PARLIAMENT.

Oamaru Mail, Volume II, Issue 393, 1 August 1877, Page 2

PARLIAMENT.

BY TELEGBAPH, FUOSI THE TKESS AGENCY.)

THE FINANCIAL STATEMENT, Wellington, July 31

At the evening sitting the Colonial Treasurer (the Hon. Major Atkinson) made his Financial Statement. He said that it was true we had reached that pointin the scheme of Public Works and Immigration, when the revenue was suffering to the greatest extent possible from the large unproductive expenditure upon railways in course of construction. It was also true that there existed a feeling of uneasiness, amounting, in some quarters, to anxiety, because of the belief that the services of the year could not be provi.ded for except by increased taxation. Knowing the strong desire that therefore arose for early information, he had taken the first opportunity afforded by the rules of the House to state the financial policy of the Government, He meant, in his statement, to direct attention to broad features only ; the details would be found in the usual' tables. He would lirst describe what had been done under the Loan Act o-f last session, which authorised the raising of one million for defined purposes. When authority was asked for, he stated his belief that the money could be raised in the Colonies, and that if so, the Government would gladly avoid going upon the London market for at least a year. That belief had been realised. His colleague, Mr M'Lean, had negotiated in Sydney with the Bank of New South Wales for an advance of half-a-million, secured upi,n short-dated debentures, bearing five percent, interest, payable half-yearly in Wellington, and one-half per cent, commission ; principal repayable in London in three equal instalments at intervals of one month, the first, instalment falling due on Ist December, 1878. From the Bank of New Zealand they had obtained L 500,000, secured upon short-dateu debentures, bearing five per cent, interest, payable half-yearly in Wellington, principal repayable in London upon the 25th February, 1879. A further arrangement with the Bank of New Zealand had also been made, by which, under the bank arrangement, an advance of L4OG\OOO could be obtained upon remittable security instead of 1.300,000, making the total advance under thatarrang ment L 500.000, and fixing the 15th February, for the repayment of all such advances. The appropriations last session forlininigration and Public Worksamounted toL2 032,288. There had been expended up to June the 30th L 1,480,617. So that there had been a saving of L 551.688 during the year on the amount voted. In asking for so large a sum, he pledged the Government to limit the expenditure as far as was compatible with prudence-, care being I taken that injury should not be done to I the public service, and though complaints might be made that some districts had

been neglected, the Minister for Public Works would no doubt be able to satisfy

the House, not only as to what had been clone, but as to what had been left undone The votes on whici the largest savings had been made were which the expenditure had been L 003,000 less than the . stimate ; water supply on go.ufi. Ids, L 61.000 less; land puremise, Island. L 40,000 less ; and roads less. Tiie other savings included L29.UUU on immigration, and about the same amount on public buildings, L 23,000 on li.rhthousi-s, L 12.000 on teh-graph extension. Taking the Public Works Account as a whole, the Ways and Means '""I Lll oOO.OOOfroni loan, including L<oO,OUJ out of loan of IS7G, and L340.G20 from receipts in, and including L2G4 Gj< from stamp duties up to December last. I here w ilS thus a total of L 11,840,620 of and .Means. The expenditure up to June 30 amounted to LlG\£Ga,43l, so that t uiv was on that date a balance of L!JBO,IS.). The principal items of expenditure had been -.-Railways, LG,129A>20 ; immigration (including location), Ll.ol < ,SO9 ; roads, L 504,571 ; land purchases, A«.rth Island. L 533.500 ; water supply on goldfields, L405 : 0G3. The charges^of_ raising the loans had amounted to LiOS, 1)132, anil interest and sinking fund represented L218,C00. Of the balance of L!)SO.I<S9, there would be required LG45,9r)7 for works under contract, or about to be let.

It was proposed to ask fov appropriation amounting to about L1,274 : G7G, a"d » there were granted, additional NY ays and Means L 990,443 would be for this account during the year. Next, as to Provincial Liabilities—Treasury Bills for LIIO,OOO had been issued under the power given by the Appropriation Act of last year, and the proceeds had been applied, in terms of that Act in making advances to the Provincial Districts of Auckland, Wellington, and Westland. Out of the 187G loan a quarter of a million was appropriated to meet i Provincial liabilities failing due between Ist January and 30th June. There had been transferred the several Provincial liabilities accounts for that purpose, L 237.500, leaving L 12.500 to defray appropriation of the cost of raising the loan, the balance being applicable to outstanding liabilities. Taking the Provinei..l habiiilies account as a whole, the receipts up to June 30 had boon L 020,051, and there was a balance of L45,53S to be applied. The Government regarded the compensation paid to Provincial oilicers whose services had been dispensed with as being properly Provmcial liability s. Tiie amount so paid would therefore be included in a statement of unauthorised expenditure, which t>.e House would be asked to cover by a vole. Before concluding this part of my subject (continued the Colonial Treasurer) tiie Committee will perhaps allow me to say a words about our public debt of the Cohmy, '.reiieval and Provincial, including Treasury bills. When the balances of all loans now authorised are raised, it will be L20,8f)r>.31.1. As against this debt, we have a balance of L 930,150 13s. Id. at credit of the Public Works Account on 30th June ; L35,41G 18s. yd. at credit of the Defence Loan Account; and \ccrued Sinking Funds amounting to LI 353,003 2s. lOd. Our total revenue last year was L3.001,51)4 10s. 4d. and excluding land sales, L2 ; 17L.05<> 135., that is after setting apart that portion of our income derived from the sale of land, which iu 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 our 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 ifead 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 w;>rk. It may perhaps be interesting to state the purposes for which, the several loans, General and Provincial, which constitute cur national debt have been raised, and 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 LBOO.OOO has been spent upon railways; L 3,500.000 on immigration ; L 400,000 on harbours, lighthouses, public buildings, roads, bridges, and other public works °for opening up the country ; L 1,300.000 in the purchase of native lands, including the debt to the New Zealand Company; L 2.000,000 in the suppression of the Native outbreak ; and the remaining L 500,000 on miscellaneousjru imposes. The expenditure for 1870-7, as authorised by Parliament, exclusive of that for railways, was L 1.858,407, and there had been a saving of L 194,054 from the vote. Of t! at amount L 73,323, under the head of interest and sinking fund, was mainly due to a year's interest on L 1,250,000 having been provided for, and only a half-year's payment being necessary. Deducting this, there would still remain a saving of L123,5GG on the appropriations for the year. The amalgamation of the Armed Constabulary with the Police Force of the Colony had enabled a considerable reduction to be 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 amounted only to about LIO,OOO. The estimates of expenditure upon railways, and the revenue for them during the year were necessarily contingent upon the progress of works, and therefore the item had been omitted in comparing actual expenditure with revenue. Under each head there had been a diminution, owing to certain extensions not being opened as early as was anticipated. He last session estimated a profit of L 54,000, he receipts being set down at L 345,000,

and the expenditure at L2G0,778. But it was a fc.ct upon which tho Colony might well congratulate itself that_ the profits from railways had been L 87,924 during the vear, the receipts having l-eeu L 316,220, and the expenditure L 228,293. He would now refer to the Consolidated Revenue. His estimate was that tho surplus with which to begin 1870-77 would be L:0,0'»2, but it had proved to be LGLO27. The total receipts under this head were estimated at L 1.071,8 j0 ; but tliey had reached L1,G14,."k53 only. The Customs Revenue showed a delieiency of L 40.021 ; but looking at the disturbance of trade throughout the world, and I to the uncertainty of the wool market during the year, the Government were prepared to find the deficiency larger, and probably honourable members wore simihulv prepared. The Postal Revenue appeared to have fallen L94-~>2 be)ow_ the estimate ; but sums amounting to L 15,923 had to be received from the Imperial and Australian Governments, so that tho seeming deficiency would be convened into an"excess of more than LOOOO. In Incidental Receipts there was a delieiency of L 15,44-7 ; but receipts under this head can niver be estimated with more than an approach toacciracy. To the L 1,014,582 received into the Consolidated Kund he added lirst the proiits on the railways— L 57.924, the L 1.0,000 transferred from the State Forests Account, the two per cent, recovered from the Land Fund, under the Financial Arrangements Act amounting to L 71,997, th>- surplus at tho beginning of the year LG 1,027, and tho assets yet to lie realised ; these made a total of L 1,882,249. The total revenue for the year, as estimated, amounted to L 2,140,002, or exclusive of railways, to L1',801,902 ; to which must be added tho estimated profit on the railways _ of L 51,244, making, as estimated, receipts for tho year, L1.55G,144 ; while the sicHioi receipts were L 1,852,249, being L 37.895 less than the est.mate. The transactions of the year might be summarised thus : Actual*expenditure, including liabilities, L 2,024,572 ; actual revenue, including realisable assets, L 2,172,892, leaving a balance of L 245.220 as a surplus, with which to begin 1877-78. Comparing IS7O-77 with"LS7."i-70, the falling oil' ii the Customs Revenue was but small, and notwithstanding it, the revenue of the Consolidated Fund, including revenue assets of the year showed an increase ol L238.27G ; the Receipts from the Lam Fund during' the vear (exclusive of goh dutv) were L 1,039.212, or L 199,01)0 won tha.ii the average for the preceding sevci I years. Since the Ist of January (said th | Colonial Treasurer) when the Financh Arrangements Act came into force, til receipt's have been L">44,454. The ostiinat was L 322.010. so that the estimate was ex ceeded by L221,88t ; but I. regret_ to na that although there is a very large incresis on the whole, the deficiency is laryji: than was provided by the Financii Arragemeiiis Act. Tho sales ill Cante: biirv" show an enormous excess, whi. those in Auckland, Taranaki, llawke Ray, Nelson, and Olago have proved t be' less bv L 83.000 t:,an the sum est mated. In cons .pence of this the who of the Treasury I.blls authorised under tl Financial Arrangements Act, aniountii to L150.0U0, have lieeu issued, and si additional sum of L 53.005 has had to 1 advanced from the Consolidated Fund aid of the Land Fund. The business doi by the Post Oiliee Savings Rink has bei sitisfaeiorv, and Hie deposits remaining < June 30 'were L720.U00. The yeai transactions in the Annuity Assuran Departments has been most satis.'aetoi but as it was intended to bring in a li to establish a Roard of Management i stead of having the direction in the ban of a commissioner, he would not in trouble the Committee with remarks data. The proposed total expenditure) the year 1877-78 was L 3..1-09,754. T cost of most of the departments had be reduced through amalgamation and si plitication. Although the work had many cases nearly doubled, he regrett that'more had not been done in this datum, owing to the want of time in con (juence oA-he mormons amount of wt which had fallen upon the Covernim through the constitutional changes, it 1) been their business to inaugurate duri the recess. I'nder the head of Pul Department, L 30.000 was included hospitals and charitable this was meant to provide the subsie which would probably be payable un the Charitable Institutions account. J th'.rity would be asked to deduct fr the subsidies to Counties, Roroughs, .' Road Boards a sutlicient sum to m; tain hosp ; tn!s for charitable purposes districts which declined to adopt the / in which it proved insullieieut. House hud already been informed of provision meant to be made for educati A large increase, amounting to Llo,'. had been found necessary in the vote military and volunteers, but it wasohi on account of stores and ammunition ; capitation for an increased number volunteers. The saving ell'ected by amalgamation of the police and an constabulary was equal to L.33,000 ay Referring next to Ways ami Means the current; year, the Colonial Treast said, " As I l.avo first shown, we hav provide for an aggregate expenditur L 3.109.7."4 Is. 9.1." for the year. Uf t L 2,394,540 12s. 9d. is chargeable n the Consolidated Fund ; on the C Revenue, L 72.000 ; and L 043,208 n the Land fund—being such charges < as each fund should support. Now all the charges placed upon the I Fund of each district could be recovc the Consolidated Fund would be position to bear its legitimate bu: without diliiculty. As a matter of : however, 1 do not think tlisit more L 500.000 of that sum will be practii recoverable, the land fund in eel districts being insufficient to meet

liabilities. It will, therefore. I)-; necessary either to supplement the Consolidated Revenue, or so relieve it of some of the charges 1 have proposed that it shall bear. 1 dismiss, sir, as altogether undesirable, the plan of charging such serv.es as police and education upon the Laud Fun I of those districts which are able to bear them. Tiny are charges which, in the opinion of the Government, should he borne upon the Consolidated Fund, aided if necessary by he d rates. Tiie < 'ommittee agree with me that I would do v.eii to charge against the. Land Fund such 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, this is the only course open to us, because I have satisfied myself that it is impossible so to reduci departmental expenditure as to bring our expenditure within our income, unless it is propose 1 to relinquish some of the business we enjoy in the way of Telegraph, Postal Services, and Resident Magistrates, which are spread broadcast over the haul, 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 I know, sir, that many persons whose opinions are entitled to great weight from their position, and their knowledge of the Colon}' and its requirements, think the time has arrived for levying a propi rty and income tax, and if we were now in a position to deal with the question of the readjustment of taxation, much might be said in support of such a tax. For my own part 1 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 satisfactor.ly during the present session. "When our trunk railways are approaching completion, when we have had time to consolidate and settle down and are able to determine our real requirements, then the whole incidents of taxation must be considered ; but to deal with it now in a fragmentary way would, I think, be a serious mistake, fi >r the reason first stated and because we thiak 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 tins year, and 1 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 now successful in the inscription of our stock : but here, Sir, it is necessary that I should recall the attention of the '-on. member to two principles which have been clearly recognised as underlying all our legislation, relating to waste lands and immigration and public works. Those two principles are, first, that the land fund shall be locdised ; second, that the cost of immigration, roads, and railways is a proper charge against the land fund. Those principles have 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 sjcond of these principles had always been acted up >:i ; but in this House, expenditure upon immigration, roads, and railways has been from time to time charged .against the Consolidated Fund, so that fund has been found able to bear it; but these two important principles have n >ver 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 our own minds the meaning of the term. Tae meaning which I attach to the term localisation of the Lmd Fund is, that the money received for the sale of the C"own lands within a district should be spent ill opening up and peopling that district. 1 am noL just now going into the question of what is a district ; that wouid open up far two wide a field altogether for the purpose of my argument. I shall accept the districts as they are, although it should be noted that Parliament has always claime.l and exercised the right of altering the boundaries of these districts from time to time. Most ho:i. members will go with me so far. At anyrate those will who, like myseif, think that the proceeds of the land should I>e applied, to the end that those who pay the most should receive the greatest facilities for occupation, and that to treat the Land Fund as ordinary revenue is morally bad* in principle. Some few will probably desire to go even further, but sir, further than this in localisation, t am not prepared to go, for, when tiie money has been spent in opening, peopling the district, the object of localisation is accomplished, our duty to the land is fulfilled, and there, in my opinion, localisation ends. Holdingthen, 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 land fund, and that it is in accordance with, the principles 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. ZSTow, there has been raised for railways and immigration a sum, in round numbers, of L 9,500,000, the whole of which is fairly a liability on the Land Fund. Tae annual charge on this sum for interest and sinking fond is about L 453,000. Out of this

! sum there had been expended, up to the 31st December, 187G—the day on which tiie accounts of the late Provinces were closed—a net sum of L 7.188.245. The Colony had paid interest thereon, to the amount of L 823,482, but was only recovered from the provinces LU0.443, so that in aid of the Land Fund tiie Consolidated Fund has actually paid L 655,139. The Colonial Treasurer stated tiie results of tables showing how each district Land I Fund had been benefited, and he then I proceeded as follows :—I have shown the j extent to which the Consolidated Fund j has been burdened by the payment of j interest and sinking fund, or moneys ex- | pended in performing the work for which j the Land Fund was localised, viz., the opening up and settlement of the country, and applying the argument I have just used, I shall ask the House to reform the principle that moneys expended on these purposes are probably chargeable upon the Land Fund. We recognise that at the present moment to refund these charges is beyond the immediate power of the less wealthy list, 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 LI 09.000 ; being in each case .me moiety » amount by which the Land Fund o ttn.se districts 'has been aided. With the ex- ■ ception of a small permanent debt, t e ( charge of 2 per cent, fur railways t..e , subsidies payable to Counties ana Road j Boards, and the cost of surveys.and ad- , ministration, the land revenue «»f Canteibury is absolutely free ; and in view ..t the fact that a sum of L2:0.C00- f surplus Land Fund has been clis nbn el within the district during the past six months, and that afurthtr sum of LIUO,UOO is nowready for distribution, we propose to deduct her contribution from the sum in hand. The case of Otago i> somewhat different. The district has a large es at.-, though it is burdened with leases, fist expiring, and which would he a waste of public money to cancel. We propose, therefore to raise the amount n quired to meet its contribution, together witii t!ie sum of L36,0C0 advanc d last year in aid of (he District Land Fund, treating the debt as a Provincial liability, and making the interest ;md sinking fund a future land fund. The whole Land Fund of the Otago district for the year will then be freed, excepting only the 2 per cent. under the Financial Arrang. mtnis Act, the interest on its Provincial debentures, the cost of survtys, and lan 1 administration. The relief to the Land Fund under the proposal 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, and of Lunatic Asylums are now borne upon the Consolidated Funds, 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 the Colony has incurred a large expenditure for Public "Works and Immigration, which is yearly improving the public estate, at a tune 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 ail rightiul charges upon it are fairly and justly met. The estimat; d total revenue of the Colony for 1577-78 was U\.l)?r2.(JS\ This total comprised L2.2G3.1G0 of Consolidated Revenue; L1G7,000 of re-funds from Canterbury and Otago Land Funds : L72,0C0, Coldh'elds' lievenue and Gold Duty ; and LB'.H),D2."> from Land Sales, Licenses, Rents, &c. The Customs lievenue was put down at the amount yielded last year, and on other it -ins there was a slight increase. Pail way Receipts were estimated at LG04.000, and the year's profit on the work done by the railways was set down, after very careful consideration, at L170.C00. Adding to the estimated revenue the surplus with which the year was be,-i;n, Ll-!8.220, there would be a total "of Lo..VLo.'..)o'>. Deducting then the estimated < xpenditure there appeared a surplus of L4-'jl.l~o. Of that sum LZ29 ,.',G!> was distributable amongst the Counties as surplus L-md Fund, and there would remain a balance Of L101,75l available to meet possible deficiencies of the Land Fund in certain districts. It had been f >nnd impossible to carry out a promise made last year to submit this session estimatt s for t'.e completion of the railway system ; a"d it had been consielered that delay was or. ferabh to an incomplete estimate for thy purpose; therefore the Governuu ni would only ask this session for a sum sui'iicieiit to unite the already completed sec-ion of the trunk line of ."500 mihs from Am burly to Kingston, and for extension of the main lines in other parts of the Colony. These works won hi be dese-ribed in the Public Works Statem-oi. and siioidd the House approve of the recommendations that would then be made, additional Ways and Means, to iho amount of L 940,443 would b.. r- ;eired. The total proposed expend'. u:v for tho vear on Public Works would i.eL1.70i».4:-i; immigration services were estimated to require L 124.152, and there were Provincial liabilities to be im-r. amountinif to T.2.~50..VG. These sums made a total of L2.150.18D, and after allowing for the balance to credit of the account. L 1.200.000 would remain, for- which Ways and Means would have to be provided. The LBOO,OOO of guaranteed debentures had, in estimating Ways and Cleans, been treated as cash applicable to Public Works. But the Govt rnment Were of opinion that those debentures should be freed, and should continue to be held as an available security against which advances could be obtained at a low rate of interest. If these proposals were approved, authority to raise a loan of L 2.000.000 would have to be asked, for the Government coukl not recommend that any of the works which would be included in the Public Works Statement should be de- j layed. But if the House should resolve | upon Public Works by. say, one half, j then the agreement with the Bank of JSevr Zealand would probably avoid the necessity for going upon tho London market for another eighteen montr.s, and next session a complete scheme of works Could, no doubt, be submitted ; but this, he repeated, was a course which tha Government could not recommend the

House to adopt. The Colonial Treasurer. n his peroration, explained why the Sovernment thought it must desirable he country should have time and ivst for he complete development of the Public iVbrks system, and .should not at present >e troubled by proposals for increased axaiion, or by questions of constitutional nances, or the incidence of existing axes. The proposals of the (jovermnent rould secure this state of things, and lie sked for their tarly and must careful i>nsidera.tion. The Howse adjourned about 20 minutes fter 9-