THE HON. JOHN HALL ON THE FINANCIAL ARRANGEMENTS BILL.

Globe, Volume IX, Issue 1246, 5 March 1878, Page 3

THE HON. JOHN HALL ON THE FINANCIAL ARRANGEMENTS BILL.

The following is the speech delivered by the Hon. John Hall in the Legislative Council on the motion for the second reading of the Financial Arrangements Bill: The Hon, Mr Hall -1 object to this Bill, because it constitutes a breach of the compact solemnly entered into between one portion of the colony and another in the year 1856, as will De remembered by the Hon. Major Richmond, the Hon. Colonel Kenny, and the Hon Sir Dillon Bell, who, with myself, are the only members now present who were then members of the Assembly. That was the first year when the Assembly of New Zealand practically obtained the full control of the affairs of the colony, and when its attention was, of course, directed to the financial position of the colony. That position was then considered a difficult one, although the difficulties were then very small compared with those which now present themselves to us. At that time the colony, entering upon the full working of the Constitution Act, and the possession of its estate, found that the debt incurred by the New Zealand Company in colonising the southern portion of New Zealand was, by the Constitution Act, charged upon the whole of New Zealand ; and therefore (lie settlers in Auckland, who at that time constituted a large proportion of the population, had to contribute towards the liquidation of this debt, which had not only not been incurred in any way tor their bem fit, but the expenditure of which appeared to them to have rather inflicted injury upon them than otherwise. It was a question upon which they felt very strongly On the other hand, the Land Fund of all parts of (he colony, including the South, was then liable to contributions for the purchase of Native land all over the colony, but practically in the North Island only. That was a grievance to the southern provinces. The whole question was fully gone into. A solution of it was proposed by (he Government, of which I was then a member. That solution was not accepted by the House of Representatives, and, upon the Government being succeeded by one of which my hon. friend Sir Dillon Bell was a member, a different solution was proposed, which eventually received the sanction of the House, and which was embodied in what are called “The Financial Resolutions of 1856.” Those resolutions were not proposed ns a mere temporary expedient, but, as expressed in the first of the resolutions, they were adopted with the view of permanently adjusting the public burdens of the colony, which adjustment, as was stated, was to embrace a settlement of the New Zealand Company’s debt, as well as the charge upon the Land Fund for the purchase of Native land. In another part the resolution stated that the management of the waste lands was to be vested in the several Provincial Governments, and the land revenue to become provincial revenue. It has been stated more than once that that was a settlement rather imposed upon the northern part of the colony, and especially upon the Province of Auckland, against its will. I have just referred to the division lists on that occasion, and I find that, of the Auckland members who voted on that occasion, nine were in favor of the resolutions and only two were against them. Therefore we may fairly assume that it was an arrangement which was concurred in by the province of Auckland as represented by so large a majority of her members. That has been considered, for many years, a binding compact. At the time it was made, and for some time afterwards, it did not appear likely to be an advantageous compact for the southern part of the colony, because at that time the land revenue was comparatively larger in the North Island than in the South. Subsequently, no doubt, a great change in that respect took place, owing in a great measure, as I believe, to the difference in the system of disposing of the Crown lands adopted in the South from that followed in the North of New Zealand. The land revenue collected in the southern portion of the country has been very much larger than in the North. But hon. members must have noticed, if they have read the official returns laid on the table of this Council, that it is not because a smaller quantity of land has actually been disposed of in Auckland than in Canterbury and Otago respectively, although it is no doubt the fact that a much smaller amount of revenue has been derived from it. The returns show that the amount of land sold in the province of Auckland is 2,144,000 acres; in the province of Canterbury, 2,331,000 acres ; and in Otago, exclusive of Southland, 2,056.000 acres. There is a singular coincidence in the total acreage disposed of in each of those three provinces, hut the land revenue received from it differs very largely. In Auckland it has amounted to £274,000; iu Ol ago, £1,807,000; and in Canterbury, £3,671,000. It is only fair that it should be considered, when the southern provinces are, as it were, reproached with their enormous receipts from the sale of Crown lands, that it amounts to this: that for a given quantity of land the southern settlers have paid much larger sums of money than the northern settlers have done. They have been content to pay this large price because they believed this mode of disposing of the waste lands was best calculated to promote its beneficial occupation. In , considering what system is best calculated to promote this beneficial occupation, wo may even go so far as to say that, if land were likely to be beneficially occupied if actually given away rather than sold, it would be better to give it away. But if we did so, unless we had extraneous sources of income, we should have no means of providing labor for the cultivation of the land so disposed of, nor for making roads, bridges, and other means of communication necessary to make the land easily accessible. Therefore, iu the South, to a certain extent in Otago, and in Canterbury to a greater extent,' it has'been accepted as a guiding principle in this matter . that a price should be charged for the land which would be sufficient to provide proper means of communication, and also, down to 1,870, carry on immigration. That is orle of the principal reasons, I believe, why the progress of settlement in the southern part of the wlfiKf hw beep wjore Koythi

I do not deny that the North has suffered from serious drawbacks, but I believe that if the two million acres sold in Auckland had been disposed of on a different system, although the settlers there would not themselves h ive obtained such large acreages for so small an amount of money, the land would now be more beneficially settled than it actually is. The principle to which I have referred was one of the reasons which induced the House of Representatives to adopt those resolutions of 1856. They were also agreed to, it is true, as I have already said, to remedy what appeared to be grievances in both portions of the colony, but also because —as was then eloquently explained by the present Judge Richmond in introducing them—if you wish to successfully settle any pirticular tract of waste land, you ought to return to it in some shape, if nob the whole, at any rate a considerable portion of what you take from it in the way of purchase money. That is the principle at the root of the most successful instances of modern colonisation, and which was ably advocated by Mr Edward Gibbon Wakefield That is one reason why on the present occasion I wish to enter my protest against a Bill which not only breaks the compact of 1856, but also violates what I believe to be one of the most important rules we can follow in the colonisation of this country. So much with regard to the principle of the Bill now before us. I have also one or two objections to the manner in which the Bill proposes to give effect to the new policy. It proposes to put on one side 20 per cent of the land revenue raised in each county, to be paid over to the County Council. If that, is a proper rule Ido not think we should depart from it and give 33 percent in addition to those portions of the colony in which land is sold upon deferred payments. When that provision was originally introduced into the Waste Lands Bill the present proposal to localise 20 per cent of the land revenue had not been made, and therefore there was a good deal to be said for giving the one-third ; but, when it was once decided that 20 per cent of the land revenue should be given to each county, then that rule should be applied to districts where the land was to be sold on deferred payments as well as to all others. lam at a loss to conceive why the deferred payment selectors should be more favorably treated than others in this respect, and why they should be allowed to make so serious an additional draft upon the colonial revenue. I also object to the Bill as framed because, at. any rate for the present year, while it robs the South, it does not enrich the Colonial Treasury. The land revenue for the year has been estimated at £1,000,000. The Hon. Colonel Whitmore—£l,loo,ooo. The Hon, Mr Hall—l venture to doubt whether it will reach £1,100,000. No doubt the land sales in Canterbury have been very large, but, independently of other reasons for their falling off, I believe that, when the purchasers of land know (hat in future a great part of the purchase-money is not to be returned in the shape of roads and other public works, it will lead to a serious diminution of their purchases. I had almost omitted to refer to what was stated by-the present Prime Minister in the House of Representatives very soon after he took office, and I may be allowed to express my disappointment that an enunciation of policy so clear and so sound should have been so very soon entirely thrown overboard. On the 26th October, on the discussion of a vote of want of confidence, the Premier said—- “ I should have shrunk with shame from some of the expedients which members of the late Government have had recourse to in reference to those sums which they proposed to take, without the authority of law, from the Land Funds of Canterbury and Otago ; I should have scorned to have been a party to such a transaction. I should have known that in those provinces every individual who bought land, and paid his money for that land, had so paid his money under the pledge that it would be expended upon certain public works, which would give value to the property he had purchased ; and, further that the fulfilment of this pledge was a solemn contract entered into with him by the Government of this country. I should have scorned to break a contract of that kind. People who would do that would not hesitate afterwards to break faith with the outer creditor.”

Notwithstanding that declaration, within a few weeks of the time it was made the Government of which the hon. gentleman is Premier comes down with a proposal to take away from portions of the colony 80 per cent of the land revenue, which, he says distinctly, is paid under a solemn pledge that it is to be applied to public works for the benefit of the land from which it arises. We are told, however, that t his proposal is to be a wonderful relief to the Colonial Treasury. Of course any statement on this point must be to some extent a matter of speculation, but, looking at the very largo sales which have recently been effected in Canterbury, I think the hon. gentleman will not say that I am far out, or that I am ’taking too favorable an estimate my own side of the case, when I assume (hat the land revenue of the colony, from Ist July last up to the end of December, will amount to £700,000. The Hon. Colonel Whitmore—£9oo,ooo. The Hon. Mr Hall —I will even accept it at £900,000. That would leave £200,000 to be raised during the remainder of the financial year. The Hon. Colonel Whitmore—No.

The Hon. Mr Hall—The hon. gentleman cannot eat his cake and have it too. If he is only to get £1,100,000 for the year, and £900,000 is received up to the end of December, he can only get £2OO 000 for the rest of the year. People who know the part of the colony where the land sales are chiefly taking place will agree that, if the Government estimate to receive even £300,000 in the last half of the present financial year, that it is quite as much as they are likely to get. That will be considerably in excess for the year of the estimate made by the present Colonial Treasurer. According to the financial system which the proposals of the present Government are to supersede, certain local charges were made upon the land revenue of the several districts of the colony. The amount of those charges for the second half of the present financial year, which would have been paid under the old system out of land revenue, comes to £320,000. Those charges are now all thrown upon the consolidated revenue, while the hon. gentle man only takes into the consolidated revenue £300,000. Clearly, if these figmes are correct, the consolidated revenue will be a loser by the transaction to the extent of £20,000, and, instead of the Colonial Treasury being helped, its difficulties will be increased, I honestly believe that, when the accounts for the year are laid before this House next session, although these exact figures may not be realised, yet the result which I have indicated will nearly be brought out. The amount may be a little more or a little less, but my hon. friend will find himself quite disappointed in the belief that this change will greatly benefit the Colonial Treasury. But that is not all. What does the present Government further propose to do ? It proposes to give 20 per cent, of the land revenue to the districts whether there is a surplus in those districts after deducting present local charges or whether there is not.

The Hon. Mr Robinson—That was always so. The Hon. Mr Hall—No. it was not. My hou. friend makes a groat mistake if he thinks so. We have hitherto given subsidies, and these are still to be continued ; but this 20 per cent, is now to be given in addition, and altogether irrespective of whether there is any surplus revenue or not. The estimate of revenue for the second half year is, as I have said, £500,000, so that the counties will receive at least £60,000 more from the Colonial Treasury than they would have got had the proposals of the present Government not beenmade. These are the reasons why I think that these proposals are not only unjust to some parts of tho colony, but that they will not give that assistance to the Colonial Treasury which we have been led to believe they will. I do not mean to say that the time may not have arrived when some modification of the present system might not be expedient and necessary ; but I believe that a modification might have been proposed which, while it would give greater relief to to the consolidated revenue, would be less unjust to the southern provinces than tho tbk&vae uow before u#. One of thG °k*

jectionable features of this scheme is not only the taking of the land revenue, but it is this : that those provinces which have been frugal in the past, and which at present have but small, if any, provincial debts, are reduced to . precisely the same foot ing as those which have been reckless and which are burdened with debt to the fullest extent they possibly could borrow. All are placed on the same level, so that it is not merely the seizure of the land revenue which is the most unjust part of the Bill, but that the whole of the provincial liabilities are to be equalized ; those provinces which have been careful in their finance, and which abstained from borrowing large sums of money, such as Nelson and Canterbury, are to be punished for their frugality and pmdence. There is still another feature in the proposals of the Government which I think very objectionable. They have not ven tured to reconsider the qi.e-Ticn of the subsidies in proportion to rates which we are now paying to various local bodies, and which cost the colony something like £BO,OOO a year. I do not at all object to a share of the land revenue being given to the County Councils and Road Boards in newly-settled districts, where roads and bridges are not yet constructed. That is desirable; but Ido not think that, in the present condition of the finances of the colony, we are called upon to subsidise large and wealthy municipalities such as Dunedin, Welli> gt.on, ami Auckland ; nor do I think that we are called upon to pay subsidies to those old settled districts, almost equa.ly wealthy, in the neighborhood of our larger cities. They have had in the past considerable sums from the land revenue. The rateable value of the property in them is large, and the amount of rates which they can levy is therefore very considerable. Ido not think that there is any sufficient groun i for the continuance of these subsidies. I should have been glad if the Government had been bold enough to have grappled with that unsatisfactory feature of our present finance, and I sincerely trust that on a future occasion they will not fail to do so. I desire, before sitting down, to notice one remark which fell from the Hon. the Colonial Secretary in moving this Bill. He said, “We must now give up the idea that each member of the Assembly is to be expected to get for his constituents this bridge, and that road,” &c. I cannot see that that is at all likely to be the result of the change introduced by the present Government. I think that the result wi Ibe exactly the opposite. So long as the land revenue was localised we could fairly say to the various localities which received it that they must construct their own local public works ; but, when you sweep the proceeds of land sales into the colonial chest, then out of what funds are local wo ks to be provided ?

The Hon. Colonel Whitmore—Out of the pockets of the ratepayers. The Hon Mr Hall—You may fairly tax the ratepayers to maintain or even improve roads in the older settled districts ; but in new districts, where land is being or has recently been sold, and where the proceeds of those sales are going into the Colonial Treasury, you have no right to expect the ratepayers to put their hands in their pockets again to construct the works necessary for opening up recentlypurchased land and making it accessible. If the hon. gentleman believes that ratepayers in those localities will do so, he will be disappointed. He must know that, in some shape or another, a largo share of the proceeds of land sales will be required for the purpose of opening up the country in which that land h sold by making roads and otlmr public works, and, if he abolishes the system under which the land revenue has hitherto bi eo so applied, the funds for the purpose will have to come out of the consolidated revenue. To my mind the one great danger we have before us in the immediate future is, that there will be constantly increasing demands for purposes of this kind upon the Colonial Parliament. I have to apologise for troubling the Council at such length at this late period of the session. If my vote should have the effect of throwing out the Bill I would give it in that direction without the slightest hesitation, because it is a breach of a distinct compact between different parts of the colony, it is a violation of important principles of political economy, and it will inflict injustice upon the portion of the colony with which I am connected, while it will not ultimately benefit the Colonial Ex-