statement led the Committee to believe that he proposed to effect great savings in the Civil Service votes, and also that he intended to amend the service by classification and promotion. The type even of the bill said to have been prepared was broken up. I will proceed to state the principal alterations we propose in the Estimates. One is a reduction of the Armed Constabulary expenditure at the rate of £20,000 a year, but it can only come into force for the last quarter. We purpose, on- the other hand, to add 5s to the capitation allowance of Volunteers. This will be for the last six months of the year, at the rate of 10s yearly, at which we propose it shall continue. These three items will appear on the Supplementary Estimates. As regards the department of Education, we think the time has come when the large, annual increase of scholars renders it unnacessary to allow the extra capitation fee of 5s a head outside the provision made in the Act. This reduction, we propose, shall commence with the last quarter in tKe year, so that it will only amount to ls 3d a head. I hope to effect a saving of expenditure and to make beneficial reforms in connection with the present system of Audit and of keeping accounts^ Virtually : at present three sets of books of the

I accounts of the colony are kept by three ' independant departments. Each department, beside the Treasury and the Audit Departments, keeps severally its set of books. lam disposed to effect an entire change by which the Audit Department and the accounting portion of the Treasury would be abolished, and to substitute, ftu Accountant-General's Department The alteration would, I believe, lead fco a considerable saving, but that would be its least m^rit. It would also lead to n much needed reform in facilitating ! he discharge of accounts. 1 have, I think, been able

to effect some improvement in tho T< !e---granh service. The use of stamps for payment of telegrams will greatly radili^ tate keeping the accounts of the depart- ' : ment. The abolition of receipts for' I telegrams will save the receivers of* "-^ I these documents and the depart- \^r ment a wholly unnecessary trouble.. I have arranged tbat the telegraph o.ffisUs" ■> shall be opened between seven and eight- ' o'clock, and closed for half an hour in .. the middle of the day between halfpasX one and two o'clock. These changes will take place on the Ist of October. Tbe statement of the receipts and expend iiure on account of the Land Fund caanot be pronounced satisfactory. It wiil be observed from the statement that the • ' L 75.203, dae to the Main Roads Account under the Eoads and Bridges .Construction Act, is yet unpaid. It wns due nt . the end of 1882-83, andmy predecessor left . •". it unpaid. The receipts and expenditure, of the year show a dificiency of L 52,652. . The Sinking Fund ; during the present; year is estimated to amount to L 244.000. I have had a calculation made which shows that during the ten years nextensuing the present sinking fund will be increased by L 3,022,800. In other words, < during ten years the people of the colony • will be paying off three millions out. of the taxation. I contend they cannot afford to do this— that it is placing on the colony a fearful incubus. The million paid off during the last five years -bas told severely on the colonists. If it had been saved to them New Zealand would • be in a different position this day. -My proposals are virtually to relieve tho permanent charges this year to the extent of the sinking fund, say L 244.000. I propose we should not be idiotic enough to tax the people to pay off a little fragment ot our debt. No other colony does it. Recently in Victoria the first railway \ loan, amounting to some millions, fell, in for payment. No one conceived the idea of taxing the people to pay it offEvery penny was renewed as a matter of course. I must say a few words, at the risk of rendering myself amenable to the charge of egotism, concerning the meant; where by the process of conversion has become so profitable. In 1675 I was in England on an official mission. I eraployed myself in endeavouring to give to colonial loans, through inscription ht ' the Bank of England, the status and. character of Consols of the Metropolitan . Board of Works Stock. I first arranged an agreement with the Bank of England, *nd touching that agreement it is Tery requisite to remark that through all tbe changes of ali these years it has not beeu found necessary to amend it, though made only by letters between the Bank of Eng- ' land and myself. Eminent counsel have pronounced that it requires no alteration. When this agreement was concluded it was, however, discovered that an Imperial Act was necessary, not to validate it, but to enable certain of the provisions to be carried out. For over two years I worked unceasingly to procure that Act, and at last my efforts were cio wned with success. No financial measure that .1 know of has met with such success. Tho citock Exchange share list shows that already over 50 millions of loans of various colonies •, have been brought under its provisions. Every constitutional colony has, I believe, used it. By the aid of this it is ttiat I propose to save the colony so.neL3oo.ooo a year. It cannot all be done at once, but effected it will be as the market will allow of its being done, and my proposal is to accept the debt as it at present stands, not vainly to tax the colonists to pay it off, but by conversion to approach to the result of saving L 300.000 & yean ' This means that, without further annual charges than at present, you may borrow seven and a half additional millions. The - honourable member for Egmont has again and again claimed for his Government the credit for raising the value df New ''"'' Zealand inscribed stock from 80 to 100. This is a very disingenious claim. The facts are simply these. In 1879 the Government found that they had brought . the country to a financial condition that made a loan of five millions imperative. Such an amount for a colonial loan was then unknown. The agents, of whom I was one, were told the price was not to bar the way. We were able to effect the operation by giving the option to subscribers to exchange their scrip or debentures for inscribed at about 80, bearing 4 j per cent, interest, equal to borrowing the money at 5 per cent. Even then wo had to give an assurance th>t tho colony would not borrow further for throe yearsj'' That three years interval, not the Government, was the secret of, the rise. ' I would ask the Committee to allow me to make a diversion to another subject— that of Local Industries. The honourable member for Hawke's Bay Captain Eussell, the other day made a happy remark to the effect that this House should consider it possessed more the character of a board of works than of an Imperial Parliament. The efforts we make to promote the resources of the colony are likely to bear better fruit than those we devote to testing recondite, social, or political experiments. It is of paramount importance that full play should be given to the industries suited to the capacity of the colony. It is a mistake to suppose that the Customs are the only vehicle, by which resources caa

be stimulated. We want to produce not only for ourselves but for export When Canada many years since, was cut out of the American market by tbe fiscal policy of the United states, the Imperial Government placed one of Her Majesty's vessels at the command of the Canadian delegates that they might search for other markets in other countries. A few weeks since my chief and friend, Sir Wm. Pox, wrote me that he was convinced that New Zealand should makea great effort to seek out markets for its produce in the Islands of the South Seas and in India. I believe with him that a great export trade is one of the objects we should keep in view. The frozen meat industry is in its very infancy, and though now. we only send it to England, do we

know that to India and these Islands with population, in the Indian Ocean, New Zealand mutton would be an infinite luxury. But there is an industry from which I helieve great results will spring, and that may be assisted indirectly by the Customs— l allude to sugar from beet, and possibly from sorghum the production of beet sugar is now so perfected that it is made economically all over Europe. We have seen that if we make no change we have a deficietcy of £52,652; but if we are content riot to reduce the debt this year, we may recover an expenditure of 1244,000, leaving us a surplus of L 191.348. But thst there is an understanding not to press the question this session, I should recommend a rate (not a large one) to meet the cost of Charitable Belief and Hospitals, together with a few additions to the Stamp Duties, and the total abolition of tbe Property Tax witb its crushing effects, upon the progress of the colony . As it is, we propose to reduce the ftoperfcy Tax by one-half, namely, to three-eights of a penny. Eliminating the balances of last year, the reduction of cee-half will amount to L 131,000. When we deduct this remission from the surplus of L 191.348 which I have just stated, we hall have a surplus of L 60.338 at the end ot the financial year, which may be reduced by the Supplementary Estimates. I now come to the question of the Public Works Fund. I will refrain from exciting tho susceptibilities of my honourable frie? d (Major Atkinson) opposite by commenting on the deplorable manner in which his Three Million Loan scheme has broken down. We cannot afford to leave the roads unmade, the native land purchases uncompleted, the gold fields neglected. the fragments of railway scattered over the country to rot away. We must borrow more, and the question is, what shall be fche amount? The gentlemen who hare done me the honour to think that my only policy is borrowing, have circulated reports that I intend to propose 10 or 15 millions. We shall ask authority to raise an additional million and a half out of which we shah replace the sum abstracted from the Three Million Loan. We •'ill adhere to the opini in that the North Island Trunk Railway is of supreme importance, and must be proceeded with as rapidly as possible. In connection with it we also recognize the necessity of obtaining large blocks of land along the line of route, and of making them the subjects of special settlements. We might make our railways as we are able to do so without undue pressure. We must look forward to the time when the colonists will no longer dread additions to the population in the shape of suitable immigration. My task is concluded. I have succeeded in impressing honourable members with my own conviction that the finances of New Zealand are not in a

condition of difficulty; that they are suffering only from mismanagement ; that they are elastic and buoyant enough to satisfy the most exacting financier; that oppressive taxation is not required ; and that under good government we may safely rely on a progressive improvement •f the country's resjurces.