FINANCE.

Patea Mail, 9 July 1881, Page 3

FINANCE.

Major Atkinson’s

Statement.

In continuation of our report of the Financial Statement delivered in the House of Representatives on Wednesday everting, the Colonial Treasurer explained at length that he proposed to rate Crown lands and Maori lands in aid of local bodies, the agricultural area to be estimated at £1 an acre upset value and the pastoral portion (presumably including all the rest) at 6s 8d upset value. The rates will be levied on these values, and the Government will be responsible for payment, and will make the accumulated rate a first charge on Maori laud whenever they are sold or leased. Valuations he proposed shall be made by Government, these values to be accepted by local bodie 8 for rating purposes, thereby saving a double expense, now estimated at £16,000 for local valuations. . MAIN HOADS AND BRIDGES FOR NEW DISTRICTS.' Now there are three distinct classes of roads, the main roads through Crown land not yet settled ;; the main roads running through settled or .partially settled districts ; and district roads in settled and unsettled districts. We will first consider the question of how money is to be provided for roads through Crown lands not yet settled. My colleague the Minister of Lands has given much attention to this subject during the recess. He has, by means of roads cleared and formed, with sufficient culverts to make, them passable, opened a large quantitj’ of land.for settlement, and he will this year submit a scheme involving the expenditure for this purpose os £150.000 out of loan, the expenditure to extend over a period of three years, at a rate of £50,000 a year. This work, wherever practicable, will be done as hitherto by the local bodies. But every one acquainted with the country must know that these provisional roads are only the beginning of a necessary work, and that settlement of small blocks of land cannot bo successful without good roads. As a matter of sound policy a good road, if it does not precede, ought certainly to follow settlement. Now there are only three ways in which money for this purpose can be obtained. It must be got either from the proceeds of the land, or from loan, or from both those sources. After carefully considering the subject, Government have come to the conclusion that the necessary funds can be obtained from the land itself, not only without injury, but with advantage to settlement. We propose that after the land has been surveyed and the roads marked out, an estimate of the cost of forming and metalling the main road through the block shall be prepared by the local body having charge of the district ; that to the fixed up-set price per acre of land to be served by the road shall be added a sum, according to situation, sufficient to cover the cost of construction ; and that the money so obtained shall be set apart and paid over to the local body under safeguards, to be used for that purpose only ; and we further propose that when half the land in any block is sold the Government shall advance the money to complete the main road through the block, recouping itself from time to time as the rest of the land is sold. MAIN ROADS IN SETTLED DISTRICTS. We now come to the roads of the second class ; those unconstructed main roads running through settled or partly settled districts. Our proposals in respect to these are in substance the same as last year, but the machinery of the Roads Construction Bill, by which it isiproposed to give effect to the scheme, is I hope an improvement upon that of the Local Public Works Bill of last session. The constitution of the Board, which was objected to by many bon. members, has been altered, and it is now proposed that it shall consist of the Minister for Public Works and three members appointed by this House. In order to provide for this necessary work, I shall ask the House to make a grant to the Board of £150,000 out of the loan, and to cause to be paid

over to it yearly a fur*her shinnot exceeding .£150,000 out of tin:- balance of Hie Land Fund:’ Thi.4'Fu'-i 1 will ho applied in the following manner Suppose a local body desires to construct a piece of main road or build a bridge which we will say is to cost £IOOO, it will prepare estimates showing the cost of the proposed work, and submit them to the Board, and ascertain if there is money available. If there is uioney available, tlie local body will, after taking an affirmative vote of the ratepa3 r ers, strike such a special rate over that part of the district beneiitted by the proposed work, including Government and native lands, as will in ten years repay without interest a quarter of the amount obtained from the Koads Construction Board. In the case supposed, of the work costing £IOOO, the Board would have to strike a special rate which would produce £25 a year, or £250 in ten years, or if the local body had £350 in hand which it could apply to the proposed work, or chose to first raise the money by general rate, it would then obtain from the Roads Construction Board £750, the balance of the £IOOO estimated to complete the work. In other words, for the purpose of main road construction, for every" pound which the district finds, three pounds are added to the Land Fuud. In case more money should be applied for than the Board has at its command, grants pro rata would be made, but all applications in cases where a main road or bridge had been destroyed or washed away, by a flood would take precedence. DISTRICT OR BYE-ROADS. HELP TO ROAD BOARDS. We have now only to consider the third class of road, that is district roads. To enable Road Boards to make tbese district roads we propose to ask the House to make a free grant of £IOO,OOO to the Roads Construction Board, and to permit it to borrow another £IOO,OOO at 5 per cent, from the Trust Funds, thus making a fund of £200,000 available for this purpose. V’e propose that this fund should be self-supporting, and that it should be dealt with in this way : Suppose a Road Board wants to borrow £IOO for a small bridge or other work, it would submit an estimate of the proposed work to the Roads Construction Board. On ascertaining that there was money available, and after taking an affirmative vote of the ratepayers, the Road Board would strike a special rate, which would produce £9 a year for thirteen and a half years. The produce of this rate would be paid over to the Board half j’early, and by the expiration of the period I have named the whole of the amount borrowed, with interest at 5 per cent., would be repaid. NO HELP TO BOROUGHS. My proposals do not affect Borougs, except to the extent of granting them power of rating all Government property within their boundaries. I think, with every desire to help Boroughs, we must recognise the fact that the surest and most effectual method of helping them is to encourage successful settlement upon the land. With a vvell-roaded and prosperous country, the difficulties of the Boroughs will end. In the above proposals I conceive that we are in fact carrying out the idea of the Legislature in withdrawing the twenty per cent, of the produce of land sales from appropriation by the County Council.s That fund wasto be devoted to the opening out of the very districts from which it arose. Unfortunately the Councils, following suite to the Legislature itself, had treated it as ordinary revenue applicable to any of the objects under their control, using it in effect to lighten local rates or dispense with them altogether. WILL THE SCHEME WORK ? The result of the proposals I have just submitted will not then be to reduce the proportion of the Land Fund locally expended, but in most cases, and for some time to come, to increase it materially, but it will be expended under such safeguards as will ensure its application to the colonising uses to which the House desired to devote it. I think the warmest advocate of the localisation of the Land Fund can desire no more. Before quitting this branch of my subject, I shall deal shortly with the suggestion that the Government should take over ’and maintain the main roads of the colony, a proposition which goes far beyond the centralising tendencies sometimes imputed to the present Government. We are not ambitious to take charge of some thousands of miles of roads, and do not feel ourselves competent to the task. The House will certainly not appropriate the needful funds out of ordinary revenue, nor will it invite an annual repetition on its floor, and on a petty scale, of the struggles for local ap-

preprint lons which have impaired the success o£ the Public Works policy. In the face of the complaints which are already abroad of the concurrent rating powers of the County Councils and Road Boards, the House is not likely to undertake itself the duties of a third rating authority, nor can it in the present condition of general finance abandon any part of the proceeds of the propertj- tax to local administration. It may be said that there is nothing very new or startling about the scheme, but the question is—ls it a plain workable scheme, casity understood, and will it give ns what we must have as radidly as our funds will permit, roads throughout the country ? I submit with confidence that it will, and that it will also relieve both this House and Ministers from pressure to supply local wants, which cannot be ignored if settlement is to advance, but which it is vciy undesirable should be dealt with directly by this House. THE YEAR’S EXPENDITURE. I now come to the estimated expenditure for the current year. It will be within the recollection of lion, members that last year the Government, with the assistance of this committee, made very large reductions in the Estimates as sent down, and that I stated to the Committee if the Government succeeded in canying out the retrenchments it had in view, the estimates for the annual appropriations for this year would be £252,000 less than those introduced last year. I am happy to say rny anticipations in this respect have been more than realised. The Estimates brought down last year for the twelve classes of services under the control eespectively of the Speakers of both Houses and the Ministers amounted to £2,108,613. Estimates for same services are, for this year—£1,774,612 only ; or £334,001 less than those of last year. Hon. members will see that upon every class without exception there is a reduction, and that in Class ll.—that of the Minister for Public Works—there is a reduction of £53, 492, notwithstanding the fact that the Estimates for the current year are for an average railway mileage of ninety-three miles greater than was worked during the past year, and that ample provision is made for their efficient working maintenance. I should not, perhaps, include in this sum the item £53,500 for Contingent Defence, which has been removed from EstimatesSuch a result, then, as the reduction of £281,501 in twelve classes of the Estimate in one year is a work upon which I think I am fairly entitled to congratulate the Committee. These reductions have not been accomplished without much hard work and painful thought, and could certainly never have been made at all but for the hearty co-operation of this Committee with the Government in effecting the necessary economies.

PROPERTY TAX. The Property Tax Act, although requiring some amendment, has been found upon the whole effective, and now that its provisions are generally understood, it is admitted throughout the colony that the tax is thoroughly fair in principle, and that it has generally worked satisfactorily, I do not mean to imply by this that direct taxation is palatable, but I venture to say that in no country in the world has direct taxation been accepted more willingly and paid more readily, than the Property Tax has been by the people of New Zealand, I have had prepared, for the infonnatio of the House, several very intefestin tables, which will, I think, greatly increase our knowledge with regard to the distribution of wealth, and especially in reference to the ownership of land. There are, I find, 27,761 freeholders inside boroughs, and 43,058 freeholders of country land. The total number of freeholders in the colony is 60,658, being somewhat less than the aggregate of freeholders of borough and country lands, because some owners of property hold land under both designations. The cost of valuations was £16,000 ; salaries, £7,275 ; preparing tables, £700; miscellaneous, including cost of collection, £7,025. The valuation has cost £3,000 more than the land tax valuation, the valuation under the latter being £13,000, and under the Property Assessment Act £16,000. In future he estimated that the Property Tax can be collected for less than four per cent. This tax, he said, has not had any appreciable check on the inflow of capital to the colony. On the contrary, more foreign capital has come in than previously. REVENUE EXPECTED, MAIN RAILWAYS TO BE FINISHED. Will it be necessary to impose fresh taxa 1 - tion this year ? I am happy to he able to inform the Committee that I can answer

that question with an emphatic negative. Can taxation be reduced this year? The answer must depend on the view the House may adopt of the action to be taken in the early future towards completing the great arterial communications of the colony. The Government, after the past year’s study of the condition of the country under circumstances of exceptional depression, have decided to assume the X/egislature will require the finance to be shaped in the sense of continuing its great undertakings. The experience of the past will enable us to do this on a surerer basis of calculation than hitherto. The general reasonableness of the expectations, as well as the dangers of the policy of 1870, is fully exposed in the revenue returns and the trade and population statistics of the last ten years, and these justify me in recommending that, whilst avoiding what I call high pressure finance, we should arrange for the construction of all the defective links in the trunk lines of railway, necessarily at a reduced speed, but without intermission. While this recommendation forbids us to propose any very imposing reduction of taxation, it need not prevent us diminishing to an appreciable amount our demand on the taxpayer. TAXING INTEREST ON LOANS. REDUCED PROPERTY TAX. On fuller consideration, the Government have determined to ask the Legislature to bring the foreign capital within the Property Assessment Act this year. We shall, therefore, shortly ask leave to introduce a Bill to amend the Act. I estimate that taxable property under it will be increased by £11,000,000, which at Id in the pound wonld yield say £45,800, and in the present condition of the revenue will enable us to propose, first, a reduction in the Customs duties, and second, a diminution of the Property Tax. We propose to admit free of duty—calicoes white and grey, moleskins, corduroy, colored cotton shirting (all in the piece), axes, spades, and shovels, and to admit free or reduce the duties on a variety of other articles which I need not now detain the Committee to enumerate ; all these remissions and reductions tending to encourage local manufactures. With respect to the Property Tax, we shall ask for the continuance of the present pennj' rate till September next, to be reduced after that date to one half-penny for the remainder of the year. REVENUE AND SURPLUS, Ordinary receipts for the year are estimated to yield £3,227,650. This includes £1,826,000 raised from taxation, the other being recoverable for public services rendered. Customs yielded last year £1,307,635 ; this year’s estimate being an increase of £53,000. But deducting £15,000 for duties remitted, the nett amount will be £1,345,000. The Property Tax is estimated to yield £270,000, including £32,000 uncollected from the previous year. The beer tax at threepence per gallon will probably yield £600,000. Stamp duties will yield £150,000, if the Deceased Persons’ Estates Duties Bill becomes law. Railways may yield £910,000 as against £838,622 last year, there being 93 more miles open. Therefore, taking the estimated expenditure, at £3,270,932? (including outstanding liabilities), adding last year’s deficit of £5,667 ; and taking the estimated revenue at £3,297,650, there will remain a surplus of £21,452 accruing in the present year. Receipts from sales of land during the year are estimated at £333,000. INTERNAL LOAN. To provide a colonial security for small investments easily convertible, the government propose to raise an internal loan by issuing bonds to amount of £250,000, at interest not exceeding 5 per cent. The bonds are to be £lO and upwards. The proceeds of the loan are to be used for public works. The investments of small savings have been steadily increasing, and this new- investment will supply a local want, and is not to be pushed on the public. ARE WE HEAVILY TAXED ? Population has increased in this colony 97 per cent in 10 years, as compared with 49 per cent, in N.S. Wales and 18 per cent, in Victoria. The colony’s imports in 10 years have increased £1,529,936 over the values in 1870. The revenue also, excluding land sales, was last year £2,066,742 more than in 1870 ; an increase more than sufficient to cover any increased cost of Government. The taxation inJIB7O was £3 4s 6d, and is now £3 11s 9d, but deducting 9s 9d per head as the cost of Education added since then, the net taxation now is 2s 6d per head less than ten years ago. The Treasurer claimed, therefore, that the immigration and public schemes have been successful. The spon-

. j taueous immigration to these shores, and 3 the natural increase of the present popn--3 I lation with (In- extension of the manufaci tures already floated, not to speak of others r which will spring up of themselves, must > alone ensure a growth of revenue adequate t to support the charges on the moderate loans necessary for our purpose, and we 1 should ill-appreciate the blessings of our 3 climate and soil if we did not confidently » anticipate the birth of other most irnport tant rural inndstries under the advantages t which our daily improving system of com- ? munication affords, and by means of the I capital which continually flows to our land I b}' an attraction as certain as that of s gravitation itself. And there is another 1 consideration, one of mere justice, which > should decide us to do all that prudence . will allow tq complete our arterial system. [ I mean the claims of those districts which 1 have patiently awaited the fulfilment of ; the pledge of the Legislature in the • schedule of the Act of 1870. Thecircum- ; stance of the time have not permitted me to offer proposals which can excite much enthusiasm, but I believe they are of a practical nature, resting upon a solid basis, and such as will reassure tlie country, and enable it to look forward to the future with sober confidence. CRITICISM. . Mr Ballance, after the Financial Statement, criticised it generally. The Local Government proposals were only a re-hash of last year. More redactions in Customs might be made. Instead of an internal loan, he would like to see the colony advance money to small property owners on mortgage, at .reasonable interest. Mr Wakefield twitted Mr Ballance with delivering a prepared speech which did 1 not fit the case. Tne Premier moved the adjournment of the debate. Agreed to.