FINANCIAL STATEMENT.

Manawatu Times, Volume II, Issue 83, 4 August 1877, Page 2

FINANCIAL STATEMENT.

. [Pbb Pbess Agbnoy.] v On Fridays>the 21st Jiily^ 1877, at tlie evening sitting, the Colonial Treasurer (Hon Major Atkinson) made his Financial Statement. V ;-■■." Jle said that it was true that we had reached that point m the scheme of Public Works and Immigration when the revenue was suffering to the greatest extent possible from the large unproductive expenditure upon railways m course of construction: It' was also true that there existed ..-..a- feeling,. of. uneasiness, amounting m some quarters to anxiety, because of the belief that the services of the year could not be provided for except "by increased, taxation. Knowing the strong desire that therefore ; arose for early information/ he had taken the first opportunity afforded by the rules of the House to state the financial policy of the Government. He meant m his statement- to direct atten- ■ tiori to broad features only. /The details would be found m the usual tables. r I Re would first describe what had been done under the Loan Act of last session, authorised the raising of one million for defined purposes. When authority was asked, he had stated his belief -that- the money 'could be raised m the colony, and that if so the G*||Mfnwould. gladly avoid going upofioftheLondon market for at least a year. That belief had been" realised^ His colleague, Mr McLean, -had negotiated m Sydney, with the Bank of N. 0; W. ; for an advance of half ia million, bearing 6 per cent interest payable half yearly m WeUington, andi£ per cent. 5 Cotnmis- : sion. Principal repayable m. London m three equal- instalments at intervals of one month. The first instalment falls due on Ist.' Dec,' 1878. vr ->; ; From the* Bank Ibf Nr Zfealandjthey had obtained £500i(X)0 , secured^ upqn. . short dated debentures, bearing ■ s' .per • cent, interest payable! half yearly (^n r Wellington repayableiijilibn-; don on -15 Feb^ 1879,;, A fur^e^a^r rangement with* the Bank of N. Zealand had also been made. by which afc advance of £400,000 could be- obtained on remittable securities instead of £300,000, making the total advance under that arrangement £500,000, and fixing 15 Feb. 1879 for the repayment of ali such: advances..". ■;- .-.-^ : ' ; -' : .; ;: ~;- : : : XV The appropriation last session for Ltimigration and P,ublic Works ambunte'd to £2,Q32,28 1 6. There had been expended up to June 30 £1,480,617, so .that there had been a saving of £551,688 during the, year on the' amount -voted; -In asking for so large a sum he pledged ■■ the Government to 'limit the expendi- ' ture' as far as 'prudent, care being taken that injury shbuld hot be doneto: the publfc service and thougbfcpinplaint night be made that some districts had. .been neglected*; the Minister for Public Works would no 'doubt ibe able to > satisfy the House, both as to. what had. ; been done, and what had been left'undone. The votes on %hich the largest had been made were,—^Railways, on which the expenditure i hiad , been £333,000 less than, the estimate.; water., supply 'oh goldfields, £61,000 less ; land purchase, Ndrth Island, £40,000 less ; -and roads, £36,000 less. The other savings incladed £22,000 on immigration, and about '■•the same amount on public buildings ;;£23 il ooo oh lighthouses, and £12,000 on tglegraph extension. Taking the; Public Works ac- t , count as a whole, the ways tod means had been eleven million five 'hundred - thousand from loans, including £750,000 : out of the loan of 1876, and £340;620 from receipts m aid, including £264,657 from' stamp duties, up to December last. Theie was thenc a total of . £11^840,620 of vWjiys and means. The expehditiire to' June 30, amounted to £lQ,B6Oi43lj;sd> that there was on that.-date a balance of /£980,189. >vThe principal ;items of expenditure had been railways; £6,129,920; education, (including ' location) £1,517,869^; roads, £894571-; land purchasers/North Island T £533>580; wa^er; supply on gold-fields £405^063, The" charge of raising the 16ans\IjjRr amounted to £498,532 and interest, and ; sinkingfund represented £21 8^500 of :-bal-. ■ anceof £980,189; Therewpulibefequired £645,957 for works under contract, or about to be lete. It was propPsed to ask for ahlonntihg to about £1,274,676, and if these were granted additional ways and means amounting to about £990,443 would be; required for this account during the year.. Next* as to provincial liabilities, treasury Bill? for£lliOoo had been issued tinder power giyen by the Appro- . priation Act" of last year, and the pro- * ceeds had been applied m terms of that Act. In maMhg 'advances to the Provincial districts of Aucklahdj Wellington and Westland out of the 1876 loan a quarter of a million was appropriated to- meet provincial - liabilities i fallingduebetween Jan. 1 and June 30. There hai been transferred to the several provincial liabilities accounts for that purpose £237;5p0, leaving £12,500 to defray a portion of the cost of raising the loan the balance being, applicable to outstanding liabilities. Taking the provincial liabilities accounts / as a whole the receipts up .to June 30 ; had been £620,951 and there was a balance of £40,888 to be applied. Government regard \ the com* pensation ppaird r to provincial officers, : whose services had bejai dispensed with, as provincial liabilities. The amount so paid would therefore be included m astatementof unauthorised expenditure, which the House would be asked to cover by a vote; " r - The gross public debt for the colony, general and provincial, including Treaasury bills, when the balance of all loans authorised are raised will be £20,885,311. As against this debt we had £980,189 at credit on the Public Works account on June 30 ; £35,416 at credit of the De-

fence Loan account, and -accrued sinking fund, amounting^ to £1,353,562. Our total revenue last year was £3,061,594, and excluding land sales £2,171,059; that is after setting apart that portion of our income derived from the r sale of land, which m most colonies is called revenue. Our net public jdebt is eight and a half times our^revenue ; or, if we include our income from land sales.itis equal, to.six times our revenue, while the public debt of ' Great Britain is more than ten times her revenue. This seems a fairer way of comparing our indebtedness than at so much; per bread of the populations It should also.be. remembered tnat_England's | public debt has been incurred for war puyppses, while that of New Zealand has Mainly been incurred for reproductive works. . The purposes for which our loans were raised may be classified thus : About £$300,000. lias _ been' spent upon railways 1 ; £3,500,000: on immigration ; £4,400,000 oh harbors, lighthouses, public buildings, roads, bridge?, and other public works,, for opening" tip «the country ; £1,300,000 m the purchase of Native land,' including the payment of the debt to the N. %. Company ; £2,900,000 in^the suppression of the Native outbreak; and the remaining £500,000 on miscellaneous purposes. expenditure for 1876---77, as authorised by Parliament, exclusive of tl^gtfor railways, was £1,858,467, and there!Rd been a saving of £174,084 nponr the votes. Of V that, amount, £73323 under the head of interest and sinking fund, was mainly due to a year's interest on £1,250,000 having been provided for, and only half a year's payment being necessary. Deducting theses there -would still, remain a saving . of £123,566 on the appropriations: for the t year. . ,-.- ■■■/"..-.■ -.../_. .;■ ; ■ • / ;-| The amalgamation of the armed constabulary with the police force of the colony had enabled a considerable reduction; tb be made m the cost of those services;- but the bonus paid: to the men discharged reduced fcfie saving fp r the six months "to. about £10,000. ; " The last session estima|ted a/prbfit of £84,000 on railways, the receipts being set -down at £345,000 and the expenditure at £260,758; But it' was a fact, upon which the colony might congratulate itself that the profit from railways has been £87fi24i^^ during the^ year, the ' receipts haying been £316,220 and the expenditure £228,295. • / ; t He would now refer to the consolidated revenue; He estimated that the surplus with which - the year i876r77; would close would, be £50,052 but it had proved to be £61,027. The total receipts under this head were estimated at £1,691,850, but they -had reached £1V614i082. ; Only , the Gustoms- revenue showed a deficiency of £40, 621, but '■» looking . at the disturbance o£ trade throughout the world and the uncertainty of the. wool market 'during /the. year^ the Gpvernnient were prepared to find the deficiencyJarge. The postal reyeriue appearedvto :■ shave (fallen : £9,452 below the., estimate, but sums amounting to £15,923 had to be received from the imperial"and Australian Groyernments, so that the :■. seeming' deficiency would become an excess of more than £6,000,:. ■"-? In incidental receipts there was a deficiency, of £18,447, but these, receipts, are never to ; be estimated verj ■ accui'ajtely. To •the £1.614,582 received into the consolidated fund he added first, the profit bn the • railways, £87,924 ;^-the £10,000 transferred from the;; state, forests amount ; the two p.^c. -recovered from the land fund under the. JEinancial Arrangements Act, amounting to £7 v 1,9a7;; .the surplus at the beginning of; -the year,' £6l,o27 ; and. the assets yet to be realised." These' made a total of £1,882,249. The total revenue for the year estimated amounted to £2, 146,902, or exclusive of railways^ to. £1,801,902 ; • to which must be added the estimated profit on the railways, £84,244, making; as estimated, receipts ; f or the year; £1,886,144, while the actual receipts were £1,882,249, being £3,89.5 less than the estimate. The- transactions of the year might be summarised \ thus : ActuaUiexpenditure, .including liabilities, £2,dJ5|072 ; actual revenue,; including realised assets, £2,172i792, leaving a balance of £148,220 as &■ surplu^.;. Com- : pare 1876-7 "with 1875-6, the falling off m the Customs revenue was but small, and notwithstanding it, the revenue of the consolidated fund, including revenue assets of the year, showed an increase of £238;276: The : receipts .from /the land fund during the year, exclusive of gold duty, ;were £1,039^242, or £419,000 more than the average for the preceding seven years. / \^ . ; - j^Since the -first of Jan; the Financial Arrangements Act came into force, the-feceipts have been £544,454, exceeding the estimate >by £221,884. But although there is a very large increase, on the whole, the deficiency "is larger than was provided for by the Financial Arrangements Act; ,: Tlie sales m Canterbury show an 'enormous excess whiles' those > m Auckland, Taranaki, .Hawkes.rßay,' Nelson, and Otago,,have. >: proved to be less by £83,000 than the sums- estimated. Consequently the ■whole -authorised Treasury TJills, amounting to £lso,ooo hayebeen issued, • and an additional sum of £53,005 has had to • be^^ advanced from the consolidated ifvind m aid of the landfundi The prbpbsed' total ;expehditure/ for the yearlß77^-8 was £3,109,175. Thecost ; bf mbst ;bf J;he departments had besen reduced thbugli amalgamation and simplifiaction. Under the head Public De- : Eartments £30,000 .-; was included lEor ospitals &c, and this was meant 1 to ; provide the subsidies which should be payable under the Charitable Institutions Act. Authority would be asked to , deduct frOm the subsidies to .Cpjinties, BoroughsV and^ Road Boards 1 a sufficient "sum to hospital's'^ and for chantable:ud m districts which declined; toadopt pe^Act, or m which itprbved m- ■ suifiijient. 'An increase? qi £10,989 had

been found accessary 'in. 'the vote for military arid volunteers tint chiefly on account of stores and ammunition. The saving effected by the amalgamation of. the police and armed constabulary was equal to £33,000 a year. . ..Wats and; MEANSf: 1877-78. ■"' v As I have just .showni we have to. pro? vide for an aggregate expenditure of £3,109*754 12s 9d for the year. Of this, ;£2,394,5'46 12s 9d is chargeable upon !the consolidated fund ; 'on the gold revenue^dE^iOOO; and £643,208 upon the 'land fund./- being such. .charges only as each fund should support. Now* if all the charges placed upon, the land fund of each district coujd be recovered, the consolidated fund would 7 be m a position to bear. its legitimate /burdens without difficulty. As a matter of fact, however,^ l : do hot think' that more than I £?60;00O of that sum will pratically recoverable, the land fundin certain districts being insufficient jbo-'meet its liabilities. It will therefore .be necessaryeither to supple intent t fife; consolidated revenue, : or to relieve it of some of the charges I have proposed ifr shall bear, i I dismiss, sir, as altogether undesirable, the plan of "charging such services of police and education upon- the land fiind of those districts which are able tb bear them. -They are charges whichi m the opinion of the s Government, should be borne upon, the' consolidated fund, aided, if necessary, jjyi-1 local rates. If [ the;;Committe'e:iagree^?*(ith^pae that it would .be unwise to charge against the ' land fund any of the services I have proposed to place upon the consolidated fund, it follows, that -the only course open tbus is. to increase that fund up to our requirements. I say that it followsthat for the present year is the only course open.to us, because I have satisfied myself that "it is- impossible so to reduce departmentalvexperiditure as to bring our expenditure within our income, unless we are prepared to relinquish some of the luxuries we enjoy., m the way of telegrapliSj postal services, and resident ' magistracies, which are spread broadcast over ibh'e land, and which, as fax as my experience goes, it. is hopeless to attempt to reduce, For the^reasons jtist stated, and because we. think pur requirements for the year can be met m a- way whfch will be far more satisfactory to;, the \ country, and which is fair and reasonable, I shall not propose additional. taxation this year. And I venture •': to h<6pe > that additional, taxation may ))e altogether avoided, if .we obtajn. irom oujr railways that income which seems ..-■now assured, and if we are successful m the inscription of our-.'Stock/.--'- ;: 7.'-'-- : ''- ; i ;^ TV/""/ v ' ; ; ; " ; ..- '. : But here, sir, .it is' necessary that I should ; recall. the atfeention.of honorable members to two principles which have been clearly recpgnised^ as underlying all ; our relating to Waste Lands, and -to; Immigration and Public Works. These two Principles are— First, That the v;Lanjl .Fund shall be localised; second^ tijftt the cost of Immigration, Roads, and railways is a proper charge ■, again sfc the Land Fund; These. principles have been constantly recognised ; and though it is true that they have not been tjontinuously acted uporii-yet the recognition of them crops up m "-our legislation, at almost every turrit By the Provincial Governments and Legislatures, ■which have hitherto had the 'practical •" control ; --.of the Land Revenue, tke .'second, of these principles has always been; acted upon ; but m this House^ expenditure: upon Immigration, Roads," and. Railways has been, from time to turie,^ chained against the Consolidated .'.Fund, ■■'•■■as that fund has,' been found able" to bear it ; but these two important ; principles have never been abondoned or lost >ight of by Parliament or the country. - .; :; With reference :.to ; the^ localisation of tho Land Fund*; it is necessary that we-should distinctly define m our minds the meaning of the/term.' The meaning, "sir, which :I, attach -to ..the term localisation ..of, the -Land Fund, is that the money receivedv for the sale of the CroWn lands ■ withinVa defined district should be; spent m opening up and peoplingthat district. • . .' : ■' Now, there ' has been raised for railways and, immigration^ a sum, m round numbers, of £9,500,000, the whole of which is fa,irly- a liability on the land fund. The annual charge, on this sum for iaterpst and, sinking fund is about £485,000; Out of this sum there had been expended, up to the 31st December, 1876; the_ day^ on which, the Accounts of the late provinces were closed, a net sum of £7,188,245 ; and the colony had paid interest thereon to the amount of £820,,482, but has only recovered from the provinces £160,343 • so that, m aid of land fund, the consolidated fund has ac--tually paid £655^9,; ;\ ' . „ It will be seen that the advantages .which the land fund' has enjoyed have been great. I have shown-tne extent to which the consolidated. fund .has been burdened by the payment; of interest and sinking fund on moneys expended m performing; the worjk for whidh /.the land fund -was localized^ viz.,: the openingup and settlement of 'the i country, and applying "the arguments I have just used, I shall ask the i House to re-affirm the principle' that: moneys expended on ' these, purposes are properly chargeable upon the land fund JWer.ecognise that . atthe present monient.'the refund . ; of - these bharges is beyqnd\the . immediate power of the less wealthy districts ; but, "as- re.sip.ects the Provincial districts o^ Canterbury . and O tago, : no such argu- : ment ijan be urged, and we propose to . charge; the land fund- of Canterbury with a sum of £58,000^ and that of O tago with a sum of £^109,000, being m each case one moiety of the amount-by which the land fund of those districts has been aided, With the exception of & small perinarierit debt, the charge of 2 per cent, for railways, the subsidies, payable to counties and road boards, • and: the cost of : survey:' arid; administrationj the

land revenue of Canterbury is absolutely I free. And, m view of the tact that a sum of £250,000 of surplus land fund has been distributed within the district during the past six months, arid that a further sum of £100,000 is now ready for ; distribution, we propose to deduct her contribution from the sum m hand. . The case of Otago is somewhat differ- ; ent. The district has a very large estate, though it is burdened now with leases, just expiring,, and which it would be- a waste of public money- to cancel. We propose, therefore, to raise the amount required to meet its contribution, together with the sum. of £36,000 advanced last year m aid of the district land fund, treating: the debt as a provincial liability, and making the interestand sinking fund a permanent charge upon its future land 'fund. The whole ■ land fund of - the Otago district for the year will then be free, excepting only the 2 per cent, under the Financial Arrangements Act, the interest oh its pro- . vincfaL debentures, the cost , of surveys, and land administratibnV Estimated Revenue,;, 1877-78, I will now state the estimated Consolidated Revenue for the year, and, m doing so, I will merely remark that I have set down the Customs Revenue a 1 i the amount which it produced last j year; m other items of i-tveiiue J have estimated- for a slight increase. The receipts from Railway s, I have estimated, after careful consideratibn, at £604,143? against an estimated expendi- ' ture. of £434,143.; In other words, I estimate that our railways will next year produce a profit on the Work done of £170,000. : v ' :' . :"■. The total revenue from .all /sources for the year 1877-Y8 will amount to £3,392,685, to which I add the. surplus of £148,220 8s sd, •with which -we began the year. I deduct from the total of £3^40,905'. 8s 5d the .estimated expenditure amouuting vto £3i109;754 12s 9d, "leaving a surplus of £431,150. 15s Scl^ of which,£329,36993ipdis distributable among the counties as surplus Land FunS, arid; we have a balarice of £101,7815s lOd available to meetjpossibie deficiencies of the Land Fund m certairi. districis.--.; '; ;., ; ■.. ■ ... -■'■'./■'!;. , t - ,;'' : -, ;j;i - IMMKJBATrONANp PCTBtip WbEKS. ■ ' . ; In making my financial proposals last year! said; "I shall; next session, submit for the consideration? of the house a scheme based upon carefully-prepared professional estimates, allowing definitely ' arict m detail what, works are required to complete, our railvvay system, arid tlie cost of 'such completion: -and* shall then ask the House to . consider the; arrangetnerits neqessary for completing tHe scheme; I shall propose to spread over: a series of years, the raising -and expenditure of the niorieys Jrequired, and -thus to keep the annual charge for interest on the. debt within the cbriipass of ourgrow'iug income." I/regret tosay that we have fqunoV it impossible to give effect to to this intentiori. The prepavatipn pf sucha scheme could not, we believe, have; been satisfactorily accomplislVed during this past recess, because of the smallness of the staff as compared with .the large extont -fit works m hand, and; bfecause-pf the time necessarily, occupied m taking over the Southern TRaflways : and we felt that, as a ; hurriedly devised plan probably be imperfect,- it .would be_ better under the circumstances; to submit: to • some delay. We shallj therefore, ask this session only for a sum ; sufiicient, to unite tha already completed sections of the trunk line' of 500 miles froiu 'Atriberley" to Kingston, and for "extensions of the Yaain lines m other parts of the colony, particulars of which .will be stated to the House by' the Minister for Public Works. .. ; - : I have stated. thai; shouldthe House direct that the works wMch -my hdbbrable-friend the Minister for Public Works mliirecom- '■■ mend be executed during the" current year, additional Waysand Means tp-the amount of £940,443 6s ildlwjlT.be required. THe .total proposed expenditure for the year on public^ Works will amount to £1 j796,*451. We' have also to x make, provision for the Immigration; Services of the year, estimated at £124,182 ; and to provide for paying off . the /Provincial V liabilities,' amounting to £259,556. These several sums inade'up a total of £2,180,189 ; which," after \ allowing for .the balance noy. at credit of the Public Works Account, will leave a sum of £1,200,000, for which Ways anil Means will have to be provided. -.. V- -" •*■ These, then, 'are the proposals of the Gdvernmerit. We shall ask -authority Jto raise a -loan of £2,000,000, :pf which £940,444 will be required for completing . the trunk line of railway m the Middle . Island from Ambefley to . Bangstqn, -fo.r making some extensions of the 'main line m the North Island, arid for other necessary public works ; and £800,000 for releasing the guaranteed .debentures ; the balance to ? defray Provincial liabilities, : * s^, ;; „ ■;. : For the immediate future," tlie 1 Goverriment believe that the need of the country is political rest. .Time- is needed for the • completion and development \ of our. public works ; quiet is rieeded .--for the consolidation of the social results without whicli a^scheme of immigration and railway's m any Country would be a failure j time and j reßldt:will cooperate- m enabling us : to satisfy .those outside the who are concerned, as to its fate, that our confidence m the wisdom Of the w;ork' we : commenced m 1870 was justified, and. that though, its. cost has been very great, its ■ benefits have been commen- * surate.. "-■■ ThefGovernmerit, sir, taking this view of the position, believe -that the present, is a time . /vrhen, the country .■ ahould, not ; be troubled with questions as 1 o tlie incidence or the 'specific character vof our taxation. Further. :Mxation''wiU;'nbt ::^ : e nec'es'sary' : ihi» year, if our proposals are accepfed. Before longi whea our new. institutions . aro consolidated,; .and pur railway; systein/hha been I developed,' a we shall .' b§ able -to face the - question of new .taxes,;, if any ai^e nodded, or to. discuss calmly. tWe- principles on :wWch-; taxation should be raised, and the irianner -.;• m Which such principles should .be, practically carried put. ■'_.'■'' ; : " ■ . . TheHbuse then adjourned. ' . '