LOCAL BODIES AND SUBSIDIES

Patea Mail, 19 June 1882, Page 3

LOCAL BODIES AND SUBSIDIES

LOCAL FINANCE

Tho question of local finance has been again carefully considered dnring the recess, and the Government have thought it advisable to issue a circular to local bodies asking for their opinion upon this subject and also upon some important questions relating to the constitution of the county councils and road boards. I shall shortly ask leave to introduce Bills to give effect to such alterations as the Government think necessary in the constitution of these highly useful local bodies, and also to make sufficient provision for their financial requirements. The principles which the Government have taken for guidance in preparing these measures are, first, that the local bodies should be loft as far as possible free from central control ; second, that they should have conferred upon them all powers which can be exercised by such bodies ; 3rd, that their finances should be as distinct as possible from the colonial finance, and that their revenues should be sufficient. The necessity of dealing with this subject during the present session is admitted upon all sides. The question is not one which should be treated as a party question, and I venture to hope that the Government will receive the hearty support of both sides of the House in providing the country districts with the means of performing the important duties which have been imposed upon them of making and maintaining a large proportion of the roads of the colony.

Estimated Expenditure. The total present annual charge upon our debt is £1,530,848, We have to pay £1,284,848 for interest, and £270,000 for redemption of debt. The estimated annual appropriations for this year amount to £1,851,127. Charges for Militia, Volunteers, Police, and Constabulary arc this year £214,000. £IO,OOO is for abatement of the rabbit nuisance. The remainder may be said to be comprised chiefly of charges for working some newly opened sections of railways, for exchange on remittances to London to pay interest, and for some necessary increases in the small salaries of civil servants.

Estimated Revenue—Surplus. I anticipate, if taxation is to remain unaltered, with the Property Tax at one half-penny in the pound, that we shall receive a total ordinary revenue of £3,393,500, exclusive of land sales. To this must be added the balance of £203,680 which stood to our credit on the 31st March, and we then get the sura of £3,597,183 as the total amount available for the services of the year. Now, if from this we take £3,478,639,. the estimated expenditure, there will remain a balance of £118,544 at the end of the current financial year. How can this surplus be dealt with to the greatest advantage to the community ? What relief, if any, can be given to the taxpayers of the colony ? But before these questions can be answered satisfactorily it will be necessary for me to revert to the question of

Hospitals and Charitable Aid. The total public and known private expenditure upon hospitals and charity last year was, in round numbers, £BB,OOO, and for present purposes we may assume that an equal amount will be required this year. This sum was made up by contributions from the Consolidated Fund, £29,000; stoppages from local bodies, £37,000 ; contributions from local boards and from the public, £22,000. As there is a great and I believe very general repugnance to a poor rate, in which I strongly sympathise, and as grants from the consolidated revenue are, to say the least, very undesirable, I propose to submit a

Scheme of National Assurance for the consideration of the House, which I believe to be thoroughly practicable, within the means of our people, and which would make the necessary provision for the sick, the widow and orphan, and the aged. It is possible that my enthusiasm has carried me too far upon this subject—has made me too hopeful ; but I have given the question much thought, and I am convinced that the scheme which I shall at an early day submit to the House is within the bounds of practical politics for us in this colony.

The Government Propose, pending further consideration of this sub* ject, to take the whole cost of hospitals upon the Consolidated Fund, and for this purpose I shall have to ask for a vote of £50,000 for their maintenance. Should this be granted, we shall ask the continued

assistance of the local boards, or the local committees, as the case may be, in their management, for without careful local supervision abuses of a serious nature are sure to creep in. With regard to charitable aid, now costing about £40,000 a year, I shall ask for a rate of £20,000, and propose that this relief should be given as far as practicable through local institutions, the Government granting pound for pound. If this proposal should meet with the approval of the committee, I shall have to increase the £40,000 for hospitals and charitable aid, to £70,000, thus disposing of £30,000 of the surplus. The balance of £118,544 will be reduced by this means to £88,554. With such a surplus, Ido not think it would be prudent to reduce taxation at present.

Land Sales and Revenue. The estimated expenditure out of land fund is 195,310, and the estimated receipts are 354,000, leaving a balance of £170,050. This balance will be held in reserve until the House considers the proposed relief to local bodies, when bills are introduced.

Internal Loan. To provide a Government stock which lenders in the colony can take up as an investment, the Treasurer will propose an internal loan of 250,000, in £lO bonds at £5 per cent., the proceeds to be applied to public works. The main object is to provide a convenient stock for investment in the colony.

Incidence of Taxation; The Treasurer gave a long and interesting statement as to the incidence of taxation on the wage-paid class, the commercial class, and the property-tax class. This can be referred to in a future issue.

LOAN OF THREE MILLIONS. We have first to consider whether a new loan is advisable this year, and secondly, if the first question is answered in the affirmative, how much will it be desirable to borrow. Now with regard to the first question we must, in order to to arrive at a reasonable conclusion, consider the state of the Public Works Fund, and the amount we can prudently expend per annum, I have already said that the balance in the Public Works Fund on the 31st March last was £924,865, with outstanding liabilities on land purchase account, for which we must add at least £IOO,OOO. So that, in addition to the £541,400 which is in course of expendiditure under existing contracts and •authorities, there only remained in hand at the beginning of the financial year about £283,465 for the continuation of the works already begun, and for new works for which liabilities have not been incurred or appropriations made. We thus see that if no authority for a further loan is granted this year, our spending power on public works for one year and three-quarters, after paying for outstanding contracts and engagements to which I have referred, will only amount to £283,465, because if a Joan bill were passed next session, money could not be raised before about December, 1883, and the Government are quite determined not to enter into engagements in anticipation of raising money at a particular date. The question then narrows itself to this : Is it prudent, at the present time, and in present circumstances of the colony, to borrow again, or ought we to be satisfied with a total expenditure of £924,865, in the twenty-one months commencing with the current financial year ? , Sir, the Government are fully aware of the responsibility they incur in placing before the committee their answer to this question. They recognise clearly the principle that before the public debt is increased the gain to the colony shall be seen to be more than commensurate with the increased liability, and they believe that a case within, this rule has now arisen. They think that, our ordinary finance being restored to a satisfactory condition, and our main trunk lines of railway being still incomplete, it is now prudent to raise a fresh loan for the purpose of completing these railways, or carrying them a stage nearer to completion, and for certain other definite and important public works. In this opinion the Government are strengthened by the fact that the railways already made are now paying practically four per cent, annually on the amount expended in their construction, and that they are steadily improving in this respect. The Government therefore, Sir, recommend that a loan should be raised, but only if the money can be borrowed at a reasonable rate of interest, and the authority of Parliament will be asked to empower the Government, if necessary, by post-

poning works, so to arrange the expenditure as to enable them to wait for a favourable market. We have now to consider what amount should be raised, and this must be decided by two considerations— (1). The amount which can be profitably expended on necessary and directly reproductive public works. (2). Amount upon which we can afford to pay interest without placing undue burdens upon the people of the colony. Now, I am afraid that there are so many necessary or directly reproductive public works only waiting to be done for want of cash to do them, that we shall find no practical limit in that direction, and that in this fact lies, no doubt, the cause of our far too lavish expenditure in the past. From the past we should take warning, and proceed at a very much more moderate pace than we have been doing upon the average for the last ten years. We must confine ourselves for the future in the expenditure of borrowed money to werks of necessity, or to works which are directly reproductive, and strictly limit the amounts spent yearly on such works by our capacity to pay the interest with tolerable ease. It is, in the opinion of the Government, of great importance that the colony should steadily pursue a progressive policy, and that our main trunk lines should be pushed on as vigorously as is compatible with the means at our disposal. The Government, then, taking into consideration all the circumstances of the colony, and acting upon the principles which I have just laid down, have determined, Sir, to propose to Parliament a loan of £3,000,000, to be raised and expended at a rate not exceeding £1,000,000 per annum. My hon. colleague, the Minister for, Public Works, when he makes the Public Works Statement, will inform the committee, in detail, of the items of the proposed expenditure, and of the mode by which we hope to confine the expenditure to the specific works determined upon by Parliament before the money is borrowed. The Government attach great importance to this provision of the proposal. It is, I think, clear, looking at the experience of the past that, if our borrowing is to be governed by that prudence which is essential, we must carefully consider what works we are justified in constructing, at what rate of speed they should be constructed, and what cost to the State. When we have determined these conditions we are then in a position to decide upon the amount to be borrowed. Upon these rules of conduct in this matter, which I am sure will meet with the hearty approval of the committee, the Government have acted in arriving at the amount which they propose shall be borrowed. And now, Mr Hamlin, I have done. The committee, I am sure, will not be dissapointed at the shortness of my statement when it remembers that this is the natural and appropriate result of the simplicity in keeping the colonial accounts which we have been enabled to adopt. I will only add one word. In 18791 stated to the committee fully and fairly the position of the colony, neither concealing nor exaggerating the grave difficulties which had then to be met, and I pointed out obvious remedies. That statement has often been characterised, especially by those who had taken least trouble to master it, as too darkly shaded, as giving too gloomy a view of things, though it has never been attempted to disprove the facts and figures which I then adduced. Sir, I venture to say that, except so far as the gloom was in the facts themselves, it never had any existence. It certainly was not of jny importing It was prudence, not folly, to look our difficulties fully in the face. It would have been folly and not prudence to doubt that we could overcome them. The Government and this House had full confidence, not only in the abounding vitality and vast resources of the colony, but (which was no less important) in the willingness of the colonists to made the necessary sacrifices, and that confidence has been amply justified by the facts I have just had the honor to lay before the committee. And, as prudence and economy and a cautious and well considered advance in public works, as funds became available? was our rule then, and has been since, so it should be now and in the future. I have full confidence, sir, that, following that rule faithfully, we shall not only maintain, but, as the resources of the country become developed, we shall steadily increase the present satisfactory condition of our finance.

DEBATE ON STATEMENT. Mr Montgomery expressed liis opinion that the statement was clear and satis-

factory, but he thought the latter part had better have been omitted, as it was calculated to excite party contention. He Thought it would be impossible to discuss the financial policy till the Public Works Statement had been made. This colony was only sharing the returning prosperity visiting all. It was satisfactory to know that the revenue balanced expenditure.

Mr Hall denied that the Treasurer had claimed any undue credit, and he thought that the Government deserved it for their careful husbanding, and the improved state of the public finances. Sir George Grey said he had never heard so weak a statement. Any little schoolboy could have made it. It should have been made on a blackboard, not in a Parliament. It was a simple demonstration that 2 and 2 make 4 ; there was absolutely nothing in it of either policy or finance.

Mj- Sheehan defended the land purchase policy of the Grey Government, and condemned the present Government for abandoning it and locking up Native lands except to a favored few. Mr Macandrew quoted figures to show that the Grey Government had not left the finances of the colony in the state represented by Mr Hall. Major Atkinson, at great length, replied to the statements made as to the condition of the finances of the colony in 1877 and 1879, and quoted figures and records to show that all the assertions he had ever made on the subject were absolutely accurate, as was also his present statement.