PROVINCIAL COUNCIL.

Globe, Volume III, Issue 281, 6 May 1875, Page 3

PROVINCIAL COUNCIL.

Wednesday, May 5. The Speaker took the chair at 5 p.m. PAPBES. The Provincial Secretary laid a number of papers upon the table The Secretary for Public Works laid several papers on the the table. FIRE AT THE LYTTELTON OEPHANGE, The Provincial Secretary said he wished to make ,a few remarks on the late fire at the Orphanage. An official had been sent over to ascertain the extent of the damage done, and he reported that so soon as the alarm of fire was given, and the children being roused, they immediately and without any confusion paraded as for fire drill, and placed their clothes, &c, in a place of safety. Hon members would see from this that a very satisfactory state of discinline was kept up. [Hear.] ROAD BOARD GRANTS. Mr Walker, without notice, asked the Government whether they would lay upon the table returns in continuation of those already made, of the amounts derivable from land sales, and the revenue apportioned to the various road districts. The Secretary for Public Works naid that the return was not prepared, but the Government would see that it was laid on the table. STATION FURNITURE. Mr J. Tosswill asked the Secretary for Public Works upon what date necessary station furniture will be supplied to the stationmasters upon that portion of the Racecourse and Southbridge branch railway, now open for public traffic. The Secretary for Public Works said that all the necessary furniture had been supplied to these stations when the line was opened ; if, however, there was anything wanting, the Government would see that the want was supplied at once. TITLE OP ROAD BOARDS TO THE SOIL OF ROADS. Mr J. Tosswill asked the Secretary for Public Works if it is the intention of the Government to take any action respecting the present unsatisfactory position of Road Boards with regard to their title to the soil of the roads. Mr Wynn Williams said the Government would be happy to receive recommendations from the chairmen of Road Boards on the subject, and they would then at once transmit them to the General Government for consideration. IMPREST SUPPLY BILL, NO. 2. The Provincial Secretary moved the suspension of standing orders in order that the Imprest Supply Bill, No 2, 1875, may pass through all its stages. Mr Knight asked the Government whether the Imprest Supply Bill contained the balance of grants to Road Boards ? From what fell from the Secretary for Public Works he thought that this would be the case. The Secretary for Public Works said the hon member must have misunderstood him. He had told the House that the balance due to Road Boards would be forthcoming so soon as the Appropriation Ordinance was passed. The Provincial Secretary and Sir Cracroft Wilson said that the Government would have no objection to pay over the balance of grant due to Road Boards before the close of the session. So soon as his Honor the Superintendent came back this might be arranged. The motion was then put and agreed to, the Bill read a first and second time, committed and reported to the House, read a third time, and passed. THE FINANCIAL STATEMENT. The Provincial Secretary, in moving the House into committee of supply, said— In presenting the statement which has been drawn up of the probable financial position of the Province for the current year, I have to ask for a certain amount of indulgence from the Council. First for myself, because this is the first Joccasion on which it has been my duty to make such a statement, and it is possible that I may not altogether succeed in properly accomplishing my task. Secondly, for the Government as a whole, if it should be found that from the short period during which we have held office there arc many matters upon which we may not have gained sufficiently accurate knowledge, And it is still more necessary that we should ask for the cordial assistance and support of the Council on this occasion, because it is our misfortune that we cannot come down with so cheering a picture of the financial position of the Province as it has fallen to the lot of our predecessors to show during thepasttwo or three years. This House and the Province generally have of late been accustomed to hear from successive Treasurers that the public chest has been always getting fuller and fuller, and a consequent and quite legitimate eagerness to push on public works all over the country has been the result. It is satisfactory to know that during this period great numbers of the most important public works have been commenced and are under progress, whilst many more have been completed. A falling off of our revenue this year will, therefore, not have so depressing an effect upon the general prosperity of the Province as it would have exercised if we had not energetically used our means whilst we could command them. The railways made, the roads opened up, formed, and metalled, and the bridges constructed throughout the Province, will enable private enterprise to progress successfully, even though the public Treasury is no longer so well able to assist it. At the same time it will be necessary that this House should fairly understand how it stands. Some few years ago we were in perhaps a worse positio i than we are in now, for in the depressed condition of trade and private enterprise throughout the Province we not only found reason for grave consideration in the question—how were wo to meet our engagements from our own revenues, but we had small hope of doing so by appealing to the assistance of the general public. We are better off in this last respect at present, but we have a diminishing land revenue, a cash balance saddled with heavy liabilities, greatly increased requirements, and many classes of expenditure which return little or no direct equivalent in money. Before entering into explanations of the various items under the heads of receipts and expenditure, I propose first to explain the form in which the estimates appear. I will then run through the items of revenue on which we calculate, and lastly, offer a few remarks upon some classes of expenditure, especially those which come more particularly within the department of the Provincial Secretary. But I may say at the outset that the deficiency which members will observe at the foot of the credit side of the balance

sheet, of £261,031 15s 6d is not actually a cash deficit for the present year. On the expenditure side there are several items, such as for instance the Timaru breakwater, the Waimakariri Gorge bridge, the General Government Public Buildings in Christchurch, and others, on which, although we take votes for the full amount for them, we shall not require to expend during the current year more than perhaps small instalments. Consequently this deficit of £261,000 merely shows in reality that the Province, in connection with votes such as these, has incurred certain liabilities, the greater part of which is to be borne by future years, I have attached to the estimates a statement showing the precise position in which we estimate that the Province is thus situated. Adding also to the above sum of £261,000 the amounts which we shall require for votes postponed to the supplementary estimates, I proceed now to explain the form of the present estimates. The principle of the estimates obtaining for some years past, has been to divide the revenue and expenditure into four schedules: one for current income and expenditure; one for land revenue and works; one for railway and harbor works; and one for railway renewal fund. As this last includes only amounts transferred to it for a specific purpose, and these amounts are not further dealt with during the year, we may still leave things as they are in this respect, and keep this as a separate schedule. But with regard to the others, the position to which they have come is this. Starting from an implied intention to preserve a balance in each schedule of account, that is to say, that current expenditura should be met out of income, and that all receipts from land revenue should be devoted to reproductive works, year by year that intention was more was more and more broken into. It appears now that schedule A, ordinary revenue and expenditure, was, on March Slstlast, in debt to the amount of £13,403 2s Id; that is, this sum must have been taken from other accounts to make up the balance of schedule A, Looking at the estimates of last year it is found that this schedule is credited with an amount, interest on bank accounts £15,000, But as by far the greater proportion, indeed almost the whole, of the balance in hand on which this interest was due, belonged to schedules B and 0, clearly this item of interest ought also to belong to them, so that in reality the position of schedule A in June last was worse by £15,000 than actually appeared on the estimates. At the same time, however, several classes of expenditure have appeared in schedule A which did not properly belong to it. Public plantations, the Public Works Department, and others are fairly chargeable, not to ordinary but to land revenue, and the same may perhaps also be said of the chief part of the permanent charges—viz, interest on debentures, consolidated and unconsolidated. But whatever might have been the state of this schedule last year, it is much worse now. In the first place, supposing we kept to the old system, we should have on one side an estimated revenue larger, certainly, than that of last year, but on the other side, over and above the debit balance of £13,403 2s Id, an estimated expenditure in several classes, almost every one of which is greatly increased from past years, and will constantly increase for the future. From the attached return, marked A, which I lay on the table, it would appear that mider this system we might have a revenue for the current twelve months of £296,615 3s 8d under schedule A, and an expenditure of £344,166 9s Bd, or a deficit of £47,551 6d. Obviously this must be made up in one of two ways. Either we must borrow from the revenues under other schedules, in which case many much required works must be postponed, or we must initiate a system of taxation to increase our ordinary revenue. lam assuming here that we keep the tariff of railway charges at its present rates, though even if it were altered, unless the alteration were considerable, the deficit under schedule A would still be very large. Now suppose we still keep to the old arrangement of schedules but transpose the classes of expenditure so as to place each against the revenue to which it is fairly [chargeable. The return marked B shows how this would work. the deficit here being still larger than before—-£63,736 16s sd. Even if we were to add to the schedule the revenue and expenditure of railways and wharves, there would not be sufficient to make up this sum, It is evident therefore that if schedules B and C are to be perpetually finding funds to meet the deficiencies on the ordinary revenue, there is not much use in trying to conceal the fact that they have to do so by means of shifting about the classes of receipts and expenditure from one schedule to another. It is perfectly fair, theoretically, to say that the land fund, being, so to speak, our capital, should not be taken to provide for our ordinary wants, which ought to be met out of income. But if we have not sufficient income to defray our ordinary expenses, and if we must take slices of the land fund for that purpose, the theory 1 have just mentioned, confronted with facts, must necessarily fall to the ground. It appears therefore that under these circumstances we might just as well at once do away with the old arrangement, and look our position fairly in the face. It might of course be possible to keep the schedules as at present, and put down as a receipt of schedule A a transfer of sufficient funds from schedule B. And probably, if there were any likelihood that in future years the position would be materially altered, this might be the best way of doing it. But it must be remembered that the ordinary revenue does not increase in the same proportion as the ordinary expenditure. Many classes do not yield any revenue at all; for instance, police, gaols, orphanage, charitable aid, are all, as at present constituted, outlay without direct return. Changes may be made at some future time to remedy this, but we cannot now calculate that for some time to come our ordinary revenue is likely to be sufficient of itself to meet our ordinary expenditure. The estimates have thereforebeen made up in a form which actually shows the true state of the case : the different schedules, with the exception of schedule D (as above explained) have been done away with, and, in accordance with the real facts, the expenditure under the various classes is charged against the revenue as a whole. At the same time this has been so arranged that the old order of classification has been generally followed. Opposite to the various classes of revenue are placed, as nearly as possible those classes of expenditure which ought to be fairly charged against them; not as showing that each expenditure can be met from its corresponding source of revenue but as a guide those members who are perhaps accustomed to the former arrangement. hTe object sought to be gained by this plan is, besides its correctness, simplicity: for there

can be little doubt that there is now no room for that constant shifting and confusion of items which must result from a continuance of the old system of schedules, I may remark here that the necessities of the case, even for the past, force us to the same conclusion. As I have stated above, there is a debit balance against the old schedule A of £13,403. On the estimates of June, 1874, I find that the revenue under this schedule was put down at £180,006; whilst in the Appropriation Ordinance of the same time there appears an authorised expenditure of £181,664, leaving a deficit of £1668. This deficit having increased during the financial period to the sum stated above, it is clear that the whole of it must have been paid out of the revenues of schedules B and 0. What, then, is the use of keeping up the pretence of separating the various accounts, when some of them must always be taken, whether we like it or not, to make up any deficiencies in the others 7 Having explained the reasons which have led the Government to adopt the present form of presenting their estimate of the provincial revenue for the coming year, I have now to give such explanations as are necessary regarding the various classes and items. But before doing so I will refer first to the item at the head of the account, “ balance in hand, March 31st, 1875, £351,943 13s Id.” This balance is the sum that remains to us of the balances to credit of schedules B and C, from former years, and of the additional sums voted to them last year. But it must not be forgotten that we can by no means calculate upon possessing all this balance for appropriation to new works this year. The footnote appended to the account I am explaining, shows that of this amount a sum of about £200,000 is due for liabilities already incurred—some for unfinished (ontracts, some for works contracted for but not yet commenced. Consequently, although we have to revote the whole of this money, we, have only £150,000 of it available for new appropriations, and the House will readily understand how, with all our other requirements for the coming financial period, our power of initiating further progressive works will be curtailed. In reality, a portion also of this available balance is placed on the estimates as revotes of various kinds; that is, for works decided on previously by this Council, but on which no action has been taken. I shall now proceed to explain the other items in their order. It will be observed first, that at the head of the list appears capitation grant, £46,470. This item has not hitherto appeared on the estimates in this form: the usual way being to simply put down the surplus, if any, arising from this source as against the expenditure charged to it. This sum is calculated as at 15s per head on the estimated population of the province, 62,320. It is a sum paid by the Colonial Government to the province, under Act of the Assembly, for general purposes. But we do not actually receive it. The Colonial Government devote the capi tation grant to the province towards the payment of the interest and sinking fund on our provincial loans amounting to £47,703. It will be seen therefore, that at present this account is still somewhat against us, the difference payable by us being £1233, The capitation grant, however, is calculated by the Colonial Government on the basis of population yearly, and it is probable that in June next, when a new estimate is made, it will be found that by the increase of our population the capitation will be sufficient to pay our interest and sinking fund, and leave a balance to our credit. With regard to the following item of £702, this is a sum due on certain debentures which were not consolidated, and on which interest has to be paid in Christchurch. The Colonial Government refund to us this money, and in consequence the same amount appears on both sides of the estimates. The next three items call for little remark at present. The pasturage rents decrease of course year by year, in consequence of sales of land, till 1880, when a new arrangement will be necessary regarding them. With reference to the receipts from hospitals and lunatic asylums, the Government cannot see their way at present to calculate on a larger sum than is here put down, but they are of opinion that in future some better scheme should be adopted for securing returns from these sources. I find from a return sent to the Government, that in the Christchurch Hospital alone for the period of nine months, between July Ist, 1874, and March 31st, 1875, there is a sum of £1624 2s due from patients discharged. The Council will probably agree that this is a matter which requires looking into, and the Government are prepared to consider it carefully, with a view to a stricter supervision during the recess. In like manner the receipts from the Lunatic Asylum might probably be increased. The inebriate ward, in the opinion of the Government, should certainly be made to contribute more than it does at present to its own support. The next item, sheep tax, &c, calls only for the remark that, although apparently less than the corresponding expenditure on the other side, it will be sufficient to meet it, as there is a sum of £414 12s 6d now in hand from fines of the last year. The two following items I need say nothing of. I come now to the item land revenues, £IIO,OOO. The Government, after carefully considering the probable land sales for the year, have arrived at the conclusion that they cannot fairly be estimated at more than 60,000 acres. The sales in the first few months of this year were much smaller than they have been for some time past, and it will be remembered that the estimate of receipts under this head for the last financial period was not realised within £40,000. It seemed to us therefore that it would be better to err, if we err at all, on the safe side, and the acreage I have named, 60,000, equal to £120,000, appeared to be the extreme limit of safety. This amount had, however, to be reduced by the estimated proportion which would have to be paid over direct to the Timaru and Gladstone Board of Works, and the balance to the credit of the Province generally is, as stated, £IIO,OOO. The item Sale of Little River Reserves is the sum which we expect to realise from about 119 acres of timber land which remain to be sold at Little River by auction under an Ordinance of this Council passed in 1869. The next sum of £971 7s 6d has, since we came into office, been received, and is therefore cash in hand. The three next are sums which passed through the hands of the Steward of Reserves. Of the Educational Reserves I find thaf there are already let an acreage equal to a rental of £3517, and that Crown grants have been sent down for a number more, which will bring in another £I6OO, or a total of £5117. The Pastoral Reserves, £3005 18s, are those which have been set apart for the endowment of superior education under resolutions of this Council. The

sum is paid in the same way as pasturage rents, on May Ist in each year. Whilst I am on this point I may remark, with reference to the Canterbury College, that the Government have several times had under their consideration the question of the proper site for this establishment and the cost of its erection. With every desire to come to a satisfactory conclusion, it has been extremely difficult for us to do so, on account of the very great diversity of opinion which we, found existing, not only in this Council, as shown by the result of last year’s votes, but in the Board of Governors of the College and the outside public. There were also many questions affecting the purchase of land for this purpose which tend considerably to complicate the matter. In considering, however, the financial position of the Province, the Government have also had under their notice the question whether it might not be easy and advisable to save to the country « large sam of money by devoting the building known as the Normal School to the purposes of the Canterbury College. We have not y«t arrived at any definite decision as to whether we shall propose this course to the Council or not, but we intend shortly to inform the House of the conclusion we may come to. The next item is education, contributions and rates, £23,225 4s 9u. This is an item very considerably in excess of the sums which have ordinarily appeared under this head. I draw the particular attention of the Council to the explanation I am about to offer regarding it. Members will remember that up to the present time, under the Education Ordinance, 1873, districts in which school buildings are erected are required to raise one-sixth of the amount required for their erection. In the face of the fact that the revenue has considerably fallen, and shows signs of still further reduction, it has appeared to the Government that in every department it was necessary to practise the most severe economy possible. Now the amount, as will be seen by the estimates, required for the Education department and maintenance of schools is £42,084, and the buildings and works for the same purpose, including the Normal School, require £61,365 3s 9d more, that is, a total of £103,449 3s 9d. Adding to this the suras which have been expended since the passing of the Education Ordinance, as taken from the auditor’s comparative statement, amounting to £108,245, it will be found that our total expenditure for establishing the educational system, supposingthe sum now asked for be voted, will have been £211,694 3s 9d. There is no reason to say that a highly-organised system, such as we have striven to establish, could have been perfected without great cost; and probably whilst money was plentiful in the treasury it might not have been necessary to curtail the expenditure to any great degree. But this year we find ourselves in a different position. With a falling land revenue, and a cash balance in hand reduced by very extensive liabilities, we have an expenditure constantly increasing, and numberless applications from all parts of the Province for new works and appropriations. At the same time there are departments upon which expenditure is absolutely necessary, in order to carry them on at all. The railways, harbors, and roads must be provided for, otherwise the progress of the country would be retarded. But of our disbursements on these we receive back on the other hand a large proportion by way of charges, tolls, and rates. But we are each year taking large sums of money which might more properly _ be devoted to these purposes and expending them on education, and against these the return in cash does not appear to be more than a small one. The Board of Education, I may observe, seem to recognise the defect of the prevailing system, for they have recommended to the Government the preparation of an Amended Ordinance, by which, amongst other provisions, the wants of education might be met by raising a property tax throughout the Province. I need hardly say that a proposal of this kind, coming from the body who may be taken as having the fullest possible experience of the merits or demerits of our present system, shows very clearly the absolute necessity that exists for increasing in some way the share borne directly by the people for the establishment and maintenance of schools. The Government very carefully considered the recommendations of the Board, and have drafted an Education Ordinance, which will shortly be introduced. But we did not see our way to the adoption of the proposal for a property tax. I shall not [at present enter into this question, as the matter will of course be fully argued when the Bill is before the Council. But with regard to the item I am now considering, it is made up in the following way—We have raised the con tribution towards buildings, for districts already established, from one-sixth to threesixths, leaving the first contribution of new districts to remain as at present. We estimate that of the £53,974 9s 6d expenditure on school buildings, the sum of £42,790 9s 6d is required for old districts ; three-sixths of this will be, as printed in the footnote, £21,345 4s 9d. For new districts the remainder is wanted, and one-sixth of this will be, as printed in the foot note, £1864. The total is therefore £23,209 4s 9d. In this calculation the-cost of the Normal school is not included. The other proposals of the Government regarding education will be explained when the amended Ordinance is introduced ; but I may here state, as the point is connected with our financial arrangements, that we propose to raise the school fees from five to ten shillings per child, making therefore the maximum limit of fees forty shillings instead of twenty as at present. The school fees do not pass through the Treasury at all, and so are not directly under our consideration just now. We next come to two items of harbor receipts. The first, harbor fees, does not require remark, except that it leaves a small surplus over the expenditure under this head. The second, harbor works loan, is an amount authorised to be raised by Act of the General Assembly, but it has not yet been raised. I find in the Appropriation Ordinance of last session that a sum of £152,996 Is 3d was voted for Lyttelton harbor works. The Auditor’s comparative statement shows that, of this £30,886 11s 2d has been expended. As the works in Lyttelton are rapidly progressing, it will be necessary during the current year to take steps for raising the remainder required by loan as authorised by the Assembly. A few small items come next, on account of immigration. These sums are, first, the amount estimated to be received during the year on account of immigrants’ promissory notes; secondly, rents receivable from in the various depots and cottages (I find that during the last nine mouths £292 9s 4d was received on this account, but the Immigration officer expects only £IOO this year);

thirdly, a refund from the Colonial Government, representing the sum which I understand they are prepared to pay to the Province. The Provincial Government has during the past year entered into contracts for additions to the various depots in the Province, under arrangemen i with the General Government, by which they were to repay to the province the cost of the same. The expenditure up to 30th September last, amounting to £5784 16s 7d, has been repaid, and the balance will be repaid as soon as the account is rendered. The earnings of rail ways and wharves are put down, as estimated by the Traffic Manager, at £161,064, This is calculated as follows:—First, receipts on mileage of railways as existing in 187475, £114,760 (I omit shillings and pence), less a deduction for loss by reduced rates of carriage from August to March, £7520, leaving a balance of £107,240; secondly, an increase, calculated at the same rate as the increase of last year over the previous one, £22,788 ; thirdly, an increase in the amount of grain traffic, which is put down at £3879; fourthly, an estimate of twelve months' receipts on the Bakaia, Malvern, and Gust extensions, £ 17,694; fifthly, estimated receipts on the new lines to be opened during the year, £9,462. The expenditure on all the Railways, the details of which I leave for the explanation of my colleague the Secretary for Public Works, is calculated at £148,450 Is Id. The difference is therefore £12,613 18s lid. From this, at the end of next March, we shall have to deduct 5 per cent of the gross earnings for the renewal fund, or £8053. So that we calculate that the railways will return us, as revenue to be carried on to the next year, by the 31st March next a surplus of £4460 18s lid. It will probably be observed that this, even adding the 5 per cent for the renewal fund, is a very small prof t to make on a gross amount of earnings of £161,064, and the Council will perhaps be inclined at first sight to think that the sums appropriated for the two departments of the railway must be in excess of requirements. It is not in my duty to enter into details of these sums, which belong to the province of my colleague, the Secretary for Public Works, and on which, when his turn comes, he will be able probably to give satisfactory explanations. But it does belong to me to show the Council why the Government have not been able to see their way to a larger profit than I have named. First, it must be remembered that during the current year we shall have to take over and work seveial new lines of railway, which are at present not ready for traffic. For instance, the extension of the main line to the Rangitata, the line from Timaru to Temuka, the branch line from Racecourse towards Southbridge, and others, will be opened probably in a few. months from now, and we have to find the necessary means for working them. But, obviously, at least for the first year, if not afterwards, we must work several of these at a loss. In some cases, perhaps, little direct profit at all may be expected, but in all time will be required before they can pay. I have before me a return from the railway manager, in which he estimates that the cost of working the new lines, including traffic and engineering departments, will he £22,006, whilst he puts down the probable receipts on the same lines at only £9462. Here then is a direct loss of £12,544, which has to be made up from the profits of other lines. Secondly, the Council will remember that in the statement regarding the railways by the late Secretary for Public Works, it was stated that the reduction of the rates of carriage on railways had resulted, during the last financial period, in an estimated loss of over £12,000. This reduction had been in force for only seven months, and so, for twelve months, we may assume that the loss would have reached £20,000, or about 16 per cent on the gross earnings of the year. Taking the same basis of calculation for the current period, the loss from reduction of rates, on a gross total of earnings of £161,064, would amount to £25,760. It may be said, and perhaps to a great extent truly, that the benefit derived by the country from the railways is not to be measured altogether by the direct profit or loss in money to the Treasury. But in our present financial position it is absolutely necessary that we should make up as far as we can the deficiencies of our revenue. We have a certain deficit to meet, and the people must make up their minds to bear additional burdens to do so. The Government have, therefore, prepared a Bill for a Railway Tolls and Management Ordinance, which will give power to the Superintendent to levy the required tolls on the lines, and, amongst other things, to make charges for haulage, wharfage, and cranage for the loading and unloading of ships in Lyttelton Harbour. It appears that at the present time no charge except the general wharfage fee. of Is per ton is made for these purposes, a system which seems to be neither profitable nor just. I may observe that the Bill I refer to is substantially one that has come to us from the late Executive, whose views on this matter would appear to have been the same as our own. Members will see that we have put down as receipts, contingent on the consent of the Council to the charges we propose, a sum of £20,000. I believe that this is by no means too high an estimate, especially as the loss on the rates of carriage alone was calculated at over £12,000 for the past financial period. This sum of £20,000 would therefore have to be added to the railway profits at the end of the year. I hope that I have fairly succeeded in conveying to the Council a right impression of the position ot our railways. There appears to be no doubt that we are working some of our branch lines and new extensions at a direct loss, under present arrangements. Possibly after some time this may be changed, and these lines return us a profit But whether the loss at present results from the unproductiveness of these lines, or from the reduction on the rates of carriage generally, or from both of these causes, there is no doubt that the railways are not returning us so large a profit as we might expect, and, in face of our general position we must do what we can to increase our receipts uuder this head. I next come to the item lighterage—l find that, during the last year there has been a small loss on this item, according to the railway statement of the late Government, of £lO7. The two sides of the account ought at any rate to balance each other, even if the Government did not receive any profit as compensation for the trouble of collecting the accounts. The next item, sinking fund and interest on same £22,000, is an amount which we may or may not receive. I understand that a difficulty with regard to this matter has been existing for some time past with the trustees of the sinking fund at home, and until the question is settled we cannot receive the money. We may get it this year and we may not; but we have a right to con-

rider it at least as an asset. The items of ref and from General Government are, as I am informed, made up as follows. The refund for the Northern Railway is for certain works done on behalf of the Colonial Government by this province, of which the account has been rendered. For the Bakaia bridge an account was sent to the Colonial Government for the sum of about £4OOO. It appears that a few items are disputed, but the sum put down of £2666 6s is th at which, as we are informed, is agreed to. The refund for railway material refers, as I understand, to the fitting up of certain narrow gauge locomotives and rolling stock, an account of which has also been rendered. The last item of revenue is interest on bank accounts, £IO,OOO. Of this amount I believe that £6BOO will be actually due up to next September for the sums at present in the bank on fixed deposit, and we calculate that in the remaining six months of the year we may reckon at least on the rest, namely. £3400. I have now gone through all the items which make up our estimated revenue. On the other side, the classes of expenditure with which the Provincial Secretary is most directly concerned are chiefly departmental. Only a few of these need from me any remarks in such a statement as that which I am now making. The increase in the expenditure on gaols, police, hospitals, and the like, is mainly due to the fact that our population is rapidly becoming larger and settlement more extended. I believe that the Government would find it difficult to reduce to any great extent, consistently with the preservation of efficiency, the sums we have put down for these purposes. I will only remark here that in the case of the Lunatic Asylum the Government have had their attention called to the urgent necessity of providing for a resident medical officer for that institution. We have not been able, in the short time at our disposal, to decide precisely on the course which we ought to pursue in this matter. But we will take care that it is not lost sight of, and that due provision shall be made as soon as possible. The item of “ Charitable Aid, £7689 35,” requires explanation from me. The Government, in considering the estimates, observed that this department appeared to have been increasing most rapidly year by year; that the expenditure asked for, nearly £IO,OOO, seemed to be much out of proportion with that which ought to have been required in a country like this ; and that, moreover, there appeared to be an absence of that complete system of control and care which is necessary. We thought likewise that, if it were possible, the work of charity should be carried on more directly by the people of the province themselves, and that the Government, if obliged to bear its share, should do so, not by taking charge of the whole, but by aiding the efforts of those persons who would step forward and attempt to initiate the necessary benevolent institutions. Looking round to the neighbouring provinces and other countries, we found that this last was the system followed, and we therefore determined that, if the Council would support us, we would lay down the following rule:—For six months of the year we will continue the present system, because we cannot suddenly cast adrift those who have become dependent on us. But after that time, charitable aid, in view of the inability of Government to perpetually carry it on, must cease to be a department of the Government; the people must exert themselves for the support of their suffering fellows. But, as a grant in aid of any deserving benevolent institutions which the charity of the people may establish, we will give, for the remaining six months of the year, a sum of £3OOO. Any grants for future years would of course depend upon the ability of the revenue to furnish them. Without any wish to press hardly upon those who really are unable to support themselves, without any desire to add unduly to the burdens which the population of this province must necessarily make up their minds to bear for the future, we do think that the course we propose is not only the one which we are bound to follow in the present state of our finances, but also the one which, as a Government, we are bound in justice to take. I shall say only a few words upon another item, Surveys, £34,639 10s. The Government have naturally not had time to look into the details of all the departments under their control, but I may say at least as much as this: that we are aware that for some time past there have been made various complaints, publicly and privately, of the state of the surveys of this province, and that we will undertake that as soon as time can be spared, investigation shall be made into those complaints, and that no time shall be lost, in the case of those which are substantiated, in taking such steps as may satisfy the complainants. It is only necessary for me to add that, if I should happen to have the honor to hold the office which I now occupy, I hope that those who have real faults to find will manage in such a way as that the matters they complain of may be brought directly under my notice. It will be observed that the Departmental Expenditure under this head amounts to £15,639 10s, and that extension of surveys requires £SOOO more. The item of £14,000 for contract surveys is one which, in the opinion of the Government, will require looking into with some care. Objections have often been made to this mode of conducting the work, but the Government will ask the Council to grant the sum put on the estimates, and during the recess the whole question will be considered as carefully as possible. The remaining classes of expenditure for the coming year are either such as can be fully explained when dealing with them seriatim, or such as I have already alluded to. It only remains for me now to briefly summarise the results of our inquiry into the financial position of the province. First then we find that the ordinary revenue is not sufficient 'alone to meet all the requirements of the ordinary expenditure, especially when this latter is increased by the debt which weighed upon it at the close of the last financial period. We find also that the prospect of improvement in this respect is not such as to allow of our continuing the separation of the schedules as heretofore. Next, it appears that our available balance for public works is reduced considerably, on account of the heavy liabilities handed down to us from last year, whilst the land revenue at the same time is also diminished. The profits from railways would probably not be so great as they should be, owing to the loss in working the new lines and the reduction in the rates of carriage, and we are therefore compelled to increase the public burdens in this respect. The requirements of the various departments are, on the other hand, steadily increasing. Police, gaols, hospitals, education, surveys, all these require large sums,

'''wETrs'rptfßlic wcifks' mhst go on, Eoad Boards and Municipalities must be assisted, and the railways and harbor works must be extended and perfected. The real fact is that in past years, when we have had a plethora of money, we have become almost intoxicated with our good fortune, and we have voted most liberal sums for very large works, trusting that the revenues of succeeding years would help us to finish them. Now we have come to a time when our riches are less, and with requirements almost aggravated by the fact of our former liberality we find ourselves, not only weighted with the legacies of the past and unable to count with any certainty on improvement in the future, but also hard pressed to provide for the wants of the present. Under these circumstances, the Government have thought it their duty to place before the Council, under the form of estimates, the whole of the sums which are liabilities from the previous year. With regard to the departmental expenditure, we have not been able to ascertain precisely how far we can reduce the amounts asked for, but we are of opinion that, by the exercise of a strict economy, some of these might perhaps be somewhat lessened. As for the expenditure on public works and railways, we shall indicate to the Council when going through the estimates, those sums which we think may be struck outor reduced. We have not, we believe, omitted any items which ought to have been shown, because we desired to make the province understand exactly its position. Whatever economies we may effect before passing the Appropriation Ordinance will, we hope, reduce the balance against us. I may observe here that in preparing thpse estimates we have gone over them most carefully several times, and that we have already struck out a great number of works, amounting to about £IOO,OOO, many of which were promised to be placed on the estimates by the late Government, but which we considered must give way to the necessities of our position. I have now only to thank the Council for the attention with which it has heard me, and to move that the House go into committee of supply. The conclusion of the statement was greeted with loud cheers. The Provincial Secretary then moved that the Speaker do leave the chair.j Mr Parker said that the House must be very much startled at the position revealed by the statement of the hon member, and he would ask the Government what were the estimates of their predecessors, so that the Council might see the view taken by two sets of men. Sir Cracroft Wilson said that, as regarded the railway estimates, and indeed all the estimates they were left very much in the dark. The railway estimates, as regarded the departments, were only received three days before, and then only after a notice had been given to the head of the department that his estimates would not be included. This had the desired [effect, for in less than twelve hours he sent in his estimate of expenditure for his department, which amounted to £106,000. [Laughter.] Mr Maude wished to ask the Government whether they did not find the departmental estimates bn their accession to office. The Secretary for Public Wohks said that he might say at once that there was no such estimates as any Government could bring down to that Council with credit to themselves. [Hear, hear.] In fact, there were no estimates at all. I Hear, hear ] r Mr Jollie wished to say that the departmental estimates were sent down to the printers. Of course the estimates forming the framework of the financial policy were not sent down. Mr Wynn Williams said that he denied at once that the members of the late Government had prepared any estimates, as they had led the Council to believe. This was proved from the fact that the railway estimates were only sent in three days ago, and those for the Board of Education only came in when the present Government took office, i He certainly objected to the members of the i late Government saying that their estimates had been prepared, because the fact was that nothing beyond the requirements of the heads of departments had been prepared. Mr Higgins said that the statement of the late Secretary for Public Works left the impression on his mind that the Government had prepared their departmental estimates only, and not their estimates of receipts and expenditure. Messrs Tosswill and Westenra having spoken, Dr Turnbull said fhat he never saw a set of estimates so utterly and entirely disgraceful as those now before them They were founded on the principle of nursing up of property and the destruction of the rights of the people. The people were called upon to pay increased taxation to keep up property ; they were told by the Provincial Secretary that no property tax should be imposed though recommended by the Board of Education; As a representative of a centre of population he protested against such a course being taken. It was property verms people, and as such he should take his stand against it. Let the Government allow of an adjournment being made, in order to allow of the public considering the statement, and he felt sure that the estimates as now laid before them were utterly and entirely unsatisfactory. He would .be prepared to move that the debate be adjourned. Mr K. Turnbull thought the Government were to be congratulated upon the step they had taken, and he should support them. The fact was that Provincialism had demoralised the people to such an extent as to make them rely wholly and entirely on the State. He thought, therefore, that the Government were right in taking the course they had. Mr J. TbSSWILL said he quite agreed with the remarks of the hon member for Christchurch (Dr Turnbull). The fact was, that there was a tendency throughout the estimates to place property against the people, which he considered was not right. He would point out to the House that there was on the estimates an item for capitation, which he called attention to, which was the contribution of the people to the revenue. He should always oppose the setting in opposition the rights of the people and property, Mr Montgomery said that he thought it was only right that the Council should have time to consider the speech of the hon member the Provincial Secretary. But while be said this, he desired to read to the House what the hon gentleman said at the time to the Council. He would read it from the public prints, and it was as follows—“On the first day of our taking office it is, as the House will at once see, impossible for us to ascertain what information has been left in the Government offices. But I may say this, that the learch 1 hate been able to make to-day has

not been attended with much information ; indeed, I may say that the information is of the meagrest kind, and not such as would guide me in making a statement.” Mr Maskell desired to rise to make a personal explanation. The remarks attributed to him were not correct, what he had said was that they could not take a less time for adjournment than a fortnight. Mr Montgomery would desire to point out that the remarks were printed in a letter written by bis hon colleague to both newspapers, and which was not contradicted at the time. His colleague wrote, after quoting the words thus reported, as follows : —“ As this must convey a wrong impression to the public, I wish xo state that the departmental estimates, which belong to those branches of the service which are under the control of the Secretary for Public Works have been prepared, and are now, I believe, either in the Public Works Office or in the hands of the printer. These estimates include the harbour department and the whole of the railway estimates for working expenses. The Provincial Engineer’s estimates have been somewhat delayed by reason of his having to attend the Rakaia Bridge Commission, but I understand they have been sent in to-day. If Mr Maskell, or the Secretary for Public Works, had adopted the usual course of enquiry from the Assistant Secretary in the Public Works Office, he could have obtained the information which I now give. 1 may add that I am also aware that my late colleague, Mr Jollie. caused to be prepared estimates for the departments under his control, and that I heard him give instructions to the Assistant Secretary to send the estimates to the printer.” Now be (Mr Montgomery) desired to point out that all was done that it was the duty of the Government to do—the whole of the departmental estimates were completed. The materials, he contended, were all there, and if the hon gentlemen had asked their undersecretaries, they would have found them. He challenged any member of the Government to say that all was not done by the late Government that they were entitled to do. He thought, however, that it would be much better if the Government took a vote for the first item —which would not bind anyone — and then allow the whole matter to be discussed, [Hear, hear.)

Mr Jebson said the Government were entitled to the best thanks of the House for the very clear and able statement they had made. As regarded the late Government, there only were two points to account for their conduct: one was that they labored under the hallucination that they had prepared estimates, and the other was that they he d only left their seats for a short time, and would soon be back again. He thought that the result of the financial statement would be to awaken public spirit. If they had gone on as in the olden times, the public would very soon not only come to the Government for their food but their clothes also. He looked upon the statement as one which revealed plainly the state of their finances, and he need only refer to the item of education, where he found that after all the money spent on it, all that had been returned into the treasury for nine months was some £I2OO.

Mr Maskell desired to explain that the whole amount of contribution was about £2600, but only £1240 had been collected. Mr Jebson pointed out that this did not alter his contention. Only £I2OO had come into the treasury during the nine months. Then again let them look at the Charitable Aid Department. During the nine months some £IO,OOO had been spent, or over £IOOO per month in a population of 70,000, He did hope that in the railway particularly the Government would see whether a reducticn could not be made, as while not wishing to see heads of departments interfered with, he thought that they should not be allowed to draw on the Government funds for whatever they wanted. The Government had taken a proper stand, and he hoped they would receive not only the support of the Council, but that a keen and appreciative public spirit should be evoked, Mr Webb said that he quite agreed with the hon member for Eakaia (Mr Jebson) that the Provincial Secretary was entitled to the thanks of the Council for his clear J and comprehensive statement. One thing he would desire to ask the Government, and that was, whether they intended only to make an increase in the charge of .haulage, and for crane and wharfage. He trusted that they did not intend to raise the passenger fares, because they were quite high enough. He had seen somewhere that the cost of working their railways was much lower than that in other colonies where the price of labour was not so.high; hence he thought that beyond the charges he had referred to, the Government need not make any increase. Mr Knight thought that the change of leaving out the schedules in the estimates was not a desirable one, as he would much rather see a loan taken from [schedule A to schedule B. [Hear, hear.] He considered that the speech of the hon member for Christchurch (Dr Turnbull) respecting the opposition of property to the people, was a most radical one, and one totally unworthy of a member of that House. [Hear, hear.] The proper time, he took it, for discussing this question, was when the amended Education Bill was before the House. [Hear, hear.] He might say that when people spoke of economy he should like to see the reduction begin at the fountain head. He would point out that under the Government before the last the offices of Secretary for Public Works and Provincial Secretary were amalgamated, and the salary fixed at £SOO, under the late Government, and he saw the present Government had continued it, the same offices were to cost £ISOO. He had hoped that the present Government would have seen their way to have returned to the former system. The Provincial Secretary in reply said that he might say, so far as he was personally concerned, he was quite prepared to see a reduction of the salary attached to the office he held—[no, no]—because he quite agreed with the hon member who had last spoken that reductions should be made at the fountain head. Now, with regard to matter of the extra contributions by districts under the Education Ordinance for buildings, &c, the Government thought that if the people bad to put their hands into their pockets and pay their quota of the expense incurred, there would not be such an extravagant expenditure of the public money. To give hon members an illustration of what he meant, he might say that they had a number of schoolmaster’s houses proposed to be erected, ranging from £3OO to £IBSO. [“Oh, ohl”] This, it would be seen, was utterly absurd, and so the Government thought it. ' [Hear, hear.] This was the reason why they wanted to make the people contribute more

than at present, in order to check the extravagant notions now in vogue. As regarded the question of charitable aid which had been referred to, he might say that whatever arrangements might be entered into the Government would endeavor at the end of the six months referred to by him, to grant a sum of money for the establishment and maintenance of institutions such as existed in other colonies. If it was found that this could not be done, then all the Government could do was to return to the old system. In reply to the hon member for Lyttelton, he might say that the Government intended to increase both the rates of haulage and carriage. Under the Ordinance the Superintendent had the power to increase these, but the Government wished first to come down to the House and tell them that they were going to do so, As to the remarks of the hon member for Christchurch (Dr Turnbull), he thought that they had been made in the heat of the moment, and that the hon gentleman would in his cooler moments repent of what he had said [Dr Turnbull—“Not a bit.”J Well, if this was so, he was sorry for the hon gentleman, that was all he could say. To say that a popular representative Government was imposing taxation upon a class least able to bear it, which was the gist of the hon member’s remarks, was absurd, and one quite beneath the notice of any Government. There was a large deficit to make up, and they had to do this by taxation equally on all classes of the province. They had no sympathy with the rich any more than with any other class, and he should just as cheerfully tax the hon member for Christchurch as any other man, and perhaps more so. The Government felt that to impose a property tax for education would not reach those who were benefited by it, because that class would not be likely to take advantage of the State schools. The Government would be quite willing to give any information that might be necessary on the various items, | Hear, hear.] The motion was then put and agreed to, and the House went into committee.

In committee, The Provincial Secretary moved the first item—Permanent charges, £48,405. Mr Turnbull asked the Government whether it was their intention to support the estimates as a whole. They had taken a very manly, straightforward course in their statement.

Sir Cracropt WILSON said that the Government intended to stand by their estimates, but they intended if possible to reduce where it was necessary. They would be very happy to have the assistance of the hon member in this course. The Provincial Secretary said that of course the Government inteneed to stand by their estimates, but as they went along they intended to propose reductions where necessary, in order to meet the requirements of the province; Mr W. B. Tosswill thought that the Government, in taking the course proposed, were pursuing a most objectionable one. [Hear,] They brought down a set of estimates, and yet they were now told that the Government intended to propose reductions in items. This was a position which the Government should not take up, and one which it was unfair to the House to assume. [Hear, hear.]

Mr Jebson thought the course pursued by the Government was a perfectly intelligible one. He did hope that they would not be entrapped into such a foolish line of conduct as to resign if an item were reduced £2O or £3O. He was quite surprised to hear the speeches made by hon members on this point. If the Government proposed to sacrifice their principles, that was a very different thing.

The Hon G. Buckley said that the Government, of course, were prepared to stand by their estimates ; but wherever there was a reduction necessary it would be made. They certainly should not resign if a hundred were struck off, or anything like that; but he would desire to point out that they had not bad time to consider all these questions. The Provincial Secretary, in answer to a question from Mr W. B. Tosswill, said that the Government had placed items on the estimates to show the Council the financial position of the province, in which it had been placed by past votes, and if they did not move an item it would be understood that they intended to strike it out on account of inexpediency. Mr Knight thought the Government had taken a very straightforward course in putting the whole of the items before the House. The votes were put on merely as re-votes in many cases, showing as they did the position of the province. They saw there votes for the Museum and College, which were of course only re-votes. He-must say he was surprised that hon members had not seen the matter in a proper light. After some remarks from Mr Jebson and Mr Jollie, the motion was put and agreed to. On the motion of the Provincial Secretary, progress was reported, with leave to sit again on Tuesday next. SECOND READINGS. The following Bills were read a second time and committed The Quail Island Ordinance, 1875 ; The Classical School Reserves Ordinance, 1875 ; The Reserves No. 1207 and 1208 Ordinance, 1875; The Reserve No. 168 Ordinance, 1875. In committee the Bills were passed without amendment, reported to the House, and the third readings fixed for the next sitting day. THIRD READINGS. The following Bills were read a third time and passed:— The Reserve No 88 Ordinance, 1875; the Diversion of Roads Special Ordinance No 2, 1875; the Diversion of Roads Special Ordinance No 5, 1875; No 1599 Ordinance. NEW BILLS. On the motion of the Provincial Secretary, leave was given to introduce the Reserve No 62 Ordinance, 1875, and the Educational Reserves Leasing Ordinance, 1875. The Bills were read a first time, ordered to be printed, and the second readings fixed for next sitting day. select committee. Mr Wynn Williams moved—“ That the name of Mr Maude be substituted for that of the Secretary for Public Works in the committee to consider the Reserve No 93A Ordinance, and the Diversion of Roads Special Ordinance No 4, 1875, The motion was agreed to, Notices of Motion having been given, the Counoil adjourned until 5 p.m, this day,