THE FINANCIAL POSITION.

Globe, Volume XX, Issue 1615, 24 April 1879, Page 4

THE FINANCIAL POSITION.

[“New Zealand Herald.”] When Mr Ballance took the portfolio of finance he found that two things had tended to make his task an apparently easy one for the first year. The loan was readily subscribed for on good terms by the public in England, and the land of the colony was being greedilv bought up by the public here. It may he said that, had the Treasurer been a wise aan in his generation, ho would not have supposed this exceptional state of things likely to last, yet ho evidently did so. His whole scheme of finance was based upon the assumption that our power of borrowing would at all times bo as easily exercised when required in the future as it had proved to he in 'the immediate [past, and that our public lands woul , at all events for many years, bo in as much demand as they were in 1878. xt is true that he proposed now taxation, but this was not with the view of relieving the constant pressure upon our credit as a colony by avoiding the constant borrowing of money, nor with the idea of setting free part of the land revenue ; but only with the idea of read] listing the existing burdens of taxation. When it was proposed to tax land it was proposed to relieve tea and sugar of the taxes raised through them; when the ill-considered faxes upon beer and jointstock companies were proposed, it was with the idea of relieving from duty a number of already liable to taxation. Thus the result of what was done was in no way to provide for a lei-s prosperous condition of the finances of the colony than had existed, but rather, so far as the present year at least was concerned, to make greater calls upon the revenue deiived from other sources. The short sightedness of this course has been rendered apparent sooner than most people could have expected. Already the Treasurer’s expectations have boon entirely disappointed in several very important particulars, with results which call for serious consideration. There will be a large deficiency in the revenue of the year, the last quarter of which we have now entered upon. This d ficiency will be caused principally by the falling off in land revenue, but partly also by the want of success in collecting the land tax within the financial year. The land revenue is, however, the main item, both as being the largest, and because while the land tax will probably bo collected early in the next year, there is no reason to suppose that the land revenue will speedily recover from the stagnation which has fallen upon it. Meanwhile, the deficiency will bo very serious. The Treasurer looked for no less than £1,229,000 of land revenue for the year; and so far as it is possible to judge there is scarcely a hope of his receiving more than about £850,000 before the 30th June This will leave a deficiency of nearly £IOO,OOO on the year’s revenue to be made up from some source, and it will tax the ingenuity of Mr Ballance to find it. In one sense, perhaps, he is not to bo blamed for the miscalculation, because ho had expected to sell the Wairaate plains, and to obtain for them as much as would have made up the deficiency now to be expected. In another point of view he cannot bo acquitted, however, because it is more than imprudent to rely upon the utmost success which can possibly be looked for in financial arrangements, as the basis of their proving other than a disastrous failure. If, as we anticipate, the Treasurer has to moot the House with a deficiency of £IOO,OOO on this year’s estimates of revenue, and with no deficiency in his expenditure, as compared with his expectations, his position will not be an enviable one. This, however, is a small matter. The success or failure of an individual Treasurer, however important to himself and friends it may be, matters little to the C.’lony compared with (lie question how his success or failure has affected our credit and our financial position. That it must affect us prejudicially to find that we have expended nearly half a million more in the twelvemonth than wo have received, must be clear to cvoryone."Oredit is too sensitive a thing to bear such a discovery unshaken. It is not only that we are half a million behind that will produce the mischief. This is bad enough, no doubt; but it is worse that we shall either have to stop our expenditure on public works, which means stagnation in a variety of ways to the colony, or wo shall have to borrow more money to carry them on, which means to put our credit again to the test in the face of serious odds against it standing the strain. Of course we do not moan to say that even so serious a deficiency as this need make us doubt the stability of the colony. Far from it. Our resources are not so limited as to be at the mercy of an over-sanguine Treasurer in any one year. But, although the errors he has fallen into may be repaired —although tho expenditure and revenue may bo made to balance, and yet our public works system need not to be suddenly paralysed, as we hope to indicate hereafter -the situation is quite serious enough to call for the speedy meeting of the Assembly. We have heard it rumoured that as usual the session will bo postponed to the latest possible date, but we trust the rumour is not true. Nothing is to be gained, even by the Treasurer, by a delay of this kind. He may depend upon it there will be no sudden recovery of the land fund to set matters right between this time and July, His true wisdom will consist in meeting the people’s representatives as soon as possible, and at once letting tho public know how the Government propose to deal with the matter. Delay only aggravates uneasiness into alarm ; and the result of alarm about our monetary position is to increase the evil both in the colony and abroad to an extent which can scarcely be estimated, and can certainly not bo provided against.