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FINANCIAL STATEMENT OP THE HON. THE COLONIAL TREASURER.

By Electric Telegraph.

Wellington, Tuesday, Sept. 12. Mr VoGEL commenced his financial state* ment at a quarter to eight o'clock. After referring to the exertions which had been Mecessary in order to bring down the statement at so early a period after his return, and indicating the substance of tbe tables which will be presented to members with the statement, be showed that the position of affairs at the end of J 869-70 was closely similar to that which he led the* House last year to expect would be the case when be made his statement before the con. elusion of the financial year.

A reference to the finance measures of last session followed. The Government considered that the loans had been very favorably negotiated, and that the arrange-, ment by which the guaranteed debentures were practically converted into a reserve fund would be of great value to the colony.

The short dated debentures under the Temporary Loan Act had proved service-* able in enabling money to be obtained on favorable terms, pending the negotiation of the loans.

The payments to Road Boards had crea--ted very general satisfaction throughout the country. As to the revenue of the past year, there had been a decrease on every item. That revenue bad proved to be ;£ 116,000 less than was estimated, and £82,000 less than was received during the previous year. The Government deplored this falling off, but disclaimed responsible lity for it. The attention of the House was called last year to the condition of the country, and that condition was urged as a reason for hastening on measures for the construction of public works and promotion of immigration. The Government certainly had not expected so large and immediate a reduction in the revenue, but that reduction had, amongst other things, proved the wisdom of the House in giving effect without delay to the immigration and public works policy. Many causes doubtless contributed to occasion the falling off in the revenue. Amongst those causes was the fall in the price of wool; but he was glad to be able to congratulate the Committee upon the recent remarkable ri.se in the value of that article. The reduction in the value of property, and the comparative suspension of public works, must be in* eluded amongst the contributory causes of the reduction in the revenue. They limited the expenditure of the people, and therefore diminished the Customs' revenue. It was not indeed necessary that a reduction in the Customs receipts should be accepted as a consequence of an unhealthy condition of the country, since it might be attributable to the exercise of frugality, or might result from a desire to accumulate wealth. In? deed the reduction might follow wholly or in part from a larger use of local produc* tions throughout the country. The Government were of opinion that the depression which had overshadowed the colony for a long period was in course of removal. Various causes had led to this change, such as the increased yield of gold, the rise in the price of wool and other products, and the prospects of largely in? creased settlement throughout the country, which would follow the introduction of immigrants and the construction of lines of communication,

The Tieasurer proceeded to compare the other branches of the revenue, and then showed the further assets available on account of the year beyond the receipts up to the 30th June. Similarly he went through the expenditure during the year, and all the engagements and liabilities on account of the year which remained to be discharged, In respect to the defence expenditure, fee especially drew attention to the fact that, instead of the amount provided having been exceeded, there was a surplus on the year, besides that £IO,OOO had been spent on ammunition, which was available for tfce future. After taking the assets into account, and defraying all the liabilities ana engagements of the past year, there was a deficiency of £76,000. Hon. members would remember that there was an overdraft of £60,000, which had remained unsettled for the last two years, and he considered that it was necessary now to look at it m the light of a deficit. Adding the amountof that overdraft to the amount of deficiency before stated* there woujd be a total deficit

of £136,000.. He thought it was very important that this amount should not be added to the permanent debt of the colony, but should be defrayed out of the revenue. Still, it would be straining the resources of the colony too much to charge the whole amount upon the present year's revenue. He proposed, therefore, that one-third, or .£46,000, should be charged on this year's revenue, and the balance to the revenue of the two succeeding years. There was a precedent for such a proceeding in the course adopted by the Assembly in 1860. In asking the committee to consider the provisions to be made for the present year, it was worthy of observation that New Zealand did not stand alone as regarded the deficiency, for the same difficulty had just occurred in England, in Victoria, and in New South Wales. It was ;dear that, apart from the deficiency of £46,000, which he proposed to charge upon the year, if the ordinary expenditure of the country was kept up to its present scale, there would have to be heavy taxation. The first duty of the Government, when expenditure exceeded revenue, was to consider whether the expenditure couid not be

ye luced. The main feature of the present budget was a material reduction in the expenditure of the country. It would be easily understood by hon. members that, in determining to make such a reduction, the Government could not fail to look in the direction of that expenditure which related to so large a proportion of the public service—he meant the money put apart for provincial purposes and provincial services. It was fair to consider how far the colonial contribution to the provincial revenue should be reduced on account of the colony undertaking duties which otherwise would have to be performed by the provinces, and also, seeing that what was now proposed involved a reduction of provincial duties, how far provincial institutions could be made less costly than they had hitherto been. Much of the expenditure of last session arae under the head of expenditure which it was originally contemplated should be borne by the provinces. It was right that a .corresponding reduction should be made in the contribution from the general revenue for provincial purposes. The Government had plainly declared last year tbat, if the existence of the provincial system interfered with the carrying out of the policy of public works and immigration, then provincial institutions would have to be modified j but, at the same time, until it was proved to be necessary to take action in that direction., they had desired not to do so. Experience had now shown that in some respects the legislation of last session required amendment. He entirely denied that either on his part or on the part of any of his colleagues, there was an indifference to the subject of immigration. The whole plans of the Government depended upon the encourageme >t of immigration. They felt, however, that it wai due to the provinces to give them an opp< rtu - nity of co-operating; now it had been proved that the plan of co-operation did not answer. He did not say that that was so be*.cause of any fault on the part of provinces, but the Government were preconvinced that it was necessary that they should take into their hands the management of immigration, and that with that assumption of management they should also relieve the provinces of expense. Honorable members would recognise that, by taking the management of immigration might be meant a looking after the immigrants on their arrival, as well as a defraying of the whole or part of their passage money. Other modifications which the Government might have to propose in the policy of last session, would probably tend to alleviate the ordinary burdens of the provinces.

There was one feature of the policy of last session, the success of which could not be exaggerated—he meant the system of subsidising Road Boards. The expenditu-e necessary from the adoption of such a system was one which Government considered might fairly be defrayed out of the loan. The adoption of that course would be proposed, and it would also be proposed to increase the amount of subsidy from £50,000, as paid last year, to £IOO,OOO. By taking charge of immigration and, to a large extent, of public works, together with the arrount of subsidy of Road Boards, the provinces would be saved from a large proj ortion of their expenditure. The question arose, therefore, whether it was fair to taxpayer * that additional taxation should be imposed in order to maintain provincial revenues at -heir present rate, whilst so ftwh of provincial expenditure, and some

of the principal provincial responsibilities were assumed by the Government of the colony. The answer must clearly be—No. Government had decided further to relieve the provinces of the cost of services hitherto voted by the Assembly as provincial services, and charged against particular allowance to each province. After making these provisions, the Government proposed to pay to the provinces, as capitation allowance, fifteen shillings per head of population, and to reduce by one-half ihe special allowance paid last year to the North Island provinces and to the County of Westland. The aggregate result of these modifications would be to give to the provinces £25,000 less thftn they received last year. In that calculation allowance was made for the payments on provincial accounts already explained, but the expense of immigration, from which the provinces would be relieved, was not taken into consideration ; supposing the provinces would have been prepared to expend a proper amount on immigration they would be great gainers by the change, or perhaps, more correctly speaking, those who live in the respective provinces would be great gainers although so much money would not filter through the provincial authorities. When the effect of these proposals upon the provinces singly was ex*amined it would be found to be somewhat unequal. Auckland appeared proportionately to be the largest loser because its services had been uniformly on a lower scale than those of the southern provinces. Wellington, on the other haud, was a large gainer, because it had hitherto defrayed the cost of services which really belonged to the Geneial Government and Assembly. The Government bad it under consideration, by way of adjustment, to make to Auckland a special allowance of £2,500. Comparison with last year did not result altogether unfavorably, and last year, it must be remembered, was the provinces' leap year, their year of jubilee on account of unprecedented receipts from the colonial chest. Comparing the results of proposals now made with circumstances of the year before last, the provinces gained £28,000, irrespective of expenditure to be devoted to immi-

gration. The Government believed that the time had arrived when provincial institutions should be made less costly. It was intended to propose that Superintendents should be ex-officio members of their respective Councils, and that the number of members of Councils should be very much reduced. In certain cases, where provinces were unable to fulfil their functions, it was intended to propose that the General Government should take charge of their affairs. If the assembly desired it, these reforms, or some of them, could be made to depend upon the option of existing Superintendents and Councils. A special arrangement as to the County of Westland would be submitted to the House. The object of all these would be to simplify provincial institutions, and to reduce their cost. The Assembly would have submitted to its consideration the question as to what railways should be constructed. The Government thought that, when that question had been answered, there would be no difficulty in deciding to what extent the arrangements with Messrs. Brogden could be taken advantage of. If it were desired that those arrangements should be converted into senarate arrangements for the construction of particular railways, the Government were of opinion that there would be no difficulty in doing so. The whole question would be left to the Assembly. A Board of Public Works and Immigration, for the whole colony, would be proposed, with, as far as possible, powers independent of Government, so as to make it a non-political body ; it would be the duty of the Board to take charge of the construction of public works and the management of immigration. It was to be hoped that the Board would assist in preventing the House from acquiring too much of a provincial character. As regarded members deeming it to be their duty to scramble for public money, to be expended in their own districts, the Government hoped that in the constitution of the Board it would be provided that recommendations for construction of public works should come through Boards instead of being originated in the House, The question of how the cost of railways should be charged was one of a very difficult nature, and some modifications in the proposals of last session would be submitted. Unlike other colonies, it was necessary in New Zealand that railways should be commenced in several different localities at once, as, otherwise, the various portions of

the colony would not agree to any line being constructed. It became necessary, therefore, to consider the different features of the country. Two principles, however, the Government had quite determined iipon. One was that no railways should be constructed which did not at once promise to pay working expenses, and another was, that in -order to prevent an indiscriminate scramble for railways, a power of local rating should, under certain contingencies, be provided; the Government had also concluded that for the construction of railways in parts of the North Island, the only course to be adopted was to acquire land representing the value of these railways, but in parts of the Middle Island such a course was not desirable, as it, might interfere too largely with the existing land laws. As regarded the Middle Island, therefore, the Government would propose to charge the coat of constructing the railways upon the land funds. It was not proposed to interfere in any way with the Middle Island railway fund, and, while powers were given to the Government to take lands required for the purpose of settling immigrants, it was proposed that where the land revenues of a province were burdened with the cost of the railways, fair provision should be made to give compensation for the lands so taken. UDtil a railway was completed, no charge was to be made against a province. When a railway was completed, the interest upon its cost up to the date of completion was to be capitalised. If the revenues arising from the railway, together with receipts from special contributions, were not sufficient, the balance was to be recovered from the province within which the railway was constructed ; or, if necessary, a special rate to be levied upon the persons in the vicinity of any railway, who derive benefit from its construction. It was proposed to keep the public works and immigration fund entirely distinct, and that all revenues from lands acquired, as well as all recoveries from the provinces or from immigrants, should be paid directly into it, as also should one-half the stamp duties, in accordance with the determination arrived at last year. On the other hand, it was proposed that all costs and charges, including interest and sinking fund, should be paid out of the public works and immigration fund. It must not be considered that this was to be done in order to relieve the revenue; on the contrary, the payments into the funds this year out of stamp duties would cover interest, and sinking fund, which had to be paid, and, as had already been explained, deficiencies after any railways bad been completed to be recoverable from provinces. A plan would be proposed by which the Board would be able to construct feeder branches for railways under a system of partial guarantee from persons benefited by their construction, to be recoverable if necessary by a special rate. This, however, would only be done at the request of a stated majority of residents in the vicinity of a railway representing a majority, in value, of the lands in the district. The proposed expenditure for the year showed an immense reduction. Last year's estimates were Tor an expenditure of one million and fifty thousand pounds, including £50,000 for Road Boards, and £34,000 was subsequently added for supplementary estimates. This year's total estimates, irrespective of £IOO,OOO for Road Boards, which would be transferred to loan, was £896,000, to which would have to be ad led £40,000. The moiety of the stamp duties to be paid to the Public Works and Immigration fund, and £46,000 on account of the deficiency from the past year, making in all £982,000* to be provided for. This showed a very large saving, and the Government desired that the present budget should be known as the retrenchment bud-o-et. A comparison of the various services showed a considerable saving in most of them. The Post Office department, including the provision for the Californian service, showed a saving of £llß. He would ask hou members to recollect that although there was a very great retrenchment, that retrenchment was on unproductive services ; that of the revenue large provision was made on account of the deficit of the past,year, and that one half of the amount of the stamp duties was proposed to be paid in aid of public works. lie wculd now ask the committee to consider the question of providing for the estimated expenditure of £982,000. The Government were averse to proposing fresh taxation, but they considered that stamp duties should be brought up to the amount which it was

promised they should yield last year. The Government would therefore submit some additions to those duties, but those additions would be such only as they really believed ought to have been included when the duties were first imposed. The House would also be asked to impose a moderate duty upon cereals, rice, and timber. He mentioned this although he did not intend to take credit in the ways and means for the amount of such duties, but those ways and means would make the allowance so small an excess that, taking into account the possibility of there being supplementary estimates, and also of some unauthorised expenditure during the year, he considered the excess should not be insufficient; therefore the House wiil be recommended to impose duties on cereals, rice, and timber, so as to raise thereby an estimated amount uf £6,500. Whilst that recommendation would be made on strictly revenue grounds, it might with propriety he urged that the fiscal policy of the neighbouring colonies forced such a proceeding upon New Zealand. The various items of estimated revenue showed on the whole a reduction of £61,000 upon the revenue estimated last year, and £55,000 more than the actual receipts during that year. The operation of the Distillation Act was producing a very large loss to the revenue. Government did not wish to show any harshness towards those who had embarked their capital in this industry, still the result was very unsatisfactory. The revenue would lose £25,000 on account of spirits already manufactured in the colony, which manufacture bad led to the consumption of 43,000 bushels of grain. Such a loss was rather a large one to be expended by way of encouragement for such a production of cereals. In 1867 the Customs duties amounted to £3 16s 7;|d. per head of the European population, whilst at the rate now proposed, it would amount to only £2 18s 6d per head. The Government would be glad when the time arrived for making absolute reductions in the Customs duties, besides the reduction in contribution per head, consequent upon the increasing population. The surplus upon the year would be £7,500; and it must be recollected that this result was arrived at without the imposition of further taxation, unless the additions which it was proposed to make to stamp duties could be considered in that light, and *that the estimates, it will be remembered, provided for a payment of £46,000 out of the revenue towards the deficiency of the past year, as well as £40,000 out of the ordinary revenue in aid of public works. He believed that this result was very much more favorable than the majority of the hon. members had expected. The Treasurer concluded by expressing his opinion that the depression, which had overshadowed New Zealand, would do it very much good if retrenchment, which that depression made necessary this year, became the rule of the colony in the future.

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https://paperspast.natlib.govt.nz/newspapers/HBT18710913.2.7

Bibliographic details
Ngā taipitopito pukapuka

Hawke's Bay Times, Volume 18, Issue 1119, 13 September 1871, Page 2

Word count
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3,503

FINANCIAL STATEMENT OP THE HON. THE COLONIAL TREASURER. Hawke's Bay Times, Volume 18, Issue 1119, 13 September 1871, Page 2

FINANCIAL STATEMENT OP THE HON. THE COLONIAL TREASURER. Hawke's Bay Times, Volume 18, Issue 1119, 13 September 1871, Page 2

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