FINANCIAL STATEMENT.

Manawatu Times, Volume III, Issue 93, 19 November 1879, Page 3

FINANCIAL STATEMENT.

BY TEIiEG^RiPH/ ; : ' ' Mr. Spbakee.— The Idiffieulties and gangers of the. position -into which.w e have permitted our finincostp drift j are ; itduiittedly so great, and; the- time; at the ■ disposal of the Government has been ; W short and so broEen, that I feel con"- --> fident I shall have the ' sympa,thy; of : : iionorable membersrin the consideration ol the proposals I 'am; ■abbut to -submit .its may be found compatible with careful criticism, and. a .lull.) diseuiision.; ■_s%_ fjheir merits. Sir, I think that alj.^<?. s e ■ who have given any real thought to the Question of ouf present financial condition must have come to the c6nclu,siqn. "thai; it will be impossible to /surmou"nt ! pur monetary difficulties aniiLescape the' "dangers, of our position witnojit; some'r j;hing like a comple|e -re^inodelling.of bur finance— boith'gerieral and; local, ,' :Vmthout careful adaiiuis(;ratipu^ by^Mirii-' Btersi and without the eieriisaQf; much thrift and self-denial on the. part of all classes of the^ community^ '- 1 11 !!^ period pf. the Session at which'-we • have: now arrived, rendersit impbssible^.tbpjrbperly ponsider the- whole I . qiiest^on '<s.:. o.Urpnance this year. My unfiiness for the ■ responsible position I hav.'ejthe ; lipnor .to; Uold would be at onco manifest; if ;i were to pretend to te capable m. the short time I have been m office qf i^aturing tttid submitting m die tiiil- so complete financial policy as "the Grbvernl^entbe|ieve to be practicable ■;^and;iiecfessiii'y^^ ■■3t;i shall, hbwover> Sir, endeavor "to indicate, clearly the general- scope -and direction of that policy, ,'aud ; to give what;! hope 4he Committee -w^ill consider sufficiently fuir details bi \ silchj parts of it as ; tiiinfc it is pbssi ble to deal witbV m this • pession. But first it will be necessary that I should -recall to "'the ; mmd i of the t jDommittee our present financial* position ■:■ vr-a position, Sir, I. venture to. say unv paralelled m the 1 liistqi-y of the colony,; with abundant natural resourcos, yni\\ excellent credit, and with an increasing * ordinary reveiiue. 'NQtwith-'.-'standing great-commercial depression, we find ourselves reduced to such a position as causes the gravest anxiety . |o all true fi'iends of .the colony, and to necessitate important measures of financial reform involving large additional . PO3ITIOIT- OP CONSOtIDATEn. PUND ,: :X ;.:■-"'■ -EE/BTATED;'-^- ':-■.■■ '■■:•' '^~ ; : In the speech which Xhadthe honor . isp address to the: Honjae-on the I4th of OctobeE laßt,l showed ttiat the;total expeuditure within and on account 6j, the y|a> 1878-9 was ,££opp\9{>l ; th^ttlia . |btal receipts amounted to' £3,875,177, including therein the surplus : o£ 1877-8, ; amounting to £116,841, and the assets of the 18,79., amounting to £6,695. realised since the 3uthsof June, 1879, and that tUe transactions of the year tended " by leaving a' deficit of £131,824, -not■withstanding the" fact j I have Just mentioned, that we b,egan it -with a s^pplus of £116,84, i. j; H a va )the deficit of would have been £50,0(^0 tess had. the Tax for" the half-year beeu'collected withiA the year ;. but I did not ; '^neiifcion, as perhaps I; ought T to i' have done, U\a.t t]\e bills taken o,n account. of the old Supreme Court site and; the reclaimed laridrin Wellington^ 'amounting Uk £82,524 Bs. 4d., hits beea pa,id,- and 49,409 12s. 8d« remains still out-atand- 1 ing. I found these bills crectibed to i revenue m the Treasury accbunfsj and'! aid not tlierefore disturb, the .arrange- j ment, although; I am clearly of opinion • that they should hot have been credited i as if the amount had been received m cash. Of CQursoj but for this mode of tPfafcing these transactions, last year's i deficit would have been £231,824., This, then, was my starting point for, the current year— a defi/nt of £131,824, to which the estimated expenditure for the year 1879-80, ainountiug^ to £3,974,034, taken from the estimates, left m the Treasury vbyjthe late GoVerti;nurot, arid obtained £4; 105^858; as the " year's. estimated ex pehditurtt. From this amount I deduct the estimated .. yevehue derivablo from our. presen.t sources of /Income, ; amounting " to £3,193,90.'), and arrived at »" tot;ii estimated delicit 6i ■£i>iljS£Sj to; b.e wo-j ■■ Tided for m soine way this ytak' '■■ ' ., s ?3TIiUTBi) KXPJSWDiTUEB A?TD jjrCQilE EOB I . THE TEA^ 1879-8p Ajiivi&li)! ■■ . |, ,§jr, siaco I -last oox^i,c^ , pa uppn

this'subject, the Government have gone Qarofully through the estimates of <x> .penditure. as left by our predecessors. These were necessarily imperfect, ho . provision having t been made for several necessary servie'es, and the estimates, as now- presented show an increase of £59,044j the total -amount ". being c£4,013,078, instead of £3y974,034.i The ; total of y these • estimates ..is larger by £6,117 than the actual expenditure of the previous year,>but it must be remembered that they include provision for- interest on the liew loan arid deificiency bills" to the i extent'of £1 18,000, as well as the expenses [atteriding the second meeting .of. .Parliament within the year.;/ We' hope,, moreover, by careful ad-ministration, to be able, after 'furtheV •experience, to effect considerable reductions ; but upon this point it is impossible .to dpjxiore;; than; promise that: we will use our best endeavors to j aonfine the expenditure "within the- narrowest limits consistent with; efficiency m the public i service^ '--We; -shall also 'during rthe Reoess carefully examine into the present- Orgk'nisatipn of * the * Civil S eryice, and see * how f ar— by the -. combination of necessary offices and the abolition of unnecessary ones -the expenditure .can be .further reduced next year. > Competent and well-paid officers are absplute]Ly essential to gopd ■ government ;j. - while a large :;staff - -of under- paid vCivit Servants is not only costly^ but is m its Very nature fatal to efficient admir.istration. The estimate pt re venue has also been caref uly re • considered ; but with -the advantage of four months' actual collections to guide me, I am' unable, 1 regret to say,- to :increa%e the amount estimated. It is .that ther Land Fund may be I'don'i-; see any j;easpa io eipect auappreciab ie increase m lajnd;:' sales : until.a; fall takes place m ? the tprice of m.oney,. and jthis' cannot be hpped'for until a good harvest has been successfully housed. ::> The problem, therefore," for solution is— How is this large estiijiated' deficit, amounting after. : correction t0 £951,002, to be provided for. this -year, -and what action must be taken, to .equalise our iuoome ana expenditure m future P For although it is somewhat unusual, T am: compelled 1 by: our peculiar circumstances^ to" Took' ,beyond the present year, •nd m some measure to. take, counsel for. the next. But .before we can answer these Questions satisfactorily, we must examine the. deficit and ascertain- whsthep it- is ; of a temporary. or .permanent character, because our mode of dealing with it wilt greatly depend uppa the result of that exßminationi Now/ to ena-ble the Go nj' ihitte'e' to "dome to a decision upon this important point, it would- be necessary to oxamine and compare the receipts of the Consolidated Fund. ■ I propose to do so for the last three years; and raised by taxation m the financial year- :— 1876-77, £1i319,643; m the .' year, 1877---78, £1,424,029,. b*eing ah increase of : -£104,386 over tlife preceding year ; m the year 1878-7?,-- £1,505,237, being .an, /increase of £81,208 over the preceding ryear, and of £185.,594 over ;tlve. year ' 1878r7-7, and this year thfe restima'ted .amount of receipts is £1,5 12,300, being abf>iit £7000. 0n1y more than last year, though largely exceeding the receipts of the years 1876.-77 and :respactively. ;Fqc services rendered : (Omitting, forf reasons; twill presently Igive, receipts [from raihvays) the*re was 'receire4 f<^;tha year 1876,77 £313,250 ; for.*he yeat 1878- 79, £42 1, 377, and* thisye£\r the estirii^te^ amount is £4()l,600*; here, aiso, as m the case of taxation, it Lwill be observed, that tile ; .increase has | been lnarke'di and_ steady during the three years na.med, and that while the i estimate of the total rpceipfcs.for this, yea, r m respect of- services avnder&'d is, about £20,001) less than the-, actual receipts of laa.t yearj "s^n increase of amount m some of the items of receipts vis anticipated^ i I will not .trouble the Committee with; remarks ■ upon the; 'separate items 'included' under the"two heads. of Taxation and services rendered, but ra,ay s,ay that ah e^aininatipn 6f Table, A,; which will be . appended to this Statement, when published, will show that in'almost every ca?e ; thei'e. has b.een a steady increase from, year to year. As I have omitted the receipts' from, railways, my reason for so doing is, that .our railway system was' too incomplete m 18i76"i77 to c*ora pare ■''fairly with the. receipts m WB-79i. : B,ut act c-pi^dirig to. the comparative, statement, of rec'eiptß. and expenditure on the. railways, niade by «the lt^te of Public Wf/rks ia Aug^s^ \tiSi, the figures I hare given under the head of j services rendered do; not show a'S. large an increase as I might fairly claim. It is not, however, ; desifab.le m Any way to- overstate the case. I have nat thought it necessary to take the yeceiptsofsnipre'than three years for con}.-' Had I done so, howeyei', the only deduction to be dra^n; ; frbnr a careful consideration of Vthe %'u'res^ would certainly not have'weakened tny conclusions: ;." On the cdnii'ary, the; further back we go the stronger would; my case appear. Tt niay theH.r tliirik; be fairly stated that ppurr r receipts from' taxation are; steadily increasing, as also' odr receipts • from . services rende»red,; andythat the slight check which the revenue derivable from those, services'^ has nfet with during the current year, is. tampbrary only, and is fully accoutitcd for by- the general depression of trade throughout , the-^ \vbrld^ ■ c This fact should, I si\b,n^it, giye.lis confidence m the future, as "showing indisputtably our population -hard-working a*nd prosperr O.us. In the financial year •1876-77, we receivea" fi^om" land sales, ' £870,819 ; pastoral .rents, £135,036; total, £1,00^855,.. In the year 1877^ landsale^ £1,440,824; pastoral -i-entsj £145,^38 { -.total,. v £ 1,586,562.;' £ast year's land '- sales, . £737,604 • pastoral rents, £13%035; total, 869,729. And th.c estimated revenue for this year : is, , for land sales; ££45,4)Q ; pastoral rents, J^B32jooo ; totaji; SjJBO;bL»O. '; J[fc T will be seen that the laitcl sales last year only reached £737^,6^4 , having' fajllen short of the eßtiin\ate by, £484,304, and that this year they are. estiinajted to produce only £248,000. ;-Herevfe' find the cause of pur^feficit; theiallin? bffin.the Crown . lftn^s^lesof last year reached the estimate and cpuld*;be. r relied on this year ,to yield £liOSO;dOP^ abput.-the of the*' last two preceding years, wo should; ha/ye , a small surplus ihstea.d of an ostiiii.ated defiuit- af . ; £a9l,oDii, m ':. -other 'wotdV uuder.-our ;presen.t sysj^ui We require;, from land sales exclusive, of the; cost of sui'veying," and administratidn soihetUirig liko per .aHniiiu in' ''4$M

ordinary revenue. It may be, I think, fairly anticipated, that with the return of. 'prosperity,* the annual sales will again be m excess o£ the estimates for the current year. With, these fac ts, tlien, before us, Sir, we age m a position to affirm that should^we continue r to treat laud sale receipts as "income and were we content to sacrifice the future settlement of the country for the sake of temporary adjustment of finance; the* deficit to which I have drawn attention would: not with our large area of unsold lands, be ' for some years to come?be of a permanent nature. .Should, however, we do so treat those receipts % we cannot disguise from ourselves that m years of depression we. should be subject 'to large deficits which ii, will be difficult to provide for without adding from time to time to our permanent indebtedness. In other words, we shall have.; an uncertain, and therefore unsatisfactory finance and shall be continuing the objectionable practice of relying upon what is really capital for ordinary -expenditure, as ought to be fdone, out of pur ligitimate income. If, on the othnr hand, we should determine that .receipts from land sales are not income, and shall not m future be so treated, their it is clear that there is a permanent deficit of from £800,000 to £900,000 a year on our. present expenditure and income. ; So' much then,. Sirj for the natureof. the deficiency "-with which .1 have to deal. Therefore, however; I answer the question as to how the Government propose to meet the estimated deficieny of this year, and to obviate deficiency m future, it will be cpnvenieut that I should call the 'attention of. the Committee to the state of our public debt, and the condition of the publio works account.. ' ; y -• 1 - ppbmo pjjbt., ...... . ; Our public debt on the 30th June last amounted to £23,222,819, treating the guArantesed debentures as ' practically issued; and including treasury bills j outstanding of which £42,000 mature on ;the lst"fl£arch next in 'London, and will have to bere r issue d. The annual charge for interest and sinking fund m respect of this debt was £1,232,119. Since then ■we have issuext deficiency bills to the amount; of, £600,000, and when the loan of- £5,000,000; is raised j pur total gross debt will amount to £28,822,311, or deducting: the accumulated sinking funds our net public debt will be £27,113,304, subject to an annual charge of about '£1 3 43O;OOO for interest, and £116,176 for linking' fund, taking, together £1;5T6,1'76. An annual burden requiring bur most wsytchf ul a tten tion, and one .which -can.- only be borne i£ our taxation is properly adjusted,- and our financial affairs managed with, discretion. It may be gratifying to the Committee to learn though the amount is smalij that last year we redeemed out of accrued sinking funds, debentures amoun ting to £71,06 c, of these £58,000 represented the whole of the oufcstandingdebenfcures issued." The Wellington Debt Act Amendment Act, 1876 ; and £13,030 represented i portion of those . issued under The INfarth Qtago District Public Works Loan Act, 1872. ' . ' (To oe continued)