FINANCIAL STATEMENT

Manawatu Times, Volume IV, Issue 47, 12 June 1880, Page 2

FikAnqi al Statement.

80HBMB 01 iiOOAI riNANOE. v So, much, then, sir, for the bjipljory of tjhf pas^. j Ttilli npw. submit for th>'. eonsideration, a.n4>, X hpp? x approval :.pf the committee, our soheme of local finanance, and our proposals for tfif ordinary services of the : current year. "..-•■ -. i I |t • will : be within' the. recollection, of honorable members that I said laatj s^s^on, "that the Governmeat woald, tliw y,ear v _r,e.commend the discontinuance of thesubaidies. This warning was, given because it ifas then generally admitted that the system, of 'subsibli'es was. 1 npt TrHriing satisfactorily ; that, without further, taxation, the Consolidated Fund coxtid no ibpger bear 'this ex« pehditure owing to the i ftnnuardhjarge on our public debt. ihaying^ beconie so large; and that the lpcal^bpdies them,selyss might •have a reasonable" nbtio'e any ohange was made. Great, however, sir, as were the needs of, the X^imffJ l»»t s«b»WP 4 and.

' great as they are at th« present time, the Government hold firmly to the opinion they ' then entertained that this question of local ! finanoe, affecting as it does the Tital interests of the whole oountry, is pne of paramount importanoe, which muit nob be dealt with piecemeal, but as a whole.! To propose the abolition of tha grants-in-aid to local ! bodies without substituting a workable scheme in their place would be trifling with th« subject in a manner whioh, I venture to think, would not meet with the approval o£ Parliament. Our aim is twofold 5 our duty being, first, to place oar general finance upon a sound footing 3 second, to put our local bodies in suoh a position as will enable them to do the work which rightly devolves upon them, and which, must be done by them if the country is to be prosperously settled. I do not think it convenient to trouble the Committee to-night with many reasons for- discontinuing the subsidies. That question can be better discussed when considering the Bills which will be intJoV duced to give effect to our proposals. I may, however, point out'to honorable members that the system of subsidies has operated unequally ; it has largely helped the rich and populous districts, while giving little assistance to those whieh are poor and thinly populated. It must also be remembered that $hey were proposed as part of, a, schema to which full effeot has never been given ; for the Land Fund has been generalised, instead of localised in provincial dis"triefcs j and the expenditure upon pabjie works, instead of being limited in amount and confined to arterial undertakings, has been lavish, and extended to works of all descriptions. The. magnitude of this expenditure will be- evident when I say that w* have increased our debt for public works within th 8 last three year* and. a-half^— the time during which the subsidies have been paid — by £9,000,000,; whibh means an annual charge of. £^50^000. The oiroumstances of the colony ha.vuif so greatly changed since the system of subaidies was introduced, and it being evident that the. Treasury cannot continue to pay them with- ! out the imposition of fresh taxation, the I ease, for a oonsideratioa of fch»- w.hole ques-. jtioa is complete; for- it is certain that Parliament will never oonsent to levy additional taxation for such a purpose without full enquiry and careful deliberation, . ■ In the scheme, Mr. Seymour, which lam ! about to submit to the committee, I must ask honorable members to bear in mind that I take it for granted,: first, that sections five f and six of, the Financial Arrangements Aet, I 1876, Amendment Act, 18£2, w.hioh'author-. ise the subsidies and the grants of 20 per cent, of the Land Fund to the counties, are L : to be. repealed ; and, second, that the pro- ' coeds from land sales are not to be used for the ordinary purposes of government. The ground being thus cleared, I will now.- endeavor, to describe in, sufficient detail the ■ soheme we propose. : ; •">>■' -; To give effect to our proposals, I shall have to ask authority' to -"iridroduce : two Bills. The Erst will be m amending Bjll :. :it will remove the- present restriction upon. rating : th,a.t is to say, it will permit all : local bodies haying the right to rate to levy rates to any amount they may consider : necessaiy for their local requirements, not ; exceeding- two shillings. W the pound, orbeyond that amount if passed), as a special rate. It will authorise boroughs and other local bodies to borrow at any rate of:inter- ; eit the. ratepayers may choose toigive, and ; to. any amount, subject}, om& to.thjsse restric- ■ tions :■ 1. That the principal* suid, interest of all new loans shall be made payable in New Zealand. 2. That any local body desiring to. raise a loan shall, before, doing : bo, levy a, special rate, sufficient to coyer the interest and' sinking fund, upon the money proposed to be borrowed ; such rate ta be continuous up,til the debt has been repaid: The Bill will' also require that any local i body which; ha.* already ■ borrowed upon its. general revenue shall, before again "entering the money market, levy a special rat« ■ tjo; 1 cover the. interest and; sinking fund; upon the existing loan or loans, as well as providing by a special rate for the new loan. These and the other powers given by the Bill are. apparently yery. large, and will, [ 1 fear, be considered dangerous by some people ; but, sir, -I would point 'out that if our local bodies are to be really useful they must be made independent and responsible.. . The. one. precaution, tjo, be. taken, is to sea that ' the ■■% tepayers spend their own money, and not the 'money' of other people, and this will be carefully provided for in the Bill. I now, sir,, cojme to a. further and still I more radical provision, of the. > Bill I—-a1 — -a provision, w,hioh, however-, I venture to hop* 1 will receive general approval, for is may be said to be the very foundation of this part lof our- scheme. It is clsar. thajt all, who • benefit by the- expenditure of rates should contribute towards them ; and, carrying, out this principle to its legitimate conclusion, "we propose, that all government property (including the waste lands of the, prownj. : and— subject to as.i.mpprtani qualification— Native lands, shaft be liabj.e.t<o rating, with. the exception of- Government House in Wellington, and Auckland, the ParliamentHouse, and grounds, the General Government Buildings in Wellington — by which I mean the Targe building upon. the. re-, claimed land,— -and the railways and wharves. , Whatever may be thought of thin proposition at first sight, it wity I am sure, on mature reflection, and- when it comes to be discussed in all its bearings, commend itself i to honorable members as fair and reasonable.. I will, sir,; first state how we propose to deal with Maori lands within counties in which. thy9. Q.oun.ties Act i,t, in force. It i» a fact, which I think should be recorded, that some eleven million acres of land ut l this .North If land are. still -held by less than 41,300 Maoris I—men,1 — men, women, : and' children — and that not one half -penny in the' way of ; rates has everbeen imposed upon, tbjsinatives by this House, foe the. construefcion of roads, and bridges which are being mad* through out the country, and by which 1 ' their lands are being enormously increased in value ; : although, sir, : it is true,' and oughji to be. noted, t|O- their: credit, that many of them have voluntarily paid rates, and contributed; from time to time,toward4,the.oost of public works. The whole of Maori property, /too, is exempt from taxation under the Property ' Assessment Act. Sir, the Government think the time has arrived^ an.d we hope and bur lieve that our. Maori friends will agree, with us in, the opinion, that henceforth all Maori property in. boroughs ihall be. subject' to , taxation to the same extent as the. property of their fellow citizens. But,, sir.* fu|rth^er. than, this jt e do not propose, to, go..* We think, after a careful consideration of all th,e cir.ownsfcances ,;• of ; .the case, that on . grounds of public policy we may reasonably 1 exetn,pt the owners of. Native, country land. from, the. payment of rates. It is clear, . hpjrewr, i£-.tftui is. dpnp,; that some equival-. i ent toflpt b'e found' to. ensbl» tju>se. counties containing a large area: of Maori land to carry ojut the. duties, w*. ar,e\ imposing upon fehen^. . . . . : ; If, therefore, we. are compelled by- considjerafcioa of publio policy to depart in this way from the principle of the Bill, it ia clear that the cost of exemption • should fall upon thf colony at large, and not upon 1 the localities on which burdens are imposed upon the assumption that all the land' will contribute its fair, share of the. local, taxation; ..;"'.■ '.:'*' ■.'.; '■■*"■. '"''/'*■■*:*''' r . : " ': It is proposed -to limit the amount of j ordinary rates leviable upon Maori pountry lands to . one-half the rates levied on the oriinarv tan.d ittflht djetiriot w whAQh, they

lie, but not exceeding 6d. in the pound; and upon waste land* of the Crown Is. in the pound upon the annual Value. These, lands being praoticalljr -unrepresented in the local governing bodies, this limitation is not, I think, unreasonable. To .inmplify matters, and avoid expense and dispute, it is further proposed ferattach" twb schedules to the Hill— one showing, for racing purposes, the estimated . aoreage and. value of the Crown land in eaoh county and Road. Board district ; and. the other affording similar information with regard to Maori land. The land, in . eaoa will<: Sje divided into two classes', pastoral arid agricultural; valued respectively at 6s. Sd; and '20s. per acre. These schedules will always enable the rateable value of Crown and Maori lands in any^distnet toTbt ascertained, notwithstanding that »»>s go pa from time to time, by simply deducting from the amount fixed in the schedule 6s. Bd., or 20s. per acre, as the ease may be, for all lands sold aooording to its class. The total estimated value of Maori land is £6,370,000, but of |his only £_5,20j0,00|0 it situated in counties in whioh the Counties Act is in operation. .-.'■■,,. lands, then; being subject to rating, with the- exceptions. I have Just, stated, the committee .will naturally wish to know out of what fund the rates on Crown landa and Sroperty, and Maori lands; are to be paid, ut, sir,' these, are by no means the only objeots for which.'money has to be provided. ! Jn. any •satisfaetOFy-soheme of local finance* means must be found to construct bur main roads; throughout the colony ; som* pro*: vision must be made; to repair damage., doneby flood and tempest to our roads! and bridges j and some. help, must be extended, if possible, to our;- district roads. This, th,en, brings me to the] second Bill to which I referred as necessary to. give effect to our proposals. The title of this BUI wiU be the Local Public Works Bill. It provides for the constitution of aa unpaid Board, coasisting of the Minister for Public Works,. tneEngnieer'in-Chiefith&Snrv.syor^eneral, and thePublio Trustee. The duties of the Board will be to pay the rates on all waste kftds. of th» Crown, t^> pay th,©. rates op. 1 th» Maori country lands, to make grant* in aid of the construction of main roads, and to advance money to construct district roads,. This will be d,?no froin funds, the constitution of -which, ]j will now, describe, i As I hare said, we, shaß. ask; Parliament to. set apart t tie proceeds of land- sales for special purposes, not permitting it to be used for the ordinary expenses of (Government; charging against it only the coat of its administration, including s«rvey. Ifow I think that, after this year, we may fairly estimate .the annual receipts from land sales for some yean to come at not lest than £300,000.. X believe .Honorable members wili agree with, me that . this is a moderate estimate, looking at th* fact, that pujc- un r ■old lands are estimated, at a low average, as worth, £12,600,000., I tlu^k we inay therefore reasonably expect tp .realize not less than £300,000 a year for some" time to come. The' charge's' ori; t h& Land ßevenue sho«Jd not excted £-^40,000 a year, there will b» 4 balanoe- to- credit of- at least £.160,0b0v THi BilL with which. Xam now dealing provides that, out of th# balance of the land sates; after: pay ing- the. expenses of acLministiation, there, shall be paid ta tbV Board each year the- sunx, of £J.50,000i If, however, tlie land sales should not in any year produce a surplus of . £150,000, then such a less amount only as the sales may produce will b» paid tpth» Board., I have estimated, tha land; sales tlni;ytar.. «t: only £300,000 ; it impossible that they. may pro-L duce more, but, I have not; after 'careful consultation with the department thought it prudent to estimate it at more than that' amount. T.h,e..cost bj?- administration and charges are set down.- at about £150,000 ; the balance, therefore, available, this year/ »hx«il<3 my estimates not be exceeded, would be only, £50,000. Sir, i&wtaai to the Government; that, in starting such- a spheme a» we, haye. U|td«r qonsictemtioß^ ik would be unwise to attempt' to' launch it without sufficient funds to enable the Board to make a good, beginning. The. prospects of ' the surplus Land fund for this: year reaching £150,000 being but small, it i* proposed to ask the House to make a gramt to th»Board of £150,00P.0ut of t'n» loan, so. as to, place it ixi, fqflds; f.or- the. 'work of next spring and summer. The fund , thuscreated is to be applied to the fnEbwing purposes : First, the payment of the; -rates en the wastelands of the Crow.n, and Maori country lands;.' second', grants-in aid. for constructing , main roads, Aj^4 repairing damage, done by .flood and. tempest. The rates, estimated at a shilling in. th». pound — supposing eVery Eoad Board and every counTy to levy ' 'a shilling rat*-— would , amount to about £60,000^ or to 'about £74,600. if rates ob Mapiji, lands «kq' included %b,ut I much dojibt it .tihe- ampujajb, of rates payable ' by^ the 1 Board: will often reabh £50,000, a. yeay. % Th*. bal^ujpe.. r^- : mainJßgV'wh^tTier it be £80,000 or;£100,000 'will be applicaple to main roadi and main roads only.- The- main roads, I should ba,ve said, will be 1 defined': :6y . procfiimation. I have hadtsketch-jnaps. prepared for th^jn,foraiatioa. of honorabl* members; showing ! the roads it i^.nrjopoied to. declare at once, powerbeing. given, in the Bill to proclaim, others from time to time, as oircumstances miay wquire*. The gr.ants-in-aid wift be limited by, the: funds at th» disppsalt of She Board, and will be made.in, this way : I will/ suppose, for the sake of illuatration,: that a county wishes to construct— aiid construction means forming and metalling roads or building bridge— a Bection of main road over which it has, control, or to repair da-' mage. done to ainain; rpad; by flood, ortenipest. The CouncU; musfc j&Jain, an; estimate, of the cost of the work proposed to be executsd, which we, wiU supDose amount to £6000.. Th* Council will tnen make an applioation to the Board for a grant-in-aid. But, before the Board can make the ; grant, the Council must show that it has one-q^uar*. ter of the £6300, that is,. £;1500, at its dis; posaVwhioh it undertakes, to, spend upon the work : or the rattpayers of the county must impose, upon themselves a special, rate which will repay one-fourth of, th# .ifiSOOOi namely, 1600,| ih; twenty; half<iyearyinstalments, without interest. In othey words,, three-fourths, of the cost of the,, construetipnof the main i;p^ds will bi>. . paj^d iby the. in cash or by wray of ."'.". Tpecial ;.#x.tendingJ over teniyear. 30F^i rible njj)mjjeri. must be«r in? mind [thai: Tj^ita 1 lands of the Crown, and Native lands are subject 'to thespecial rate, a«. ;y»ll as pcirafo lands. Th« reason for making no grants .unless th». county is prepared, <jo.cpatribut<j , .-.."flair pror portion o|th». oujsiay. will! % pbviouß to the,, committee, and honorable nxembers will, I think, admit that th\e 'qpntribution has been, made as stnaJJ as is compatible ijrijbh psTudehce. "'^v; .:•' ■'" ■'. :=. !i :''' : *;"-' ' • ' r "I' now turn to tht proppsed' assijitance.l toi be given to district rbads^ that is, to .loads other that main roads/ The Bill proTides that the Board of Local Public Works may borrow f torn tim« td tim«, at 5 per: cep,t. interest, of the Pbstmaster-Gheneral or Q-OTernment Inaurance Commissioner, any sum not exceeding in the whole £100,000-^---the colony being Cable foe its repayment— and lend it to the local bodies for the purpose., of constructing distriot 'roads. T. he terms upon grants ar* to be made are, that a special rate is to. be ; levied by this local body desiring to borrow, which- will produce 9 per cent, per annum upon the proposed loan* Jhfl^^^isjitwrt charged if to. be :*'•»■?.

cent., «o that 9 per cent, paid half-yearly will cover both interest and sinking f and, and will extinguish tl»* loan in fifteen ytarj.. ' Tb will be observed that tht rate of interest is very loir, and the terms of repayment I easy, I think, however, honorable member* will approve of substantial assistance being given to local bodies for the purpose of constructing roads throughout tne country, if only we keep within our legitimate means. But the committee will say, how can theBoard borrow money at five per cent, interest and lend it *t. four.?. Sir, tbi» difficulty can only be got over. £y the same' means as is propoaed in the «aso of-the : ; f und for 4h#. construction of mrin^x^ds, : rl?shaU therefore ask for JgSO,OQD to be so granted for> the purpose.^ The Board witt then be in a position, should tne grant be made," to lend., £150,000 or any less sum, at four per cent, interest, and at the same time to pay. 5 -percent, upen such sums as it may borrow up! to the limit of £100,000 with, a safe margin, ,for.cotningencies. ':"".' :.".,-.. BoaoTOHt. '* . So far> air, I have not directly mentioned an important branch of thy subject. I refer to* boroughs. X do. not desire to make, light of the present loss to these bodios of the sdbflidies. My proposal will, np doubt, necessitate for a time reduced- expenditure ; but there wil aecr«e to the boroughs the permanent right to tax Government and native property of not miioh less" than on* million in valuer I say permanent, >for I think no one can doubt tha^, if .once the principle of taxing Government property is by this House, it will never be possible to retraoej that- step. The rates, upon all Government property it is pro-, posed to charge upon ttie Consolidated Fund : as being properly included in, the. ordutary.expenses of GoTernmjßnfc -... • , I trnst, tatt) the. proposals- .which 1^ 1 have brie% sketched wilj: cojiimend them-. selves to hVjftoeaele-membei? a^ajtany r/ite, i the bask upoß, which, this knporbant question of local finance may be ultimately setttedT We are «tt of opinion, r th'ink,. j that the- subsidies, shpuld ceas«j,;if mean* to. a reasonible extent ;fos' carding on^the ne;cesi aj?y Txork* cafl, bu peovijded' in~* be^rway;, and; I submit that our pioposal arebetter in every -Tespoct. The «cheme is sound because it ia based on two principles; whi<Aaranaw unan^mpvatyfccoep^ed inthis, House. vFh^t that the! pTpoeed* of land; sales be applied to opening np and settling the country ; secondly that the landowners, must for the future paotioally find the. imeanj to r maintain, the. rc«yJs of , tjhe v <?olony. "And i* hfts aapreoxer tKis greatisddiJiionali advantage, j thai it will enable us to complete? - thV separation, of general and- local finance. : The one will; in. future,. be. in no way depen.--dent upon the other—an advantage which i; (Venture to think will be "of incalculabl* benefit to both the Government and the local) if bodies. ■Should our proposal* meit with the'approval of Parliapienl;, % shQuJd.also ask^for . authority, where necessary, to nermit: localbodies to rectfve direttiy etery iax^ or rate, which belongs to or has been made- over- ; them; ■"■',; ,'[■/■ ■ ' ': - ••-.- „■' V : -'