PARLIAMENT.

Patea Mail, Volume VI, Issue 531, 10 June 1880, Page 3

PARLIAMENT.

From our Wellington Correspondent. (By Telegraph .) Financial Statement. SCHEME OP LOCAL FINANCE.

A MILLION DEFICIT. —♦ —: House of Representatives. TUESDAY. Major Atkinson, Colonial Treasurer, submitted to-night the financial statement as follows :—When in November last I had the honour to submit the, usual Financial Statement, it was thought by many persons not unfriendly to the Government that in estimating the probable deficit for which it would be necessary to make provision by first of April last at £BOO,OOO, I had taken far too gloomy a view of our financial position. I regret to say that ray anticipations in this respect have been more than realised. I have no* the least doubt that the present check to our prosperity is temporary only. It is gratifying to know that the plain facts of our financial position produced in the public mind a determination that the annual expenditure shall be brought within the annual revenue. Government propose to ask Parliament to give practical effect to this determination. Certain measures were introduced by the Government and passed by the House last session, modifying very considerably our financial S3 r stem, but Government fully recognised the fact that it was their duty to submit to the House a scheme which shall place local finance on a satisfactory and something like permanent basis. POSITION OF THE COLONY. Before submitting the proposals of Government, it will be more convenient that I should place before you the results of the transactions for the last financial period, which, through the change in the financial year, comprises nine instead of twelve : months. I will first explain the actual financial results of the year ended 30th June, 1879. Last session I estimated that the expenditure would amount to £3,110,262, but this sum was increased to £3,139,639 by the passing of the supplementary estimates.. The actual expenditure to 31st March last, including advances in the ,hands of officers of Government, amounted to £2,772,276. I now come to the estimates of the revenue of the colony for the nine months ended 31st March, 1880. ; The total revenue received during the period/ amounted to £2,133,769, to which I add £50,000 receivable on Ist April from the Land Tax, which the Committee will remember was included in my estimate, making together £2,183,759, the estimated amount being £2445,200. The revenue, therefore, fell short of my anticipations by the sum of £261,441. The revenue from Customs did not reach the estimated amount by £47,350. This, although I fear chiefly caused by the general depression prevailing throughout the colony, has also been partly caused, as I believe, by the. awakening of the population to the necessity of cultivating more thrifty habits and practising selfdenial. The gross. revenue from stamp duties during tbe nine months ended 31st March amounted to £111,057, and refunds to £18,879, an altogether unusual amount; but an estate which paid £18,405 duty in the year 1878-79 was declared by the Supreme Court as not chargeable, and the sum, therefore, had to be refunded in Feb-, ruary last. The receipts from railways fell short of tbe estimate by £113,072, but this loss was counterbalanced by a saving of £43,242. The land revenue, too, I regret to say, produced only £155,108, instead of £246,700. The postal revenue, however, exceeded the estimate by £12,961, but of this sum £6982 was profit of the Post Office Savings Bank account, which has heretofore been treated as Incidental Revenue; There also were small excesses derived from several minor sources of revenue. 1

RESULTS FOR NINE MONTHS. A MILLION DEFICIENCY. The deficit for 1878-9 has been shown to be £933,790. • The expenditure for the nine ihonths : ended 31st March last was £2,772,276 ; and liabilities ‘oh same date, £272,774 ; making a total of £3,178,840. The receipts for the period ended 31st March, were £2,133,758, Land Tax due on_lst April, £50,000; . assets, £SOOO ; total, £2,188,758. Taking, therefore, the. total revenue from the total expenditure,

wo arrive at a deficit of £990,081 for (he period ended 31st March, 1880, to meet which Treasury and Deficiency Dills have been issued to the amount of £1,090,000, leaving a credit balance of £O9IB to be carried forward to the next financial year.

PUBLIC DEBT. On 30th June, 1879, the gross Public Debt of the colony amounted to £23,222,311 ; on 31st March, 1880, it was £27,422,611 ; o.i deducting accrued sinking- fund, £1,805,498, the nett public debt was £25,617,113. This amount is exclusive of Treasury and Deficiency Bills for £992,000 held by the Public Works Fund, and the £BOO,OOO unsold debentures of the Joan of £5,000,000 authorised last year has been raised. On Ist March last, Treasury Bills to the amount of £442,000, forming part of the publiedebt on 30th June, 1879, matured and were temporarily redeemed out of the Public Works Fund, provision having been made under “The Treasury Bills Act, 1879,” for renewing them to 31st December, 1882, and exchanging them at that date for debentures with currency of three years. Daring the nine months ended 31st March last, additional Treasury and Deficiency Bills, to the amount of £1,000,000 have been issued in aid of revenue. When the Imperial Guaranteed Debentures for £BOO,OOO are sold, and the whole of the Treasury and Deficiency Bills now held by tho Public Works Fund, find representing advances to the Consolidated Fund to the extent of £992,000, are issued to the public, the gross debt will amount to £29,214,611, or, deducting accumulated sinking funds £1,805,498, the debt will be subject to an annual charge of about £1,535,000.

EXHAUSTING THE LOAN. The Committee will naturally expect some account of the raising of the loan of £5,000,000. In last year’s budget, I said Government had reason to believe, from advices received from London, that not. more than £3,000,000 of the £5,000,000 could he then successfully floated. When however, the time arrived for placing the loan on the market, the Loan Agents considered it would be safe to ask for the nhole amount at once,; and the result proved that they were right. Had thej’ succeeded in floating the £3,000,000 only instead of the whole, our position at this moment would hayc been one of grave embarrassment. The Committee will understand this when I tell them that it has been' necessary up to the present time to use the loan to the extent of upwards of £3,160,000, of which £1,818,000 was for expenditure, and £1,432,000 for advances to Consolidated Fund on Treasury and Deficiency Bills. There is no doubt that the price obtained was low, and the terms of conversion at option of the investors very favorable to purchasers. It is an unpleasant truth, but one which we shall do well to recognise in regulating our expenditure for the future, that our financial agents in London felt themselves compelled to offer our Five Per Cent. Loan at 97£. I am unable to state the precise nett price realised for the loan, but after allowing for discount, commission, and accrued interest on bonds, the price was about for the 5 per cent, debentures.

PUBLIC WORKS FUND. At the close of the year 1878-79, the balance at the credit of the Public Works Fund amounted to £506,205, of which £298,543 representsd advances in the hands of officorc of Goi ernment, the cash balance in the Public account being £207,562. During the nine months from 30th Juno, 1879, to 31st March last, we received on account of the £5,000,000 loan £4,242,000 and certain special receipts and recoveries, amounting to £22,849. making, with the balance at the beginning of the period, a total of £4,778,054. We issued during the nine months £3,599,681, as follows :—On public works, immigration, and other services, £1,750,881 ; redemption of guaranteed debentures of loan of 1870, which are of course available for re-issue, £800,000; temporary advances to Consolidated Fund on Treasury and Deficiency Bills, £992,000 ; temporary advances on debentures of Waimea Plains Railway Company, L 40,000 ; Wanganui Harbor Board, LI 7,000 : total, L 3,599,881. Since’the beginning of 1870, we have borrowed for Public Works to the extent of L 18,700,000, which amount has been supplemented to the extent, of L364,794b} r stamp duties and other receips, making a total of L 19,064,794. Our nett expenditur eduring the same period, on services permanently charged against this fund, has amounted to L 15,286,621. To this*sum I add the advances in hands of officers of the Government on Slat March last, L 315,763, and an estimated sum of L 200,000 for discount and charges of raising the last loan, making together L 15,882,384, which, being deducted from LI 9,064,794 — the total ways and means—leaves a balance on 31st March of L 3,262,410. FUNDS FOB NEW WORKS. We have left a sum of available for our Public Works and other requirements until we can sell the Treasury and Deficiency Bills referred to. The liabilities of the Public Works Fund on the 31st March last amounted t0£2,445,313 made up as follows : £10,000; Public Works Department £644; Railways, £910,506 ; Survey of new lines, £1,500; Roads, £180,696; Land purchases, £1,061,485 ; Waterworks bn Goldfields, £10,704 ; Telegraph extension, £1,034 ; Public Buildings, L 205,314; Lighthouses, Ll2O ; Miscellaneous public works, L 73,309; total, L 2,445,313. To this sum I add further liabilities incurred by the Public Works Department since the 31st March, LI 10,000, and a contribution for the current year towards the cost of the Defence Force on the same scale as for past nine months, L 35,763, leaving L 2,389,550 as the sura required to be set aside out of ways and means at credit of the fund on the 31st March amounting to L 3,262,410. Of this sum of L 3,262,410, L 1,342,000 is represented by Treasury and Deficiency Bills, issued in aid of the Consolidated Fund. A large amount of the liabilities will absorb the whole of ; the cash at : the credit of the Public Works Fund, and will necessitate .the sale of L 469,000 of the Treasury and Deficiency Bills hypothecated to that fund. The means available for new wrorks and services will, therefore, be represented by L 873,000 in Treasury and Deficiency Bills, making the balance of the L 1,042,000 now held by the Public Works Account.

SCHEME OF LOCAL FINANCE. STOPPING THE SUBSIDIES. I will now submit for the conside ration and I hope approval," of the Committee, •our scheme of local finance, and our proposal for the ordinary services of the cui> rent year. I said last session that the (Government would .this year recommend the discontinuance of subsidies. This - warning was given .because it was then generally admitted , that the system of ‘subsidies was hot working satisfactorily ; that without further taxation the Consolidated Fund could no.-longer bear this expenditure, owing to annual charge on

onr public debt having bionic so large ; and that the local bodies (hj selves might have a reasonable notice b'To o any change was made. To propose the abolition of the grants-in-aid to local bodies, without substituting a workable sch'-m ■ in their place would bo trifling \vi . L.e subject. Our aim is two-fold, our duty being first to place our general finances upon a sound footing, and secondly, to put our local bodies in such a position as will enable them to do work which rightly devolves upon them. The system of subsidies has operated unequally. It lias largely helped the rich and populous districts, while giving little assistance to those which are poor, and the only people who need them. It must also be remembered that they were proposed as part of a scheme to which full effect has never been given, for the Land Fund has been generalised instead of localised in Provincial Districts, and expenditure upon public works, instead of being limited in amount, and confined to arterial undertakings, has been lavish, and extended to works of all descriptions. The magnitude of this expenditure will be evident when 1 say that we have increased onr debt for public works within the last three years and a half, the time during which the subsidies have been paid by £9,000,000, which means an annual charge of £450,000. The circumstances of the colony have not so greatly changed since the system of subsidies was introduced, and it being: evident that the Tneasury cannot continue to pay them, without the imposition of fresh taxation, the case for consideration of the whole question is complete, for it is certain that Parliament will never consent to levy additional taxation for such a purpose without full enquiry and careful deliberation. ' NEW ESTIMATES.

The estimates show a very large reduction of charges upon the Consolidated Fund, as compared with last year, amounting in the gross to L 541,000. The total proposed votes for the year, inclusive of liabilities, is L 3,473,700 ; but of this we cannot spend and bring into the accounts within the year more than L 3,248,709. We are now paying over a million a year in salaries and wages, and L 18,700 for pensions. This includes our railway employees and our ordinary complement of constabulary and police. Of this sum L 643,000 is salaries, pay, and wages of L2OO a year and under. SAVINGS. Besides several minor reductions, the Minister for Public Works has reduced expenditure of his department by L 36,000, without impairing the efficiency. , The Native Minister has succeeded in reducing the expenses of his department from L 46,944 to L 14.252 this year ; or, after allowing for transfers to other departments, nearly fifty per cent. The salaries and contingencies were. last year L 21,164 ; this year they are estimated at L 13,453. The Land Purchase department, which had grown into serious excrescence, has reduced the salaries from LIO,OOO to L 6,000 a year, or about 40 per cent. Ministers propose that-the salaries of members of the Government be reduced by 40 per cent, for the current year. They also propose that 5 per cent, or L 5,000, should be struck off the estimate for salaries and pay.

PROPOSED EXPENDITURE, If those reductions arc agreed to, the expenditure for the year will be L 3,198,709, for which provision has to be made. Estimated revenue for the year is L 3,180,000, leaving a deficit of L 8709. The total receipts from the land fund are estimated at L 335.000, being L 200,000 from land sales and L 135,000 from pastoral rents. THE PROPERTY TAX. The Government propose to exempt personal effects from the property tax, thereby reducing the income from that tax by L 40,000. This amount, and the deficit of L 8709, have to be made good. NEW TAXES. The Government propose a tax of 6d per gallon on colonial beer, and an increase of 6d on imported beer. The beer tax is estimated to produce LIOO,OOO a year. The Government also propose to increase the succession duties by LIO,OOO a year. If these expectations prove correct a credit balance of L 41,291 will remain with which to end the year, a margin none too wide. In conclusion, the Colonial Treasurer moved a resolution to give effect to the above changes. After a discussion, during which there were several smart passages at arms, the resolution was carried on the voices, and the house adjourned a few minutes past midnight.