FINANCIAL STATEMENT

Feilding Star, Volume XII, Issue 6, 28 June 1890, Page 2

FINANCIAL STATEMENT

4 •■ ♦ (Continued from'lasi issue). SETTLEMENT . OF CBOWN LANDS. In the light of what he had previously said, the question how the funds were to be obtained for carrying on the settlement of the land— that waß simply for the Survey and Crown Lands Departments and' • for making roads to render the lands fit for the occupation of settlers — w»b to be> * considered. It was estimated that, even with only the present amount spent on roads, iir the next two years a million acxes would be taken up on settlement conditions and that probably considerably . more would be occupied if greater facilities in the way of roads were given. How, then, was sufficient money to be> obtained for surveys and administration! without unduly forcing the sale of Crown, lands for cash, finding, as they did, that the people preferred perpetual -leasehold tenure ? It seemed to him that, for a time•at least, it must be borne by tire- consolidated revenue and he should therefore ask authority for as a grant-in.aidfbr this year, that being the estimated amount required. He thought it best to takethe required assistance in this way as a distinct vote, because it was most desirablenot to run the risk of bringing the proceeds of land sales info the ordinary revenue, and it would naturally be inclined to drift' there if they once charged the cost of surveys as ordinary .departmental expenditure. It was clear that' money for this purpose could, only be obtained in one of three ways — from loan, from, the consolidated fund, or the land itself. The Government were not prepared to recommend a resumprion of ordinary borrowing for this or any other purpose. It was clear that they could not spare the necessary amount from the consolidated fund. They must therefore fall back upon the land itself, if this could be done without a deterrent effect upon settlement in consequence of the apparently enhanced price -which our proposals involve. As the perpetual lease tenure was growing in favour, ths cost to the Crown would in the first instance have tobe provided by the Crown, so that provision must be made for purchase of land, survey, and roading. The Government thought the land must, be made to bear the cost, and that it could be done in suck a way as not only not to retard settlement but, actually to promote it. The general outline of the scheme for doing this waa as follows.: — A block of land, for instance say 10,000 acres is to be opened for settlement ; the roads would be laid out, and '< and the sections surveyed; the cost of forming and metalling the main road through the block would be estimated and added to the cost of clearing and forming the district roads. The total amount thus ascertained suppose is ; a rate under the Bating Act would then be struck over the block to cover that amount, less - the present value of the thirds, as though ■ it were a district raising a loan tinder the Government Loans to Local Bodies Act.: and the County Council in which the land - was situated would be asked to surperintend the execution of the work, under; i [-1 regulations approved by the ' House. They should propose that in bush districts all road-making, excepting the first clearing of the main roads, should, be. offered to the settlers in the first instance, so as to give- employment to them fojl^ the first year or two, when work is most^T required near him by the small bushsettler. If this system was carried out . he thought it would give great satisfaction and confidence to intending settlers'' by insuring the making of the necessary.- . ,roads as they are required— -the money : ' being at call and depeudiug up^n uo con-

/tingeiicy— and enabling the small settler to earn a fair amount of cash at a time when he most needs such help. No fresh borrowing powers would be required if _^ this plan met with the approval of Parha. tnent. as there is' ample provision under the Government Loans to Local Bodies Act ; a s'lr^ht amendment of that useful Act extending its jrovisions to land about to be offered for sale being all that is required, the purposes for which the advances are proposed to be made being identical with the purpose for which the Act was passed. No doubt it would be said that .this was borrowing, and so it was, but for a purpose already affirmed by Parliament, and within the limit now fixed the only difference being that the money would be provided at a more suitable and useful time. This seemed to the Government by far the simplest and safest way of raising the funds, and no strain would be put on the colonial reyenue. It must be remembered that ■v after this year the present arrangement -^S^^if finding money out of loan for settlement could not be continued. £262,600 had been found for this purpose, and the available loan balance would be exhausted by the end of the year. The Government had under consideration the question of any possible amendraent of the land laws, with a view of still further increasing their efficiency in promoting bona fide settlement. A Bill • to give effect to these proposals would be introduced shortly. We propose to ask the House to create such a fund by setting apart a block of, say, 250,000 acres in the North Island, and by paying in future into a Separate account a certain percentage of the proceeds of all such lands sold for cash or deferred payment and also of the rent of such lands let on " perpetual lease. This land has, in part, been handed over to the Crown Lands Department, and the balance of it has only lately been acquired. In the meantime, pending the disposal of the land set apart, it will be necessary, for three or ijiir years certainly, to have cash available at the rate of about £30,000 a year for* buying Native land. This money •will, of course, have to be raised. The -Government will ask Parliament to authorise the Treasurer to advance it K^^ifthe fund authorised to be raised the authority given by the GovLoans to Local Bodies Act, the by that Act being sufficient to requirements. I think that no difficulty in disposing of as may he retime at 4 per cent at j will, as we propose, alsubject to the property - we can issue it at that price be as profitable a transaction as an ordinary short-dated in London. AND PROSPECTS OF THE COLONY. referred to loss of population by emigration as an adverse fact that had been nndmy^fiagnified to our great disadvantage. Jnjmigration had always* exceeded deaths > nd emigration, but in 1888 there was n-n excess of- 6179 of emigration. In arffult males there was *net gain of 432^/^Oonsidering that only spent on public works years 1837-90 as against 1884-77, the fact spoke the inherent attractiveness of those who really know it. to say that this suggests at diffi* v ty, and its solution. also showed great proand tables in connection with them be presented, from which it would H le seen that the value of exported agricultural produce showed an extraordinary Hferease from L 588.022 in. 1887 to Ll,l» 1889..; Another table would that the large flock owners — those over 20,000 sheep — had increased 139 to 152, or. about 10 per cent. ; owners— those holding P52 Preen 10,000 and 20,000— from 201 to 239T0f 19 per cent. ; and the small owners-j-those holding under 10,000 sheep — from &517 t0 % 10,146, or 55 per cent. The frozen meat trade had assumed -very l a jrg© proportions, and was now a settled/and important industry of the •conntfry. It had grown in value from XV9.339 in 1882 to L 783,374 in 1889, and sfas, undoubtedly, capable of practically zftnlimited expansion. 7 As one of the indications of the improving condition of the people it was grati;fying to find, from the returns, a conrtinued increase in the number of depositors and in the total amount deposited in I savings banks. / The Government Insurance Depart- / xhent also continues steadily to grow and ■ to maintain its popularity. ■•■; The mortality statistics for the various i colonies showed the per centage to - be lowest in New Zealand— 9'4o. i The Treasurer admitted that in spite of ' these signs of substantial progress what is known as trade in its more limited sense was dull, and expressed his opinion thus as to the main cause :-— " I believe it is the practical abandonment of our long-continued practice of borrowing very large sums of money in the London market by the Government and private individuals that is at the bottom of our trade difficulty. Wa have recognised in a vague sort of way M that the' difficulty is connected with the C cessation of public borrowing, but few of W^ns have recognised the potent factor which f the borrowing by private persons ofout- ' aidecapital has been and still is, m our financial condition. It may seem a curiv ous and startling thing to say, but I be- " lieve it to he true, that the cessation of private borrowing in the various forms of - credit given in London to our settlers has as much to do with the present trade difficulty as the cessation of our public loans. The subject is a difficult one, and requires v close attention to master it." ML He went on to place before the House p^tbe^fce^'reliktin^ to our public and private borrowing. The net result has been that, from 1871 to 1890, the colony has been able to use as it liked the whole of the proceeds of its oxDorted produce, and has had besides to «Dend £12,100,000 of borrowed money, or f on the average £600,000 peryear. the . average gradually tapering off until for the last two or three years we haye i not had any free money coming in, but have had stm, of course, to bear our fuU burden of interest. We have now reached a stage when Government and private borrowing in London has ceased, and we find ourselves in this position : That instead oi having the whole of the proceeds of our Sted produce, and, say, £600,000 to spend as we please per annum, we have no loan money coming in, but we have to find from our exportedproduce £3,250,00U to pay our London interest. I think we have at last reached the fulJ limit of the difference of exports ovei imports which our indebtedness to the Mother Country requires, unless we make up our minds to pay off the capital ol our debts and are able to do so. It seeme to me that we have now practically borne the crucial test, the heaviest strain thai ■»■ can be put upon us, if we refrain from -, further borrowing, and that we have < «hown our strength is ample to carry m through. From what I have said it « clear that, owing to the determination oi the people to cease borrowing, our distributing trade must be brought down tc jQonnal limits. ■"••"■ l iiETItOSPECT AND COMPARISON. This being the last session of the preParliament, he should review snortlj (Continued on fourth B&ge.)

of tbe Parliament* to the retrenchment of lSb^- 9* £291,410 -was saved, some mi glit ask — How is it, if such P^^arjre. reduotiocs have been made mtb© - expenditure of 1889-90 as compared with tr»t-of 1886 87, that the total expenditure for last year was £4,243,761, while the-total expenditure for the year 1886-7 waa £4,280,444; a "difference of only £36,3&3 in' -the favour of last year? The mcTQase of interest and sinking fund from £1,8*2,876 . paid in 1886-87 to £1.897,603 psad in 1889-90 is the mam reason (.• but \\B compansar>,^vas not quite. fair, as tb^ftHwemtf paid in U. 886-87 woill4 Tiaveoeen. £1,676,320 Instead of £1,642v87f had not £33,444.been thrown . fbrwarflfcjto the next year by conversion opQlftbns. The increased ambunt for and sinking fund was £254, 727. f In respect of this increase, however, the present Government were only directly respodsible for £40,000, being the interest on the loan pi. £1,000,000 authorised by this Parliament in 1888. The balance of the increased- charged arose from the issue of the whole of the loan for the North Island Main Trunk Eailway ; from further debentures issued for the increase of the sinking funds— of which there are now outstanding £939,084 ; from further debentures issued to provide loans to . local bodies ; and from debentures issued tbUpTovide loans to local bodies ; and fitm debentures for the amount of deficit, outstanding on the .31st March, 18S8, which was . funded, and sundry other small amounts. For these increases the Government were only so far responsible .that they continued and had carried on cautigusly the policy approved by more than one Parliament. But another question arises here, the answer to which seems to puzzle many people : it is, why -so large an iv crease in taxation was required if such reductions in expenditure were being made. The increase in taxation, notwithstanding the large reductions in our public expenditure, was rendered necessary, in the first place, because the recurrent revenue of 1886-87 (that is, the ordinary revenue, •excluding certain items which would not recur)' was insufncient to 4 cover the .expenditure of that year:by £405,2l9,_ie$virig out of the computation the interest, £33,444 thrown forward, to, which t haye referred. These figures .can be verified t>y any one who >wiil take the trouble rto look into the published accounts, and the Financial "V Statement of the late lEr6asure^ 'The non- recurrent items- in "the v revenue of 1886-87 were, first the *aid receiyed from^loan. £113,912; then the Teleased sinking fund, £104,---.767; the difference^ viz., ±17,475 — ' ietwee^i £37,859, the surplus in iihe Ordinary Revenue Account, with -which the year 1886-87 began, and 1i20,384, the deficit in the Land Fund .Account ; and certain recoveries in the £ Land Fund, L 22,509; and to these had to be added the deficiencies with which the year 1886-87 ended— L92.293 in the Ordinary Be venue Account, and L 54,263 "iri the Land Fund Account. These sums amount to L 405,219; and, excising tbe -transactions of the years 1887-88 and 1889 T 9O we should have found deficient liad .the revenue and expenditure of 1886-87 as about revised been contined 'withft alteration in 1889-90 ; that is to say, tne expenditure of the year, exclusive, of the deficit at the beginning,- would have" exceeded jthe revenue by L 405,219 Next we have to take into account L254j.727^' the increased amount for interest •apd., sinking fund paid in 1889-90 over' that pajd ih»lBS6-87 which I have alreadyi .explained^Furlthfr we paid off L 50.000 ' < of the deficit „of"-Ll!2^605 at the 31st March, 18^8, uriprovided for. So that rjihe total amount which would have had :to barnade up in last year was L 709,946; .liut allowing for the growth of certain 3branchds of the revenue, which is now found t6, have been "about L 103,000, the ■~ ■■ required to balance the account required to balance the account was i 606,946. And the necessary equilibrium has 4)een established in the first place, as I have sho\yn, reduction of expendi- ** liure t© the extent 0f.L291,410, while, had Vv the -House -approved^of some other proposals the Groverninenir made the reduction would have been increased by 145,000 more , and, secondly, by adr .ditional taxation, estimated to yield ■« 1i336,00D : but actually yielding a little less,j)r about L 315,00 0; and, thirdly, by the ordinary growth of certain branches of re venue. •He claimed that the Government had ■fully, carried out what they promised in : Mnancial Statement of*lßßß. In^conclusion (the Treasurer said) I will say that I have endeavored, and I hope not unsuccessfully, to place before the Oojnmittee a true picture, of the financial and general condition of the colony. I claim to have shown that our finance ia well under control; that, although we have borrowed largely outside the colony, we. have— not of course in every case but on the whole— publicly and privately, invested our borrowed money so as to pro-duce-satisfactory results, as witness the material advantages enjoyed by the population generally, I repeat that the num- { * ber of people leaving our shores during the year 1888. was in round numbers only one-third of those who left Victoria, the numbers leaving the respective Australian colonies during that year being — New South Wales, 43,681 ; Victoria, 60,236 ; "^South Australia, 12,750 ; Queensland, .$3,059 ; Tasmania, 17,936 ; New Zealand, <\22,781; The problem therefore for our solution is not so much how to keep 'our settlers, bnt how to induce others to come. I liave shown that our population, as a whole, is well and profitably employed. It is clear, therefore, that no heroic policy ia required to set us right. All we require is a steady pursuit of our present policy, of careful economy in the administration of our affaire, a steady refusal to again' resort to borrowing to make matters more pleasant, and a determination to get our wasie land settled as rapidly and as well as possible. Finally I would say : Sober finance, extended settlement, increased , industries — these, With never-failing confidence in our future, will carry us prosperously on, and leave this land as a noble inheritance to our children. — Cheers.