THE PREMIER'S SURPLUS. (Wellington correspondent Christchurch Press.)

North Otago Times, Volume XXXVII, Issue 8166, 25 April 1895, Page 4

THE PREMIER'S SURPLUS. (Wellington correspondent Christchurch Press.)

The jubilant announcement at Marton, by the Premier, of a grois surplus of L 430.031 was received with such general incredulity that I thought it well to procure the beat opiniona ob« tamable upon a subject that must be the most engrossing topic of the hour for some time to come. I have been fortunate in securing statements from ijir R. Stout, the Hon. G. H. Richardson, and Mr George Hutchison, M.H.R., than whom there are probably no three public men more capable of expressing an opinion upon the financial position of tbe country. INTKKVIEW WITH SIR It. STOUT. I found that Sir R. Stout had the figures ab bit lingers' end. He said — ' There is some difficulty in comparing this year with last, because of the different way the aid under the Consolidated Stocks Act, ssB, had been dealt with. For example, in 1893-4 we issued L 184.500 worth of debentures under the Act as aid to revenue, bub by the end of tbe year we bad paid off a considerable portion of them. This year we have adopted a system, recommended by Mr Gavin, of only iisuing the amounb we actually require —at all events for the last nine months. The old system was continued for the tirst quarter. The issue is LI 17,800, and that is a loan in aid. But for this issue we would have had to pay cash. There are bhree or four ways of looking ab the transaction for tbe year.' Reporter — ' Can you tell me how wo stand in a cash basis V Sir Roberb— 'Yes. Leb me take that aspect tirsb. 1 assume thab Mr J Seddon's figureß are correct Well, then, ho had a revenue of L4,40G,."515. Leb U 3 deducb the amount borrowed under the Consolidated Stocks Acb, and our net revenue is L 4,288,715., 288, 715. We spenb on ordinary expense* L4.26G.722, and paid L2-AOOO to the Public Works Fund. Our deficib was, therefore, L 228.007.' •Did you * y deficit °' •Yes, deficib ; that is the facb.' 1 Well, then, how does Mr Seddon get his «urplm V ' I'll show you. You asked me for an actual cash basis and I have given ib to you. Let us nee how we get o surplus. We had L290'238 last year as a surplus, and we borrowed LI 17,800 as I have shown you. Add these together. They come to L 408.038 Deduct the deficit in the years' transactions L 228,007, then we geb the surplus of L 140,031, which appears in Mr Seddon's statement.' 1 Do you admit a surplus, then V 1 Yes. We have made one by adding togebher our borrowed money and our last year's surplus ; bub the true transactions of the year, leaving ont borrowing And deficit, is as I have stated.' ' In whab other aspecbs can the position be viewed V ' You may compare last years' revenue with this. Lasb year the Customs revenue was L 1,655,302 : the Treasurer estimated only L1.G00.000. Bub ib is said the revenue is L 30.000 less than tbe estimate, Compared with last year, there is, therefore, a drop of L8D,002. Thea our railway revenue — the fall in b was estimated ab L 5547 less than last year, but it has fallen L 17,000 below that estimate so there is a drop of L 22.547 there. These 'two items of revenue show a drop of LI 08,0 19. The obher revenue rawb have kept up in a remarkable way. I have no details, bub judging by whab was published for the nine months of the year I should fancy the stamps will come up to lasb year. Lasb year they were LG74GI7, bub the Treasurer only estimated our iocome at L 638.000. It will nob surprise me to find that bhe revenue will I show aboub tbe same as lasb year. Then I think our Land Tax revenue was under-estimated. You will notice that, leaving our sinking funds bonds (borrowed money in face) our revenue has fallen as a whole from 1^,308,537 to L 1,288,715, a decliue of L 72,822. Ido nob see how bhat can be oiled a splendid result.' ' How has the expenditure stood compared with lasb year V 1 Well, you see, because of the change of the method of dealing with the bonds under tbe Consolidated Stocks Acb, in tbe absence of bh9 published account?, one cannob actually say ; but I expecb ib will appear bhab our expenditure mainly in tha inborwill sboir an increase of L 40.000 or L 50,000. I estimate a tobal increase of L47,3G4.' • What do you think of bhe posibion of the Public Works Fund V 1 Thab cannot be accurately judged, unles one knows the liabilities ; but ib eeems to me to b» aboub stranded.' ' But the Premier tilk? jubilantly about ib.' 1 Yes, bub the true figures show no ground for jubilation, as I will show. Las': year our crodib for appropriation waaL5GB,4l9. We had liabilities of L 214,742 on bhe 31st, of March, 1894. We vobed for expenditure, with a recklessness never equalled, L 578,530, or Llo,lll more than we had to spend. Luckily we have only apenb (I am upeikiog of Part 1 of this acaounb) L 317.000. This leaves us a balance of _L 251,119. We are to have L 150,000 paid from the Consolidated Fund. This will give us L 400,000 in round numbers to starb the year. Bub we have liabilities ; I expecb at least L 223.000, perhaps more : so bhab is nob much for bhe railways, roads, and public buildings, etc' IDo you consider ib safe to go on with a public works fund so depleted V I 1 don't. Ib must mean great contrastion in our ruling expenditure, railway expenditure, etc I am afraid there will be more brouble wibh the unemployed.' 1 What of k the railways— Obago Cenbral, etc. 1 ?' Ab bbis Sir Roberb smiled. ' Oh,' he said, ' they will be content, at before, wibh honeyed, words, and be informed thab the Otago Central Railwy League is a political Associabion. • What do you consider the outlook V ♦Will, OUV GuitQQll WVIQUQ i«

falling, and our land revenuo musb fall, hs rents musb go down. The position is one requiring great care ; bub with that we should pay our way. What has to be noticod is that), nob« withstanding fchab our exports have gone up, our imports have fallen off, and thab means that capital is not seeking investment in the colony. Whatever the cause, confidence ii not inavasing. But I never lose faith in blie colony, Ad.un Smith once said England cou'd stand many ' ruins.' That could be applied to New Zealand.' * Ib seems the Consolidated Sb>ck Act, 1881, comes in very handy when you wanb a surplus,' I suggested ' Yes, that was passed by our Ministry when the co'ony was in great straits, and had a big and increasing deficit, and by i s aid we were able to stave oft' taxation ; indeed reduce it, Bub these and other benefits, conferred on this colony by our administrntion, are sometimes forgotten.' ' Oue question more. Will you tell mo how tho past year compares with tho year before as to revenue? 1 •Well, in 181)3-94 we had an increase of revenue over 1892-93, leaving ou 1 ; the question of consolidated stock debentures of L 38.746 17s 9d. This year, on the whole, there is a decrease of L 79.522. This does nob show progress. The expenditure, us I hive said, has risen, bub I cannot apportion the items until the public accounts are published.'

WHAT Mil (JEO. lIUTCIH.SON SVYS. ' Mr Seddon, at Marton, did not spem, 1 said Mr Hutchison, 'to ho conscious of the fact that ia disclosing the remits of the pasb financial year ho was justifying the criticisms recently directed to the public finances. The figures admit a serious deficit on the year's transactions, and this is what is shown to bo inevitable. The figures given by Mr Seddon are arranged in such a way as to convey an erroneous idea of tho position. For instance, thfi L 25.000 transferrp 1 from the Consolidated Fund to the Public Works Fund is treated as a contingency, or after. thought, whereas it •s provided for in the Appropriation Act as any other of the items chargeable against tho revenue. The exponditure for the past financial year, therefore, was noo L4,2GG,722, but L4,j1G,71 ) 2. The receipts being put down by Mr Seddon at Lt, 406,-11 .">, it follows that on the transactions of tho year there is a deficit of LI 10.207. These 'receipts' include Lll 7,800 borrowed against sinking funds, an amount which is not properly revenue ; but may pass a3 income borrowed to save taxation. But the deficit of LI 10,207 is claimed to be extinguished by the ' surplus ' of L 290.238 from 1893, and as a matter of accounting this no doubb converts the loss on the year's transactions into a credit balance at the end of the year of L 180,031. The figurp* quoted by Mr Seddon would be the better, the mora intelligent and convincing, if supported bytheaud^ed accounts for the con* year, which must now be available for publication. Why are they nob eluding (March) quirfcpr of the financial gazetted ? Thp estimated revenue for the year was L 4,235,000, which, with M 17,800 as proceeds of debentures tloated to equalise sinking fund payments, made up a total estimated income of L 4.352.800. The public accounts, as already gazetted for the three quarters ending the 31st December, show the revenue collected up to that date as L 2,995,833. This and tho LI 17,800 borrowed against sinking fund (and brought to credit in the first quarter) made a total income to the 3lst> December of L3,l 13,G33. The estimate for Customs and railways for the whole year was i L 2,770,000, and of this there was i collected up to the 31st December the sum of L 1,913,720,, 913,720, leaving, as bhe amount to til! the estimate during the Mnrjli quarter, L85G,280. But we are told these two services, which represent about two-thirds of "the total revenue, are shorb on the whole year by L l7/JOO ; so that the actual income for the March quarter from these two sources could only have been L 809.280. Tho other items making up the ordinary revenue account are Stamps, Post and Telegraphs, Land and Income Tax, beer duty, registration and other fees, marine and miscellaneous and territorial. The estimated revenue from these sources for the whole year was L 1,405,000, of which L 1,052,000 was collected up to the 31st Decembor (including about L 272.000 for land tax, collectod in the June quarter) ; thus leaving about L 383,000 to come in during the March quarter. It is here that the doubtful part of Mr Seddon's Financial Statement come 3 in While ho admits that the two chief sources of revenue Bhow a loss on the Treasurer's estimate of L 47,000, he indicates that this is not only made up by the revenue from othor subordinate sources of revenue, but (by a coincidoncee) these actually produce an excess on the whole estimated revenue for tho year of exactly tho same amount as the deficit on tho two most important smrces, namely L 47,000. Thab 13 to say, these subordinate sources of revenue have bettered their estimates by L'J4,OOO, and this, too, in the lasb quarter of the year, about which we are given no particulars, except as to tho deficits in the Oustoras and railways. In other words, instead of yielding in the Mnrch quarter L 383.000, as estimated, they have contributed no les3 than L 477.000. This is, of course, not possible, but ib is so expected (by the Treasury) thab the details would be interesting. Assuming these ascertained and approximate amounts to be correct, they "ggrpgate closo ">n the figures Mr Seddon gave as bhe ' actual receipts,' and assuming the unexpected (and unexplained) advances in the last quarter, under the smaller heada of , revenue of noarly LlOO 000 to bo ( genuine, there is still tho deficency on the year's transactions of upwards of another LlOO,OOO, relieved by a balance which ia traceable back to 1892. The admibfodly neoP39ary reduction from 1.250,000 (a* the vot«

(QonUnmi on 1« /ty#.)