FINANCIAL STATEMENT

Gisborne Times, Volume VI, Issue 189, 17 August 1901, Page 2

FINANCIAL S T ATEMENT

HALF A MILLION SURPLUS. LUDICROUS PESSIMISM.

[Bv TKLKon.vrn.j Wellington, last night. The Financial Statement was delivere 1 to-night by tho Colonial Treasurer, the Right Hon. R. J. Seddon. He said : Mu Guinness, —The people, and especially lion, members, arc naturally anxious at any time to have the Financial Stateand this, my sixth Statement is, owing to various causes, awaited with more than passing interest.

FINANCES OF TUE COLONY. In this, as in other preceding Statements, I will without reservation endeavor to place the finances of the colony before members in such a way that all may understand the national accounts. The revenue received last year exceeded my most sanguine expectations. Notwithstanding the remissions granted in Cus-

toms duties, railway freights, passenger fares, and tho reduction in postal rates, bygiving tho penny postage, there was a pleasaut surprise in store, for, after meeting all current obligations, there was n balance on tho credit side amounting to £532,564. The pessimistic criticism of our finance during the last few weeks has almost verged upon the ludicrous, and thereby a feeling has been raised in the public mind that additional taxation was imperative. The financial hotch-potch created by some of the critics in mixing tho ordinary revenue with the loan account proves gross ignorance, and the necessity for a better education in respect to public finance, whilst the great ingenuity and industry displayed in endeavoring to prove that this year the balance must be 011 the wrong side of the lodger may be appreciated by tho few who desired such a con-

tingency. the puemiek’s joke. I am glad to say that the revenue this year more than meets tho expenditure and there will be no deficits. It has been stated in several newspapers that it was proposed to meet the estimated deficiency iu Parliament by an additional land tax, and also by some slight rc-arrangeuient of the Customs. It was furthor alleged that some stringency has occurred in the finances through the claims for old age peusions being much more numerous than was anticipated, and our detractors have oven gone the length of cabling this nonsense to the London journals. The credence given to tho imagination of tho penny-a-liner should not bo found fault with by mo, for with a patriotism that docs them infinite credit—which, as Colonial Treasurer I very much appreciate—merchants havo risen to tho occasion, cleared kerosene, sugar, and tea, with the result that tho Customs revenue this mouth is buoyant iu tho cxtreuio, and contrasts very favorably with the same month of last year. The only possible foundation that* could give rise to what appeared in certain- papers was a statement made by me warning a deputation of members and other gentlemeu against pressing for oxccssivc public works expenditure, thereby entailing borrowing and squandering. Incidentally I stated that the revenue returns as furnished by the Departments did not warrant the suggested expenditure, and that this caused mo some anxiety.

ANOTUEK STATEMENT. Again in respect to tho increase of the graduated land tax, I stated in this House some weeks ago that if the Government was to keep tho pledge given last year in granting the reduction of a farthing in the pound on the mortgage tax, the graduated tax on land would require to be increased, so as to yield an amount equal to that conceded by way of mortgage tax, and, after carefully reviewing the position, I now find that tho views expressed have been verified, for a reduction in revenue to tho extent of £25,000 could not be prudently granted unless otherwise recouped. The pronouncement that revenue cannot be given away without a necessary recoupment will very naturally' and properly load to tho conclusion that revenue and expenditure are fairly evenly balanced. This conclusion is correct, but it is „owing to tho inclusion of nearly £120,000 of abuormal and non-recurring expenditure this year, and to tho increase in the education and technical education

votes, which are in excess of those of last year by no less than .£167,000; also to an increase in the vote for the Colonial Secretary’s Department, which exceeds the vote of last year by ±'69,000, caused by extraordinary services. The vote for defenco, including the capitation payable to our volunteers, is also largely increased, owing to the number of volunteer corps being more than doubled. Even with those exceptional demands upon our resources, there will be sufficient to meet every requirement, and at the risk of disappointing the pessimistic alarmists I am able to announce that there will be no deficit, but a reasonable surplus. It is well, however, that I should in respect to the expenditure urge the absoluto necessity for prudence and economy, for though the revenue is buoyant and increasing, yet owing to reductions in the Customs tariff, the concession of penny postage, remissions in railway charges and other concessions, there is this year, as compared with last year, a decrease of only 119,000. Coraespondingly, there should be a jealously guarded expenditure, for a restricted population can only bear a limited and reasonable impost of taxation. Luckily for this colony, all our eggs are not in one basket, and the curtailed spending power, owing to the low price of wool, is counterbalanced to some extent by the prices for other of our staple products. With a surplus of over half a million last year, and the continued favorable revenue coming in this year, there seemed every prospect that the desire of Ministers to a grant a concession of taxation and reduced rates on products carried on our railways, would bo consummated, but in the face of the necessarily increased expenditure this year, the more prudent course is to defer any further reduction in revenue to a more favorable opportunity, and the national expenditure should bo cut down to the lowest limit consistent with efficiency, after providing for the necessary requirements. The eager and pressing desire for the rapid construction of public works and conveniences has forced borrowing up to a limit beyond which it would not be safe to go. There need be no curtailment of expenditure in respect to obtaining lands for settlement, or for roading back blocks and Crown lands, which so materially assist in furthering the settlement of the people on the land, or in respect to advancing moneys to settlors, or in pushing on the North Island Main Trunk and other important railways, and in otherwise developing within reasonable limits the resources of our colony; for this means increasing the output of products and exports, and tends to promote an increased population, which the colony badly needs. In respect to tho expenditure on several classes of public works, district railways, and especially buildings and works which arc more a matter of convenience than of necessity, prudence demands that there should be a reduction in the expenditure thereon, especially seeing that our population is so slowly increasing, for it should be borne in mind that the increased rating of population is much below that of the increased ordinary expenditure. Eor every million borrowed and expended on non-revenuc-producing works and objects, an annual charge of about lOd per head is entailed upon every European man,

woman, and child in the colony. Coining to the demands upon the consolidated revenue, the several services of the colony have necessarily increased, and the strictest economy is necessary, for if ever the time arrives when increased taxation is required to meet the ordinary expenditure so surely will reductions in salaries eventuate. To avoid the contingency and the injustice which arose in the past, it is well for those haying responsibility to do their utmost to koep down expenditure. In the budget last year I stated that thereafter the aid to public works fund from the surplus in the consolidated fund would have to he partially if not wholly abandoned. The public works requirements of this year are, however, so largo that I am compelled to use £'500,000 of the surplus, and that amount will be transferred accordingly. I regret, again, to have to state that from various causes, well known to members, the money market in London continues to be unfavorable to floating loans,

and we have had recourse to raising £500,000 locally on short-dated debentures bearing -1 per cent, interest. Full particulars of the floating of this local loan will be given. Recently a paragraph appeared in the Press something to this effect,

• The needs of tho Treasury were so urgent shat £IOO,OOO was borrowed from a loading life assurance society at -1 per cent., with a condition that the interest would be paid at tho head oftico in Sydney.” The facts are that tho prospectus of- tho £500,000 local loan raised in April last provided for interest being made payable in New Zealand, Australia, and London. Some time after this loan had been closed tho society in question asked tho Government if it would accept an investment of £IOO,OOO, and seeing that at tho time w were selling debentures openly over th counter on terms as to interest similar t those above referred to, WO natural!, obliged tho society and accepted their money. Other institutions and private individuals have also been glad to avail themselves of this further opportunity to invest their money in short-currency security carrying a fair rate of interest. The war in South Africa still continues, and the large Imperial loans and other demands upon the London money market lead me to the conclusion that it will be some little time ore any loan could with advantage be floated in the Mother Country. It becomes necessary, there-

fore, that a large proportion of the amount required and authorised should be raised locally, and this being the case there- should be a careful public works expenditure until a favorable opportunity for raising the money in London arrives. Having given a goner .1 summary of the situation, which viev. cd m tue light of the elasticity of our resources, is, if anything, on the side of caution, 1 will now proceed to give the details of the receipts and expenditure of last year.

ITNANv'US OF 1900-1901. — KKVENUE. Tho actual revenue for the past financial year reached £5,872.705 ; to which has to be added £52,800 derived front the proceeds of sale of debentures for sinking fund accretions, and a small sum of £1,411, recovered in connection with expenditure of the previous year. Theso amounts reach tho large total of L 5 ,906,916, or not very far short of six millions of money, and represent tho largest volume of receipts into the Colonial exchequer since its foundation. Compared with the revenue proper of tho previous year, which amounted to L 5 ,580,085, there is an.exeess of L 272.020, of which L 73.295 was derived from Customs, 1,40,006 from stamps, 1,45,905 from the land and income tax, L 00,028 from railways, and with other items of rovenuo produced a net increase of L 11,025. Theso figures conclusively prove tho wonderful progress tho colony has made without- any undue pressure upon the taxpayer to contribute to its revenue. Turning now to n comparison of results between the estimated and tho aotual rovenuo for the year ended 01st March last, I find that mv estimate has boon exceeded by the sum of L 429.506. Under all tho heads of revenue except one tho ostimates have been exceeded. Tho following are tho figures : —Undor Customs L 157,801, stamps 1.18,905, Land and Income Tax 1,13,390, beer duty, L 2170, railways Ll-10,241, marine L 3353, miscellaneous .L 2411, territorial L 00,290, and recoveries Ll4ll. Under tho head of registration and other fees the rovenuo was L 6462 less than was exported. A word or two of explanation of theso increases may ho necessary. First, as to the Customs revenue, in my estimate for tho vear I took off nearly L 85,000 from tho actual receipts of tho previous year, so as to provide against tho anticipated loss arising out of concessions which I had stated in mv Budget would probably reach L 107,000. In spite, however, of tho reduction of duty mado on leading lines of goods there lias been an extraordinary clearing of other lines untouched by tariff alterations, which have resulted in large increases of revenue. For instanco, tho duty on spirits increased by 1,21,800, tohaeco L 15.800, cigars and cigarettes L9IOO, sugar LOSOO, ad valorem goods and other items L 98,000. These items which aro mainly luxuries, may bo taken as clearly demonstrating tho increased earning power of our colonists, and the prosperity which arises thorefrom. It is quite likely that tho visit of their Royal Highnesses the Duke and Duchess of Cornwall and York to some extent inflated tho figures connected with the ad valorem duties. At all the gatherings to weleomo our future King I was impressed with tho appoaranco of thorough content and prosperity which was exhibited by tho vast crowds assembled to do honor to tho Duke and his amiahlo wife, tho Duchess. Last year tho stamp revenue increase of

nearly £49,000 over the estimate was caused by an anticipated reduction of £20,000 from the penny postage, a concession which in reality did not tako place, the sales of the now stamps making good any loss arising from the reduced rate, while the “ dredging ” boom is, I think, responsible for a largo increase in the salo of adhesive stamps. Impressed stamp sales and the bank composition wore considerably increased over the estimates. The concession made by my worthy colleague, the Postmaster-General, has given universal satisfaction, and I feel sure the loss to the revenue by tho adoption of universal penny postage will bo made good by increased correspondence. Concerning the increase over the estimate of £43,000 in tho land and incomo tax, I may mention that the land tax was within £OOO of my expectations, and tho income tax exceeded them by nearly £35,000. The railways revenue has produced a very handsome surplus over my colleague’s estimate, which was the exceedingly high one of £1,074,100. The passenger traffic and the goods carried continue tG bo maintained, and afford a sure barometer of tho substantial prosperity of our colonists, and of the development of our industries. The increase over the estiinato of £30,000 in territorial roveuue arisos from land sales for cash, LIB,OOO, and from vent of pastoral runs and miscellaneous items, altogether amounting to L1‘2,000. With regard to the item of L 6,400 overestimated under “ Registration and other fees,” I find that I was over-sanguine as to the fees to be received under “ The Government Valuation of Land Aet, 1890.” Theso fell short of my estimate by about L6OOO. EXrKNDITUKK. The actual expenditure during 1900-01 was L 0,479,703. Similar expenditure during tho preceding year totalled L 5,140,127, showing an increased cost of L 339.576 during last year. The permanent appropriations are answerable for nearly LOO,OOO, of which tho old ago pensions contributed an extra cost of L 39,000, and subsidies to local bodies L 7.500. With increased revenue increased expenditure may bo expected, and it is therefore not surprising to find that the departmental expenditure was in excess of that of tho previous year by L‘289,070. Under tho annual appropriations tho increased expenditure on railways amounted to L 105,500, on dcfonco L 64,400, the post and telegraph cost an extra L 27,700, and| the miscellaneous vote of tho Colonialv Secretary’s department is mainly answerable for the increased expenditure of L 15,500 in Class If, Colonial Secretary. It may, I think, be broadly stated that in the other departments of tho State tho expenditure has been increased so as to keep l'n line with tho increased requirements of our colonists, and to provide for the expenditure which our liberal legislation sanctions for the good of tho people, | be they rich or poor.

Comparing the actual expenditure ot the year with the estimates, the oxpend*turc was less than estimated' in some directions to the extent of L'206,910, while in others it exceeded the estimate I>y L 113,350. Of the latter amount, the ‘ railways were answerable for L70,5(3T), and services not provided for L 25,500 Tno not saying in the expenditure as compared with the estimate was L 93,590. Result: The rovenue for the year was L 0,906,916, and the ordinary expenditure L 5,479,703, leaving a balance of L 427.213. Out of the balance brought forward from the previous year(lß99-1900) of L 605,351, a transfer of LOOO.OOO was made to tho Public Works Fund, leaving L 105,351 to be added to the results of the year’s transactions, prolucing at the close of the year a balance amounting to 1,532,564, which I indicated in my introductory remarks. I feel sure hon. members will join with me in congratulating the colony upon such a successful result,

THE PUBLIC WORKS FUS'D. The transactions on both sides of the account of the l’ublic Works Fund were largely increased last year. Tito ordinary expenditure exceeded that of the previous Year by L 315.000, and necessarily extra funds had to be found to provide for the expenditure. The balance of the loan of 1899, amounting to L700.0G0, was raised ; also L 200.000 under the Act of last session. The total figures, as shown in the accounts which are appended, are : Receipts L 1,901,787, and expenditure L 1,809,021. The balance brought forward was L 189,749, and the balance at the end of the past year amounted to L 282,515. LOAN'S TO LOCAL BODIES ACCOUNT. The balance at credit of the loans to

local ho lies account on 81st March, 1900, was £20.598. Debentures for 1.176,000 were created and issued during the past year, and refunds of unspent balance of grants, together with a payment made in reduction of the inscribed debt, was received, amounting in all to .07726. Payments on account of loans were made during the year to local bodies, £133,956, and towards opening up blocks of land for settlement, £87,090, leaving at the end of last year a balance of £27,978 to the credit of the account. Up to the 81st March last the total amount of debentures created and issued and carried into this account was £1,531,900, and the total disbursements have been—to local bodies, £1,138,497 ; to laud and survey department, towards opening up blocks of land for settlement, £282,856 ; and to public works fund, £89.300, in exchange for debentures under the Hoads and Bridges Construction Act, 1832 The business connected with the granting of loans to local bodies still continues to considerably increase, the payments during last year being more than double those of the preceding rear, and the largest amount that has been advanced since the commencement of tiie Act. This is no doubt attributable to the fact that late legislation has granted greater facilities whereby local bodies can obtain assistance. The Government Loans to Local Bodies Act Amendment Act, 1398, which was specially framed for the purposes ot providing for irrigation, water supply, etc., has been largely availed of, and in consequence there lias boon a corresponding increase in the amount of loans made. The Public

Health Act and tho Slaughtering and Inspection Act of last session permit of loans being granted for sanitary works and for the erection of abattoirs. Applications under these Acts aro now being received. 11V the Government Loans to Local Bodies Act Amendment Act, 1900, the rate of interest on loans was reduced from 5 to 4.J per cent, per annum, local bodies also being able to re adjust their loans to even lower rates, namely, 4 and iI.J- per cent, per annum upon correspondingly extending tho currency of their loans. Of the total inscribed debt of local bodies, amounting to i 11,222,234, the following figures will show what a great advantage the amending Acts of 1899 and 1900 have proved to local bodies, and to what extent they have availed themselves of the opportunity of reducing their rate of interest : —Amount of loans reduced to 4.1 per cent., .£874,449 ; 4 per cent., .£12,694 ; 8.1 per cent., 41999,157. I am pleased to bn enabled to report that the payments of tho half-yearly instalments of interest on the inscribed debts continue to bo fully and punctually paid. LANK TAX AND INCOME TAX.

The proceeds of the lund tax only exceeded those of the precedin'; year by about 1000, the Department having beon unable, from a defect in the Valuation Act, to place the increased valuations upon the rolls for last year. The income tax receipts, however, brought up the revenuo from direct taxation to an amount which it has never bofore reached, affording evidence of tmoxamplcd prosperity in the colony generally, as well as careful departmental administration. When linform lion, members that during tho nine years the income tax has been in force the number of taxpayers lias moro than doubled, and tlie revenue lias increased by L 106,000 a year, tho result must be considered satisfactory. A careful revision of tho land values of the colony is now in progress, but it will take some time yet to complete this work. Tho rosult so far is an increase of tho capital value of L 8,090,000, and of the unimproved value of L 0,070,000. Tho gain to the land tax revenuo this year I estimuto at 1.10,000, and 1 see no reason, notwithstanding the unfortunately low prico of wool, why tho land tax should not increase year by year in sympathy with other heads of revenue until at all events the whole revision of the valuations lias been completed.

LAND l-'olt SETTLEMENTS ACCOUNT

The balance brought forward amounted to L53J189, and by the sale of debentures funds were obtained to tho amount of L2 1(1,000. Kents and other moneys came into the account to the extent of L 72.796. On tho other side the purchase money for the acquirement of estates totalled L 180.621, interest on debentures amounted to L 50.000, and expenses to L 14.305. Tho balance of tho account at the tdosc of the year was L 93,349. Tho purchase of land for close settlement is being vigorously pushed forward, and it is pleasing to know that the estates which have been hitherto purchased have been satisfactorily sold. During the last year approximately 177 farms wore provided, and about 170 workmen's homes. The following table gives the — Names of the provincial districts in which the land during the year has been purchased, tho acreage, and the prices paid therefor : —Hawke's Kay. Hatuma, 20,330 acres, price £141.018 ; Mangatoro, 19,550, .£87,975 ; Wellington, Laudole, 940 ti, .£36.009 ; Mangawhata, 1'226, XU), 129 ; Matmgaraki, 423, .£3000; Kprini, 103. £9146 ; Marlborough. Waipapa, 3600, .£6250 ; Canterbury, 4235, £15,759 ; Kohika, 3SG4, .£28,093 ; llainclitl', 755, .£2424'; Taranaki, 32, £2BSS ; I’ukaka, 39, £9Bl ; Mrs Delarey, 100, £3OO ; Otago, Earnscleugh, 1152, £3OOO ; total. 70.833. £350.193. COMPARATIVE STATEMENT 1890-91 TO 1900-1901.

There has been considerable adverse criticism, and assertions have been made to the effect that there has been an undue increase in the expenditure during the last ten years. It is quite true that there has been a largely-increased expenditure, and that necessarily so, for we have a largelyincreased population, and also a greatlyincreased revenue. \\ e have now also in existence departments of State which were in 1891 unknown, and many of them unthought of at that time. TOTAL EXPENDITURE AND KEVENTS. Total expenditure 1690-91 £4,291,215 1900-01 5.479,703 Increased expenditure, £1,188,483. Total revenue 1890-91 £4.158.774 1900-01 5,852.706 Increased revenue, £1,693,932. Turning to the revenue-earning departments of State, whilst there has been an increased expenditure there has also been increased earnings and increased profits.. A table is given, bearing out this statement.] POPULATION ARRIVALS —DEPARTURES BIRTHS —DEATHS.

In my introductory remarks I expressed the opinion that the colony was in need of an increased population. The latest census of the people proved that during the last five years our population had been relativelv to the previous five years—that is, from 1891 to 1896—actually decreased in number by 7.266 persons. The opinion of the late‘Hon. John Ballanee, as expressed in his budget in 1891, may not be oul of place, showing as it does the bearing an increased or decreased population has on the prosperity of the colony. Mr Ballanee said : “ I consider it my duty to

direct the attention of tho committee to tht> .lesson conveyed by the census returns of the population recently issued. Briefly, the rough results of the census, as shown by enumerators, give a populaiion, subject to revision, of 623,352 persons, not in-

cluding Maoris, against 578,482 persons in March, 1886, making an increase for the five years of 44.870 : but the natural increase for this period being the excess of births over deaths, is 64,168 persons, so that the loss by excess of departures over arrivals is 19.238. The arrivals recorded in the five years were 73,386, and the departures 83.945, giving a loss of 10,562 persons. It would thus appear that the unrecorded departures amounted to 5736 persons. The full out-go of population from the colony had evidently not been

returned to the Registrar-General in the monthly statements, and it is well known that in the year 1569-IS9O, and of late, the steamers for Australia were, greatlycrowded, owing to a disposition on the part of the floating population to leave, mainly for New South Wales. Now, here is a loss of wealth and wealth-pro-ducing power in the departure of so many people from our shores to seek employment in other colonies which demands the serious consideration of Parliament. jA comparative table is here given.] Between 1891 and 1896 there was an increase of 76,751, and between 1896 and 1901 an increase only of 69,385 (the Chatham and Kermadec Islands not included).

OL'R WORKING RAILWAYS,

The rapid and continued growth of the business of our railways, the principal highways and means of communication between the various parts of the colony, is one of the best indications of the continued healthy and prosperous condition of the colony. The actual profit for the vear ending 31st March, 1901, was L 599,389, as against L 571.533 for the previous year. The capital cost of railways open for traffic was L 17,207,323. The profit on working gives L 3 9s Bd, as compared with L 3 8s 5d for last year. Taking into consideration tho large reductions in passenger and other rates, the increased cost of materials, coal, iron, etc., ana the increased wages, this result is eminently satisfactory, and the figures are, I venture to think, eloquent testimony of the success of State administration of our railways. Notwithstanding tho fact that tho increased traffic during the past six years has been of such a phenomenal character, there is every indication that the business for tho present financial year will be fully equal to that of the preceding year. The total reductions made since the Government took over tlie railways amounted up to last year to no less than 1j368,439, and to 31st March, 1901, to L 420.239. The regulations have been made of a more liberal character than heretofore, tho train services improved, speeds increased, and additional trains, involving expenditure of many tens of thousands per annum, have been provided, and to further meet the convenience of tho public, goods and passenger trailic have been separated whorover tho volurno of business has warranted sucli a step.

NORTH ISLAND MAIN TIIL'SK RAILWAY

The Central route having been finally determined upon for the North Island Main Trunk railway, immediate steps were taken to put further work in hand. Tho formation is now well advanced between Kawakawa and Taumaranui, while bush-felling, etc., is in hand south of the Wanganui River. From the south end the works extend nearly to Turangarere, all the important works on this section being fully manned. The erection of tho Makohino viaduct is progressing satisfactorily-, notwithstanding that the work has been retarded by continued bad weather. The viaduct will be completed during the coming summer, and simultaneously the railway will be opened to Mangaweka. The amount voted last session was sufficient to cover the requirements for tho year, but an increased amount will bo necessary for the coming year.

MIDLAND RAILWAY

In accordance with the resolution passed by the Public Accounts Committee last session a Royal Commission was appointed, and after a very exhaustive inquiry has reported practically- that the company and debenture-holders have been very well treated. They find that the total expenditure by the company on the railway was L 1,108,628, of which only L 655,411 was expended on the actual construction and equipment of the railway, and the balance, L 454,217, on supervision, commission, salaries, cost of raising capital, interest charged to capital account and incidentals. [Tho finding of the Commissioners is given at length. | POST AND TELEGRAPHS.

Tho post and telegraph is ono of the most important departments of State, and is inseparably interwoven with the public finance, and is one of the baromotors that novor fails to diseloso the progress of the colony, and the condition of the people. In character,it is more for tho convenience of tho peoplo than for revenue-producing purposes, yet notwithstanding the many unpaid services performed it has proved more than self-supporting. Last yoar the expenditure was L416,363,and tho receipts LOOS,IBI. This year the expenditure is estimated at L 441.214, and the revenue is anticipated to reach L 485,800. The increased business in connection with the telegraph and and telephone services is shown by a tablo given.

EDUCATION

Out of the statutory capitation of L 3 15s per annum on the averago attendance which is paid to the Boards of Education, these Boardsjhavo to pay teachers’ salaries and allowances, the incidental expenses of school committees, and their own office expenses, together with the cost of the inspection of schools, receiving, however, an additional grant of L4OOO per annum towards this Inst item. The circumstances of the various boards are vary different, and it is practically impossible for the boards of the smaller districts, and even for the larger boards, such as Auckland, in whose district small schools are numerous, to pay salaries equal to those paid in districts in which there is a greater number of large schools. The consequent anomalies and irregularities in the salaries of teachers occupying similar positions in different parts of "the colony arc such as certainly exist in connection with no other department of the public service, and probably in no other class of workers in the colony. Yet it cannot be said that the highest salaries are by any means too high. So many issues were involved that it seemed best to appoint a Koval Commission to enquire into the whole question. The report of the Commissioners contains two scales of staffs and salaries for a public school. The first, which involves an expenditure of L 4 per head on the average attendance in the public schools of the colony, is a vast improvement on the existing conditions. The second, which the Commission strongly recommends, is on the basis of LI 2s tid per head. It has the same general features as to staffing and salaries as the first, but the salaries are higher by about L 5 all round, except in the smallest schools, where the first scalo is already sufficiently liberal. The salaries under the second scale, in fact, would mean, with very few exceptions, a general levelling 'up. As to the exceptions the Commissioners suggest that for two years no salaries should bo lowered, .and as the I cost of the concession would be trifling I this suggestion may readily be adopted I without interfering with general scheme. Since January of the present year, with the L 3 15s statutory capitation and special vote of os per head, the total payments j have been at a rate principally equivalent I to a capitation of L 4 on the total average i attendance. Last year the appropriation for capitation was L 898,000. This year ! L 416.200 is required to be voted, which is ! L 15.200 in excess of tho amount voted ■ last year. Yext year, the finances of the | colony permitting, as I believe they will, I we hope to be able to provide for payment j to teachers on the second scale rccorn- ! mended. MANUAL AND TECHNICAL INSTRUCTION. The administration of manual and technical instruction last season engaged the attention of the Government. During the recess organising inspectors have been appointed, and the regulations required to give effect to the Act have been issued. The terms of these regulations are such as to offer a degree of encouragement to manual and technical education as liberal as offered bv the State in any part of tho world. The inspectors have already visited nearly every part of the colony, have met teachers and others interested, riving model lessons and such information and advice as will enable local controlling authorities to begin work on the best lines, or extend their work where it has been already begun. Inspectors have also in hand a series of small manuals, suggesting suitable programmes of work in manual and technical classes. One of the most satisfactory features of the movement is the degree of interest being manifested in regard to tho introduction of hand and eve training into the schools of the colony, inasmuch as trained teachers are essential for effective work. Special grants have been given to all tho boards of education to enable them to establish classes giving manual instruction. The extension of technical education proper will' be sufficiently indicated when l say that eincathc

I passing of the Act there have been forty [ or fiftv applications for grants in aid to buildings, apparatus, and material. The expenditure under the head of technical instruction, exclusive of grants for building, for the year ending 31st March, 1901, was L 2690." The expenditure this year may be estimated at L 14,000 or L 15,000, exclusive of building grants, which last year amounted to L 2178. This year the expenditure is anticipated to be LIO,OOO or L 12,000 upon buildings and apparatus. After a few years the grants in aid to buildings and apparatus may be expected to decrease, as the need generally will be satisfied, while on the other hand the grants of capitation and other current items will increase year by year for soma time.

STATE COAL MINES.

After referring at length to the gold mining industry, the Treasurer proceeded The time has arrived when the colony should supply itself coal. The outpu at present does not adequately meet th< requirements. Private enterprise is no meeting the general increase. The annua consumption of coal for several branehei of the public services amounts to abou 110,000 tons. The railways alone requin 100,000 tons a year, and of this 65,00( tons are hard or bituminous coal. Tht inadequate supply and increasing demand have brought about an undesirable situation. There is a combination of coal dealers and mine owners working in unison, with the result that abnormally high prices are charged to consumers. The effect of opening a State coal mine will ameliorate, if it does not remove, this evil in the course of time, and should the necessity therefor arise, we could, in addition to supplying our own State demands, extend the output so as to enable coal to be supplied to consumers at reasonable rates. Another valid reason for the State stepping in is the necessity that exists for having a reserve of coal at least at the four centres to meet contingencies that might arise. At the presont time the arrival of extra steamers and vessels requiring coal interferes with the ordinary demand, and a coal famine ensues. We have had several in the last year or two, and that there should bo a coal famine in a country like New Zealand, which is teeming with coal, points to a serious defect, the remedy for which is the opening of a State coal mine. The House will this session be asked to pass the necessary iegislation to grant authority and provide moans for working a State coal mine. ESTIMATES. The Estimates for 1902 are set down at £5,763,814. The actual expenditure of last year amounted to £5,479,713. There is, therefore, a proposed increase over last year’s expenditure of 42284,111. The revenue being estimated at £5,896,000 and the expenditure £5,763,814, thore remains a balance (£32,563) of the surplus brought forward from last year. After allowing for £500,000 to bo transferred to tho public works fund, these figures show a balaneo of £164,750, out of which provision for supplementary Estimates has to be made. CROWN TENANTS.

Last session, a llebate of Crown Tenants Act was passed. Its working not having been satisfactory, an amendment is necessary, and at this juncture it is well to snealc plainly, for from facts coming to

my knowledge it is clear that persons taking bush land having no capital cannot pay rent until the land yields a return. There are practically no returns for two years. By the time, two years’ ront are in arrear and the yield not sufficient to maintain a settler and family, another two years passes, and he is still behind in his rent, or, if paid, ho has probably had to borrow money for that purpose. Under the circumstances, it is much better that the State should insist upon tho improvement conditions being strictly complied with, and allow the tenant to sit rent free for the first four years. After that time the tenant would bo in a position to pay ront, and the anxiety and worry caused under the conditions now existing would bo avoided. There is also another point worthy of being taken into consideration, namely, that although there is a large area of Crown land available for settlement most of it is inaccessible, and situated a long way from centres of population, and is not of extra good quality. Therefore some inducement is nocessary which, if given, will tend to promote tho settlement of the peoplo upon our Crown lands, and relieve oxisting congestion among those who prefer to go upon the land. Hter referring to old age pensions tho Treasurer referred at longth to the efforts being made to assist agricultural and pastoral industries, which include a proposal to open up cool storage in London. A contract for a direct line of steamers with South Africa is also advised. A tribute is paid to the returnod soldiers, and the question of pay dealt with. The question of federation is alludod; also the 'Frisco sorvice, and steamer communication. [A portion of the statement is givou on the fourth page. |

SUMMARY AND CONCLUSION. In dealing with the many questions necessarily involved in placing the public accounts before members, I havo endeavored to bo clear and oxplicit, not withholding or unduly extending information which is necessary in order to afford a lucid explanation of the finances of the colony. The Budget provos that the financial position of the oolony is sound and prosperous, that the operations of last year were satisfactory, and that at tho close there was a credit balance of L 532,000, that this year there will bo a surplus and additional taxation will not bo required. Provided the present laws remain unaltered, and presuming, as we do, that the public works expenditure will be fairly up to the estimate, tho balanco left in the public works fund is likely to be less on the 31st March next than it has been for some years past. It is better that this should be so; that

there should bo a tapering off rather than increased borrowing. As compared with last year, the difficulty in raising money in London has not been without its advantages. It has taught ns that we may with success float loans locally, under normal conditions, at 4 per cant. The rate is too high. Although money could be raised at 3 per cent at Home, the expenses there are so heavy that it would be an advantage to some extent to raise our money locally at 31 per cent, and to issue debentures over the Treasury counter, or even over counters of the colony’s banker, so that a person could as easily obtain a Government short-dated debenture for LIOO as he can put his money in the bank and obtain a receipt therefor, It must ho pleasing to members to know that tho elasticity of finance for which our oolony is noted still continues, and that, notwithstanding the concessions granted last year, our Customs revenue is buoyant and more than realises expectations. Customs revenue is the barometer of the spending power of the people, and also of our prosperity, and the indicator points between “ fair and set fair,” whilst the financial meteorologist announces a blue and cloudless sky. For years past it has been contended and urged that the State should open its coal mines and be self-supplying. The existing dearth of coal and excessivo charges practically forced tho position. With good selection and careful administration there is every reason to believe

that the result of a State-owned coal mine will, as in many other ventures of a progressive character, prove successful. The construction of roads to the back blocks, roading of lands prior to settlement, the endeavor to improve our communication to permit settlers to bring the produce to market, we realise to be of paramount importance. Bailways in our country should be run for the common good, to give encouragement to producers, small as well as large. The true principle to be observed is to carry produce at the lowest possible rates, so as to give the producers an opportunity of competing with the markets of tho world. Some honorable members may have misgivings respecting the large amount asked for defence, but money spent with this object is only the payment of a premium on insurance to preserve peace. It is wise to be ever prepared for war, and it is also a duty we owe to the Mother Country and Empire, as well as to the people oi New Zealand, that our able-bodied men should be trained to arms : that our sons should be drilled at school, so. as to become efficient members of o'adet corps, and ultimately volunteers, and when required, as was the case of our sons in South Africa, prove themselves valued soldiers of the Ring.

I advise, and that in good faith, that at the present time the good steamer “ Finance ” should be steadied, and that “ slow ” and not “ full speed ahead should be the order on the dial. Reasonable care will insure the good ship riding buoyantly and safely in calm and placid waters.

The information upon which the present position has been gauged will be placed at the command of hon. members, and I trust that they with myself will conscientiously and honestly arrive at the conclusion that our fair colony is prosperous ; that there is a bright future before its people ; that progress is assured, and that as at present, so in the future, this colony will hold a foremost position as a British- dependency. (Cheers.)