FINANCIAL STATEMENT.

Southland Times, Issue 1105, 6 August 1869, Page 6

FINANCIAL STATEMENT.

• BY ELECTRIC TELEGRAPH. The following Government telegram, containing the Financial Statement de livered by the Colonial Treasurer, Mr Yogel, last evening, Thursday, did not reach us till a late hour. This is the first instance on record in New Zealand, of a minister's speech being known throughout the colony the morning after it was delivered : — Me VOGrEL rose at half past seven o'clock, in committeeof supply, tomake the annual financial statement. He was received with loud cheers, and commenced his speech by asking the indulgence of the committee. After this introduction, Mr Yogel began his statement by referring to the existing system of accounts under the " Revenues Act." This system has been in force two years, and has failed, exceptinmorerapid compiling of accounts. It does not properly regulate imprests and advances, nor bring them to account in the year's transactions. For example, iv 1868-9, in addition to votes and £4,000 special Order in Council for defence, there were £18,000 of previous advances and ,£27,000 of unauthorised expenditure by operation of Public Revenues Act ; large sums spent in a year will appear, by accounts, not to havebeen spent. The control is a mere farce. The Controller releases large sums, which pass to the Pay-master-General, and may be employed as chanceor design dictate. This system takes no effectual heed of liabilities. If the Assembly means to control expenditure, it must insist on liabilities not being incurred beyond votes. Government propose to forbid liability without special authority. Advances under imprest will be greatly limited, and brought to charge within the year. As accounts have now been ordered to be made up, they will shew all advances, and get rid of the great sham of pretending that money which had left tha Treasury has not been spent. The control system will be amended — no separate account of Paymaster General ; all payments out of one account, and pre-audited. At present the Controller releases tens of thousands, without knowing for a long time what becomes of the money. The four branches of the public account are nominal divisions ; all stand to one account at bank, and the Controller and Treasury are not agreed how much belongs to each branch. If we want to overdraw on one of the accounts we require the Bank Manager to make a fictitious entry to its credit ; changes will be proposed enabling the House to judge when and how appropriations are exceeded, and a Board of Audit will perform the double duty of controlling issues aud auditing both Revenue and Expenditure. The accounts of 1868-9 will comprise expenditure brought to final charge, imprest advances, and liabilities contracted during the year. — Consolidation of loans: Thelmperial Government have consented to allow the sinking fund to be invested in Colonial securities as proposed by Mr Yogel, in 1867. Mr Fitzherbert negotiated full amounts of £1,114,000 under "Public Debts Act," and £2,723,250, bonds were converted, of which £1,400,850 were colonial and £1,322,400 provincial. The present annual charge for interest and sinking fund of consolidated loan is £174,220 ; according to crown agents calculations, the profit by the consolidation would be iJ537,600 in 28 years, the present value of which is £137,000, less £38,000 expenses. According to Mr Vogel's calculations, the profit is this — the annual saving is £11,081 for 28 years, the present value of which is £165,000, less expenses. The actual profit is therefore somewherebetween £99,000 and £127,000. After paying expenses of the consolidation account, in addition to improved credit, a longer period for that loan, convenient system of redeeming the debt, and release of part of accumulated sinking fund, a sum of £5000 was giveu to Crown Agents, as remuneration. The settlement of account with the Imperial Government by mutual release is due to the great patience and perseverance of Mr Fitzherbert. — Estimated revenue of 1868-9 : The estimates of last year were very accurate — total estimated, £1,000,500 Actual receipts, £1,005,933, as follows : — Customs, £805,929 ; bonded warehouses, £4,686; stamps, £60,042; post office, £45,561 ; telegraph, £18,350 ; miscellaneous, £71,363 ; telegraph shows increase. New lines wOl shortly be openedbetween Wellington and Wanganui, and between Aucklaud and the Thames A uniform charge for telegrams will now be made, whatever the distance. Customs shows an increase — chiefly Auckland, £63,000 — being upwards of 50 per cent, increase. Dunedin small increase. In decreases, Hokitika is most prominent, j being £41,000, or 30 per cent. Total customs increase, £10,000 ; the gold produce decreased on the year 62,000 ounces, but Auckland increased 67,000 ounces, and Otago a small increase. Nelson has decreased in export of flax. — Expenditure of 1868 : What has been said about the system of accounts must be remembered — thus, though the appropriations were £998,525, there was a gross expenditure, including advances, unauthorised and refunds, of £1,436,259 ; excess, £433,232, of which £375,000 for interest and sinking fund, £179,9,74 advances of previous year, brought to account, and £195,007 excess of expenditure for defence ; the actual expen diture was £266,391, besides advances of 1867-8 brought to charge ; the money, legally available, was £198,981, besides speeialorderof £40,000, and£27,409 spent without authority. In addition to this the out standing liabilities for defence fyre £69,000. — Trust funds : Balance at credit on 30th June, £242,360, of which £50,000 are invested in consolidated bonds and £146,000 treasury bills, and balance in cash at bank. Thus, trust iunds were operated oriiri aid of 'expenditure, the Controller 1

holding Treasury bills, and the Controller therefore decides the extent to which the trust fund may be operated on. — Sinking funds : The A.ct of last Session will be amended to allow sinking fund on unconverted portion of Colonial loan to be invested at home : these sinking funds will be released from control of commission, but itis proposed that accumulating fund be invested in New Zealand securities. — Provincial sinking fund: Under present Act the amounts released are paid to consolidated revenue, and acorresponding amount written oft 7 provincial liabilities. Government disapproves of this, as drifting the colony into fresh borrowing withont the Assembly being well aware. The only alternative is to hand over proceeds of released sinking funds to the provinces, which will accordingly be proposed to be done. — Provincial overdrafts : All these will be regulated — provinces allowed I to arrange with their banks for over- ' drafts, not exceeding one fifth of previous year's income. The Colony not to be liable, and overdraft at no time to exceed the limit. — Provincial loans: Government looks forward to more hopeful times ; to shut out hope of public works would be to deny any future to the country, but in present state of the credit of the colony, and until its finance be on a more satisfactory footing, it would be unfair to allowfresh liabilities. Thceondition, however, of some provinces cannot be ignored. Marlborough is insolvent. The settlers will not tax themselves to continue their separate Government, and Government only sees the course of reuniting it to Nelson. A general Bill will be introduced, allowing friendly negotiations. Southland's condition is not satisfactory, but Government desires very much to enable it to retrieve itself. Southland will be obliged to sell part of its territory, and unless some unexpected good fortune comes, it will have to do that, or re-unite with Otago. The case of Wellington is also special — borrowing as it is at an exorbitant interest ; and the state of Westland's finances causes Government anxiety. A treasury officer has been sent there to report. — Loan for North Island : The opening of roads is necessary to solve the Native difficulty ; the revenue cannot afford it, and a loan will be asked, to be charged on North Island. In order that no renewal of such charge be made, the provision charging the loan on the North Island is not to be reversible by less than three fourths of the votes of the members of the Ho\ise of Representatives, and the condition -will be perfected either by Imperial Act or by orders in Privy Council for forbidding the Governor to assent to a repeal. The Act authorising the loan will give an alternative power to borrow, with deferred interest, of say from 5 to 15 years. Such a loan would probably be attracI tive on account of the vast sums seeking investment for terms of years. The Imperial guarantee will not be asked, but a permissive Act, enabling trustees to invest in the loan ; the money not to be raised at once, but Assembly to direct each year what and how the money shall be spent. During the present year authority will only be asked for £50,000, and authority will be asked, if found preferable, to raise that sum by Treasury Bills, One member of the Government, however (the member for Mataura, Mr Dillon Bell), while approving of the policy of road-making, does net concur in the loan being raised. — Duty on grain and flour : Government will propose a small duty, to continue while the price does not exceed a fixed maximum. The duty is estimated to yield about £14,000. Government does not assert the abstract doctrines of either protection or free trade, but proposes the duty because the fiscal policy of Victoria 9eem9 to force this course upon us. — Financial relations of colony and provinces : The various tables presented to members on this subject will be of interest. Out of seven millions of revenue raised within the provinces since the year 1858, over three millions have passed to colonial purposes and services. In that time £1,400,000 has been spent on General Government services ; and the provinces, for provincial appropriation, have had £2,600,000, exclusive of land revenue. Canterbury and Otago alone have yielded over three millions of revenue in eight years. Even Taranaki has given the General Government £57,000. These things should be considered before destroying existing institutions. Two years ago we made a revolution in OUT financial system, and scarcely a year elapsed before we made another. The partnership between the colony and provinces does not add to the taxation, and Government will not propose organic change, for, at any rate, the partnership makes it the interest of every province to aid the General Government in reducing the cost of the services which are provincially charged, and an alteration would not promote economy, however otherwise desirable. — Provision for outstanding liabilities : Of all the difficulties before Government., the one of making clear the exact financial state of the colony is the greatest. Distinct provision will be asked for the two classes of liabilities. First, for services rendered up to 30th June ; secondly, for services permanently voted, but the money for which is not available. Looking at the bank balances on 30th June, and taking into account the £60,000 overdraft, there is a deficiency. That is, there is £44,428 of cash to meet the overdraft of £60,000. The estimate of liabilities on general account is £110,234, and on defence account, (so far as come in) £69,000, but as there is even yet no pi-ecise knowledge about defence liability, authority will be asked for any further amount that may be proved due. The liabilities on general account include the new Government house, telegraph extension, light-houses, and other services, lor which appropriation was made out of the £1,114,000 loan. Southland debts to the extent of £6000 additional have to be provided for, and there are some liabilities for provincial charges, but these will be paid out of the provincial moieties of the Consolidated Fund. The total, then, stands thus — of outstanding liabilities, £89,284 ; engagements to be fulfilled, £67,932 ; overdraft under Revenues Act, £60,000 ; making total of £217,216, to meet which there were at the credit of Government — Bank balances, £103,167 (on consolidated and special funds), £6000 of Treasury bills, renewable, £11,000 old Treasury bills unissued, £12,000 in hands of the Crown agents, and other smaller sums, and lastly the £150,000 Treasury bills just authorised. The House may ask why the issue oi these bills was necessary with so much nroney in the Bank. The necessity is clear ; there were heavy payments of the current year to be met, such as £70,000 for " remittance home, £17,000 of Wellington bonds, and other amounts. The available assets may be stated as £282,967, against the £217,216 to be met, leaving a balance of £65,750 available for the expenditure of the current year, 1869-70, after paying off all liabilities and the overdraft. The assets include all available balances under the permanent loans, and the floating debt (in the shape of Treasury Bills), is £378,000. — Estimated expenditure of 1869-70 : The civil list 13 £27,500 ; permanent charges, £284,089 ; ditto on Provincial account, £157,416 ; domains, £2,480 ; public departments, £40,890 ; law and justice, £51,808 ; postal and telegraph services, £134,334 ; customs, £40,475 ; native services, £21,407 ; miscellaneous, special and temporary, £31,516; militia and volunteers, £27,669; armed constabulary, £118,000; contingent defence, £32,000 ; making a total of £969,587. In

| postal services the increase is consequent on the cessation of the Panama line, although there is a saving on the permanent appropriation of £50,000 ; miscellaneous expenditure shows a great decrease. By the amalgamation of offices and other measures savings will be effected. Last year part of the defence expenditure, as well aa many other expenditures, came out of loans and extraordinary revenue. This year the whole expense will appear on the estimates, and the Government will not advise the House to grant money for defence to an extent that would involve bankruptcy. — Ways and means : The existing financial system charges against the Provincial moiety of the Consolidated Fund a part of the appropriations. The estimates on General Government account are £617,114, and on provincial account, £352,453, for which latter the Provincial moiety provides. The estimated revenue is as follows, for 1869-70 : — Customs, £816,000 ; bonded warehouses, £5,000 ; stamps, £66,000 ; post-office, £48,000; telegraph, £25,000; miscellaneous, £72,000 ; making a total of £1,032,000, to which has to be added duty on grain, £14,000 ; making together a total of £1,046,000. Government believes these estimates moderate. One-half | of the consolidated revenue will be £523,000. \ Then there is £40,000, the amount of i sinking fund that will be released by conver- ; sion of colonial debentures into consolidated stock, and the balance above stated of £65,750, making the aggregate of ways and means r to £628,750, against an expenditure on General Government services of £617,114, and thus leavins a surplus of £11,000, which will be increased by £6000 further debentures, to be charged to Southland, or a total surplus of £19,000, which it is hoped will be a more favorable result than the House had expected. As a measure of precaution, since some of the money has to be got at home, authority will be asked to issue Treasury Bills for between £20,000 and £50,000, to be only used in case of need. The proposals here made do not involve organic changes, but will relieve the colony from a complicated condition. For the first time provision will be attempted, in more than name, for the service of the year. Only one liability is unprovided for, namely, the detention of the 18fch Regiment, but this will not come in for payment during 1869-70, and its amount is of course uncertain. — Annuities and life assurance : Government have cordially taken up Mr Vogel's proposal, and will introduce a measure to give it effect. — Immigration : The Government invite consideration to several conditions on which assisted immigre^ tion should be dealt with, and though they cannot see their way to dealing with the subject this session, they will invite specific proposals for carrying out immigration and settlement, in order to lay these before the Assembly next year. It is not for the North Island only that national efforts to promote immigration should be devoted, they should apply to both Islands under a comprehensive plan. It must be remembered that, while it is the interest of the colony to get the best class of immigrants, it is the interests of the Imperial authority to rid the mother country of the worst. The duty of self-defence in new settlements, and the clear exemption of the Government from compensation risks, will be the guiding principles in whatever plans the Government may propose. The attention of members is invited to the annual estimates now placed in their hands. Mr Yogel concluded his speech by again asking the indulgence of the Committee, and sat olown amidst loud cheers. A vote of £5,000 for Marine Survey was then moved pro forma.