FINANCIAL STATEMENT.

Southland Times, Issue 1642, 1 October 1872, Page 5

FINANCIAL STATEMENT.

■»■ (BY ELECTRIC TELEGRAPH.) ■*>

Wellington, Sept. 28. The Colonial Treasurer made his financial statement last night. In tbe following summary of it shillings and pence are omitted *. — The House went into Committee of Supply, when the Colonial Treasurer (Hon. T. B. Gillies) made bis Financial Statement. His object would be to state clearly the financial position of the Colony, and the state of the several funds constituting the public account. He would endeavor to do that not from a sanguine nor from a despondent point of view, dealing with figures only with a desire to render tbem valuable, because , accurate. Certainly he would not J knowingly permit any feelings as to the position of parties in the House to cause ! him to injure the credit of the Colony or retard its real progress. The total amount of the Colonial debt at the present time was £9,985,936, but there , was a sum of £576,848 of sinking fund accrued. The annual charge consequent upon tbe debt, which must be provided out of general and Provincial revenue, was £616,895. From a carefully compiled balance-sheet of the consolidated fund account, he concluded that on tbe 30th of January last there was a deficit of -£33,345 on that account to be provided for, and not a surplus of £10,562 with which to commence the current year, as was stated by his predecessor. Tbe discrepancy therefore was £43,908. He accounted for it thus: He believed the amount recoverable from tbe provinces was £28,917 or £5,360 less than shown in his predecessor's statement. He could not treat as an asset any part of the -£13,650 for which his predecessor took credit as recoverable from the confiscated land account. The Government meant to grant a considerable portion of those lands to the natives from whom they were taken, and tbe balance would not do more, if indeed it would do so, than meet claims and pay costs of management. His predecessor omitted from bis calculations £2321 of interest due on 30th June upon temporary loan, debentures, deficiency bills, &c. He also omitted a liability of £17,585 in respect of savings on Civil list, the Native schools fund, and the Armed Constabulary reward fund. In addition to those four sums, be (the Colonial Treasurer) bad ascertained tbat £5000 of additional liabilities existed up to 30th June, a great part of this amount having been paid since that date, thus tbe discrepancy of £43,908 was accounted for, and a deficiency of L 33,345 on tbe consolidated fund at the commencement of the financial year was shown to exist. Under tbe Defence aud Other Purposes Loan Act there had been placed up to June 30th a total of L 635,000, of wbich at that date there remained available for defence services during the current year, L 106,922. His predecessor estimated the amount available to be L 158,247, so tbat there was a discrepancy of L 51,324 to be accounted for. Of that discrepancy L 23,792 was accounted for by the fact stated by his predecessor that tbe L 158,147 said to be available was inclusive of then existing liabilities to tbat amount, therefore the sum available for the current year was reduced. Of the remaining L 27,531 of discrepancy, L 8358 was accounted for by his predecessor having taken credit for that sum in tbe consolidated fund account as recoverable from defence, but having omitted to debit it as a liability against defence. Of the amount realised tinder schedule 2, L 9563 was for the redemption of Otago Dock bonds, not yet redeemed, and waß therefore a liability against tbis fund which might have to be met any day. Still further L 9373 of the discrepancy was accounted for by that sum which was advanced on account of confiscated lands from the consolidated fund having been treated as an asset, a course which be could not follow — add to the amount already stated, L 235, whicb represented charges for raising the last L 150,000 of tbis loan, but of which his predecessor was not aware, and the discrepancy of L 51,324 was accounted for. There had been up to June 30th raised under the Immigration and Public Works Loan Act a total of L 1,600,000, of which there remained on the day named L 845,006 in cash available for works already contracted for, or which might be contracted for. As regarded tbis fund, but little discrepancy existed between the accounts of his predecessor and those now submitted, except tbat bis predecessor, in stating the available balance at £935,684, omitted to take into . account £79,250 of liabilities then existing, and that his predecessor did not include the charges on raising tbe last instalment of the loan, the accounts of which had not at the time been received in the Colony. He need not detain the committee bj a reference to the Trust Fund or the Land Fund, because he believed the statements made as to them by his predecessor to be substantially correct. He would next explain the position of the several funds included under the general title of Immigration and Public Works Loan Fund account. The date up to which his explanations as to those funds would reach was September 10th, the day on which the present Government took office. First as to Railways Fund. The amount authorised to be raised was two millions, to which must be added £37,202, as representing moiety of stamp duties, 1870---71, less refunds. The total amount of accounts passed for payment was £314,365. There were liabilities amounting to £982,347, for rails and rolling stock on railways begun or contracted for, and there were further liabilities amounting to £298,168, being tbe estimated cost of rails ordered or contracted for on account of lines not yet begun or contracted for — thus of the

£2,037,202, there remained £451,321 iv cash, and the rails last mentioned, so that on the 10th September last, there was available for railways not yet begun or contracted for, cash and rails representing £740,000. The engineer's estimate of probable cost of railways authorised but not contracted for, showed a total of £2,005,110. So that, deducting the L 740,000, and considering all the facts and contingencies, it was fair to estimate tbat at least an additional million and a half would have to be provided before the railways authorised by the Assembly could be completed. But this position of affairs did not require to be dealt with at present. The balance of cash on baud, £845,096, would enable the works already , contracted for to be carried on during tbe present year, and would also enable the Government to initiate and push forward others of the works J , authorised by Parliament. The Minister i of Public Works would inform tbe House J what those works would be, and during ! the recess the Government would work with a full recollection of tbe fact that the policy of railways and public works could not be reversed, and that to be a benefit to tbe Colony, it must be carried on vigorously, though at the same time With prudence, judgment, and economy. Of the one million authorised bo be raised for immigration, there remained on September 10th, providing for liabilities up to 31st December next, as stated by the late Public "Works Minister, L 868,714. Of tbe L 300,000 for the goldfields water supply there remained available, after providing L 51,495 for the Thames water race, L 231,855. The sum authorised for tbe construction of roads in the North Island was L 400,000, and there remained L 225,084 available after providing for contracts and meeting liabilities up to September 10th. On the same date L 135,175 was available out of tbe L 200,000 for land purchases in the North Island. On Telegraph Extension account the £60,000 appropriated had been overspent to the amount of L15,3r3. His predecessor proposed to meet that excess, and to provide for further extensions, by allocating for these purposes L 40,000 unapportioned of tbe Immigration and Public Works Loan, and the committee would now be asked to consent so to allocate for tbe present L 30,000 out of the L 40,000. A very disturbing element in the calculations arose from tbe fact that the LIOO,OOO set aside for Road Boards last year was ordered to be paid out of the Public Works fund, but was not directed to be charged against any one of tbe accounts included in that fund. A decision on the point must now be come to, and his recommendation, after very careful consideration, was tbat the LIOO,OOO should be charged against the immigration portion of the loan. He did not purpose to again subsidise road boards out of loans, for he believed that the members of the boards themselves considered tbat by sucb aids they gained merely a temporary benefit at tbe cost of constant future taxation. As to tbe estimate of revenue and expenditure for the current year, he should differ but little from bis predecessor. Save in a few particulars it was unnecessary for bim to enunciate a general financial policy different from tbat of his predecessor, for the present Government were called into office on the one ground that the previous Government bad failed in the administration of the policy agreed upon. His duty was to carry out tbe existing policy, subject to sucb administrative reforms as he should indicate. The consolidated fund revenue had, on the whole, been fairly estimated by his predecessor. His predecessor had apparently not taken into account as revenue, about L9OOO which would be received from surplus interest on trust fund and other accounts. As he now proposed to provide out of the consolidated fund for interest on all the colonial securities, including those held by tbe • trust fund, it was but fair that the surplus interest on such funds should be treated as revenue. Therefore be added L9OOO to tbe item " incidental receipts," and with tbe exception stated, accepting the estimates already before the committee, his calculations would take tbe estimated revenue for 1872-3 to stand at L 1,085,000. As regarded expenditure : On the consolidated fund there were three points on which his proposals would differ from those of bis predecessor. Firstly, be did not propose to continue the charge for interest and sinking fund on the Immigration and Public Works Loan upon the loan itself, giving as a grant-in-aid one-half of tbe stamp duties, and a further contribution for tbe consolidated fund. Instead of tbat plan be proposed to charge tbe interest and sinking fund in question directly l upon the consolidated fund, as the law required. He would reckon on half tbe stamp duties to aid in meeting the charge, first making tbe necessary alteration in the law. He would charge against the Public Works Loan for this year only sucb balance of the interest and sinking fund as the consolidated fund could not bear. The cash result for this year would be the same as that proposed by bis predecessor, but it would be arrived at directly, and not in an indirect and misleading manner. Secondly be proposed to increase tbe capitation allowance to the provinces by recognising that Maories were large consumers of dutiable goods, and by substituting a payment of 10s a head on account of them instead of giving an arbitrary allowance. Taking 15s per head as before for Europeans, 10s per head for Maories, and continuing tbe special allowance of 2s 6d per head of European population to Westland, the capitation payments would stand thus : — Auckland, £59,866 ; Taranaki, £4,626 ; Wellington, £21,442 ; Hawke's Bay, £6,210; Nelson, £17,538 ; Marlborough, £4,222 ; Canterbury, L 36,983; Westland, L 13,49 1; Otago, L 53,889. Tbe total would be L 200.241. Thirdly, he proposed to calculate upon a reduction during the remainder of the '

year of LIO,OOO upon the estimates of ordinary expenditure, Clashes I. to VIIL, as brought down by his predecessor. There had not been time to recast and reprint them, and to do so would confuse the accounts of the Treasurer and the Controller. The gross estimated expenditure amounted to L 1,108.915., 108. 915. Deduct the Llo,ooo, savings to be made, and the next expenditure would be Ll ,098,915. There must be added the debit balance already stated of L 33.345, less 1.15,222 on account of civil list and Native school savings, which would probably not be required this year. Then there would be a total estimated expenditure of consolidated fund for the year of £1,017,038, which amount in- • eluded the whole interest and sinking fund on Public Works Loan, amounting to L 96,000. There would thus be an excess of £32,038 of expenditure over receipts, and he proposed for this year , only to debit the Immigration and Public Works fund with L 34,500 of the interest and sinking fund on that loan. Tbe difference between the two amounts would probably be required for supplementary estimates. If he made the financial statement next year, he would altogether oppose any portion of interest and sinkiog fund on Immigration and Public Works loan being charged to the loan itself. He would prefer to see, and to propose if necessary hereafter, to augment the revenue by a change in the incidence of taxation, rather than the Colony should be deceived by the idea that it was getting public works for borrowed money, while that money was merely being spent in paying interest upon the loans themselves. He believed tbat reductions amounting to L 25,000 a , year could be made in the Estimates, and the committee might fairly complain if he brought down estimates next year without effecting such reductions. He recognised the important reforms instituted in the Treasury Department by bis predecessor, and be hoped during the recess, freed irom other cares of any other office, to devote himself to reducing those intended reforms into a practical shape, such as would be beneficial alike to the department and to the public.