PARLIAMENT.

New Zealand Times, Volume XXXI, Issue 4769, 5 July 1876, Page 2

PARLIAMENT.

LEGISLATIVE COUNCIL. Tuesday, July 4. The Council sat at 2 o'clock. MINISTERIAL STATEMENT, The Hon. Dr. Pollen announced that the Ministry had been increased by the addition to it of Mr. George McLean, who had accepted a pertfolio as Commissioner of Customa. IN COMMITTEE. The Friendly Societies Bill and Building Societies Bill were passed through committee. ' The Council then adjourned. HOUSE OF REPRESENTATIVES. Tuesday, July 4. The House met at half-past two o'clock. Before proceeding to the business on the Order Paper, Mr. Leonard Harper, member for Cheviot, was duly sworn in. PETITIONS &C. Several petitions were presented, among them being one by Mr. Andrew from a number of settlers on the east coast of the Wellington province, praying to be exempted from the taxation imposed ostensibly for educational purposes, on the [ground that the said settlers were not within reach of Government schools, from which therefore they derived no benefit. COMMISSIONER OP CUSTOMS. Sir JULIUS VOGEL announced that the hon. member for Waikouaiti, Mr. George McLean, had received the appointment of Commissioner of Customs. . ' Mr. McLean then took his seat on the Ministerial benches. • NOTICES OF MOTION. A number of notices of motion were given by different hon. members. Sir Julius "Vogel gaVe' notice that he would move for the appointment of a committee to consider necessary alterations in the San Francisco mail contract. EASTERN MAOBI JDISTMCT ELEOTION. The report of the committee on the Eastern Maori District election was brought before the House. It recommended that a new writ should issue at once.; On Sir JULIUS "VOGEL moving that a respectful address be presented to his Excellency the Governor, asking him to issue a new writ, as suggested by the committee,

•.' ASlong diseussionensued, in which the majority of jthe members present ia the House at the time took part. Mr. SWANSON objected that the committee had not explained the grounds upon which they baaed their recommendation. Mr. REES objected to the course of proceeding with reference to this subject, and he considered that the House would be establishing a- bad precedent if they decided to issue a new writ upon the recommendation of a committee who had taken- no evidence as to the merits of the election. He further stated that it was popularly supposed'the Native Minister had "been instrumental in creating the difficulty by suggesting to Henare Potai that he should object to the election of Karaitiana. Mr. FITZKOY took a similar view of the case: that is, he objected to the issue of the writ as proposud, and quoted authorities (American) in support of his argument. Mr. ANDREW would vote against the issue of a new writ. Sir DONALD McLEAN said the committee had evidence before it to the effect that actually no member had been returned for the Eastern District. He must state, in reply to Mr. Rees, that the Government had no interest in the matter whatever. There had been no communication between himself and Henare Potai. The only consideration of the Government was that the district in question should be represented as soon as possible, and they held that the best way to accomplish that end was by issuing a new writ. Messrs. Bunny, Button, Babff, Bastings, and Captain Russell followed. Sir ;GEORGE GREY, in speaking on the subject, said there was a very general opinion amongst the native population of the Eastern District that Karaitiana was not to be allowed to obtain his seat in the House. He went on to question the fairness of these Maori elections generally, by saying that the Government Land Purchase Commissioners appeared in the capacity of active electioneering agents on behalf of the Government, using the influence they possessed with the natives for that purpose. He thought, in fairness, the name of Karaitiana should be endorsed upon the writ, and that he should be invited to take his seat as a member of the House. Mr. LTJSK, having expressed his opinion, being adverse to the motion of Sir Julius Vogel, The Hon. Mr. BOWEN, in reply to Sir George Grey, said the Government should not be subjected to any such insinuations as were contained in the words of that hon. member. The facts of the case under discussion were these. The election miscarried owing to the district, or part of it, being visited suddenly by a flood. The Government received intelligence from the returning officer, but they determined to have nothing to do with the matter, and instructed him to act on his own responsibility after receiving the advice of the law officer of the Crown. Under all the circumstances, he thought hon. members (approaching the discussion without party feeling) would be able to discover what were the opinions of'the electors themselves. The fact was, that a very large number of the electors had been unable to vote, and hence the election could not be regarded as legitimate. After further discussion, in which most of that already given utterance to was repeated, Mr. STOUT addressed the House at some length. He considered that the committee should have taken evidence upon the matter they were elected to consider, and concluded by moving an amendment to the effect that the report be referred back to the committee, and that the committee ascertain the number of persons prevented from voting, and at what polling places. Sir JULIUS VOGEL then read the opinion of the law officer of the Crown on the subject, and with regard to the amendment of Mr. Stout, stated that he considered it proposed a very fair course, and would therefore withdraw his motion. On the motion of Mr. Montgomery, the endorsement on the writ "returned by the returning officer was read. He then stated that it was obvious that the election had been prejudicially effected, so far as the other candidates were concerned, by the fact that a great number of electors had been shut out from recording their votes. Mr. ROWE moved that these words be added to Mr. Stout's motion : " and that in the meantime Mr. Karaitiana take his seat as a member of the House." Mr. REES supported the motion. Sir JULIUS VOGEL objected, as it would be doing a manifest injustice to the other candidates for the Eastern Maori district. On the question being put, that the words proposed to be added be so added, the Speaker declared the noes to have it. A division was called for a»d taken. It resulted thus:—Ayes, 33; noes, 43. Mr. Stout's motion was carried. PAPERS. Papers were laid on the table by Sir Julius Vogel, Sir Donald McLean, and the Hon. Mr. Richardson. questions. Mr. LARNACH asked the Government, — Whether their attention has been called to the condition of the Supreme Court buildings at Dunedin, and what steps they intend to take to provide suitable buildings ? The Hon. Mr. RICHARDSON replied that a sum of £ISOO had been voted by the House for the erection of a new building; but, after some correspondence on the subject, it had been decided to improve the old building for the present, and defer the expenditure of the vote until it could be s?en what money was available for such a work after the proposed constitutional changes had been made. Mr. STOUT asked the Native Minister,— What steps the Government have taken, and what steps, if any, they intend to take, to capture Winiata, the murderer ? Sir DONALD McLEAN said he would defer answering this question, as it was within a few minutes to half-past five, the hour for adjournment, because he desired to give the fullest possible information. In tho meantime he wished to contradict the false and malicious statements made as to there having been Maori murderers present at the interview between himself and King Tawhiao. IMPREST SUPPLY BILL. Major ATKINSON, in moving the second reading of this Bill, Jsaid it was necessitated by the fact that the whole of the appropriations ceased on the 30th of June. No opposition was offered to the progress of the Bill, which was passed through all stages. CORONERS ACT AMENDMENT BILL. The Hon. Mr. BOWEN moved the second reading of this Bill, which contains seven clauses, and provides that Resident Magistrates shall be coroners, number of jui-ors at inquests not to exceed seven, in special cases may consist of four; and where it is impossible to obtain four jurors, the coroner himself may hold an inquest, in which ease he is to transmit to the Minister of Justice for the time being a statement of his reason for holding the inquest without a jury. The fee for holding an inquest to be abolished. Tho Hon. Mr. Bowen explained that the matter had been discussed last session, and a Bill to do away with coroners' juries altogether was withdrawn on the Government undertaking to consider the matter during the recess. The outcome of a consideration of the matter was the present Bill. They had no desire to cast any slur on medical men who had been coroners. Many of them had done their work well; but there were difficulties in the way of their performing their work in a manner satisfactory to themselves, or calculated to give the public complete confidence in inquests conducted t>y them. He indicated some of the difficulties, and said it was not desirable to continue the present system. In Victoria the police magistrates were coroners, and the plan worked, well. At the request of several members, it was decided to postpone the second reading, as the Bill had'not been distributed sufficiently long to allow the House to consider its provisions. Mr. PEARCE said he thought there was a necessity for legislation directing when and under what circumstances inquests should be held." In the matter of fires this was particularly the case. A large and destructive fire sometimes occurred, and when a coroner was applied to for an inquest, he might decline because ho did not happen to see the necessity foD it. This discretion should not be vested in a coroner. The second reading was then adjourned.

STAMP ACT AMENDMENT BILIi. The Hon. Mr. BOWEN presumed the same objection would be taken to the second reading of this Bill, and he'was willing to postpone it, regretting that the Bills had not been distributed before, which had not been the fault of the Government. He explained the provisions of the amending Bill, which were mostly of a technical character, to clear up doubtful passages in the Act of last session. The second reading was postponed. FINANCIAL STATEMENT. Sir JULIUS VOGEL commenced by complimenting Major Atkinson on the statement made by him last session. The singularly clear and lucid explanations then given, left no information imsupplied. He woidcl now contiuue the scheme of that Budget, which, as the Committee would recognise, was to simplify all financial arrangements, and to place them on the most intelligible footing. The Government did not consider the question of Abolition as undecided : they regarded it as beyond all doubt settled that the Provinces should cease to exist. They recognised that Abolition would impose upon the Government many difficulties, and to meet those difficulties they asked the aid of the Legislature, by passing such measures as would be necessary to give effect to the legislation of last Session. The Financial Statement was a necessary prelude to the business of this Session ; and, in order to avoid delay, he had not waited for the complete returns of the year's transactions. The figures that would be put before the Committee would, therefore, involve results that were partly estimated ; but the totals might be relied upon as sufficiently near to what they would virtually prove to be relied upon for all present purposes of discussion and consideration. As soon as was possible, the actual figures and the usual tables would be laid before the House. As to current loans, the Treasurer said, honorable members were informed last year that it was proposed to dispose of the unsold balances of various loans, excepting the guaranteed debentures, which are used as a convenient reserve fund. In pursuance of this determination, the Agent-General and Crown Agents jointly were authorised to sell some £1,250,000 unguaranteed debentures under various Acts. They reported a sale to be im-pi-acticable at previous rates, and instructions were then given to them to effect a temporary loan on the securities. They are now negotiating for a twelve month's loan of one million on short-dated debentures,. and we are led to believe the transaction will be completed on the receipt of the advice that the necessary authority has been issued on this side. It would probably have been completed before but for the interruption to cable communication. The expenditure out of the Public Works Account had during the year been £900,000 less than was authorised. When difficulty in negotiating the balance of the loans became apparent, the Minister for Public Works was asked by the Government to retard for a time the operations of his department ; and the only substantial excess of any item of expenditure for the year, under the Act mentioned, had been for Native Land Purchases, a quite inadequate vote having been taken for that service. Taking into account the Guaranteed Debentures, the remaining balances of Unguaranteed Debentures, the repayments of all advances to the Provinces, and of those to Water-race Companies, there would be left out of the amounts authorised out of the Public Works Account, £1,400,000 to be expended. Of the Defence Loan there was probably £40,000 available for expenditure. Respecting the total public debt of New Zealand, including Treasury bills, the honorable gentleman said The gross Public Debt of the Colony, when the balance of all loans now authorised is raised, will be £19,543,194 ; and the annual charge thereon for interest and sinking fund, £1,035,104. Deducting the accrued sinking fund, £1,229,200, from the principal sum, the amount of liability is £18,313,994. These figures include the Provincial indebtedness, which, irrespective of the debt for railways, amounts to about three and a half millions, involving an'annual charge of about £220,000. As the Provincial debts are charged on the Land Fund of the different provinces, we have, the charge on the Consolidated Revenue reduced by the amount named, and the result stands an annual charge of about £815,000 on the Consolidated Revenue, and £220,000 on the Laud Revenue. I use the word " about," because the amount of aggregate Provincial indebtedness cannot be exactly defined ; it will be varied by the liabilities which will have to be met, and by the reductions consequent upon the acquirement of the railways constructed out of Provincial Loans. The results of the year 1874-5 had proved very nearly as his honorable colleague had anticipated last session. As to the year 18756, owing to certain permanent appropriations not coming to charge until the present financial year, there was a saving of about £200,000 between the amount set down for expenditure and the amount actually expended. Part of this sum, however, namely, that which had not been expended on account of railways, was not to be considered as a saving in the ordinary sense of the word, since.a corresponding reduction in the amount of revenue indicated that portions of railways expected to be opened for traffic during the year had not been so opened. Amongst the items of expenditure • was £15,000 for State Forests. By some oversight £5,000, which ought to have been set apart for the year ending the 30th June, 1875, was not reserved ; and he had caused it to be now added to the £IO,OOO for the current year. He was of opinion that we should be very unwise if we allowed any consideration to cause us to fail in reserving the money which had been appropriated for this purpose. Experience of almost a world-wide character had shown the immense importance of attending to the forests of a country ; and he was convinced that, before many years had passed, questions which now seemed to us of great moment, would have sunk into insignificance compared with the interest which would be felt in the progress and maintenance of the forests of the colony. The revenue for 1875-6, ascertained as had been before stated, was about £119,000 less than was estimated last Session, but was £29,000 in excess of tho actual revenue for 1874-5. After making ample provision for meeting all the liabilities of 1875-6, there was a surplus of £72,000 with which to commence the current year, 1876-7. The Land Revenue . for 1875-6 was set down at £836,000. Respecting the Trust Fund, the Treasurer said, the total balance to the credit of the Annuities and Insurance account, including the value of investments held, is £109,967 12s. Id. The Report of the English Actuaries appointed to make the first quinquennial examination into the state of the Department will be laid before the House ; and I think hon. members will come to the conclusion that it is exceedingly satisfactory. The surplus shown, after estimating the present value of liabilities and premiums, is about £12,000. The Actuaries explain, however, that they would not consider this sum divisible as profits. It should be remembered, in reading the Report, that the Actuaries evidently look upon the system hero as based upon what is technicalled "participating .rates;" but hon. members know that it is by no means the principle upon which the Government Department is conducted, to charge higher rates for the purpose of affording a participation in profits. Insurance offices have commonly one rate for non-participating and another for participating policies. There is some object, or some advantage, I presume in this ; but it has always seemed to me that those who insure on the participating plan are asked to pay higher rates in order to constitute the profits of which they are to have a Bhare. It has been clearly understood here from the first, that the principle of our insurance system was non-participating, and that the rates charged were the lowest consistent with safety. It is true, however, that the House, after the establishment of the Department generously agreed that if there should be such a profit as to justify Parliament in deciding that a certain sum could safely be taken out of the Insurance Account, it should not pass to the ordinary revenue of the country, but should be divided amongst the insurers. Still, I repeat, it has never been understood that our object was

to chargehigh rates with the view of creating a fund- for division. The Government pro- ' pose, however, to defer to the opinions of the Actuaries, and to alter the rates to those based upon what is known as the Institute of Actuaries' Table. The estimates I shall submit to the House for this department, will provide for more systematically dividing the country into districts for the purposes of insurance business ; and for the establishment of agencies throughout the country, in connection with the permanent agents in each of the four principal cities of the colony. Before the receipt of the Actuaries' Report, the Government had decided to discontinue the Industrial Branch, and an Order in Council was issued for the purpose. It will be seen that this step is entirely in accordance with the recommendations of the Actuaries. Considering that the first five years of the existence of an Insurance institution is its most critical period, I think we may feel the greatest gratification at the result. Had it been necessary to come to the House for a vote to cover a small deficiency, I think hon. members, in recognition of the vast benefit which the system confers on the community, would have readily passed the amount. But as it is, we have this beneficent institution flourishing amongst us without any cost to the State. Coming to the question of future financial ararrangements, the Treasurer spoke as follows: Honorable members and the country are aware that the arrangements which were proposed last year require some modification. My colleague made proposals which all the then circumstances justified. But observation during the year has shown that some changes are necessary, others desirable. It is my duty to describe them ; but I will first state the circumstances which render the changes desirable, and explain the financial conditions which we aim at establishing. Amongst the reasons that compel changes in the proposals of last year are, that the revenue has not reached the amount then estimated, and that I am not able to estimate such an increase for 1876-77 as will be needed to meet all the charges which it was then contemplated to impose. Some of those charges would be larger for this year than it was estimated they would be for the year which has just expired. I allude especially to the increase in the items, subsidies to municipalities and road districts, to the cost of education, if it is all to be charged to Consolidated Revenue, and to the increased loan charges. All these would be additions to the expenditure proposed last year, whilst there is not, as I have said, reason for estimating a corresponding addition to revenue. Then, the Government have come to the conclusion that there are insuperable difficulties in the way of continuing to charge the railways to the abolished provinces, keeping an account with each, and charging vai-y----ing deficiencies to the Land Revenue of each. Such a plan is inconsistent with the economical working of the lines ; it occasions complications in the accounts, stoppages of uncertain amounts of Land Revenue, and disputes producing the greatest annoyance even whilst the provinces .exist ; and with the provinces abolished, such evils would be largely increased. These reasons make changes necessary. The aim and the hope of the Government, in the changes to be proposed, are to take advantage of the information experience has supplied. The provinces have broken down because of their coming into conflict with the Colonial Government on many points, and especially on points of finance. Their doom was only a question of time, when it became obvious that they could not raise their own revenues ; that they had to look to the General Government to supply deficiencies ; and that they could not borrow without the colony becoming liable. I tried hard in 1573 to make it otherwise. I endeavored to give them a separate finance ; and I thought I had devised means by which they could borrow without the colony being liable. These efforts have all failed; and now we have to build up again more soundly, knowing, as we do, the faults we must avoid. It has been asked, Why should a province be denied the power of borrowing given to the smallest municipality ? The answer is, that municipalities can borrow without making the colony liable, and the provinces cannot. Another cause of the failure of the provinces was thatwlthin themselves a rending rivalry was always creating distrust between the towns and country districts. Again, and not least in importance, the colony had to perform a number of works for the provinces, some of which they ought to have performed themselves, and with others they ought not to have been charged. It thus became impossible to "tell to whom belonged various duties ; and eveu if in theory the apportionment could have been determined, in practice the theory could not have been worked out. "We have arrived, then, at three clear aims: the interests of the towns to be kept from conflicting with those of the country districts; the interests of both to be kept from conflict with those of the colony ; and a separate system of finance for each. In other words, we shall be successful with the new institutions we propose, in proportion to the distinctness of the duties, and the finance with which we endow them. To carry out these conditions, we have first to determine on having only one Legislature. Clearly, the risks of conflict increase with the number of bodies empowered to make laws, while there can be no hope of freedom from conflict except in the symmetry and consistency of a uniform legislation. We purpose, then, to constitute Districts — divorced from the towns, and not possessing powers of legislation, but endowed with clearly-defined duties, revenues, and authority to augment revenue. We shall call them Counties, and we aim at separating them from road districts, towns, and colony in regard to their duties and finance. With the finance I have chiefly to do ; and the essence of our plan is, that the counties, the road districts, and the towns will not be able to pledge the credit of the colony, whilst their own credit and revenue will be sufficient to enable them to perform the work assigned to them. Mr. O'Rorke, I dreaded doing away with the provinces because I thought we should have to sit here in judgment on local works, and that gradually we should find creeping upon us the demoralising system of mutual compromise called by the Americans " log-rolling." But we have avoided this difficulty. If our system be carried out, the name of any particular road or bridge—of any work, indeed, but the buildings for the Government services and the main railways of the country—should rarely be heard in this House : at least not for purposes of supplication, though it might be as the subject for congratulation, at the triumph of the form of Local Government that could give to the country the works it required without the necessity of parliamentary intervention. It will be seen that in thus withdrawing from Parliament the charge of the construction of local works, we depart from the systems prevalent in the colonies and approach to the Imperial system, under which the principal works of Great Britain have been locally performed. We do, indeed, approach this system, or, rather, we aim at shaping into a system the adopted, rather than legalised many-sided form of Local Government which has grown up at Home during a long period, and under circumstances entailing much discontent. That discontent is referable to the feeling that too much work is thrown on Local Governments and too little revenue given to them, and that the management is not thoroughly representative. In assuming the charge of the Police and the Gaols, and in giving to local governing bodies a distinct contribution from the Consolidated Revenue, we think we avoid the first two of those causes of discontent, whilst our system will be thoroughly representative in its nature. In determining the pecuniary resources of these local institutions, we must insist upon a rigid system of colonial finance which he who runs may read. This is what we aspire to. We hope hon. members will agree to place the Consolidated Revenue on a footing the permanence of which will not so much depend upon agreements or promises, a 3 on its thorough adaptability to the requirements it has to meet. We want to draw a clear distinction between ordinary revenue and' borrowed money, between I ordinary expenditure and expenditure out of

loans. We want to see charged on the Consolidated Revenue the expenditure only which it will bear; and we want to see that expenditure so defined that the country may legitimately hope that increased revenue will be followed by diminished taxation. To do this, we must know what is to be eharged to the Consolidated Revenue, and we must be freed from the temptation to add to the expenditure because of increased revenue. If we make up our minds how the various services of the country are to be carried out, appointing to the General Government, the boroughs, the road districts, and the counties their several duties and several revenues, Parliament may leave to the Colonial Government the endeavor, as they have the hope, to secure a reduction of taxation. I would much rather see the objects on which the Consolidated Revenue is to be expended narrowed, and the direct taxation, about which so. much is said, levied by the local governing bodies, than unnecessarily, as I think, to force such taxation on the whole colony. We do desire to avoid the imposition of a Property-tax aud Income-tax. We know there are those who think such taxation would be popular, and who are anxious to see it, because it would touch absentees. We are of opinion that, if necessary, the country could bear an income-tax and a property-tax, but that they would be serious evils, and ought, if possible, to be avoided. They would be very unpopular, because very inconvenient ; and they would be calculated to reduce the value of property of all lands by more than their actual burden. They would not affect absentees in the manner or to the extent popularly supposed. Absentees who merely leave the colony for a while, after laboring within it for many years, might well be excused from special taxation. They often do the colony much good. They show by example and enforce by precept the success to which colonists may attain ; and they frequently observe new industries or modes of conducting established industries, and apply their observations to enterprises in the colony. Permanent absentees are to be affected mostly by taxation on mortgages; but by the terms of their mortgage deeds they generally protect themselves, so that the taxation, if imposed, would tot fall on them, but on those to whom they lent their money. Simple in theory as th > v taxation of absentees appears, it must not be forgotten that au income and property-tax would much tend to discourage the future introduction of foreign capital : and I' express the opinion that New Zealand has not outlived the need of outside means being introduced for application to private enterprises. If in the opinion of the House it is'desirable to extend the scope of expenditure out of Consolidated Revenue beyond our proposals, then direct taxation will be necessary; but we hope that there will be evinced a disposition to forego such extension, with the view of placing the Consolidated Revenue on a sound footing, without making New Zealand the first of this group of colonies t« levy an income and property-tax. We have borrowed very much during the last few years for reproductive works it is true, but attention has been directed to the fact, as I have already stated. Let us, if necessary, submit to some sacrifice, and show to those outside the colony, as well as to ourselves, such a clearly defined, irreproachable plan of revenue and expenditure, as to set at rest all doubts as. to the safety of our position. It must be remembered that a fact is not altered by its being stated in different language ; and we have not only to deal with an altered classification but a diminished scale of expenditure. Nearly all the provinces were expending in excess of their revenues, and it is idle to suppose we can enable expenditure to be continued ou the same scale. We hope for a great reduction in the provincial departmental expenditure ; and as for the expenditure on public works which the provinces showed a laudable disposition to indulge in, those works will now fall to local bodies possessing fixed current revenues, and having power to borrow for special works of importance. Assured, then, of the necessity of reducing the demands on the Consolidated Revenue, we cannot recommend the Assembly to insist on the expenditure for Education being entirely borne by that revenue. We propose to charge two-thirds of it to the Land Revenue, leaving the Consolidated Revenue to furnish one-third, besides the cost of the inspection of primary schools throughout the country. The cost of school buildings we propose should in great measure be charged to the reserves ; and for that purpose we shall move for a power being given to School Boards to borrow on the security of the reserves ; I speak of the reserves for primary education. The balance of revenue from reserves, after meeting loan charges, we are willing should be .devoted to lessening the contribution from the Land Revenue ; so that, in fact, the will pass in aid of that revenue, and not in aid of the Consolidated Revenue, which will continue to pay its third and the cost of inspection. After a time, however, we consider that the counties should contribute somethin/j to education, by keeping the school buildiags in repair and providing additional buildings. In order that this expenditure should not constitute a burden at the outset, we have inserted a clause in the Counties Bill postponing its operations for fouryears, andthenonly authorising it to the extent required by the Assembly. These reserves, and the management of the schools, we desire should continue in charge of Local Boards and Committees ; and we shall introduce a Bill to provide for such local management in the provincial districts which will be left without local management after abolition takes place. We do not desire to see special taxation for educational purposes, and will propose its abolishment wherever it exists. We think, however, the children educated at the schools should pay a modest foe ; and it is part of our plan that whilst the revenue from the reserves shall pass in reduction of the contribution from Land Revenue, the fees shall pass in reduction of the contribution from the Consolidated Revenue. We do not propose to reduce the subsidies from Consolidated Revenue. to the road districts and boroughs. The subsidies payable by the legislation of last year to Road Boards and Counties from Consolidated Revenue and Land Revenue, amounting to £2 to £l, we intend to equally divide between the road districts and counties. The license fees collected within their limits we propose to give to the counties. The license fees, and £1 to £1 to boroughs from Consolidated Revenue, we are still willing to give, only we- think some duties should be entailed on boroughs in return. It seems to us they, as well as counties, should contribute to the support of charitable institutions, and we propose to make this a condition of the grant. We shall submit a provision by which outside districts using these charities may be called on to assist them. We shall not require boroughs or counties to retain the management of these institutions in their own hands ; on the contrary, we would much rather see it in the hands of committees, private charity being invited to aid. Whilst they are in Government hands, private charity is discouraged. The Corporations and County Councils, by making grants to these institutions proportionate to the amounts privately contributed, would encourage private assistance and save a great dealof money. We shall be willing that the Consolidated Revenue shall in like mauner contribute ss. for every £1 raised by private subscriptions. The Government of the colony will thus be spared work it is Dot desirable they should perform, and the Consolidated Revenue will be relieved of supporting these institutions beyond the rateable contribution I have mentioned, and the expense of inspecting them so as to see that they are properly managed. In the term "Charitable lustitutions" I do not include Lunatic Asylums ; the chai-ge for these we place upon the Consolidated Revenue. We propose to assume the charge of, and responsibiUties for, the railways. There are unanswerable reasons, to which I have already referred, for this step. The question is, on what terms should it be taken ? Our proposal is that, in consideration of the colony accepting the liability for constructed and authorised railways, and for those yet required to complete the trunk lines, as also the liability for the cost, past and future, of immigration, a certain contribution from the Land Revenue I should be made. We do not see how otherwise

it can be done, without recourse to large direct taxation ; nor do we see how there can be two opinions aa to the fairness of the proposal, considering how the railways and immigration have raised the value of the waste lands of the CrowD, and made them more saleable. The Land Kevenue of each Province should from the first have been made to bear the entire interest on railways in course of construction within the Province. My colleague showed last year that it was a mistake to suppose we had paid that interest out of borrowed money ; that notwithstanding a limited power to do so had been taken, it had not been exercised to an amount that more than covered the special revenue contribution devoted to Public Worki-in the shape of the one-half of the Stamp Duties. In theory, paying interest out -of capital whilst works are in course of construction, and considering such interest part of ■-the cost, is sound, and for private enterprises may be" reasonable enough. But, in practice, the, public instinct rebels against such a course when pursued by a Government ; aud I was very glad, the year before last, to be abb to state-to the Committee that the proposal of the Government was" to take the whole sibly of interest on the cost of works, finished or unfinished, upon the revenue, and not to use the power we possessed to partly charge it to loans. But whilst the colony was thus careful to refrain from charging on loans an expenditure open, as I have said, rather to an instinctive than to a theoretical objection, it did not, as it might well have done, relax its previous intention not to make the provinces feel the burden of the uncompleted works. It adhered to the principle, as between itself and the provinces, of capitalising interest on cost during construction, and relieving them of all charge until the railways constructed, equipped, and opened for traffic—were handed over to them, or worked on their account. This really amounted to the colony, from Consolidated Kevenue, lending to the provinces money on permanent loan. I have more than once said we had to submit to expenditure to induce the provinces to rest contented with our performing work so signally useful to them as the railways, with which we have literally gifted, them ; for up to their completion they not only incurred no charge, but largely enhanced their revenues by sales of land induced by the prospect of railway communication. I do not hesitate to say that, in letting the_ Consolidated Revenue bear the cost of the interest on these works whilst in course of construction, we submitted to expenditure which should have been charged on the Land Revenue of the provinces respectively interested.

This plan cannot be continued. If we are to place the Consolidated Kevenue on a satisfactory footing, we must remember that we cannot spare part of it to relieve the Land Kevenue from contributing to the cost of interest whilst the works that benefit that revenue are being constructed. On the ground of saving the Consolidated Revenue from the burden of interest on incomplete works, a contribution from the Land Revenue is justified, and is strictly in accordance with the conditions under which the Public Works policy was instituted. Indeed, the original intention was to look to large assistance from the waste lands. I have referred as yet only to the burden of interest on works uncompleted; but we must also bear in mind that it is not tu be expected that the railways when completed will at once yield in excess of working expenses sufficient to meet interest on the cost of their construction. Such a result would be scarcely desirable ; for it would necessitate the adoption of very high rate 3, and the utter ignoring of all questions of convenience and promotion of settlement in favor of an iron inexorable rule of working the railways only to make them yield as much profit as possible. There is no reason why the Land Revenue should not, and every reason why it should, bear a portion, if not the whole of the cost of the difference between the interest paid and that recovered in the shape of profits in excess of working expenses. But then we are met with the condition that it is inexpedient to work each line separately, and therefore that the contribution must be made an arbitrary one. "We might have proposed a contribution from the Land Fund, in the shape of a uniform percentage upon the gross revenue, and have enabled the fund to meet it without loss to the provincial districts, by raising the price of' land, but although there would be no actnal loss to the provincial districts, such a plan would war with the sentiment which has made the compact of 1856 to be looked upon as something more than an economical arrangement. We are led to believe that, whilst the people within any provincial district would object to the proceeds of the land travelling beyond the boundaries of the district, they will willingly recognise the fairnes3 of contributing from the Land Fund a stated interest en the cost of the railways within their own boundaries Taking into consideration the element of the interest on the uncompleted railways making the present expenditure more unproductive, it seems to us the contribution should be larger at first and gradually diminish. The contribution we propose from the Land Fund of each provincial district is for three years 2 per cent., for the next three years IJ per cent., and for the next three years 1 \ per cent., on the total expenditure on railways within such district, after which time we think they should be sufficiently productive for the Consolidated Revenue to bear the whole responsibility.' The land compact of 1856 cannot be left without further remark. Whilst, as I have said, we are willing to respect it in spirit and letter, we are not willing to condemn a large portion of the colony to an outcast existence. There are parts of the colony which at present do not enjoy a considerable Land Revenue. I say at present advisedly, for there are many who think that in course of time the districts which now yield little Land Revenue will yield more than those which at present are more fortunate. But an old adage says that whilst Nature slowly allows the herbage to grow a very useful animal may starve ; ■ and it is not enough to point to eventualities to satisfy the pressing want 3 of considerable portions of the colony. Their case, we are of opinion, must be met ; and we propose to meet it by making the Consolidated Reveuue guarantee to them a sufficient revenue from the land to meet the prescribed payments the land is to bear. Thus, whatever we charge specifically on the land, such a 3 cost of surveys, interest on provincial liabilities, including the interest on railways, and the one pound to pound subsidy to road districts, we propose shall be guaranteed year by year from the Consolidated Revenue, to be recovered, without interest, from auy surplus Land Revenue in the future. The whole country will thus enjoy certain advantages, whether or not the Land Revenue in any particular province is equal to the demand for a particular year. The interest on provincial loans will be assured, -and so also will be the co3t of education, and the subsidies to counties, road districts, and boroughs. Some of the counties will be more fortunate than others, on account of the surplus Land Revenue they will receive ; but they will all have the one-half of the £2 to £1 subsidies—the other half going to the Road Boards—the licence fees, tolls, and a power of adding to I their own revenue. • Honorable members will have understood from what I have said that the Government consider the time has come when the upset value of land should be increased. Admitting that, as was to be expected, the most accessible lands have first been -selected, it is to be remembered that the value of all land has been enlarged by the settlement and public works which have been progressing for many years, and that some of the very best land is now only becoming available by reason of the communication which is being opened up to it. Interest on money is le3s than it was in the early days of the colony. Every reason, in short, points to the expediency of raising the price of land. What we intend is, to ask the Assembly to concur in raising the upsetprico wherever it is less than £2 an acre by about 25 per cent., without, however, interfering with the different land systems in force throughout the country, with two exceptions : one, that we propose to repeal all power to make free grants of land, including those under the Immigt.lnts' Land Act; the other, that wo shall ask the Assembly to agree to a much enlarged

system" of deferred payments. We are-con-vinced that no artificial system of special settlements will compare with a general provision, open alike to new comers and old settlers, to poor and rich, to acquire on easy terms of settlement a homestead of 200 acres. To the young men growing up in the colony this will be a priceless boon. "We had considerable hesitation m deciding whether it was expedient to recommend that the upset price of land in Canterbury should be increased. We thought that the price should be higher than it has been during past years, but wo could not come to the conclusion to raise it anywhere this year over £2 an acre. All these matters I can only touch upon now ; but it is evident that the Government having intimated the intention of asking Parliament to raise the price of land, it is not desirable to allow speculative purchases at existing prices in the interval. If no action is taken, the Land Offices, where land is open for selection, will be crowded to-morrow. I shall, therefore, ask the Committee to agree to a resolution to the effect that upon purchases of land made after this date, any addition that by law this Session may beeome payable on similar land shall, as a condition of the issue of the Crown grant, be payable on land taken up between the present date and that of the coming into force _of the general Act increasing the price. This resolution, I wish it to be distinctly understood, will in no way bind the House to agree to the additional price, nor will it involve any extra payment in anticipation of the law. But it will prevent speculation on the issues of the deliberation of the Assembly, whilst it will leave the Assembly time for leisurely considering the question. I appeal to the Committee to°accept the resolution in this spirit, and not to discuss the question of the increase before there has been time to take the whole Financial Statement into consideration. With the suggested changes from the Abolition proposals of last year, we believe we may dispense with direct taxation for colonial purposes ; and those changes are—Education to be partly charged -on the Land Revenue, and the bulk of the cost of Charitable Institutions, exclusive of Lunatic Asylums, to be devolved on. the boroughs and counties. There is, besides, the change involved in taking over the Railways ; and with that is involved the condition of a stated contribution from the Land Fund of each province to the railways within its boundaries.

One other point I should mention is, that we think if a limit be not set to the term of subsidies to counties, road districts, and boroughs, that, as was the case with the provinces, when the Assembly comes to vary their revenues, the demand will arise to accept the liability for their loans. It is too much to suppose, as these institutions progress, that the Consolidated Revenue or Land Revenue can give equally progressive aid. The increase year by year will be very large ; and with the probability of such large increases, I hope it will be considered that Parliament should not be bound beyond the_fpllowing terms—viz., that the Consolidated Revenue shall pay to the boroughs, road districts, or counties,' £1 for £1 for five years, and thereafter the question of its continuance be open to the consideration of Parliament, and that on like conditions, and for a like period, it shall guarantee the payment of £1 to £1 out of Land Fund.

I venture to think these plans meet fairly the many admitted difficulties. They still leave the provinces to enjoy their Land Revenue. In no part of the country can such distress and destitution, in respect to public institutions, exist as has before existed. The Consolidated Revenue will have only a certain loading. If necessary, the revenue must be added to by taxation ; but there seems to be more probability, as the railways are completed, and the heavy liability which their incomplete and therefore unremunerative condition occasions is lessened, that taxation may be diminished instead of increased. It is to be hoped the system of giving away land will not be continued. We indeed start with a reduction of taxation in one direction ; for we propose, as I have already stated, to abolish all education rates.

In dealing with future financial arrangements, I cannot forbear a reference to the | very important effects which we anticipate will follow the change which we will submit in the present system of purchasing Native lands. If our proposals have effect given to them, the most fertile cause of Native expenditure will be removed ; the value of property in this island will be largely increased, and therefore its capacity to contribute to local works ; the condition of the Natives will be vastly improved, and the Land Revenue of the North Island much augmented, without the necessity of further loans and constant inte-rest-bearing expenditure. No longer will the Natives be galled with the reflection that, instead of aiding them, and receiving a legitimate consideration in return, we are always trying to get the better of them in the bargains into which they and we enter; no longer will the Land Revenue of the North Island be a questionable equivalent for the expenditure incurred ; and no longer will the Government of the colony be forced into competition with private individuals. The revolution in the system of Native land purchasing is a worthy crown to the other oreat changes which, we believe, will relieve New Zealand of the principal difficulties under which she now labors, and qualify her for tho pre-eminent position amongst these colonies to which her capabilities entitle her. We propose to arrange for acquiring such of the railways as are provincial property, _ by deducting from the indebtedness of the province parting with the railway an amount equivalent to its value. This would lessen the charge on the Land Fund for loans of that province, and therefore leave more of that fund to be_ divided amongst the counties. As we are taking over the railways, it is right to remember the position of the Middle Island Railway Fund. That fund was created as a charge on the colony, to correspond with the charge on the colony for roads in the North Island. As the railways are now everywhere to be charged on the colony, it is fair to allow to the provinces concerned a reduction of their railway debt, to the extent that each has received credit for railways (not roads) out of the Middle Island Railway Fund. The question of further borrowing is one about which the Committee will feel much interest. I have incidentally referred to provincial expenditure; and hon. members will not be surprised to learn that when Abolition takes place, a large amount of liabilities will devolve on tho Government. Some of these will be for uncompleted some for existing liabilities, some for deficiencies such as overdrafts ; while a part will be for ordinary current expenditure which it will be impossible at once to arrest. It must be remembered that after Abolition the present provincial revenue is disposed of. The revenue from licenses, for example, goes to local bodies ; the land revenue is appropriated to meet certain charges with a fixed destination for the balance ; in short, with respect to revenue of all kinds, the new arrangements commence when abolition takes place. But some of the expenditure it may not be possible immediately to stop, and liabilities must be met. I cannot give you any trustworthy estimate of what the total will be: I shall be glad to find that it is less than half-a-million. What we propose to do is, to ask power to issue Treasury bills or debentures to cover it, as it 3 amount is ascertained ; the provincial debt of each province to be augmented by the amount borrowed to discharge the liabilities of such province.

Some of the appropriations approved by the Government,.on the recommendation of_ the Provincial Governments, involve expenditure which will extend far beyond the period of abolition. Especially is this the case with the Provinces of Otago and Canterbury. Ministers did not recommend approval of these authorities without adequate consideration. Although they felt the difficulty of continuing the expenditure after the revenues become the property of local bodies, yet it seemed to them so inexpedient to suddenly arrest the works proceeding—for the now bodies cannot immediately get to work and mature their arrangements—that they decided to approve the Estimates recom- | mended, and to see them carried out, after

Abolition, at the cost of the Provinces-con-cerned. Theworks authorised by these Estimates, not completed when Abolition takes place, will be carried out on behalf of the Provinces, and form part of their outstanding liabilities. At an earlier period of my Statement this evening I explained that a considerable amount appropriated for Public Works for the year just expired had not been expended, and I also stated approximately the ways and means for Public Works that were yet available. We propose to continue the progress of the Trunk Railways, and a reasonable expenditure on Immigration. The latter, we think, should be temporarily reduced, because of a somewhat less demand for labor. The construction of the Trunk Railways should be continuous, and as rapidly as may from time to time be found convenient.

I have already said I should be glad to find that half a million would meet the liabilities of the Provinces. There is, indeed, little chance of this. The liability to the Consolidated Revenue and that to the Public Works Account make nearly the sum, without including liabilities to be discharged after Abolition takes place. We propose to ask authority to borrow £750,000 for provincial liabilities, and £1,250,000 for Public Works and Immigration. We do not think it will be necessary to negotiate more than a million this year, unless a favorable opportunity occurs. My colleague the Minister for Public Works will explain as soon as possible the views of the Government as to the expenditure of this money. I may, however, mention, that we propose to devote it to continuing the Main Lines of Railway, and to Immigration. It will be the duty of my colleague to enter into details concerning the intended expenditure for the year. I desire to say a few words about the general position of New Zealand's credit. There is no use disguising that it has suffered, partly from detraction, which I hold to be altogether unmerited, and partly from the fact of the colony having borrowed very largely. It is impossible to secure for the public debt of a colony like New Zealand an accurate consideration of its true nature. People will not pause to analyse; a public debt means to them a public debt in its ordinary acceptation, and they compare New Zealand's public debt with the national debts of old countries. The comparison is essentially faulty ; for the New Zealand debt is mainly composed of moneys expended on objects which have no place in ordinary national debts, but the value of which is fully recognised. If a person wished to show the extremes of good and ill which distinguish a country, he would be apt to point to the small extent of money expended on the usual objects for which national loans are contracted, and to the vast expenditure on the purposes for which mostly the debt of New Zealand has been contracted. Do not let us say there is nothing in a name. If a large proportion of our New Zealand debt had the shape of a loan to railway companies, not to the colony, its amount would be accepted as a proof of the colony's progressed judicious promotion of settlement. As it is, we must accept the position ; and we must show that we do this, by so improving the condition of the securities already outstanding as to leave no room for carping complaint, and by contracting our expenditure until the market has time for recovery. I have already mentioned that the agents have not sold the last parcel of debentures for the negotiation of which authority has been sent Home, and that they are negotiatingfor a temporary loan on them. Obviously it is desirable to add to them at present as little as possible. To improve their position is also very desirable. I commend hon. members' attention to the paper respecting the Inscription of Stock by the Bank of England. The Government are of opinion that, through the arrangement which has been made, the Assembly has it in its power to greatly improve the position of New Zealand securities, without any corresponding sacrifice. The attention of the House will be earnestly asked to this , matter. It is one of vast importance to the colony, for it not only involves the improvement of the present credit of the colony, but it includes a great saving of future expenditure in regard to loan charges. In another way you will be asked to improve the position of New Zealand's credit, by making its finances more simple, and therefore more easily comprehensible. With the system of ill-defined partnership and no-partnership which has prevailed, there have been so many intricate details that people have shrunk from the task of mastering for themselves the real position of the colony, and have consequently been inclined to accept any misrepresentation which might be made. I hope we shall this year define what are and what are not purposes to which the Consolidated and other revenues are to be devoted, so as to leave no doubt what the financial position of the present is, and what the financial arrangements for the future are to be. I have said that the New Zealand loans include amounts for objects which persons outside do not accept as coming within the scope of ordinary national debts. Within limits, I am not sure that we are altogether right and others altogether wrong. It has often been asked here, when money for useful objects was wanted by local bodies, such as Provincial Governments, Harbor Boards, and Borough Councils, Why should not the colony borrow it at as low a rate as it can be obtained ? The answer is partly to be found in the fact that the quotations for our loans are not so high as we should wish. Those who lend money have a great prejudice against vicarious borrowing. The Imperial Government has often said, when urged to borrow for the colonies, and for other than directly national purposes, that if the sountry committed itself to such loans, its credit would not be so good, and it would have to pay more for the money it borrowed. As a matter of fact, the direct loans of the country command a considerably higher rate than those which are equally well secured by an indirect guarantee. It does not follow that the bodies to which Imperial assistance is refused fare badly. There are many public bodies in Great Britain which have borrowed money almost as cheaply as the Imperial Government could have borrowed it for them, and without the risk of generally reducing the value of the Imperial securities. I am convinced that '.in New Zealand we must in future be very chary of giving the guarantee of the colony to local bodies. I think we should continue to add to the ordinarily recognised purposes of public debts the cost of railroads and immigration ; but that we should avoid making the colony liable for the large number of public works—most useful in their character—of which in future the local bodies are to have charge. In the Bills relating to Boroughs and Counties which we shall bring before you we make it perfectly clear that the colony is not liable for the debts they may incur. We propose to give them certain powers of ordinary borrowing proportionate to their rates. When they wish to go beyond this, and to borrow for special purposes on special securities, we desire to make it necessary that they should obtain the consent and approbation of the ratepayers, and that with that consent thoy may go into the market and make their own financial arrangements. I am not thoroughly familiar with the system at Home ; but I believe that to some extent it includes Government supervision, with, in some cases, a power of approval or veto. After much consideration, we think this would not be desirable here. Anything oC the kind in the colony would be construed into a quasi liability ; and the Government would not be strong enough to resist the argument that their "approval of a loan committed the colony. At Home, the Government is so powerful, and so accustomed to disregard inferential claims of the kind, that they would treat with indifference any liability not direct and explicit. Turning to the expenditure for the current year, tho Treasurer explained that —including £112,000 for nine months' grants to municipalities, and also including capitation and special allowances for three months, and a moiety of Stamp Duties for three months, to bo paid to the Public Works Account—the total was estimated a,t £2,317,000. The incorporation of the Provincial with the General Government Estimates had occasioned an immense amount of trouble: and after all, some of the former

had to be, incorporated as they stood. The Government were sanguine that, when the Provincial departments had been.taken over, very considerable reductions on the Estimates would be effected. The Treasurer added, I have kept in the Estimates a statement of all the appropriations last year. I will forbear, on the present occasion, from entering into an analysis of the differences that taking over the Provinces will involve. Honorable gentlemen will be able to form their own conclusions upon that point. They will probably consider that by taking over the Provinces we are incurring a larger expenditure than we met by the payment of Capitation Allowances. Indeed, that this is so may be readily conceived when we remember that the amount of revenue we take oyer with the Provinces is a mere bagatelle ; whilst we are undertaking to satisfy substantial items of expenditure. The two systems are, indeed, so entirely different that every person who choses to enter upon a comparison of them may do so from a different point of view, and therefore come to a different conclusion. This is not a time for me to justify or defend the Abolition policy. I strongly hope that one of its results will be that, on the whole, throughout the colony, there will be a_ less amount of expenditure ; and I look upon it as a great advantage that a very large proportion of the expenditure that has been conducted by the Provincial Governments will be canducted by a number of truly Local Bodies. As to Ways and Means, the Treasurer said "the Consolidated Revenue was estimated at £2,199,000, inclusive of £445,000 as receipts from railways. The Land Revenue was set down at £770,000; and the Goldfields Revenue at £85,000. These items showed, a total revenue of £3,050,000, which did not include license fees, &c, which would be paid direct to counties, boroughs, &c. He had prepared a table of revenue in this form for statistical purposes only ; and his reason for so doing was that New Zealand had often been placed at great disadvantage through comparative statements of revenue, the receipts from land and from goldfields being-included in the totals given for Australian Colonies, but having been excluded in the case of New Zealand. The actual Ways and Means of the Government for the current year were estimated as follows: Consolidated Revenue, £2,199,000; balance available at the commencement of the year, £72,000 ; and two ■ per cent, contribution from Land Revenue, on account of railways within the respective provinces, £75,000. These items represented a total of £2,346,000 ; and deducting the amount of the estimated expenditure, there would be, at the close of 1876-7, a surplus of £29,200. This would no doubt be considered a very small balance, especially as there were sure to be Supplementary Estimates ; but if the Committee resolved that the Supplementary Estimates should not be excessive, he thought it would be found that the ways and means provided would be sufficient for the services of the year. He was, indeed, sanguine of reductions in the estimated expenditure being effected when the Provincial departments were in the hands of the General Government.

The Treasurer explained why he had not included Goldfields' Revenue in his estimate of available means. Last session, he said, the goldfields members persuaded the House to accept a clause by which, after defraying all the expenses of the Goldfields, the balance of revenue from them was to be handed over to the Local Government bodies, to be subject to the payment of a subsidy of £2 to £l. The Government explained at the time that such a clause would mean nothing—that they could not hold out any hope of such a subsidy being more than nominal. A moment's consideration will show honorable members that the idea involved in the clause is absurd. It is, that the Government shall pay a subsidy of £2 to £1 upon the amount of revenue collected. Such a plan would be rolling a stone up a hill, with a vengeance. If the Government had to pay £2 to £1 upon the balance ■arrived at in the way stated, then the Government would not improbably think they were doing right in making that balance as small as possible. The plan would work out in this way:—Occasionally heavy "finds" would be made within some goldfields, and the Treasury would have to deplore such results, as making unexpected calls upon the revenue of the colony. Instead of the Treasurer being allowed to rejoice, as he would naturally desire to do, in the progress of the Goldfields, he would have to dread the occurrence of discoveries which would otherwise cause general But whatever the Treasurer might feel, it was clear that the clause agreed to last session was incomplete, and must be inoperative. It provided that the surplus of Gold Export Duty, as well as of Goldfields Ordinary Revenue, should pass to the local governing body of the district within which it arose ; but it did_ not provide or suggest how the amount arising within each district should be. ascertained. When the Treasury came to look into the question, it was found, therefore, that the clause could not be carried into effect. It would be impossible to. connect the payments made into the Customhouse on account of export duty with the quantities of gold brought down from the several fields, even if all gold was conveyed by escort. This .difficulty can easily be remedied by legislation;'but the rest of the subject demands larger attention. The Government desire to make a proposal which they hope the goldfields members will recognise as more beneficial'.to the districts than that of last session; namely, that instead of charging against the revenue from the goldfields all the expenditure upon them, including that for gaols and police, and handing over the balance, subject to the provision proposed last session, all the ordinary revenue for each field, including the export duty, shall be handed to the local governing bodies of the districts within which the fields are situated, for expenditure on local works. If the hon. members representing goldfields still require that we shall adhere to the plan of last session, then we shall have to charge against the revenue every item of expenditure, and, except in the case of lucky " finds," little money will revert to the local bodies.

It will, continued the hon. gentleman, be satisfactory to the country, and to hon. members, to find that it has not been deemed necessary to propose any increase of taxation. Indeed, we propose to some extent to reduce taxation : since we ask Parliament to do away with the Education Rates that have been levied in some parts of the colony. The year we are now commencing is, in my opinion, the most onerous and difficult we have had to do with for some time past, aud for which we shall have to provide for a long period to come. Besides that it is the year in which we have to take upon ourselves all the immense responsibilities which we shall have to . meet when Abolition takes place, it is the year in which we shall be made particularly to feel the effects \ipon the revenue of having to meet the interest on the cost of Railways in course of construction, and which are not yet reproductive. As the Railways are completed and come into use, they will, year after year, give us greater relief financially ; see no reason to suppose that after the present year we shall not be at liberty to resume Immigration upon a considerable scale. I am confident that if the provisions we propose for giving land upon deferred payments are made, they will induce a great amount of settlement thus to some extent relieving the labor market and creating a demand for further labor. I am sure I need scarcely say that it has not been, and will not be, our desire to cause a glut of the labor market. Statements that the Government have such a desire have been made ; but they are not true. No doubt, in parte of the country, there are some unemployed persons ; but in no cireumstances, and under no conditions, would it be possible—whether the scale of immigration be large or small—to find a country in which there are not some people who are not able, at times, to find work, or upon whom others would not look as undesirablolemployes. I am sure the number of such persons in this colony at present is not large: in that statement I believe I shall be supported by hon. members from the various districts. Still, in view of the fact that some of the authorised railways are being completed, and from other circumstances, we have thought it better, for the next few months, to -reduce the number of assisted immigrants. I will briefly recapitulate the principal

points of. the statement I have had the honor to submit to the Committee. We wish it to be understood that we do not consider the question of .Abolition an open one. We look upon it'as' ahNjady decided ; and we are of opinionltgw-ftjiere'la no chance whatever of the re'fersed. We wish .hon. memiplMraP i e';jM nlir y to reco £" niss that with the mere coming into force oT'tlie'*'Abolition Act, but that the operation of that Act will cast upon the Government a large number of gravely onerous duties, desired to make it clear to hon. me"m^s, i; that a leading feature of the present ;Bu|jfet,is the putting upon a simple frfoting"the finance of the colony—relieving the' Consolidated,, Kevenue of various contingent charges—giving to the colony its finance, and to the different local theirs —preventing in the future the.. clashing of claims, if not of interests, which has caused so much mischief in the past. It has been | my duty to point out that certain changes in the Abolition proposals agreed to last session have been rendered necessary by the larger knowledge and experience which the past year supplied. Those changes are represented principally by the cost of -Education being now proposed to be partly borne on the Land Fund, and by the cost of charitable mstitutionsbeiug mainly devolved upou the people of the colony themselves, and on the -districts in which the institutions are respectively situated or the residents within which they serve. I have had to explain to the Committee .that, in the opinion of the Government, it is necessary the colony should take charge of the Kailways of the country ; and that, in order to do so, and to meet the pressure of the interest on the cost of works in covirse of construction, as well as the deficiency to cover interest which the receipts in excess of expenditure may for some time show, there should be made from the Land Kevenue of each provincial district, during the next nine years, a contribution beginning at 2 per cent., and falling gradually to 1J per cent., upon the cost of the railways within its own boundaries. I have further had to explain that the Government believe the time has now come when a material increase in the price of the Waste of the Crown should be made—not with the view of benefiting the Colonial Government, but to enlarge the surplus at the disposal of the Local Bodies, and for the purpose of doing justice to those who long years since purchased land at its present prices, and who have a right to consider that their labors, in making the colony what it is, render it but fair that those who now come in should pay a higher rate for land than was paid by the pioneers of settlement. These are the main points of the Budget ; and I commend it, as a whole, to the earnest and favorable consideration of honorable members.

This is no time for party or personal animosities. I feel that lam in the midst of three generations of public men. I see around me those who had grown grey in veteran service to the colony, when little mere than its name was known to me. I see those who, contemporaneously with me, have given their best services to the country during the last decade ; and I see and welcome with great pleasure a number of members who, though only this Session entering public life, have already given evidence of vigorous thought, and fluent and eloquent speech. We meet on no common occasion. We will this session make an imprint on the history of the colony that eannot be effaced in all the years to come. As far as the internal affairs of New Zealand are concerned, it has fallen to us, the old, the middle-aged, and the young in public life, to give to the country a new Constitution, which those who live now and those who come after us will have to work out. In the presence of such a duty the strife and prejudice of the hour should be hushed. Tree from every disturbing influence from which we can possibly escape, let us devote ourselves to the endeavor to frame a Constitution which will give to a law-abiding, liberty-loving, and noble people powers of self-government unfettered by any control save that which one Parliament in the country deems it necessary to give to one Government. Sir Julius Vogel concluded by moving the following resolution : —" That, whereas the Committee has under consideration the question of increasing during the present session the price of Waste Lands of the Crown throughout a great part of the colony, it is resolved by the Committee that if any such increase is made during the present session, it shall take effect as to all sales made on or after the sth day of July, 1876, and until the end of the session ; and that, as to all such sales, the purchasers shall be required to pay such increase before the issue to them of grants from the Crown. And further, that this resolution be forwarded to the several Waste Lands Boards and Commissioners of Crown Lands, in order that its terms may be made known to intending purchasers." The delivery of the Financial Statement occupied about two hours and a half. An adjournment for half-an-hour was then taken. ,

Sir GEORGE GREY then spoke strongly against the resolution proposed by the Premier, which he said should not have been obtruded upon the attention of the House at so late an hour. He moved an amendment, as an addition to the resolution, as follows : Provided always that should the purchaser be dissatisfied with such increase, they shall be entitled to have their purchase money refunded, with interest thereon. During his speech Sir George Grey attributed corrupt motives to the Government in connection with their, proposal to raise the price of land. Sir JULIUS VOGEL protested against this eternal introduction of corrupt motives, and said the object of the resolution was merely to protect the country against injurious speculations. He had already explained that the endorsement of the resolution by the House would by no means commit members to the policy of the Government. Mr. MURRAY-AYNSLEY proposed a further amendment, —That the balance of the increased payment proposed should not be paid until one month after the termination of the session.

Sir JULIUS VOGEL suggested that the resolution should read, The purchaser shall be required to pay such increase within one month from the termination of the session, or failing this to forfeit his purchase. Messrs. Whitaker, Wood (William), Reid, and Wood (Reader) having spoken, Mr. Stout moved the adjournment of the debate, that the Chairman should report progress, and ask leave to sit again. Messrs. Brandon and Rees, the Hon. |Mr. Bowen, and Sir George Grey having spoken, the Premier, on the suggestion of Mr. Montgomery, amended the resolution so that it should not affect the price of land in Canterbury, where it was already fixed at the Government' limit, £2." Messrs) Carririgton, Gibbs, Reynolds, Macandrew, and Lusk having spoken, Mr. S COUT moved, as another amondmeut, —That the original resolution should only apply to Nelson, AVellington, and Hawke's Bay. Oh the amendment being put, the Speaker declared it negatived on the voices. A division was called for, which resulted—Ayes, 18 ; noes,' 46". Majority for the Government, 28. The following is the division list:— AYES. Do Lautour Dlgnan Grey Hamlin Hislop Hodgkiuson Joyce Lumsden .Lusk Macandrcw Nahe Eces Shrimßki Swanson Tolo Thompson "Wood, E. J. • Stout | NOES. Andrew Hursthouso Pyko Atkinson Johnston D. Bold Ballance Kelly Reynolds Barff Kennedy Richardson Bastings Kenny Bowo Bryce Larnach Russell Bunny Macfarlano Seymour Button Maunders Stafford . Cox Sir D. McLean Tawiti Douglas G. McLean Tcschemaker Fisher • Montgomery Vogol Fitzroy Moorlionso "Whitaker Gibbs Murray-Aynslcy Williams Harper Ormond "Wilcock Henry Pearce Wakefield Hunter ■ ■ ■ ■ Mr. STOUT moved that progress be reported, in order that the Government might consider whether they would agree to exempt from the effect of the resolution special lands, andlands under deferred payments. Sir JULIUS VOGEL explained that the resolution would hot affect these lands.

I After a lengthened discussion, Mr. Stout I moved an amendment, —That intimation be given to the Otago and Southland "Waste Lands Boards that land reserved for sale under deferred payments, and special value lands, be exempt from the operation of this resolution. A discussion ensued, which was followed by another division, when there were for Mr. Stout's amendment 18, against 42 ; majority for Government 24. Mr. BASTINGS proposed an amendment That the resolution should not affect lands leased or sold under deferred payments. The Hon. Sir JULIUS VOGEL accepted the ameEdnient. The resolution as amended was then passed as follows :—" That whereas the Committee has under consideration the question of increasing during the present session the price of Waste Lands of the Crown throughout the ■great part of the colony to a price not exceeding £2 per acre, it is resolved by the Committee that after any such increase is made during the present session,, it shall take effect as to all sales made on or after the sth day of July, 1876, and until the end of the session ; and that, as to all such sales the purchaser shall be.required to pay such increase; and further that this resolution be forwarded to the several Waste Lands Boards _and Commissioners of Crown Lands, in order that the terms may be made known to intending purchasers ; provided always that this resolution shall not affect lands leased or sold on deferred payments." The House resumed, and the resolution as passed by the Committee was adopted. The House adjourned at 3.15 a.m.