Public Works Account.

New Zealand Times, Volume XXXII, Issue 5103, 1 August 1877, Page 3

Public Works Account.

Ways and Meant.'

From this it appears that the unexpended balance is £980,189 13s. Id., but of this sum £645,957 will be required for works already under contract or authorised. My colleague, the Minister for Public Works, will submit estimates in detail of the work which it is proposed to continue and to enter upon; and it will be for the House to consider how far it is desirable to sanction them. We propose to ask for appropriations to the extent of about £1,274,676. If the committee should see fit to grant this amount, additional Ways and Means will be required for the year of £940,443 6s. lid. The Imperial Guaranteed Debentures have been used during the year as security for advances made from time to time by the Bank of England. I propose to continue to use them in this way, as we are thereby enabled to keep a working balance always in hand, regulating it according to our requirements, and thereby saving interest; and I shall presently submit to the Committee proposals which will enable us to adopt that course. It will be remembered that power was given in the Appropriation Act of last year to make advances, to the amount of £IIO,OOO, to the Provincial Districts of Auckland, Wellington, and Westland, and to obtain the required funds by the issue of Treasury bills to that amount. These bills have been issued and the proceeds applied as authorised. Of the New Zealand Loan, 1876, £250,000 was set apart to meet Provincial Liabilities coming in for payment between Ist January and 30th June, 1877. The sums transferred from the loan to the several Provincial Liabilities Accounts to provide for these charges amounted on the June to £237,500 leaving an available balance of £12,500 (subject to the cost of raising the loan) to meet liabilities yet outstanding. The actual receipts and payments on account of Provincial Liabilities up to the 30th June were as follows :

Particulars of the receipts aud expenditure on each account, as classified by the Provincial : Auditors, will be laid before you, so soon as they shall have been received. The expenditure on these accounts will include certain disbursements which, except in so far as they may have been sanctioned by sections 16 and 35 of the Financial Arrangements Act, must be held to be unauthorised, and as it has been thought proper to include under that head the amount disbursed as compensation to Provincial officers whose services have been dispensed with, instead of charging it on the Consolidated Revenue. In many instances, payment of compensation on dismissal was a liability of the Provincial Government, fixed by agreement with the officer concerned, and in all cases it must be admitted that the compensation paid was a recognition of services rendered to the Provincial Governments, and was properly a Provincial liability. In that shape the expenditure will be submitted, and the House will be asked to cover it by a vote. I propose to lay before the Committee estimates of the Provincial liabilities yet to be provided for, and to include therein the amount of such appropriations for necessary works as jet remain unexereised, and which would otherwise lapse. The Government considers that it is due to the districts in which these works were proposed to be executed that the matter should be submitted to the House, and that it should be asked to determine to what extent, and in what instances, these unexeroised appropriations should be renewed. Amonst the liabilities yet outstanding will be found the bank,overdrafts of the late Provincial Governments of Taranaki, Wellington, Westland, and Otago. These overdrafts amount in the whole to £106,269 3s. 7d., and though they remain undischarged they have been subject to no charge for interest since the 15th February, the Government having arranged with the bank on that date to forego interest on a corresponding portion of the balance at credit of the Public Account. DEFENCE LOAN. The balance to the credit of this loan on the 30th June last was £35,416 18s. 9d. after providing for the service the House placed upon it last year. We propose to ask for an appropriation of £12,000 this year for roads in native districts. TOTAL PUBLIC DEBT, INCLUDING TREASURY BILLS. Before concluding this part of ray subject, the Committee will, perhaps, allow me to say a few words about our Public Debt. The gross Public Debt of the Colony, General and Provincial, including Treasury bills, when the balances of all loans now authorised are raised, will be £20,895,311. As against this debt, we had a balance of £980,189 13s. Id. at credit of the Public Works Account on 30th June, £35,416 18s. 9d. at credit of the Defence Loan Account, and accrued Sinking Funds amounting to £1,353,562 2s. lOd, Our total revenue last year was £3,061,594 14s. 6d., and—excluding land 5a1e5—£2,171,059 155., that is, after setting apart that portion of our income derived from the sale of land, which in most colonies is called revenue, our net public debt is eight and a half times our revenue, or, if we include our income from land sales, our public debt is equal to six times oui revenue, while the public debt of Great Britain is more than ten times the amount of her revenue. This seems to me a far fairer way of comparing our indebtedness than at so much per head of the population. It should, moreover, be remembered that the public debt of England has been incurred for war purposes, while that of New Zealand has mainly been incurred for reproductive works. It may, perhaps, be interesting to state the purposes for which the several loans, General and Provincial, which constitute our national debt, have been raised, aud the amount applied to each. I have ascertained, by an examination of the several Loan Acts, that those purposes and amounts may be classified thus;— About £8,300,000 has been spent upon railways; £3,500,000 on immigration; £4,400,000 on harbors, lighthouses, public buildings, roads, bridges, and other public works for opening up the country; £1,300,000 in the purchase of Native lands, including the payment of the debt to the New Zealand Company; £2,000,000

in the suppression of the Native outbreak; and •the-remaining £600,000 on miscellaneous purposes. CONSOLIDATED FUND. I will now invite the attention of the Committee to the Expenditure and Revenue of the past year. Expenditure op the Year 1876-77. The expenditure for the year, as finally authorised by Parliament, exclusive of that for Railways, to which I shall refer presently, amounted to £1,858,467 2s. The actual expenditure made was £1,681,682 17s. lid., as will be seen by the following table :

It will be seen that in one case only have the appropriations been exceeded, and I am confident the House will approve of that excess when I state that it has arisen on the item Native Schools. The net total savings on the votes of the year amount to £194,084 la. lOd. Included in this total, and under the head of Interest and Sinking Fund, there is an unexpended balance of £73,323 6s. Bd., owing partly to an actual saving of interest in the case of the guaranteed debentures, and partly to my having estimated for a year’s interest on the £1,250,000 negotiated at this time last year, whereas we have had to provide only for a half-yearly payment. There was some uncertainty as to the precise date from which interest would be payable, and I thought it best to provide for a whole year. Apart, however, from this item, in respect to which about one half of the saving represents rather a necessarily excessive estimate than a diminished expenditure, the Committee will, no doubt, regard with satisfaction the large savings, amounting to £123,566 17s. 4d., which have been made in the other classes of expenditure. Particulars of the amount appropriated and of the expenditure made under each vote will be found in the Table D, and it will be seen that in almost every instance the Government has been able to effect a saving on the sum voted. The amalgamation of the Armed Constabulary with the Police Force of the Colony has enabled a considerable reduction to he made in the cost of those services, but owing to the necessity of paying a bonus to the men discharged, the saving for the six months amounts only to about £IO,OOO. With reference to the Railways, I need scarcely say that our Estimates, both of expenditure and revenue, were necessarily contingent on the progress of construction, and for this reason I omit the item in my comparisons of the estimated with the actual-expenditure and revenue. Owing to certain extensions of the lines not being opened for traffic so early as was anticipated, there has been a diminution, as compared with our estimates, both in the expenditure and in the revenue. I calculate on obtaining a profit of £84,000, estimating the receipts at £345,000, and the expenditure at £260,758 6s. Bd. The actual receipts were £316,220 7s. 3d., the expenditure £228,295 19s. 10d.; and the net profit, £87,924 7s. sd. The steady progress which this item of our income exhibits, is a circumstance on which the Colony may well congratulate itself. Revenue op the Year 1876-77. I now come to the Consolidated Revenue for the year 1876-77. I estimated in my_ last year’s Statement, that, after taking credit for realisable assets amounting to £19,228 15s. 2d., and deducting outstanding liabilities amounting to £90,410 12s. 2d., we should begin the financial year 1876-77 with a surplus of £50,052 16s. 2d.; the assets have realised £27,083 ss. sd„ and the liabilities have turned out to .be £87,290 Iss. 2d., so that the real surplus with which we began the year was £61,027 3s. sd. . The table which I now submit sets forth, under classified heads, the Revenue of the year 1876-77, estimated aud actual:—

It will be necessary for me to trouble the Committee with a few remarks upon one or two items of revenue as shown in the table. As compared with the sum estimated, the Customs Revenue shows a deficiency of £40,621 ; but looking to the disturbance of trade throughout the world, and to the uncertainty of the wool market during the past year, the Government, and probably the House also, were prepared to find the decrease larger. The decrease in the Postal Revenue is only apparent; postages to the amount of £15,923, yet to be received from the Imperial and the Australian Governments on account of the past year, will ultimately convert this deficiency into an excess of £6471. The item Incidental Receipts also appears considerably short of the Estimate. The receipts under this head are of a somewhat uncertain character, and it is difficult to estimate them with more than an approach to accuracy. As regards the item Miscellaneous Provincial Revenue estimated to yield £13,333 —but as to which the actual receipts are set down as nil —I may state that, under the legislation of last session, moat of the sums which it was estimated to receive under that head were made over and have been paid to the various local bodies, while the remainder have been passed to credit of the several Provincial Liabilities Accounts.

To the sum of £1,614,582 10s. 3d, above referred to, I add, first, the profits on the Railways, as already stated, £87,924 7s. 5d.; the £IO,OOO transferred from the State Forests Account; the 2 per cent recovered from the Land Fund under the Financial Arrangements Act, amounting to £71,997 Bs. Bd.; the surplus with which we began the year, £61,027 3s. 5d.; and the assets yet to realise, £36,717 18s, 3d. This makes up a total of £1,882,249 Bs. The total Revenue for the year, as estimated, amounted to £2,146,902 16s. 2d., or, exclusive of Railways, to £1,801,902 16s. 2d., to which must be added the estimated profit on the Railways, £84,244 13s. 4d., making as estimated receipts tor the year a sum of £1,886,141 9s. 6d., while the actual receipts were £1,882,249 Bs., being £3895 Is. 6d. less than the amount estimated. The transactions of the past year may he shortly summarised thus ; the actual expenditure, including liabilities, was £2,024,572 6s. Bd. ; the actual revenue, including realisable assets, was £2,172,792 14s. Id. Subtracting the expenditure from the revenue, we have a balance of £148,220 Bs. 5d., which is the surplus with which we begin the year 1877-78. I subjoin a statement of the Consolidated and Land Revenue (exclusive of Goldfields Revenue) received during the eight years commencing 1869-70, and I have combined this

information in one table, in order to remove the misconceptiou.which exists outside the Colony as to the amount of our income.

In concluding my remarks upon the Revenue, I lay before the Committee a table showing the Consolidated Revenue of the year 1876-77 (excluding Land Revenue) as compared with that of 1875-76 :

It will be perceived that, as compared with the previous year, the falling off in the Customs Revenue .was but small; that, with three exceptions; there was an increase in every other item ; and that, notwithstanding the decrease on the items referred to, the revenue of the Consolidated Fund, including the Revenue assets of the year outstanding, shows an increase of £238,276 6s, 2d., as compared with the year preceding. LAND FUND. The receipts of Land Fund for last year (exclusive of Gold Duty) were £1,039,242 4s. Bd., or £419,003 15s. 3d. more than the a-erage , for the preceding seven years. Since the Ist January, when the Financial Arrangements Act came into force, the receipts have been £644,454 6s. 9d., the estimate was £322,610, so that the estimate was exceeded by £221,884; but I regret to say, that although there is a very large increase on the whole, the deficiency is larger than was provided for by the ■ Financial Arrangements Act. The sales ,in Canterbury - show an enormous excess, while those sales in Auckland, Taranaki, Hawke’s Bay, Nelson, and Otago have proved to be less by £83,000 than the sum estimated. lu , consequence of this, the whole, of the Treasury bills authorised under the Financial Arrangements Act, amounting to £150,000, have been issued, and an additional sum of £53,005 19s. 9d. has had to be advanced from the Consolidated Fund in aid of the Land Fund. ; THE PUBLIC TRUST FUND. The business done by the Post Office. Savings Bank has been satisfactory ; the number of depositors increasing yearly. The operations of the calendar year are fully set forth in the annual return already in the hands of the Committee- ■ On the 30th June last the total deposits amounted to £720,120 9s. 4., as against £715,693 10s, 3d. on 30th June, 1876. With regard to the Government Insurance Account, as I propose to bring in a Bill to establish a Board of Management instead of : leaving the direction in the hands of a Commissioner, I need not now trouble the Committee with any remarks except to say that the year’s transactions have been most satisfactory, and reflect great credit upon all connected with the department. ' The rest of the Trust Funds do not require to he specially brought under the notice of the Committee. Expenditure for the Year 1877-78. ! I now come to the consideration of ,'the'Bx-, penditure for the present financial year. .WeJ have, through amalgamation and simplifica-; tion, reduced the cost of most of I the depart-: ' ments, although in many cases' the- work- has nearly doubled. I regret to say, it has been found impossible to do more in this direction j than has been done, owing to want of time ini . consequence of the enormous amount of workj , which has fallen upon the Government through j the constitutional changes which it has beenj our business to inaugurate during-the-recess.: - The proposed expenditure is as follows ' EsTiatATED Expenditure, 1877-78. :: Consolidated Fund— ' . .. : Civil List .. • - • • ... £29,750 0.0

The increase in the Permanent Charges arises from our having borrowed more money during the year, and from the transference of the cost of the Canterbury and Otago Provincial Railways, which have been taken over by the Colony, from the Land Fund of those districts .to the Consolidated Fund. Under the head of “ Class I,—Public Departments,” a sum of £30,000 has been provided for Hospitals and Charitable Aid. This is to provide the subsidies which will probably be payable under the Charitable Institutions Act. I may also say that I shall ask for authority to deduct from the subsidies granted to Counties, Boroughs, and Bead Boards, a sufficient sum to maintain Hospitals and Charitable Aid in districts where the Charitable Institutions Act is not adopted, or proves insufficient.

The House has already been informed by my honorable colleague, the -Minister for Justice, that it is our purpose to provide out of the Consolidated Fund for the service of Education a sum of £135,000, which amount, together with the capitation rate, the rents of reserves, and other endowments of the Education Boards, estimated to yield £45,080 in all, will, it is believed, be a sufficient provision for the year’s outlay. By the amalgamation of the Police and Armed Constabulary a saving of £33,000 a year has been effected ; but I regret to say that a large increase, amounting to £10,989 os. 4d., has been found necessary in the vote for Militia and Volunteers. This, however, is chiefly on account of stores and ammunition, which have become very low, and must be replenished, and for capitation provided for a larger number of Volunteers. The charge for Surveys is very large, hut, as lion, members know, the surveys are in a backward condition inmostof the late provincial districts. The control is now in the hands of a thoroughly competent and economical officer,

and I am sure the Committee will ungrudgingly sanction whatever expenditure may be required for so important an object as placing our surveys upon a proper footing for the future, and keeping them even with the requirements of settlement. It will be observed that, so far, I have relieved the Land Fund from all the direct charges to which for years past it has been subject, except interest on Provincial Debts, the cost of Land Administration and Surveys, and the subsidies to Road Boards. Ways and Means, 1877-78. As I have just shown, we have to provide for an aggregate expenditure of £3,109,754 12s. 9d. for the year. Of this £2,394,546 12s 9d. is chargeable upon the Consolidated Fund; on the Gold Revenue, £72,000; and £643,208 upon the Land Fund, being such charges only as each fund should support. Now, if. all the charges placed upon the Land Fund of each district could be recovered, the Consolidated Fund would be in a position to bear its legitimate burdens without difficulty. As a matter of fact, however, I do not think that more than £560,000 of that sum will be practically recoverable, the Land Fund in certain districts being insufficient to meet its liabilities. It will therefore be necessary either to supplement the Consolidated Revenue or to relieve it of some of the charges I have proposed it shall bear. I dismiss, sir, as altogether undesirable, the plan of charging such services as Police and Education upon the Land Fund of those districts which are able to bear them. They are charges which, in the opinion of the Government, should be borne upon the Consolidated Fund, aided, if necessary, by local rates. If the Committee agree with me that it would be unwise to charge against the Land Fund any of the services I have proposed to place upon the Consolidated Fund, it follows that the only course open to us is to increase that fund up to our requirements. I say that it follows that for the present year is the only course open to us, because I have satisfied myself that it is impossible so to reduce departmental expenditure as to bring our expenditure within our income unless we are prepared to relinquish some of the luxuries we enjoy in the way of Telegraphs, Postal Services, and Resident Magistracies, which are spread broadcast over the land, and which, as far as my experience goes, it is hopeless to attempt to reduce. ' I take it for granted, then, that we must, at any rate temporarily, aid the Consolidated Fund, and the question is. How is this to be done ? I know, sir, that many persons whose opinions are entitled to great weight, from their position and their knowledge of the Colony and its requirements, think that the time has arrived for levying a Property and Income Tax ; and, if we were now in a position to deal with the question of the re-adjustment of taxation, much might be said in support of such a tax. For my own part I am very loth to open the question of taxation at present. Our liabilities being what they are, the subject of taxation is not lightly to be touched. It is one which requires the most careful thought —it must be considered as a whole, and it would be quite impossible to deal with it satisfactorily during the present session. When our Trunk Railways are approaching completion, when we have time to consolidate and settle down, and are able to determine our real requirements, then the whole incidence of taxation must be considered ; but to deal with fit now, in a fragmentary way, would, I think, be a serious mistake.

For the reasons just stated, and because we think our requirements for the year can be met in a way which will be far more satisfactory to the country, and which is fair and reasonable, I shall not propose additional taxation this year. And I venture to hope that additional taxation may be altogether avoided if we obtain from our railways that income which seems now assured, and if we are successful in the inscription of our Stock. But here, sir, it is necessary that I should recall the attention of honorable members to two principles which have been clearly recognised as underlying all our legislation relating to - Waste Bands, and to Immigration and Public Works. These two principles are— First, That the Land Fund shall be localised ; second, that the cost of Immigration, Hoads, and Railways is a proper charge against the Land Fund. These principles have been constantly ■ recognised ; and though it is true that they have not been continuously acted upon, yet the recognition of them crops up in our legislation at almost every turn. By the ■Provincial Governments and Legislatures, which have hitherto had the practical control of the Land Revenue, the second of these principles has always been acted upon ; but in this House expenditure upon Immigration, Roads, and Railways has been, from time to time, charged against the Consolidated Fund, as that fund has been found able to bear it ; but these two important principles have never been abandoned or lost sight of by Parliament or the country. With reference to the localisation of the: Land Fund,, it is necessary. that we should distinctly define in cur own minds the meaning of the term. . The . meaning, sir, which I attach to the term localisation of the Land Fund, is that the money received for the sale of the Crown lands within a defined district should be spent in opening up and peopling that district.

I am not, sir, now going into the question of what is a district : that would open up far too wide a field altogether. For the purposes of my argument, I shall accept the districts as they are ; although it should be noted that Parliament has always claimed and exercised the right of altering the boundaries of these districts from time to time. Most honorable members will go with me so far, —at any rate those will who, like myself, think that the proceeds of the land should be applied to the land, —that those who pay the most should receive the greatest facilities for occupation, and that to treat Land Fund as ordinary revenue is thoroughly bad in principle. Some few will probably desire to go even further, but, sir, further than this in localisation I am not prepared to go, for when the money has been spent in opening and peopling the district the object of localisation is accomplished, our duty to the land is fulfilled, and there, in my opinion, localisation ends. :

Holding, then, as I do, the opinion that with the proceeds of the land it is the duty of the State to open and settle the land, it seems to me not only no violation of the principle of localisation, but merely an extension of it, to say, that if the State finds the money beforehand for these purposes, such an expenditure should be made, a charge against the Laud Fund, and that it is in accordance with the principle of localisation to charge against the Land Fund of each district any sum not exceeding the amount expended within that district in any way which Parliament may determine is the most convenient.

Now, there has been raised for Railways and Immigration a sum, in round numbers, of £9,500,000, the whole of which is fairly a liability of the Land Fund. The annual charge on this sum for Interest and Sinking Fund is about £485,000. Out of this sum there had been expended, up to the 31st December, 1876, the day on which the accounts of the late provinces were closed, a net sum of £7,188,245 ; and the Colony had paid interest thereon to, the amount of £825,483, but has only recovered from the Provinces £160,343 ; so that, in aid of Land Fund, the Consolidated Fund has actually paid £655,139. It will be seen that the advantages which the Land Fund has enjoyed have been great though not proportionate, but into that question I do not now propose to go. I have shown the extent to which the Consolidated Fund has been burdened by the payment of Interest and Sinking Fund on moneys expended in performing the work for which the Land Fund was- localised, viz., the opening up and settlement of. the country, and, applying the arguments I have just used, I shall ask the House to re-affirm the principle that moneys expended on these purposes are properly chargeable upon the Land Fund. We recognise that at the present moment the refund of these charges is beyond the immediate power of the less wealthy districts ; but, as respects the Provincial Districts of Canterbury and Otago, no such argument can be urged, and we propose to charge the Land Fund of Canterbury with a sum of £58,000, and that of Otago with a sum of £109,000, being in each case one moiety of the amount by which the Land

Fund of those districts has been aided. With the exception of a small permanent debt, the charge of 2 per cent, for Hallways, the subsidies payable to Counties and Hoad Boards, and the cost of Survey and Administration, the Land Revenue of Canterbury is absolutely free. And, in view of the fact that a sum of £250,000 of surplus Land Fund has been distributed within the district during the past six months and that a further sum of £IOO 000 is n ow ready for distribution, we propose to deduct her contribution from the sum in hand. The case of Otago is somewhat different. The district has a very large estate, though it is burdened now with leases just expiring, and which it would be a waste of public money 1° cancel. We propose, therefore, to raise the amount required to meet its contribution, together with the sum of £36,000 advanced last year m aid of the District Land Fund, treating the debt as a provincial liability, and making the Interest and Sinking Fund a permanent charge upon its future Land Fund. The whole Land Fund of the Otago District for the year wall then be free, excepting only the 2 per cent, under the Financial Arrangements Act, the interest on its Provincial Debentures, the cost of Surveys, and Land Administration.

The relief to the Land Fund under the proposals of the Government is very considerable. In the Southern Provinces, Education was almost entirely borne upon the Land Fund under the provincial system ; and, considering that the whole cost for building and maintenance of schools, of police, of gaols, of lunatic asylums is now borne upon the Consolidated Fund, I do not think that the inhabitants of Canterbury and Otago will consider the proposition I have made unreasonable. And it must further be borne in mind that when the Colony has incurred a large expenditure for public works and immigration, which is yearly improving the public estate, at a time when the burden of the expenditure on uncompleted works is most severely felt, the only possible means of maintaining the broad principle of localising the Land Fund is by taking care that all rightful charges upon it are fairly and justly met. Estimated Revenue, 1877-78.

I will now state the estimated Consolidated Revenue for the year, and, in doing so, I will merely remark that X have set down the Customs Revenue at the amount which it produced last year ; in other items of revenue I have estimated for a slight increase. The receipts from Railways, I have estimated, after careful consideration, at £604,143, against an estimated expenditure of £434,143. In other words, I estimate that our Railways will next year produce a profit on the work done of

The total revenue from all sources for the year will amount to £3,392,685, to which I add the surplus of £148,220 Bs. 5d., with which we began the year. I deduct from the total of £3,540, 905 Bs. 5d., the estimated expenditure amounting, to £3,109,754 12s. 9d., leaving a surplus of £431,150155. Bd, of which £329,369 9s. lOd. is distributable among the counties as surplus Land Fund, and we have a balance of £101,781 ss. lOd. available to meet possible deficiences of the Laud Fund in certain districts. IMMIGRATION AND PUBLIC WOEKS. In making my financial proposals last year I said, “I shall, next session, submit for the consideration of the House a scheme baaed upon carefully-prepared professional estimates, showing definitely and -In detail what works are required to complete our railway system, and the cost of such completion ; and shall then ask the House to consider the arrangements necessary for completing the scheme. I shall propose to spread over a series of years the raising and expenditure of the moneys required, and thus to keep the annual charge for interest on the debt within the compass of our growing income.” I regret to say that we have found it impossible to give effect to this intention. The preparation of such a scheme could not, we believe, have been satisfactorily ..accomplished during the past recess, because . of the smallness of the staff as compared with the large extent of works in hand, and because of the'time necessarily occupied in taking over the Southern - Railways ; and we felt that, as a hurriedly devised plan would probably be imperfect,- it would be better under the circumstances to submit to some delay. We shall, therefore, ask, this session, only for a sum sufficient to unite the already completed sections of the trunk line of 500 miles from Amberley to Kingston, and for extensions of the main lines;in other parts of the Colony, particulars of which will be stated to the House by the Minister for Public Works. I .have stated that, should the House direct that the works which my honorable friend the Minister for Public Works will recommend be executed during the current year, additional Ways and Means to the amount of £940,443 6s, lid, will be required. The total proposed expenditure for the year on Public Works will amount to £1,796,451. We h ve also to make provision for the Immigrati ■ Services of the year, estimated at £124.'82; and to provide for paying off the Prov' oial liabilities, amounting to £259,556. Thes ■ several sums make up a total of £2,1 ''.189; which, after allowing for the balan-. o now at credit of the Public Works Account, will leave a sum of £1,200,000, for which Ways and Means will have to be provided. As honorable members are aware the £BOO,OOO of Imperial guaranteed debentures have, in estimating our Ways and Means, been treated as cash applicable to public works. We propose to ask for authority to raise a sufficient sum to free those debentures, so as to keep them as an available security, against which we can obtain advances from time to time, at a low rate of interest. Should these several proposals meet the approval of the House, I shall have to ask for authority to raise a loan of £2,000,000. This sum could, of course, be reduced to £1,200,000, if the House should think it desirable to sell the guaranteed debentures; but the Government are of opinion that until the completion of our railway system, those debentures should not be sold, but should be used as they have constantly been since their creation. It is also possible to further reduce the amount of the proposed loan, should the House determine that some of the works which will bo recommended by my honorable colleague, the Minister for Public Works, shall not be executed within the current year; but considering that most of those works are connecting links on main lines which are already returning a very fair per-centage on their cost, I think the House will hardly consider it desirable to postpone their execution. If, however, the House should determine to reduce the expenditure upon public works by, say one-half, then the arrangement recently made with the Bank of New Zealand—which modifies the agreement subsisting with that bank, so as to provide for increased advances upon certain conditions, and which fixes the time within which repayment of such advances shall not be required—would probably enable the Government to do without going upon the London market for another eighteen months; and next session a complete scheme of works could, no doubt, be submitted to the House. But this, as I have sufficiently explained, is a course which the Government cannot recommend the House to adopt. These, then, are the proposals of the Government. We shall ask authority to raise a loan of £2,000,000, of which £940,444 will be required for completing the trunk line of railway in the Middle Island from Amberley to Kingston, for making some extensions of the main

line in the North Island, and for other necessary public works ; and £300,000 for releasing the guaranteed debentures ; the balance to defray Provincial liabilities. With regard to the Consolidated Revenue, I have shown to the Committee that it can bear all legitimate charges without having recourse to fresh taxation, if the Land Fund of those Provincial Districts which are able to bear it is charged with a small refund in aid of the interest on the cost of public works which has been paid out of the ordinary revenue ; and I think the Committee will agree with me that this is a satisfactory result. Before concluding, I desire, sir, to direct attention to some matters which I regard as having an important bearing upon our financial position, and consideration of which is essential in dealing with the proposals I have had the honor to make. For some years past it has been evident to all of us that radical change in the Constitution was necessary. We have differed fundamentally as to what the nature of that change should be, but we have agreed that important modifications of some kind must be made. Consequently men’s minds have been unsettled; the political horizon has been overcast and threatening. Before 1870 there had been several years of depression throughout the colony. A restoration of confidence and of activity was essential; and, to secure it, bold steps were taken to open up and people the country. Since that time we have had for several years political anxiety and unrest; commercially and socially, we have had a condition of unexampled prosperity. Our great prosperity has been undoubtedly due in part to the success of the Immigration and Public Works Policy, to cany out which our loans were raised; but it was also due in part to the high prices almost uninterruptedly obtained for our chief article of export, wool. During this period of prosperity, the House and the country have become accustomed to the belief that the desire of the people of a district to have a railway or other important work constructed, afforded sufficient reason for demanding that such work should be immediately undertaken. The idea has been prevalent that our powers of borrowing were unlimited, and, though we were not ignorant of the experience of other countries, many of us have seemed to think it was impossible we could go too far or too fast in raising money for works of a reproductive character. During the last year, the political crisis culminated in the Abolition of the Provinces. As a consequence, the County system was inaugurated; and I am sure it is scarcely necessary to suggest to hon. members that the labor and the anxiety involved in that inauguration are not measurable by the apparent ease with which the transition to the new state of things has been effected. During the last year, also, the financial position of the Colony had to be considered in its broadest sense. As Colonial Treasurer, I have had a promise to redeem, as well as proposals to develop. Two years ago, when first I had the honor of addressing the House as Treasurer, I said that it was the intention of the Government to spread over two years the expenditure of loans then authorised ; and that has been more than accomplished, because, up to the 30th of June last, the expenditure out of loans has been £200,000 less than the amount of loans authorised at the time I spoke. I trust, sir, to have the concurrence of the Committee in my'suggestion, that the result just stated, and the statistics as to the financial results of the past year which I have submitted, justify the conclusion that the Government have fairly realised the difficulties of the position and have successfully grappled with them.

For the immediate future, the Government believe that the need of the country is political rest. Time is needed for the completion and development of our public works ; quiet is needed for the consolidation of the social results without which a scheme of immigration and railways in any country would be a failure ; time and rest will co-operate in enabling us to satisfy those outside the Colony who are concerned as to its fate, that our confidence in the wisdom of the work we commenced in 1870 was justified, and that though its cost has been very great, its benefits have been commensurate.

The Government, sir, taking this view of the position, believe that the present is a Brue when the country should not be troubled w Ith questions as to the incidence or the specific character of our taxation. Further taxation will not be necessary this year, if our proposals are accepted. Before long, when our new institutions are consolidated, .and our railway system has been developed, we shall be able to face the question of new taxes, _ if any are needed, or to discuss calmly the principles on which taxation should be raised, and the manner in which such principles should be practically carried out. I thank the Committee for the attention with which they have listened to me ; and I trust that the questions with which I have dealt may receive that early and careful consideration to which their importance entitles them.

Progress was reported, and leave obtained to sit again.The Hon. Major ATKINSON then moved, that this House do now adjourn, which was carried, and the House adjourned accordingly

Immigration and Public 'Works £4,000,000 Loan,1870 Immigration and Public Works 2,000,000 loan. 1873 Immigration and Public Works Loan. 1874 .. ' 4.000,000 0 0 General Purposes Loan, 1873 750,000 New Zealand Loan, 1876 .. Receipts in Aid— Contribution of Canterbury for 56,000 Railways Stamp Duties to 31st December, 1876. .. .. ... -• 264,657 16 4 Transfer fromConfiscatedLands 10,063 Liabilities Account .. £11,840,620 17 7 Expenditure. Class X.—Immigration, including lo£1,517,809 II.—Departmental,PublicWorks HI.—Hallways 99,101 IS 0,129,920 8 4 5 IV.—Roads 894,571 7 V.—Land Purchases, North 9 533,580 6 VI.—Water Supply on Goldfields 405.063 8 10 VII.—Coal Mining 10,260 VIIL—Telegraph Extension IX.—Public Buildings 206,469 17 178,467 18 8 4 X.—Lighthouses 53,362 7 4 XI. —Charges raising Loans 498,532 XII.—Advances to < itago .. 64,791 Interest and Sinking Fund .. 218,500 £10,860,481 4 0 Balance on 30th June, 1877 — Cash in the Public Account—Public 619,543 Works Account 5 Cash in the Public Account—New 50,000 Zealand Loan, 1876, Account Advances in the hands of officers of the Government 133.441 12 Balance of amount of Debentures guaranteed by Imperial Govern275,000 0 0 Debentures of loan of 1870, unsold .. 2,200 0 0 £11,840,020 17 7

Provincial District. ■Receipts to June 30. 1877 Expenditure to June 30/77 Balances on June 30, ’77. £ s. d. £ s. d. £ s. d. Auckland .. 47,529 9 1 40,803 14 8 C65 14 5 Taranaki 27,412 5 2 26,932 13 1C 429 11 4 Wellington.. 77,290 12 5 61,235 10 6 16,055 1 11 Hawke’s Bay 10,774 19 (J 7.420 9 - 4 3,354 9 8 Nelson 51,846 S 6 40.181 16 6 11,664 11 11 Marlborough 10,273 7 8 9,992 0 V 231 7 1 Canterbury.. 231,256 10 11 229,592 8 4 1,664 11 7 Westland .. 34,819 19 £ 30,867 9 7 3,952 10 1 Otago 120,747 3 9 121,920 18 1 7,820 5 8 Totals 620,951 5 1 575,063 1 5 45,838 3 8

Heads of Expenditure. Appropriation. Net Expenditr’e £ £ Civil List Interest and SinkingFund 29,750 730,385 27,573 603,062 Under Acts of the Legislature .. Appropriations — Class I.—Public Departments 99.650 184,338 88.929 145,230 HI.- Postal and Telegraphic 229,424 74,941 61,383 V.— Miscellaneous 34,610 37,417 VII. Militia, Volunteers, ana Armed Constabulary .. v 78,340 66,315 VIII.—Public Domains and Buildings .. .. • X.—Grants to Municipalities, &c. 28.361 24,727 75,000 53,157 Capitation and Special Allowances l48.8ll Moiety of Stamp Duties .. Services not provided for .. Refunds of Revenue Totals 1,858,467 1,681,682 Appropriations— 263,386 220,722 Class IX.—Railways

Heads of Receipt. Revenue as Estimated. Actual Revenue 1876-77. Customs — Duties, Rents, £ £ s. d. 1.240.000 1,199,378 15 0 Bonded Stores 5,500 6,530 19 2 Fees, Marine Act, and 15,800 3 10 Light Dues 17,350 Pilotage Rates, Harbor Dues. 6,067 4,940 2 9 &c., (0 months) 115,000 122.670 18 9 96.000 86,547 14 0 Telegraphic 67,000 03,983 13 1 Fees—Registration of Land 12,600 13,640 15 5 Registration of Deeds 16,500 4,757 3 9 Registration of Births 5,600 Crown Grants.. 6,000 4,053 14 9 Fees and Fines, Inspection 5.000 3,548 8 0 of Sheep (6 months) Fees—Miscellaneous . .. Incidental Receipts .. 40,000 27.552 0 3 Miscellaneous Revenue — Provincial, 0 months 13,333 “ 1,091,850 1.614,582 10 3 ProOt on Railways .. 84,241 87,924 7 5

Fina’c'l Year. Consolidated Revenue. Land. Revenue. Total. . £ B. d. .£ - 8. d. £ 8. d. 1869-70 1.048.175 0 7 . 209,023 3 6 1,257,798 4 1 1870-71 936.188 5 10 208;091 5. 0 1,144,279 10 10 1871-72 1,031,082 18 7 336,311 0 6 1,307,392 39 1 1872-73 1,119,004 3 4 889,642 14 1 2.000,646 17 5 1873-74 1,420,216 17 3 1,066,744 7 3 2,486,961 4 6 1874-75 1.605.002 16 5 773,265 17 9 2,378.268 14 1875-7G 1.703.190 3 11 857,990 18 1 2.661,181 2 1876-77 1,051,726 11 7 1,039,242 4 8 2,990,968 16

Heads of Receipt. Revenue of Year 1875-76. Revenue ‘ of Year 1870-77. Customs —Duties, Rents, Seizures, &c. .. Bonded Stores Fees,' Marine Act, Light Dues, &c... Pilotage Rates, Harbor Dues, , &c. (6 months) Stamp Duties Postal .. Telegraphic Judicial .. .. Fees—Registration of Land .. Deeds .. „ Births ... Crown grants Fees and Fines, Seeep Inspection (6 months) Fees, Miscellaneous Incidental Receipts £ 1,225,766 5,343 16,591 114,429 80,656 63,970 38,726 12.478 16,732 4,669 4,447 3,*415 51,677 £ 1,199,378 6,536 15,806 4,940 122,670 86,547 63,983 41,982 13,646 16,482 4,767 4,053 3,548 3,694 . 27,552 Railways (Provincial lines—6 . months only) 1,637,004' 63,939 1,614,582' 285,220 Revenue Assets 1,701,843 11,606 1,899,802 61,923 Total Consolidated Revenue 1,713,450 1,951,726 Net increase .. 238,276

Pamanent Charges ..£1,151,137 10 7 Less interest chargable on land fund .. 863,380 4 8 787,757 o 11 Class I.—Public Departments .. 105,144 2 0 XT.—Law and Justice 137.535 13 1 ’ III. —Postal and Telegraphic 230,910 0 0 (l IV.—Customs , : .. 76,711 1 0 V.—Education 135,000 0 0 .. VI. Native .. .. .. 32,463 19 7 VII.—Militia and Volunteers 34,522 12 10 VIII.—Constabulary and Contiugerit Defence 138,625 10 0 XI.—Public Domains and 28,131 4 0 , M X.—Railways .434,143 0 0 .. IX.—Miscellaneous .. 33,852 3 10 XII.—Counties, Boroughs, and Eoad Boards 130,000 0 0 Total Expenditure,Consolidated fund £2,394,54(1 12 9 Gold Revenue— Amount payable to Natives 4,500 0 0 Amount payable to Counties and Boroughs 67,600 0 0 Total Expenditure, Goldfields £72,000 0 0 Crown Lands Department 22,348 12 0 Surveys 160,069 3 4 10,160 0 0 Grants to Counties, Road and River Boards 80,000 0 0 Interest and Sinking Fund on Provincial andPermanentdebts£193.220 4 8 Interest at 2 per cent. onamount expended on Railways .. 171,420 0 0 364,640 4 s Total Expenditure, Land Fund .. £643,208 0 0 Total Expenditure, 1877-73 .. £3,109,754 12 0

£170,000. Customs .. £1.226.000 0 0 Stamp Duties 124,000 0 0 Postal 107,000 0 0 Telegraphic 70.000 0 0 Judicial 43,000 0 Native Lands Courts —Fees, &c. 10,000 0 0 Fees—"Registration of Land 13,250 0 0 ,, Registration of Deeds 10,250 0 0 „ Registration of Births, &c. 6,200 0 0 ,, Crown Grants 6,060 0 0 ,, and Fines, Sheep Inspection .. 11,000 0 0 Miscellaneous 3,950 0 0 Railways 600,450 0 0 Incidental Receipts 27.000 0 0 Total Consolidated Revenue 2,263,160 0 0 Refundson account of moneys raised for Railways and Immigration — From Land Fund of Canterbury.. 58,000 109,000 0 0 From Land Fund of Otago 0 0 Goldfields Revenue ,, 38,000 0 0 Gold Duty 34,000 0 0 Land Sales 743,000 0 0 Licenses, Rents, &c. .. 147,525 0 0 Total Revenue, 1877-78 .. £3,392,685 0 0