FINANCIAL STATEMENT.

Poverty Bay Standard, Volume I, Issue 237, 17 September 1884, Page 2

FINANCIAL STATEMENT.

In Committee of Supply, Tuesday, 16th September, 1884, by the Colonial Treasurer, the Hon. Sir J. Vogel. Mr. Hamlin,—The usual yearly Financial Statement may be somewhat curtailed in its length and deprived of its dry details, because of my predecessor having already related a history of the year ending the 31st March last, and its results. I will briefly epitomize the pcs.tion he described. The year 1883-84 was commenced with a surplus of L 35.549, and it ended with a deficiency of L152.U2. This result was represented in the Treasury at the end of March as follows :—There were outstanding deficiency bills still current amounting to L 398.000. To meet them there was cash, L 203,447 ; and imprest advances to officers of the Government, L 42.441. Taking the last as cash, it would be seen that the deficiency stood at the amount stated. The revenue and expenditure of the Land Fund, which, though kept in a separate account, forms part of the Consolidated Fund, show that during the past year the payments exceeded the receipts by L 6.117, the balance of L 86,561 with which the year began, and which was chargeable, with a sum of L 75.203 transferable in respect of the transactions of the year 1882-83, to the main roads account in the Public Works Fund, under The Roads and Bridges Construction Act, 1882. Thus it became L 80.547 at the close of the year, without the repayment to the Main Road Fund having been made. The L 75,203 due on the transactions of 1882-83, therefore still remains unpaid. To the Main Road account, on the 31st March, 1883, there was in the Public Works account (I quote my predecessors for the remainder of the sentence) an expended balance of L 877.912, but of this L 202,484 was advances in the hands 1 of officers, and, as hon. members who follow the public accounts know, advances outstanding, although included in the balance in band, are not usually available for expenditure. The balance included the whole proceeds of the second million of the three I million loan, and also the proceeds of that odd little Colonial inscribed loan of L 250.000, which was taken up by the Post office. The public debt of the colony on the 31st March, 1884, after deducting the Sinking Fund, aceruedpamountedto L 29,574,902, the annual charge in respect of which (including the contributions to the Sinking Funds) amounts to L 1,578,799. This debt was exclusive of the Deficiency Bills, amounting to L 398.000, issued by way of revenue, and remaining outstanding at the close of the year ; as also of the £400,000 of Deficiency Bills issued to facilitate remittances, which I consider contingent, through remote liability. The Colonial Treasurer (Major Atkinson) after procuring his Excellency’s assent to a dissolution, obtained temporary suppli n s, and inorder to provide for them, secuL .1 also authority to issue extra Deficiency Bills to the amount of L 300,000, to represent, first, the deficiency of the past year, amounting to Llb0,000; second, L 50,000 additional to the L 500,000 of Bills already authorized for the cuiient iates within each year; and thirdly, LlOO,OOO in aid of the Public Works Fund. These aids, the Treasurer stated, would carry him on to Ist September, and he was about accurate in saying so, but after him the deluge. Taking the date of my accession to office as the first of this month, the immediate financial prospects were as I am about to describe. It must be understood that the Statement is not a bookkeeping one, obtained from a balance of the accounts, but merely an estimate of the cash requirements for the month. That estimate showed that taking into consideration probable incoming moneys of the month, and the liabilities which it was known would have to be satisfied, the Consolidated Fund would be a few thousands short. Notwithstanding that all the Deficiency Bills authorised by law were issued and disposed of, there is a further amount not estimated, which has come in for payment, but about this I shall say nothing at present. As regards the Public Works Fund, the estimate showed that

LlOO.OOO would have to be borrowed in some shape to carry on to the end of September, and that the like process would have to be gone through for meeting liabilities until the third million loan was negotiated next year. LOAN CONVERSION. Last year the loan conversions as described by Major Atkinson, consisted of L 3,558,300 5.30 debentures, and L 1,832,000 short dated debentures, but the transactions consequent on these conversions are still not completed. A considerable quantity of the converted short dated debentures remains to be sold, whilst only a portion of the 5 30 issue has come in. Notice has, however, been given to pay off so much of the balance as carries 5 per cent, interest in January next. On the whole the annual savings on the conversions of last year nominally amount to about L 30.000, and some L 6.000 more will be gained by the conversion of the balance of the 5 per cent. 5.30 Another effect of the conversion has been the postponement of payment of a sum of about L 50.000 for interest from a date within to present financial year to next year. It is much to be regretted that the conversion was commenced with the 5.30 instead cf with the Consolidated Loan of 1367-1870, which carries with it an accumulation drawing on Sinking Fund. The 5.30 could have been paid off at par at any time on six months’ notice. This is really now what it has been found necessary to do with the principal part of the 5.30 loan, bearing 5 percent, interest. Only half a million of them wee bought in. The bulk of the 5-30’s which came in bore 4,| per cent, interest. They amounted to £3,053,000. The P"ofit on them was comparatively trifling afterpayment of expenses and premium, but they stand in the way of further operations because of the la-ge mass of inscribed stock that represent them on the market. They ought to have been about the last instead of the first securities operated on. The operation in connection with the short dated debentures, was more in the nature of a sale than a conversion. They had never been placed on the English market, and the real object was to dispose of the bulk of them. The ('•ffe’-ence in the rate of interest between a floating and a funded debt can hardly be all called profit. That is why I used the wo d “ nominally,” shortly since the floating debt. Befo -e pjo’ceding further to desc»ibe the p’esent position and future plans. I think it will be as well, whil-t the subject is in the memory of the hon. members, to deal with the question of the Deficiency Bills. They as the committee a-e aware, to L'50,000 for last yeai’s deficiency ; L 150,000 for current purposes on the year’s Consolidated Fund account; and LlOO.OOO for

public works account. There are besides thr L 400.000 Contingent Liability Bills. Mj friends, I dare say, will think that I an; rather good natured not to trouble myself with working out my predecessors difficulties. “ Fund,” they will say “ by adding to permanent debts so much of this floating debt as will leave you without any anxiety for the future, and start on a fresh career of manufacturing a new floating debt.” I shall not do anything of the kind. I am profoundly impressed with the conviction that it is intricate entanglement, rather than real difficulty, with which New Zealand has to contend. I believe her finances can be put in order, and that we may count from year to year on such improvement in revenue that so much of the present floating debt as does not come within the catagory of mere aid within the year car. be discharged within a reasonable period. The L 450,000 I shall consider as strictly aid within the year, and I shall ask the House to increase the amount by another L 50,000. My predecessor stated his opinion that the L 500.000 was not sufficient, and actual experience has shown that the additional L 50,000 for which he obtained authority is still not enough, for as I have told the committee, there is beyond all the deficiency bills a deficiency of a few thousand in the estimate of the present month. I shall ask, then, for authority to add L 50,000 to the L 450.000, strictly for the purpose of anticipating revenue within the year. The L 150,000 for last year’s deficiency I shall pay off within the next two years or so. The LlOO,OOO for public works can either be allowed to lapse, or continue to be used as means of adjusting public works revenue within the year. As to the contingent L 400,000,1 do not like the arrangement, and shall hope to be able to do away with it shortly. Thus lam not intending to propose that most unpopular of all financial operations the converting floating into permanent debt. THE ESTIMATES. I have had to take estimates very much as I found them. The hon. member for Egmont in his last Financial Statement, told the Committee that he proposed to effect a great saving in the Civil Service votes, and also that he intended to amend the service by classification and promotion. He did not particularise his proposed reform, and he thought it undesirable to leave a record of them behind him ; the type even of the Bills said to have been prepared was broken up. As to the promotion by the classification system irrespective of merit, I am not an advocate of it. It reduces officers to a dead level and leaves little incentive to individual exertion. I have been told that in an adjacent Colony at onetime, under the influence of this system, it was found necessary to have an army of supermarines outside the Civil Service regulations, in order to carry on the business efficiently. I will proceed to state the principal alteration we propose in the estimates. One is a reduction of the armed constabulary expenditure at the rate of £20,000 a year, but it can only come into force for the last quarter. We propose, on the other hand, to add five to the capitation allowance of volunteers. This will be for the last six month of the year, at the rate of tens yearly, at which we propose it shall continue. We shall also ask authority for appointing a commanding officer of volunteers, and we shall place a sum on the estimates to defray the expenses of members attending the annual competitions of those singularly mtr.torious and valuable bodies, the volunteer and fire brigades. These three items will appear on the supplementary estimates. As regards the department of EDUCATION

■we think the time has come whem’the large annual increase of schools lenders it unnecessary to allow the extra capitation fee.of ss. a head outside of the provision made in the Act This reduction, we propose, shall commence with the last quarter| in the year, so that it will only amount to Is. 3d. a head. We shall ask the House to exceptjtheJschools in Westland Provincial District, the funds of which are somewhat'tfcontributed. There has been no time to minutely analyse|4he reports, receipts, of the RAILWAY DEPARTMENT.

We are of opinion that closer and more intimate business inspection will materially aid the economy and efficiency of the management of railways. We design no reflection on the present manager. I know of many systems of railways not so laige as that oi New Zealand where it wouldj.be. thought absurd to leave to one man the virtually irresponsible control, no matter what bis experience, and though he was receiving five times the salary, of the Hov e .er good a manager may be, he derives immense strength from being able to refer difficult points to the calm consideration and judgment of a board of able businesslike men. The expense of such aid is nothing when you have to do with an undertaking running over a million a year of reve iue, and absorbing over half a million of expenditure. At the same time the session has been so much wasted, and so much remains to be done, that it is possible we may not press on proposals for local boards this year. I hope to effect a saving of expenditure, and to make beneficial reform, in connection with the PRESENT SYSTEM OF AUDIT,

and of keeping accounts. Virtually at present three sets of books of the accounts of the colony are kept by three independent departments besides the Treasury and the Audit department. They are not precisely the same books, but they are of an allied character, and they are kept by separate staffs. I am desposed to effect an entire change by which the Audit department and the accounting portion of the Treasury would be abolished, aid to substitute an Accountant General’s Department. The Accountant Ge. eral would, like the Auditor General, be a Parliamentary officer, and have all the power of controlling expenditure and receipts, and reporting to Parliament, that the Auditor possess; but he would also keep the books of the colony, and hia officers would keep the books of departments, or regulate the way in which they arc kept. The alteration would, I believe, lead to considerable saving, but that would be its least merit. Its great advantage would be, it would assist in connecting the departments, and in reducing their separate action in the way of contracting liabilities. It would also lead to a much needed reform in facilitating the discharge of recounts. I referred on a previous occasion to the serious complaints made as to the difficulty of obtaining payment of moneys due by the Government. It would lead also, I think, to making it cheaper to obtain the returns which are required for so many purposes. But all these are opinions founded on theory, and before I can give effect to them I must narrowly investigate their probable practical operation. I am having inquiries now made on the subject. At any rate there seems little douht that, as between the audit and Treasury, the books may be kept with more economy. I have, I think, been able to effect some- improvement in the Telegraph Service, though without the expenditure of money. The use of stamps for payment of telegrams will greatly facilitate keeping the accounts of the department. The abolition of receipts for telegrams will save the receivers of these documents and the department a wholly unnecessary trouble. Another change has not as yet been made public. I have been much impressed by the inconvenience occasioned by closing a large number of offices at the early hour of five o’clock. I have arranged that these offices shall be opened between seven and eight, and closed for half an hour in the middle of the day between half-past one and two o’clock. These chrnges will take place on Ist October. I should also call the attention of the Commi. lee to the serious 10-s the Colony has suffered, and is suffering, through the diversion of a large part of its English correspondence to the Brindisi route. The English authorities have, to my mind, behaved most unwarrantably in the matter. L .ND REVENUE AND EXPENDITURE, The statement of the receipts and expenditure on account of the Land Fund, other than the revenue from leases, cannot be pronounced satisfactory. It must be remembered the year is in a great part gone, and I am giving the results a.if anticipations as we found them. My colleague the Minister for Lands will probably make an exposition of his views on the subject late’- ia the sebsion. It will be obse.ved from the Statement that the L 75.203 due to the mai i roads account, under the Roads and E.idees Construction Act. is yet unpaid. 1. was dut at the end of 1882-83, and, as my predecessor;:

left it so long unpaid, I do not see that it is )f pressing importance for me to discharge it. tn fact, other provision might have to be nade for the purposes of the Roads and Bridges Construction Act. If it is to remain m the Statute Book it will absorb the whole ■f that Colonial Inscribed Stock Loan which was authorised for the purpose of being taken ip from time to time as people required it, but which was absorbed in bulk by the PostOffice.

RECEIPTS AND EXPENDITURE OF THE YEAR.

I proceed with the statement of the estimated expenditure of the year with such few Alterations as I have described, and also I .;ive a statement of the expected revenue, supposing the revenue is raised on precisely he same terms as last year, including a threefarthing. Property Tax. The estimate of evenue is moderately stated, and I believe non. members may count on the amount set lown being verified. The estimated receipts of expenditure of the Consolidated Fund for the financial year ending 31st March, 1884 : Ordinary Revenue Account—Receipts—Ordinary Revenue Custom, £1,375,000 ; Stamps, £527,500; Property Tax, L 275,000; Beer Duty, L 55,000 ; Railways, L 1,120,000 ; Telegraphic, L 94,000; Registration and other fees, L 37,000; Marine, L 16,000; Miscellaneous L 35.000. Total, L 3,534,500. Territorial revenue—Depasturing licenses, rents, etc., LlBB,OOO. Grand total, L 3,722,500. Expenditure—Permanent appropriations—Civil list, L 29.750; interest and Sinking Fund, L 1,540,115; under special Acts of the Legislature, L 53.724; total, L 1,642,589. Annual appropriation—Legislative, L 46.518; Colonial secretary, L 238.334; Colonial Treasurer, L 51,643; Minister of Justice, L 117.265; Postoffice and Telegraph, L 259,322; Customs, L 790,081; Stamps, L 27,491; Education, L 328,102 ; Native, L 18.311; Mines, L 21,308 ; Public Works, L 740,660 ; Defence, L 183.427 ; total, L 2,132,563. Grand total, L 3,775,152. The Committee will observe that this shows a deficiency of L 52,652. Let us now see what w T e may do in the way of converting the deficiency into a surplus.