Financial Statement

Nelson Evening Mail, Volume XII, Issue 275, 20 November 1877, Page 4

Financial Statement

Mr Larnach referred to the desire of the Govern- ♦ ment to consolidate the administration of the colony, and introduce a comprehensive and stable plan jof finance. He said two courses were open: — Firstly, to ask the House to vote supplies for three or four months, to adjourn, to meet again early next year, and place our plans before the House in a matured form, or secondly:— ;To take up the estimates of. the late Government, make, such modifications as are necessary, and during the recess, reorganise and consolidate the financial and departmental system. ! We have determined to adopt the latter, at the same time the House has a right that we should indicate our views upon the financial condition of the colony, the character of the changes we propose and the reasons for those changes. The late Colonial Treasurer laid before this House a statement, with the tables and returns that usually aitend such a document. lam therefore relieved of entering to any great extent into details. I will admit that it would be impossible for me to give more clearly than the late Treasurer details in reference to the different loans, nor have I the time or the means to revise them. So, also, with regard to expenditure, anxious as we are to effect changes by means of rearrangement and consolidation, yet as more than one third of the financial year has elapsed and as much inquiry is requisite I have no other course open than to accept the estimates, nearly as they appeor. If, however, I am precluded from dealing with details, I will endeavor to indicate the tendency of our present system the evil3 to which it leads, and the only remedy I can see to enable this colony, without imposing enormous burdens, to maintain its credit, and to bring to a successful issue the immigration and public works policy. EAKLIEB MEETINGS OF PARLIAMENT NECES9ABY. The General Assembly frequently meets after the commencement of a new financial year, and afterwards months elapse before the Appropriation Act passes, and expenditure is conducted without appropriation, upon the authority of Imprest Acts. The Government is thus able to incur any expenditure it pleases, and the duty of the Assembly is rather the ratification of expendi- 1 tore during several months, than the watching of amounts it is asked to vote. To cure this, the Government will either alter the date when the financial year ends or call the Assembly together earlier. ;tbeasurt. bills and other floating debts. , In 1874-75 ther9 were outstanding treasury bills to the extent of £400,000. It was hoped this sum might be extinguished by paying out of revaaue £100,000 per annum If that had been realised, there would be outstanding now only £200,000, but the tendency is in an opposite direction, for the amount is now above £800,000. We have been unable to pay off the deficiency and the necessities have been greater than before. The charge on the consolidated fund is now so large that to meet Treasury bills out of it is hopeless. In 1875-76 a further issue of Treasury bills was made of £182,000, ' ' last year of £260,00p, and the late Colonial Treasurer purposed a similar borrowing this year, but the fund on which this is to be secured is not the Consolidated Fund, but the land fund of Otago. Thisfcondition of affairs is not considered satisfactory to our reputation as prudent and careful colonists, and above all to our credit in the English money market. POSITION A3 TO PEOVINCIAD LIABILITIES. Last session this House finally determined to abolish the Provincial system, and to make ProvinciaMiabilities Colonial liabilities, for which this House has to make provision. The burden which has been undertaken is greater than was anticipated. The difficulty of ascertaining the amount 6f Provincial liabilities is very great, and that of finding the means to liquidate them ie still greater. Up to the 30th of June lust, £237,500 had been advanced ftom loan to meet Provincial liabilities, and there then existed Bank overdrafts as Provincial accounts, the sum of £105,888, or an aggregate of £343,388, which may be reduced by £45,888, the amount of balances in hand to meet liabilities on provincial aecount thus leaving still unsupported £297,500. From 30th June last I may travel upon a different track. There are at this date further liabilities on provincial account amounting to £279,766 reductable by about £30,000 due from land fund and other sources, leaving a total to i>e provided for somehow of £249,766, and further liabilities in this direction vrftl most surely present themselves. In the statement of these liabilities which I find in preparation for the last Treasurer, they appear to reach £660,000. There is £104,000 to be paid in January next to the Wellington Trust and Loan Company for money lent to carry on the reclamation on the foreshore of . the harbor, The money can be reborrowed on the same security. From the statement of the late Colonial Treasuror it will be seen that there remain no balances from loans to which I can charge any of these payments ; but it is necessarv to go into the money market under disadvantageous circumstances to borrow still further. To do so on anything like reasonable terms, we must be prepared to show a state of finance characterised by aouaduees and stability. UNSTABLE CHASACTEB 0? 2ECENT COIONIAI FINANCE. Has there been any stability in the finance of the Colony during the recent past? By abolition, a financial arrangement, euppoaed tq, be of a definite and permanent character, was arrived ac. Iu reference to the Land Fund, this arrangement . never even saw the light of day, but fell stillborn. Great difficulties would have arisen from this cause, had not certain provisions in the financial arrangements Act come to the rescue. These provisions the late Government proposed to alter, thus removing every trace of fixity. to meet all exigencies and pay interest, what is the state of the Treasury ? It is more satisfactory to deal with cash than mere book-keeping aceounfc. With the latter it is not d^licult to manipulate balances, with the former it is not easy to show two sovereigns where, in reality, only one exists. STATE OP PUBLIC ACCOUNT. On our entry to office on 13th Oct. there stood to the credit of the colony £702,312, Surely with such an overflowing treasury as this the House will wonder what need there is for any financial difficulty. I shall at once proceed to show the House of ■wkat this balance consists. To the credit of the Consolidated Fund there was £105,563, to the credit of the land fund £554,648. THE LAND rUND— ITS PEESENT POSITION. The whole of the Land Fund is appropriated by special enactment : the Government has no power to touch one shilling. What the law places at its disposal — the whole of the residue — is to be distributed . to the counties in which it is raised. An accumnlated liand Fundcannotbe used, even temporarily, in aid of .a deficient Colonial Treasury. The Laud Fund this jear will be largely in excess of the sum estimated by the late Government, which was £743,000. To September 30, there had been paid £542,231. Ido aiot anticipate four times that sum, bnt it is reasonable to suppose that one million will be realised. After paving all subsidies, the residue has to be jo%id to the County Counci While the Laud

Fond receipts have been largely ia. excess?^ tiie r estimates, that has arisen from She., l^rge guais realised in Canterbury, while in othei>:diatnof3 $&&**' amount has been much under the estimate, FUTUBE DISPOSITION OF LAND FOND. Though the Land revenue has been treated as Provincial revenue, in fact, it has been encroached upon to suck an extent that the idea that a large proportion is available for localisation is a delusion] it not being for the most part part derived |rom ! : actual sales, but lent from Treasury tiilla. It is desirable therefore that the subject should be placed on a satisfactory footing with which view we propose to do openly what our predecessors have been doing indirectly. We mean to make the land fund colonial bevendb, subject to all .the obligations,, which the Colony has undertaken inrespecfe thereof, - such as the cost of administration, jcost : of surv&y,£ ; immigration, interest on Provincial' loans,' and so*' forth. It is our intention, howevqr, that twenty per cent, shall be localised for- the purpose of being expended by local authorities on roads, bridges, and publio works within their reapaotira districts, and we shall ask Parliament to agree to & uniform land law, whereby the bubllo estate, subjaofe to classification, shall be sold at unifdrm.^ripes ' throughout the colony, whether on' a. sys,tem\ emf bracing free selection, deferred payments, or otherwise. If administrative reform and reductions of ex? penditure canbeeffected to an extent whichmayauW/'" of aDy increase of the proportion of 20 per cent. re"- Iferred to, such proportion shall have the benefit. "While the circnmstances into 'which! the Colony has been permitted to drift render it imperative that the land revenue should be dealt with as proposed, my colleagues and myself recognise that one of the mosfe legitimate objects to which this revenue should b» applied is to render available for settlement the particular locality from whence it has been derived. la fact, this ought to be regarded as on© of fcha main conditions upon which the purchase money is paid. We are therefore of opinion that, in apportion", ing the revenue throughout thd Colony ? suck ' conditions should be kept in view. The 'Gavernment looks forward to being enabled to submit next session proposals based upon sound data, whereby important districts may be opened up and connected with the main railway lines by. means of branch lineg to be constructed out of the proceeds orthe land which will be. rendered valuable and accessible by suoh lines. There are at present extensive areas of public territory throughout the colony which are unavailable for settlemonS and which must continue to be so till rendered - accessible by railways or roads. The Government--' looks with favor on the actions taken during the present session by private members. We are of opinion, however, that it is a subject which ough6 to be dealt with by the Government, and we shall be prepared to devote to it that consideration which its importance deserves. MAIMTBNAKOB AND BBPAIE3 OF SLLIH HKBS OI? BOADS AND BEtDGES. The Government has had brought under its notice the necessity of taking steps to repair the maia roads and bridges of the Colony, and although the Counties were created to do this . work,' they have been unable in too many cases to grapple with the difficulties imposed upon them. If the Government find it to be the interest of the Colony "that ifc should undertake the work, it will not fail to do so, even if a- portion of the subsidies payable to any local bodies may have to be diverted, SEDUCTION Iff DEPARTMENTAL EXPSNDkmraa.' ■ Some interest has been excited by tha Premier's statement relating to a reduction in the salaries of Ministers. There is a laudable curiosity as to fcbo extent aid nature of these proposed reduotiona which I desire to gratify. In the year 1874 the salaries of Ministers were raised from £10.00 per annum each to £1750 for the Premier and £1250 each" for "other Ministers. We shall propose a revision of 6b!e Civil list-, and aak the House to fix the Premier's salary at £1000, and'that of each of the other Ministers atthe aaaie amount. We propose to sell, not prfaatefo "i one of the steam veesels, now the property of the Government. Ihe Publio Accounts Committee report on the advisability of selling the Hinemoa, but before determining which boat to dispose of, wa shall . be guided by careful advice from officers qualified to give it. In dealing with the Civil Service, it will be our object to maintain the efficiency of the publio service, and not to cut down salaries of necessary officers, but to consolidate offices as much as possible, Iu this direction .we believe much can be done towards effecting a large saving. BAI1WA? MANAGEMENT. We look forward to a report from the Committee appointed to enquire into railway manage manly and * much valuable information for our future guidance. We shall be prepared to give the report moat serious consideration. A. commission appointed to enquire . into the Auckland Hues reported iu favor of ' them. If these recommendations 'are supported by the report of the. committee, we shall as£ this House to favorably consider them with a view of effecting a saving, as we believe there ia room foe considerable reduction in the system of railway management. P3OVISION FOE BEC3NSTBJJCTION OF UNEB. We have been accustomed to hear of revenue da* rived from, railways, but that was simply the balance of profit after deducting the coat of maintenance and working expenses from the gross receipts. The necessity of providing for the renewal of the various lines, a point in respect of which the tnoafe careful provision has always been made in the railway system of the mother country, has in our case been entirely overlooked. ;It is impossible to over estimate the significance such necessity will have on our finance. With our system of light narrow guage railways the question of renewals is much more important than at home. We cannot propose to deal with the matter now, but it will ' form a leading feature in our: public works policy of next year. PEO3?OSED NEW XOAN: I desire to say a few words on the views of the. Government as to the extent of the further borrowing powers to which we shall have to ask the Gomm\tia& to assent. . It has not been easy, with the political and departmental business appertaining to offices on my hands, to meet you with a statement of our views on this subject to-night ; nor has it been less difficult for us to decide as to the sum necessary to be borrowed. We shall ask the House to consent to a loan of £4,000,000, being sure this amount will be wanted. We propose to redeem the guaranteed debentures, to provide for publio works, for provincial liabilities, for other necessities of the year, and for all floating debts • due by the colony, but there is also the million dua to the two banks which we have not provided for. We have loans raised in London, loans raised in Sydney, loans raised in this colony, and we have the treasury bills before referred to. The Government deem it desi able that this system should cease, and that there should be but one sort of funded debt for this colon^, show ing at a glance the entire debt. One current or working account showing our annual revenue and expenditure under their several heads aud that the numerous small multiplying accounts and balances at present existing under the heading of the public accounts should be done away with, and that we should as far a3 pos-i sible have but one creditor, I mean the 'London money market. The .practice of concealing , the amount of the Colonial debt by "the issue of Treasury bills, and the raising of temporary loans in the Colonies, has an effect even • worse than imposing directly on the home creditors. 16 en^ • courages the people of this Colony to fancy their liabilities to be smaller than they really are, and to ag tate for a greater expenditure than the Cplotjy can afford. Fuller details of these questions will ba given when the Loan Bill is brought down. taxation. ; During the recess, we shall seriously consider large reductions in the publio expenditure which we believe can be carried out, and also the question of altering the present system of taxation with tha view of more equally distributing its burdens. Should our land receipts keep up, I apprehend it will not be necessary to raise a larger revenue from tha people than is now drawn from them, but should that fail we must submit to heavier burdens to keep our obligations to our creditor and conduct the business of the country. After the experience to be gained during the recess, we shall be in a better position to offer * an opinion on the aubjeofc.