HOUSE OF REPRESENTATIVES.

New Zealand Times, Volume XXXI, Issue 4788, 27 July 1876, Page 6

HOUSE OF REPRESENTATIVES.

- Tuesday, Jolt 4, ' : 1 , . FINANCIAL STATEMENT.' * * ! ' Sir JULIUS .VOGEL commenced by complimenting * Major Atkinson on the -"statement '’ made ”by him last session. Tho singularly clear and lucid explanations then given, left no'information unsupplied. , He would now continue the scheme of that Eudget, which, as the Committee would recognise, .was to simplify all financial arrangements, and to place them da the most inte.dgdu.S 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 Sesaion • and, in order to avoid delay, be had not waited for the complete returns of the •year’s transactions. The figures that would 1 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 discus- ’ sion 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 debenturesunder various Acts. They reported a sale to be impracticable 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 that the necessary authority has been issued on this side. It would probably have been com,pleted 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 oiily 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, £1,035,164. Deducting the accrued sinking fund, £1,229,200, from the principal sum, the amount of_ liability is £18,313,994. These fiemrps 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 re-, duced by the amount named, and the result stands an annual charge of about £815,000 on the Consolidated Revenue, and £220,000 on the Land 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, owin" 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. Experi- ; ence 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. j 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 the 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 Trast 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 lair] 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 here as based upon what is technicalled “participating .ratesbut horn 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 comjxnonly. ,'que rate for non-participating and participating policies. There .is: ;'Botpe iobjebt, or some advantage, I presume in jthis,; Tint it has always seemed to mo 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 share. It has been clearly understood here from the first, that the principle of our insurance system was non-participating, and that the rates jphapred were... the- lowest consistent; ...with safety. It is true, however, that the House, after, the establishment o£- the - Department ■generously agreed that if there should be such p. i profit, as to justify Parliament in deciding -that4 certain sum could safely betaken 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 neyer been understood that our object was to charge Ibigb rated with the view of creating a fund for division. .The!Government -pro-pose.-however,- to-deferrte-tbe-offimonsof the lA'stuuriefc, and-tA : 'al tori’the rates‘■to those -•based-upon \wh‘at Ta -knAwhas-fllri Xifstituteof mit to the House for this, .department,•■will' provide'" loif rdoi’e-syStteiatieftlly dividing the]

country' into districts for-tho' purposes Of insurance business'; and fori-the establishment of 'agencies ‘ throughout’ the. country, in connection with the permanent agents in each of- the four principal cities of the, cojpny. Before tho receipt of. the Actuaries’' Report, ; .tho .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 ia its moat Critical period, I think wo 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, X think hon. members,, in recognition- of the vast benefit, which tho 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 tho question of future financial arrangements, 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. ; 1 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 bo needed to meet all the charges which it was then contemplated to impose.. Some, of those charges would bo 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 varying 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 1873 to make it otherwise. I endeavored to give them a separate finance; and 1 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. Auotherjcause of the failure of the provinces was that within 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, aqd with others they ought not to.have been charged. It thus became impossible to tell to whom belonged various duties ; and even 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 alms: 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 wo 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 m 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 vve 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, X dreaded doing away with the provinces because I thought we should have to sit here in judgment on local works, arid that gradually we should find "creeping upoh.ua 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 tho 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 tho-construction of local works, ; we depart from .the-systems prevalent in the colonies' and approach to the Imperial system, , under which tho principal works of Great Britain have been locally , performed; We , do,/indeed, approach 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 circumstapges entailing! much discontent. ;.,That discontent.,is. refer, able to the feeling that top much.,.work/is thrown on. Local Governments, and : too/ little revenue given to them, and, thatr the management,is no,!; thoroughly representative:,/.ln 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 those local institutions, we must insist, upon a; rigid system of colonial finance which ho who runs may . read. , i . . . This is what we aspire t 0.,. We hope hon. members will agree,to place the Consolidated Revenue on ( a footing tho permanence of which will not so much depend upon agreements or; promises, as on its’thorough adaptability to : the requirements it has to mept. Wo want to draw a clear distinctionbetwepn ordinary revenue : find borrowed ; ■ money,, ' between 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 byffiminishedptaxatiqn; ' To-do this, ,we must, know; wtat. fis.ito ;be, chargedito the 'Consolidated Revenue, and we.must be freed frosjtjfhe, temptation to to, thoieipcnditure •

because Of increased re venue. If we make up' our minds how the 5 various_ servicesjof country are to lie .carried out, .appointing to-the General Government, 1 the’boroughs,,.the rqad 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 taxation. . X would much rather! see the objects on which the Consolidated Revenue is to.be pended narrowed, and the direct ’about which so much is said, levied by the IdCal governing bodies, than unnecessarily, as X think, ; to, force , such, taxation on the wholej colony,. ~ ~ ... , j ’ We do desire to avoid the ,imposition/of a. Property-tax and 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 pr6perty-taxi< but that they would he 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 1 value of property of all kinds 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-taxa-tion.' They often do'the'colony muoh : 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 inert-! gage deeds they generally protect themselves,; so that the taxation,, if. imposed, would 'not 1 fall on them, but oh those to whom they have 1 lent their, money.. Simple in .theory, as the, •taxation of absentees'appears, it, must not bo forgotten that an income and property-tax; would much tend to discourage the future .in-! troduction of foreign capital: and, I express; the opinion that New Zealand has not, outlived' the need of outside 1 means' being introduced for application to private enterprises. If in; the, ppinion of the House it is desirable to' extend the scope of expenditure out.of. Con-i solidated Revenue beyond pur proposals, then, direct taxatiqu will be Accessary; but we.hppe ' that there will be evinced a disposition i to: forego, such extension, with the view of plac-, ing 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. • - ;;JT i 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 aterest 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 clas- : sification, but a diminished scale of expend!ture. Nearly all the provinces were expending■in excess of their revenues, and it ■ is idle to suppose we can enable expenditure to 1 be’continued on tbe 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 j 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, avei '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 tbe .Land Revenue; so that, in fact, the reserves 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 something to education, by keeping the school buildings 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, and then only authorising it totheextent requiredby the Assembly; Thesereserves, and the management of,the schools, we desire should continue in charge of Local Boards and Committees ; and aye 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 fee ; 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 raduco the subsidies from Consolidated Revenue to. the rqad districts and boroughs. The subsidies payable by the legislation of last year to Road Boards and Counties from Consolidated Revenue a,nd Land Revenue, amounting to, £2 to £l, wo intend to equally divide between the road districts and counties. The license fees collected within their limits we propose td give to the counties. The license fees,’and £1 to £ll6 boroughs from Consolidated Revenue, we, .ate still 'willing to give, only ,we think some duties should be entailed on boroughs in return. , It seems to us they, as well ah counties, should contribute to the support of charitable institutions, and we propose to make this a condition of the grant. ‘ We shall submit aprovision by whlch'AutMderdistrict’s using these cKatjKes may. be called, on to assist them. W! e shall not require boroughs or .counties to retain tl £hq management of these institutions'in hands ; on the contrary, we woifid r n;uchrather see I 'it in the 1 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'ihatitutions proportionate to .the, amounts .privately contributed, would encourage private assistance and save a great deal of money. We shall be wfil)hg that the Consolidated Revenue .shaU in liko manner contribute 6s, for every. £1 ’raised, by private subscriptions, .: Ti Hi, Governinent 'of tbe colony will thus bo spared tyork. it is ,not del sirable they should perform, and the Consolidated Revenue will be: relieved, of, supporting these institutions beyond the rateable contribution I have,mentioned, and; of inspecting tbom so as to see that they are properly managed. In - the term—“ Charitable Institutions” I do not - include;. Lnpatic Asylums - the charge for these we place upon the Consolidated Revenue. ■ Wo propose to-assume tho’ charge of, I and responsibilities for, the railways. : ’l’horo .avo unanswerable reasons, to which I have already referred, for this. step. Th e: question is,-, on \yhat terms should it be, taken ?; Ouri'proposal is. that, in consideration -of ~tbe.. colony'.aeceplb Ing the liability for.jCpnßtructed 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 Laud should bo made. We do pot see how otherwise it. can.be.done,.without recourse-to-iarge-diiwct taxation ; nor do<we see how thefe' Oan-bo lyFp opinions as'to the fairness of the’proposal, considering how tho railways and ’immigration liavoi raised, .the 1 .valuo'jof -the/.waste/lands >of the Crown, and made them more saleable; ;/ : 1//. The frpm’the’, first have been .made to bear-theieiß tjreiintCrest on raßways.ih ebhatrud’ tion within the Province. My colleague

’showed last year .that it was a mistake to sup: pose we had' paid that' interest but of borrowed money ; that’ notwithstanding a limited power tb had been taken;' it had not been exercised to an amount that more than covered the special revenue contribution devoted to Public Works in''the shape of .the one-half of the Stamp Duties. In theory, paying interest but of capital whilst works are ' in course of con-: Btructi6n,’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'; ■ and I was very glad, the "year before last, to bo able to -state to the Committee that the proposal of the Government was to' take the - whole responsibly 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, ,Eut whilst the colony was thus careful to refrain - from charging on -l° an3 all expenditure open, as i,l, have said, father to an instinctive than fo!a theoretical objection, it did not, aa it might well have; done, relax its previous intention hot to make the provinces feel ,the burden, of the uncompleted, works. It adhered to the prinoiple, 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 Con- ; solidated-Revenue, .lending to the provinces money on permanent loan, I have more than oncer said we had to submit to expenditure to ’ induce', the . provinces, to., rest.contented with, our performing'wprk 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 c]o not hesitate .to say that, in letting the Con- . solidated Revenue, bear the cost of the. interest on these works .whilst in course-of con.struetion, we submitted to expenditure which sbpuld have, been charged on. the, Land Re-; venue pf the provinces respectively interested. 1 ..., . This plan cannot be continued. If we are to place the, Consolidated Revenue on a. satisfactory footing, we must remember that we cannpt spare:part obit to,relieve the Land Revenue from contributing,to the costpf interest, whilst the works that .benefit that revenue are being ,opnstruoted. , 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 Ipok 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; to, 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. S uoh a result would be,scarcely desirable ;. for it would necessitate the adoption of very high rates, 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 lino separately, and therefore that the, contribution must, be made an arbitrary .one.- We might haye 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 tbe price of land, but although there would be no actual 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 fairness of contributing from the Land Fund a stated, interest sn 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 If per cent., and for the next three years 1J 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 wants of considerable portions of the colony. Their case, wo are of opinion, must bo met ; and we propose to meet it by making- the Consolidated Revenue 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 as 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 bo recovered, without interest, from any surplus/Land Revenue in the future. The whole country: will; thus enjoy certain ad: vantages; whether or not the Laud Revenue in any particular, province is equal to the demand for a particular year, i The interest on provincial loans will -be. assured, and so also wiU be tiie .cost'of education; and the subsidies to ' counties, / road districts, and. boroughs. Seine., of tlte coujxUos, will be more fortunate tten.’.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,, sqlls, and a power of adding to their,ownrevenqe., 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 tha'most accessible, lands havo 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 , tho very best land is now only becoming available by reason of the communication ..which-is-being - opened up to it. Interest on money is less than it was in the early days of tho colony. Every reason, in short,*pointS'tq~th6”.expedieffoy:'of!'raising the, price of land. 'What we’intend is, to ask the Assembly to concur in raising the upsetprioe wherever it is less than,£? an aere'by about 25 percent.,/without,,.however,lnterfering 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 Immigrants’ Land'Act;’ the other; that we shall ask the Assembly to agree to- a much enlarged system of/fieferred payments! We are convinced that no' artificial- system’ of spe'oial settlements will compare/with a general provision, open alike to new comers and old settlers,'to poor and rich, to acquire on easy/terniß of set-, tlement a homestead pf 200 acres. To tile young men’gro'wirig up in the colony this wi|l be a prioeloßs‘boon.-i ,s ’- ;i - " v • ‘,;" ‘ ! , , We had considerable 'hesitation' In*''deciding' Whether it whs' expedient td pecdmjnend' that the upset price i6f ifeid 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 become payable on similar laud 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 Hallways ; and with that is involyed 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 coines 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 following 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 bo 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 Pund. 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 uuremunerative 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 w-e 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 remove;! ; 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 great changes which, we believe, will relieve New Zealand of the principal difficulties under which she now labors, and qualify her for the pre-eminent -position amongst these colonies to which her capabilities entitle her. Wo 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-wasi 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 bon. members will not bo surprised to learn that when Abolition takes place, a large amount of liabilities will devolve on the Government. Some of these will be for uncompleted engagements, 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 do 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 fox- the balance ; in short, with respect to revenue of all Icinds, 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 eatimato of what the total will fie; I shall bo glad to find that it is less than half-a-millidn. ■ What'we propose to do is, to ask : power to issue Tx-easury bills ‘or debentures to cover it, as its 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 appi-opriatioris approved by the Government, on' the i-econimendatiou of the Provincial •>Governments, involve expenditure which will extend far beyond the period of abolition. Especially is this the case with the Px-ovinces of Otago, and Canterbury. Ministers ‘did not recommend approval of those 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, ax-rest the works pi-oceeding—for the new bodies cannot' immediately get to work and mature their, arrangements—that they decided to approve the Estimates recom--meuded, and to see them carried out, after Abolition, at the cost of the Pi-ovinces con-, corned. The. works authorised by, these Estimates, . 'not: completed twhen 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 We

propose to continue the progress of the Trunk Railways, and-a reasonable expenditure on Immigration, The latter, we thmk, 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 progress and 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 negotiating for 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 beenasked 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 ns it can be obtained 1 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 country 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 1* reducing the value of the Imperial securities. : I .... 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 i 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 da 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 1 that consent they may’ go into the; market and make their own financial arrangements. l am not thoroughly familiar'with the system at Home; but I believe that to some extent it includes Government supervision, with, in some oasOs, a power of; approval or veto. After much consideration, we think this would not be desirable.here.; . .Anythinghi 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, the Treasurer explained that—including £112,000 for nine mouths’, grants to municipalities, and also including capitation: and special allowances for three months, and.a moiety of Stamp Duties fowthreo mouths, to be paid to the Public Works Account—the total was estimated at £2,317,000,; Tim incorporation of ’ the Provincial with the General Government Estimates had occasioned an immense amount of trouble: and after 5 all, some of the former' had to be incorporated as they stood. The Government , were l 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 idifferences.' that taking - over the (Provinces will involve.; Honorable’ gentlemen, ,s»jll (be,able to form: i 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 over 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 ohoses to enter upon a comparison of them.may do so from a different point of.view, and therefore come to a different conclusionThis 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 mil 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, tbe'' 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 feesr&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 state* ments of revenue, the receipts from land and from goldfields being included in the totals given for Australian Colonies, but having been excluded in the ease 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, £73,000 ; 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. Tbi* 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 satisfaction. 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 earned 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 bon. 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, and 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 1 when Abolition : takes place, it is the year in which we shall be made particularly to feel the effects upon 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, Riey will,.year after year, give us greater relief- financially ; and I 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 tone. No doubt, in parts of the country, there are some unemployed persons • but in. no circumstances, and under no conditions, would it be possible—'whether the scale of immigration be large or small—to finsl 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 uudesirablejemployes. : 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 somS’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. J . : I will. briefly recapitulate the pnuoipal points of thejstatement 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, ,already. decided ; and we are of ppinion that'there is no chance -whatever.of thedeoisioa being reversed. We wish ,hon.(members ,£nd,the;country to rpcogmss.tliakAbpUtioin 4oe» not end-with -the mere coming into force, of . .the Abolition Act; but that (file operation of. that Act.will,:cast upon the Government a large number of gravely ‘oneroua.fintieß. I-haya desired jto;make , it clear to hbu. members', that a leading feature

of the present Budget is the putting upon a simple footing the finance of the colony—relieving the Consolidated Revenue 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 go much mischief; in the' past. It has been: my duty to,point out that certain changes in ■ the Abolition proposals agreed to last session l have been rendered necessary by the larger knowledge and experience which the past year hasl supplied. Those changes are represented principally by the cost of Education being now proposed tobe partly borne oh the Land Fund, and by the cost of charitable institutions being mainly j devolved upon the people of the colony them-; selves, and on the districts in which the insti-, tutions 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-Kail-; ways of the country ;, and that, in order to do so, and to meet the pressure of the interest; on the cost ot works in course 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 Band Revenue of , each provincial district, during the next nine years, a contribu-' tion beginning at 2 per cent., and falling' gradually to 1? per cent., upon the cost of the 1 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 Lands 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 wha 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 I am, 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 ; andXsee 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 ns, 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 bushed. Free 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 GRET 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 laud. 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. Mont-, gomery, 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. Carrington, Gibbs, Reynolds, Macandrew, and Lusk having spoken, Mr. SPOUT moved, as another amendment, That the original resolution should only apply to Nelson, Wellington, and Hawke’s Bay. On the amendment being put, the Speaesb 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.

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 BQKCiaI lands, andlands under deferred payments. .JULIUS VOGEL explained that the resolution would not affect these lands. After a lengthened discussion, Mr. Stout 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 amendment.

i The resolution as amended was then passed ’ M'lollmvs':—“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, 18 fG, and until the end of the session ; and •that; as to all such sales the purchaser shall, be required to pay such increase; andfurther 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 oh deferred payments.” The House resumed, resolution as passed by the Committee was adopted. The House adjourned at 3.15 a.m. Tuesday, Judy 25. PUBLIC WORKS STATEMENT. On the House resuming at half-past seven, The Hon. Mr. RICHARDSON delivered, the Public Works Statement. He commenced by regretting that the delivery so soon after the close of the financial year compelled him ; to prepare the Statement more hurriedly than he otherwise would have done. Additional : tables had, however, been appended, which, together with reports from the Enginefer-in-Chief and other officers, containing information in detail, would convey full information. RAILWAYS. The railway works had not been pqghed on so rapidly as in the two previous years, but care had been taken to avoid delaying those approaching completion, so that they might be made remunerative as early as possible. The’estimates had been materially interfered with by the necessity for lining several tunnels, at a cost of £59,000, over the whole colony, and by the constantly increasing traffic which, he was happy to say, had rendered largely increased station accommodation requisite, and also large additional provision for rolling stock. ‘ The Kawakawa railway would be in working order during the present year. To develop the traffic on the Kaipara and Riverhead railway, an extension beyond Helensville would be necessary. The proclamation for the Riverhead and Auckland line was withheld, owing to the heavy claims for land compensation. Should they be persevered in, it would be the duty of the Government to alter the route. The exceptionally bad winter had delayed the Mercer to Newcastle line. Tenders are only now being called for the permanent way. It would be twelve months before the line could be opened. The Napier and Manawatu line was open to Te Ante. The laud claims were unexpectedly heavy, and some damages had been done by floods. The line would shortly be open to Waipukurati. The Waitara to Patea line was in progress to Inglewood, and its extension southwards was intended as soon as practicable. Satisfactory progress is being made on the Patea to Wanganui and Wanganui to Manawatu lines, but the land claims are inucb in excess of the estimates. The conversion of the Poxton and Manawatu tramway will be sufficiently completed in a a few months so as to enable it to be worked under railway regulations. The-works on the Wellington and Masterton line have not progressed as fast as the contracts enteredinto led the Government to expect, owing in some measure to the difficulty of getting men to remain in the bush country. The Rimutaka and other tunnels were found to require lining although difficult to bore. The portion opened to the Upper Hutt gives satisfactory results. The Nelson and Foxhill line has suffered very little from floods. To develop traffic, it requires to be extended to the new wharf. The necessity for extending the Picton and Blenheim railway over the Opawa river into the town of Blenheim, is more and more evident. Prom Amberley to Waitaki very little remains to be done, and specifications for the last platelaying contract, south of Waimate, are being prepared. The land claims have been excessive, and £IB,OOO have been required for additional station accommodation. Considerable additions to the rolling stock will be required if traffic continues to increase as it has done during the past year. An extension of the Kaiapoi and Eyreton railway to join the Oxford and Rangiora, is necessary. The loss in working these lines, owing to their not being connected, has caused the province to vote a portion of the cost of extension, which is over a country so favorable as to require little more than laying the permanent way. The Waitaki bridge has been opened for traffic, and has now a water supply for protection from fire. From Oamaru to Moeraki the line will be ready for trafio in about two months. The works South to Dunedin are all under contract, except nine miles at Waikouaiti. This length will be let as soon ns the Blueskin section is completed. The land compensation throughout the district has been very heavy, and the bricking of the tunnels involves a further appropriation of £36,000. The remark before made relative to station accommodation and rolling-stock, Amberley to Waitaki, applies also to district Waitaki southThe Minister after visiting Balclutha has given instructions for the Clutha to Mataura line to be proceeded with, .as set out by the Engineer-in-Chief. The works south of Clinton will not be completed before the end of the year. The Westport and Mount Rochfort line is , processing. A contract for loading coal and protective works has been let in excess of appropriation, but liable to cancellation if the House directs. The Government consider this a colonial work, and it continued, votes should be taken year by year. There is now a fair prospect of the field being practically opened up. The Government concur in the decision come to by the recent Royal Commission on the colliery reserve, whose inquiry was exhaustive. . The Greymouth and Brunner line is open, and the coal traffic may be expected to commence in September. The Government consider that the Greymouth works should, like those at Westport, be dealt with by the colony. An arrangement has been made with the Corporation for taking over the wharf and its dues. Fending the sanction of the House, a separate account of wharf dues is kept. The mileage of railway is ; —North Island, 392 authorised ; 145 open for traffic ; and in progress 183. South Island, 638 authorised ; 404 open for traffic; and in progress 199. Total, 1030 authorised ; 549 open for traffic; and in progress 382. The amount spent on railways during the past year was £1,639,014, making a total expenditure on railways of £5,215,018, with liabilities extending into 1878 of £983,253. This includes all existing contracts, and plant and material ordered from Home. Having in detail referred to the great additional cost of land, it is mentioned that the compensation already paid, and liabilities which will come in for payment over the next eighteen months, will amount to over £90,000, and it becomes a question whether the district through which future extensions are made should not provide the land free, before any expenditure is incurred towards construction. Further explorations have been made from Canterbury northwards, towards Blenheim, but as it is doubtful whether the best route has been discovered, this exploration will be continued during the present year. The surveys from Hokitika to Greymouth show the cost of the proposed lino to be £222,000, as against the original amount stated of £85,000. Some deviations are under survey, by which a reduction in tho former amount is hoped for. The photo-lithographic establishment has effected a saving of £2OOO per annum on railway plans alono. ROADfi. A comparatively small amount has been spent bn new road works during the past year, and only two districts need to be specially pi’en-

tioned, viz., Wauratapa and north of Auck-! land, ■: ;■. ■, . , ' ! r Contracts have been made for metalling all the worst places in the Seventy-mile Bush, but. the severe winter weather has obliged the work; to be suspended. The road' opens up a large; tract of fine land for settlement.) ~ r ■ Up to June, 1875, £47,252 have been spent; on roads north of Auckland,bxclusivebf Man-' gere bridge. The* expenditure "and liabilities’ last year amounted to £6889, leaving a balance of £5853. It is proposed to expend this: balance on the bridges requisite to make the!, main trunk road, Auckland to Bay of Islands,; passable for ordinary traffic' A rewrote of £17,872, unavailable for technical reasons last year, will be asked ’for to meet “liabilities in-; curred on the presumption that the money’ was available for roads generally in the North Island. A considerable number of the Aimed' Con-' stabulary have been employed, principally in 1 maintenance and repairs. : No extra pay has; been given, and although taking their time and; ordinary pay ; into account, the work has not ’■ been executed so cheaply as if let by contract,; yet as it has been done in addition to their constabulary duties it is a clear .gain to the country. ■ • The small balance from the - Westland road vote will be expended south of Hokitika) and that from the south-west goldfields vote on the road between Greymouth and Reefton. WATER-RACES. . ’ The Thames, Waimea, and Mount Ida water-races and the Waipori sludge channel are already completed. The Nelson creek race will take some months to complete. It’ will not be necessary to' ask. for votes for the expenses of management, as they w.U be handed over to their respective counties. Tenders have twice been called for the first section of the Mikonui water-race, but they were so much higher than Government were led to expect, that they have on each occasion been reluctantly declined. It is now proposed to hand the work over to the county,' with a further contribution of £IO,OOO, to be advanced by the. Government.’ ■■ ; PUBLIC BUILDINGS. As the Colonial Architect’s report contains details of buildings erected, nothing further is stated thereon. 1 V V COAL EXPLORATIONS. ’•’ ( The result of the topographical survey of the Buffer coalfield shows an extension qf the, coal measures, a considerable portion of i which will he available for working as, early as, have been yet found. It ,is , not proposed to continue the survey at present. Eleven leases have been granted, aggregating 8520 acres. Several of , these lessees , will probably be ready to use the railway from Ngakawau to Westport • as,’ soon as completed. , , i At Greymouth fresh outcrops have been discovered, and at Jackson Bay and at Abbey Rocks, far south on the West Coast, the coal development has been examined, but no workable seams have as yet been discovered. Some superior samples of coal have been, received from West Wanganui, and that part of the country will shortly receive attention. INSPECTION OP MACHINERY. ■ The Act is being carried -out very fairly. The fees charged were rather more than covered expenses. RAILWAYS OPEN FOR'TRAFFIC. The railways have been worked with the following result during the past year ■:—

The permanent rolling stock has been kept in thorough repair. There baa bean a loss’of £037 on the Foxton tramway during the process of its conversion into a railway, but it is now paying its expenses. The receipts from the Canterbury railways for year ending 31st March were £185,806, and expenses £124,513. The receipts from the Otago railways during the same year were £90,790, and the expenditure £66,852, leaving a credit balance on the Canterbury and Otago railways of £85,232. The Auckland and Mercer traffic has not been so large as expected. Objections have been made to the rates; but it is impossible to lower them if the line is to be worked so as to leave a margin above working expenses. It is a very prevalent opinion that the public ought to have the same amount of accommodation as on the railways in England or the adjoining colonies where the cost has been so much greater; but the fact is, that the rates charged are generally below thpso charged in England, and only in Otago are they as high as those charged in Victoria. If the accommodation now asked for in various parts of the colony, and which to a great extent has been given in Canterbury, is as a rule to be acceded to, the cost of the lines will be so increased as to require the rates to bo generally raised. The aim of the Government will be to equalise the rates, and they should not be higher than those in the southern part of the Middle Island. ’SUMMARY OP EXPENDITURE. The total expenditure to 30th June last, under the Immigration and Public Works Act, in the North Island, has been, for railways, £1,780,956 ; on . roads, £491,636 ; and on water-races, £58,636 ;. total, North Island, £2,331,228. In the Middle Island, on railways, £3,403,538 ; on roads, £194,721 ; on water-races, £222,283 ;Ttotal, Middle Island, '£3,820,543, Sundries, £30,523. Total expenditure, £6,182,295. PROPOSED EXPENDITURE ON RAILWAYS FOR CURRENT YEAR. An amount is proposed to be asked to cover contract and other liabilities during the current year, on the following railways : - & Kawakawa railway .. ~ 20,000 Auckland-Puniu 101,000 Napicr-Manawatu .. .. .. . 47,000 Wellington-Mastcrton .. 137,000 - IVaitara-Patca 87,000 Patea-Manawatu .. .. .. 114,000 Nelson-Foxhill .. .. .. 7,700 Picton-Blenheim 4,5Q0 Greymoufch-Bmnnerton .. .. 19,000 Westport-Ngakawau .. .. 49,000 Amberley-Waitaki .. .. 79,700 Waitaki bridge 1,300 Waitaki - Invercargill and Lawrence branch 224,400 Winton-Kingatoa 63,000 £1,054,600 The following new works, if voted, will not be put in hand until the Government are assured that the necessary means are available: — Ist. Tho extension of the railway from Riverhead to Kaipara, from the present temporary station at Helensville for about half a 'mile, and the erection of a wharf at which vessels can with ease discharge their cargoes. The cost of this extension will be about £15,000. 2nd. A new wharf at Onehunga in connection with the railway. The coat of this will be £14,000. 3rd. A vote of £29,000 for the extension of the main south line from New Plymouth towards Patea and Wanganui. 4th. A vote of £IO,OOO for the extension of the main line from Napier towards Wellington. sth. A vote of £BOOO to extend the Nelson and Foxhill line into the port. 6th. A further yote of £25,000 to meet present liabilities at Greymouth on tho Brunner railway, and to provide funds to continue the harbor works at a moderate speed. 7th. A further Vote of £30,000 for works at Westport. Bth. A further vote of £16,000 to complete the Picton and Blenheim railway into Seymoursquare, in the centre of Blenheim. 9th. A vote of £BOOO for connecting the Kaiapoi and Eyreton railway. 10th. Now surveys, £IO,OOO. Total for now railway works, £156,000. Considering how small an amount of work baa been done in the north of Auckland, it is

proposed_to .a»k..for £IO,OOO, Hor.completing theiinain ffunbyoad to the Bay p£ Islands for! dray traffic, and for a main cross road, from Wangarei Heads westward. ' In ttye Colonial Treasurer’s Financial^Btate-' ■ ment some pf.the reasons were giyeh fo* takingover the responsibility of the management of all the railways, ; and it is now pointed but in addition th'atithere are,\three 1 systems of man-; agement, three ’entirely/distinct -tariffs of charges, three audits,; and the remuneration, of; the same classes of officefs’are on very different: scales, which leacjs to. difficulty and expense, i A considerable ‘saving wdld'be effected'by tfie; whole of the lines being under a combined management, and the entire rolling stock on connected lines would, he available on emergencies, ■ Any comparison between the systems of management now in force is purposely 1 avoided ; but uojtmatter who works the lines; the public convenience Willi have to; be suited, and the Government, watched as it ’is - by the House, will insist on their being econo,- ■ mically worked. , - - ■ The experience of the past year confirms the - opinion previously expressed that with prudent management the railways will yield, taken as u whole, a very cohsiderable.contributionitowards the interest on their cost. , ■ The estimated revenue on lines at present worked by the Government is, stated at £132,000, and that on 1 the Canterbury and Otago lines at £185,800- and £127,800 respectively, making a total of £145,000. . • G If the estimates are correct, a yield of, ,3-per cent, on the capitalised cost ought to result. . The Statement concluded with the following allusion to the late Agent General In 1871 the first Minister for Public-Works announced in his Statement the appointment of the late Dr. Featherston to the- office of Agent-General under the Immigration and Public Works Act. It is with the deepest regret I mention the loss . the Public Works dei partment, as well as the - colony; has sustained by his recent death. This is not the,, time to allude further to the services of that officer. I last .year bore testimony to the faithful manner in which his duties connected with this department were performed, and, I feel that any further reference now . would be superfluous, if not out of place.' 1 '' ' The Public Works Bill was introduced, read a first time, and ordered to be read a’ second time on Tuesday next. i , ; f

DeXautour Dignan Grey Hamlin Hielop Hodgkiuson Joyce Lumsden * Lusk Macandrew Nahe Rees Shrimskl Swanson Tole Thompson Wood. R. J. Stout NOES. Andrew Hursthouse Pyke Atkinson Johnston D. Reid Ballance Kelly Reynolds Barff Kennedy Richardson Bastings Kenny Rowe Bryce Lamach Russell Ennny Macfarlano Seymour Button Maunders Stafford Cox Sir J>. McLean Tawlti Douglas G. McLean Teschemaker Fisher Montgomery Vogel Fltzroy Moorhouse Whitaker Gibbs Murray-Aynsley Williams Harper Ormond Wilcock Henry Pearce Wakefield Hunter

Receipts. , £ s. d. Expenditure. £ 3. ll. The Kaipara Kailway. .. 2,497 18 9 2,638 16 3 Auckland-Mercer’ 22,487 16 10 19,410 18 1 Napier- Waipukurau 12,417 2 4 7,902 12 0 Waitara-New Plymouth 1,833 12 3 2,190 12 0 ■Wellington and Upper • Hutt .. 9,429 5 3 6,293 10 2 Ficton and Blenheim .. 3,510 3 2 3,083 9 9 Nelson and Foxhill 2,531 4 1 2,303 17 9 Brunner-Greymouth 1,063 8 a 883 11 8 Making a total of receipts for the year of Expenditure for the year of Leaving a balance of .. 55,776 11. i 44,713 7 £11,063 3 8 8