THE LOAN BILL.

Mt Benger Mail, Volume 17, Issue 850, 29 August 1896, Page 3

THE LOAN BILL.

Fkoji Tiit Stak's Pabllvmextaby Kepojitek, WELLINGTON, Adgust 22. Last night's fare for the consideration of members was the measure under which the Government asked for power to ra : ,sc a million loan, and which is knoAvn as the Aid to Public Works and Land Settlements Bill. • As soon as the measure was called on Captain Russell pointed out that as the Bill was only circulated the previous evening members had not had time to consider it. He therefore asked that the second reading should not be pressed till Tuesday's sitting.—The Premier said it was necessary to get tbe measure through as soon as possible. They could not go on with the Estimates until it was passed, and he thought that they should go on with it at once. He then proceeded to move its second reading. It merely provided the machinery, he explained, for carrying out the proposals outlined in the Financial Statement, and he had no doubt that every member of the House had fully made up his mind as to the Bill. The matter had been already discussed by members. At the 31st March last year there was only £45,000 to the credit of the Public Works Fund, and members were no doubt very agreeably surprised at the elasticity of the publio finances. For some time past public works had been dependent on the revenue of the colony. When the Government assumed office in 1891 there was £700,003 in the Public Works Fund, but against that there were liabilities amounting to £300,000. Since then £850,000 had been paid into the account out of the Consolidated Revenue, and £IOO,OOO had been paid off the floating debt. As they had been able thus far to carry on without direct borrowing for public works, he thought that they were now entitled to this million asked for. The present was a very favorable time for raising the mono) - . If the money market continued as at present, they ought to be able to get it at per cent. It would be impossible to carry on railway works and to supply rails, rolling stock, etc., without borrowing. It was also necessary to obtain money for works on goldfields, for the improvement of the land, and the acquisition of Native lands. They could not now say in what particular part of the colony or particular works the money should be expended. He would like to have placed this information in the Bill, but he could not do so. They would have this safeguard, however : that the money could not be spent without the allocation of Parliament. Particulars of this allocation would be set out in the Public Works Estimates. He scarcely thought that they had done justice to the goldfields in the amount asked for the works on them. They should not give everything to syndicates. In regard to railwav works, he gave the Eketahuna-Woodville line the pride of place as the work deserving of the first consideration. The sooner this work was completed the better for the colony. He did not think that there was anyone who would say that the other railway works proposed were not necessary. The item of £50,000 for the improvement of the scenery of the colony and the thermal springs would prove one of the most quickly reproductive of all the votes. In the past the colony had done too little in the way of bringing its scenery and natural wonders before the world. They had practically done nothing in this respct.—Mr Mitchclson said that the Premier had only told the House half the truth. He had said that the Public Works Fund had come to an end, and replying a few clays ago to the question of the Leader of the Opposition he had said that he did not iutend to bring this Bill down till the end of the session. He had now, however, been forced by circumstances to bring it down at once. He would either have had to do this or bring down a supplementary Financial Statement authorising the transfer of a further sum from the Consolidated Revenue to the Works Fund. Where now was the boasted soundness of the finance of the Government? Unless the Government got the money proposed in the Bill at the end of the mouth they would not be able to pay the salaries of the officers in their departments. Last year the expenditure on public works was increased over the year previous by £52,682, which he thought showed that this expenditure was increasing. The average expenditure for the first six months of this year, if carried on at the same rate as last year, would use up the whole of the sum now to the credit of the Public Works Fund, and unless the million proposed to be borrowed was agreed to there would be nothing left for public works. This was what the Government called sound finance! He thought it would be found that a large number of members would not support the proposals contained in the Bill. He did not think that the Government were entitled to raise this money, as the greater portion of the members were returned on a non-borrowing ticket, and it remained to be seen whether they would adhere to their pledges. He entirely disagreed with the amalgamation of all these purposes in the one Bill. There were members who would agree to some of the proposals, but not to all. He agreed wiili the proposal to raise money for the purpose of acquiring Native lands and for the roading of the country, but not with the other proposal. Before the House went in for further borrowing the electors should be consulted. The Bill should be entitled the New Zealand Loan Bill, 1896. It was a loan Bill pure and simple. Mr Dutbie said that the Bill was of a most unsatisfactory character. He thought that the House, if it were agreed to authorise borrowing of this kind, should first take to itself the right to the control and allocation of the money when raised. It was surely the duty of the House to see that the money was properly expended, and not commit itself to the hazy proposals outlined in the Bill. Unless there was to be a very great change in the expenditure on public works the money proposed to be raised was not anything like adequate, and they should therefore obtain from the Government an explanation of their future proposals. He went on to complain of the delay in pushing on the Eketahuna"Woodville Railway, and argued that a sufficient sum should be set down for completing that work as quickly as possible. Regarding the question of acquiring Native lands, he agreed with it, but here, also, the House ought to have further information. He quoted instances of waste money in purchasing lands of a useless nature. He claimed that the House should have power to guard against this sort of thiDg for the future. Particulars of the proposals in respect to the goldfields expenditure should also be quickly put before members, and also of the proposed expenditure on scenery. He would not object to money being spent on scenery improvement if he only kDew how it was to be expended, but he did not think that the Government even yet knew this themselves. He referred to the necessity for inquiring into the co-operative system before allowing such an expenditure as was proposed under that system of carrying on the works of the colony. He objected to the Government getting the money in the colony, and contended that if the money were to be borrowed they should go straight to the London market for it. If the money were necessary the House should clearly know how it was to be expended. —■ Sir R. Stout said he was not surprised, in view of their pledges of 1893, that no Ministers got up to defend this measure. In one respect the Bill was necessary. The Public Works Fund had been depleted to such an extent that it had been necessary to transfer money from the Consolidated to the Public Works Fund. During the Scat quarter of this year £70,000 had been so transferred, and as only £50,000 had been authorised he would like to know how this camcjto be done'? The Premier said that the Public Works Fund had been kept going out of revenue without borrowing. Since 1890 the sum of £541,000 bad been borrowed for this purpose. It was certainly not direct borrowing, but by use of the sinking funds, and there had been a consequent increase of the public debt. Of the million about to be borrowed £350,000 at least was to be spent on roads and bridges. When the provinces were abolished it was understood that the local bodies were to carry on this portion of the colony's work. The reason for this was plain. The Houae was perfectly incompetent to do the work. The House generally knew nothing of the necessity for the work, and an absolutely autocratic power [was therefore given to the Minister of the day. He could point out cases where the vote had been spout, not for roads to open up new lands, but on roads that had been open for years. The money might as well have been spent on the streets of the cities. The House had no control of this kind of expenditure, and was quite unfitted to deal wjth thw question. The power should be taken from the I pijiater, A «lwge to $ e * VBte w ww »«edcd,

and the matter letfc to the local bodies or to a grand committee of competent members of the House, who should be selected to allocate the money for these work 1- . The whole expenditure of public money was at the present time centred in the Cabinet. The House had really no control. Ministers and members, however, would not face the question. He himself knew the difficulty in the matter. This opening up of lands for settlement was a misnomer. It was not opening up lands for settlement at all. The Bill also proposed to to place the Midland Railway on the same footing as the other railways of the colony. This was departing from the attitude always taken up in the past. It was a grave matter, and meant that the Government were taking the line over altogether; but as the matter was now before the Public Accounts Committee he would say nothing further about it for the present. However, he urged that the Midlaud Railway should be taken out of the list of railways upon which loan money was to be spent. He urged that more particulars should be given of the proposed expsnditure on railways. He objected to the proposal to give the Government carle blanche as to the expenditure of the money to be raised. It was all very well to say tl ', the vote 3 would come down on the Works Estimates, but this House would pass anything brought down by the Government. Parliament had really no control whatever. He objected to the borrowing proposal, as more than half tlie money would not return interest direct. No doubt, the colony would gain an indirect benefit, but there would be no interest-paying asset to show for the money, and the interest would have to be paid out of taxation. Ha therefore thought that the money from the ; Native lands sold should be kept sacred to re- ! pay the money borrowed for the purchase of that land, and the rents received from the land should go to a similar purpose. This would be legitimate finance. But as at present conducted this money was used as ordinary revenue. It came to this: that the mon?y was now really borrowed for ordinary purposes. As to the goldfields, tbey could not afford to spend a quarter of the loan on works on goldfields. If there was gold to be found, and the miners got a fair tenure, they coull carry on without assistance. Sir Robert's remarks were cut short by the time limit.—The Minister of Public Works complimented members upon the spirit in which they had discussed the Bill. Regarding Sir R. Stout s suggestion to have a special account into which the money for the purchase of Native lands should be paid, he contended that so little land was now sold that this would be useless. At the present time the interest on the money paid was met out of the return from that land. He ventured to say that the rates for roads and bridges would receive careful attention of members. Referring to the Midland Railway, he complimented Sir R. Stout upon his success in connection with the arbitration proceedings. He defended the co-operative system, concerning which he said that the Government had received very complimentary reports from independent sources. The Minister generally defended the proposals embodied in the Bill, saying that he felt sure that the country would congratulate the Government upon having introduced this measure.—Mr G. W. Russell said that this Bill was laying a further responsibility on the settled portions of the colony in order to develop the unsettled. In this connection he looked upon the Bill with a critical eye. It was clear that this loan was the forerunner of several other loans. In view of this he thought it better to go direct to the London market and raise the money as cheaply as possible. SpcakiDg generally, he would support the second reading of the Bill, but in committee would support certain amendments Mr Collins agreed that the Government should go to the Loudon market for the loan, and combated the statements of the Hon. Mr HallJones regarding the success of the co-operative works, saying that he had been grossly mistaken —Mr R. Thompson regretted that the Bill did not allocate the money to be expended. He opposed £50,000 being voted for roads for tourists and for scenery improvements while so many of the roads in the country were in such a deplorable condition. He atmounced his intention when in committee ot moving to strike out this vote, with a view to inserting "on the construction and metalling of roads in the north of Auckland." On that he would take a straight issue.—Dr Newman pointed out that there was a clause in the Bill which enabled the Government to raise a portion of the loan immediately the Bill passed, which showed very plainly that the Government were very hard pressed financially. He ridiculed the amount devoted to the railways of the colony, contending that it would be better for the colony to devote the £50,000 for surveys and improvements to railway works than to use it for the pu pose now proposed. It was simply preposterous out of the £250,000 devoted to railways to propose to construct a new railway and to expend it on such lines as the Otago Central. He contended that light railways would be quite sufficient, and would have the effect of opening up a large amount of country at a comparatively small cost. When in committee he would move that the allocation of the million loan be altered so as to provide for £400,000 of the amount being spent on railways. He condemned strongly the miserable, dawdling way in which the railway works were now being pushed on.— After short speeches from Messrs E. M. Smith, Buddo, and Willis, who all supported the Bill, Mr Allen pointed out that the Bill made no provision whatever for any year after this, and contained no policy except for the immediate present. There should be some policy as to the way these railway lines should be continued in future. These railways had not been railway works, but relief work?, and there was no particu'ar policy to carry them on to a paying point. After referring to the eeveral lines of railway in the schedule, he said that, excluding the Midland, North Island, and Lawrence lines, the amount set apart for the other lines was not nearly sufficient, and as it was proposed to carry them on next year it would be far better to concentrate their efforts on one line in the North and one line in the South, and carry them on to a paying point, rather than extending all sorts of lines piecemeal fashion. He was always opposed to borrowing, but the Government had been carrying on to a great extent for years past on borrowed money, and instead of a decrease in the public works expenditure there had been a considerable increase. He thought it was desirable to open up our scenery for tourists, but did not think such a large sum of money should be borrowed for this purpose, which ought to be used for the surveys of lands and makinj roads.—On the motion of Mr Mills the debate was adjourned till Tuesday.