THE FINANCIAL STATEMENT.

Taranaki Daily News, Volume XLVII, Issue 81834, 29 August 1906, Page 3

THE FINANCIAL STATEMENT.

- AN INTERESTING DOCUMENT A LIVE POLICY FORESHADOWED. UNIQUE LAND REFORM PROPOSALS. POSTAL AND TELEGRAPHIC CHARGES REDUCTIONS. THE DEFENCE PROPOSALS. 'By Tbi.eokapii.]

Weixixgtox. August 28. The Colonial Treasurer submitted his Financial Statement to the House last night, excerpts from which we make as follows: in submitting ine first Financial Statement of the present Administration, I am not unmindful of the obligations we owe to our predecessors. When the Liberal party took office under the late Hon. Mr Ballance, it was predicted by those opposed to him, and feared by some Of his friends, that his legislation would be reckless, and his finance unsound. It was the same when the late Rt. Hon. Mr Seddon succeeded him. In both cases these prophecies .and fears have been proved false by the event. The policy that Mr Ballance started and Mr Seddon so brilliantly extended has made New Zealand prosperous at home and noted abroad, as indeed I believe that in the secret recesses of their hearts and consciences many of the hon. gentlemen opposite are compelled to admit. Our former leaders have g, n» to their rest, and we have entered into their labours. It will be the aim of this Government to maintain the high traditions they established, in showing that sound finance is not inconsistent with progressive legislation and vigorous administration. The abstract of receipts and expenditure of the Public Account covering the transactions of the last financial year have already placed before hon. members, and they have been informed through the medium c.f the public addresses of mv lamented Leader, the late Right Hon. Mr Seddon, of the successful results of the past year's financial operations, so that it is stale news to tell them of the very handsome balance at credit upon closing the books on the 3"t March last. The transactions for the year were exceptionally large upon both sides of tlie ledger, a total of over s v n millions and a-half having been received and expended in the rever.U" account of the Consolidated Fund. 1 did not intend to detain you at any great length concerning last year's transactions, but it is as well to set them down in their sequence. CONSOLIDATED FUND, 1905-06. Ordinary revenue account: —The ordinary and territorial revenue for the year amounted to a total of £7.584,359, and compared with the revenue of the previous year showed an increase cf £301,489. The estimated revenue was eet down at £7,402,600, so the increase uf actual revenue against estimate was therefore £181,750. Comparing the principal items of revenue the one rear with the other, I find that receipts from railways open for traffic exceeded the previous year's returns by £120,651, Customs by £65.427 stamps by £41,144, land and income tax by £40,7(16. miscellaneous by £25.433. and other-smaller ittms by £19,.531. There was a decrease cf £11.763 in I receipts from cash land sales. Actual revenue from Customs, railways, stamps, and land tax yielded £184,348 more than was anticipated, and gome other small items £?./>3, mak injf a total of £i.%,4ii in excss of estima'e. On the other hand, income tax, registration and <ther fe s. and miscellaneous had been overestimated to the amount of £4652. The result is a net increase oyer the estimate of £181,759. As I have already stated, by authority of law. £65,000 to provide for Sinking Fund payments was credited to thi- account, as also some refund and minor receipts amounting to £740. Turning to the expenditure side, 1 find that permanent charges and annual appropriations totalled £7.122.340, in addition to which £500.' on was paid over to Public Works Fund. Comparing this expenditure with the figures of the previous year (£6,635,902), an increase of expenditure of £486,438 is shown. Under permanent charges there was an increase of £190,135, consisting of £93,475 for interest and sinking fund. £50,988 for old age pensions, under special Acts £24,547 (principally for subsidies to hospitals and payments for the promotion of education), and £21,125 distributed over the "Civil List" and payments to local bodies, including subsidies and local territorial revenue. The expenditure und e r Annual Appropriations showed a considerable increase, namely, £287.303, but I am sure that upon making careful examination of the increased expenditure of the various Departments, hon. memhers will not find fault. | Take, for instance, expenses connected with the general election, postal and telegraph services, cost of education, care 0. mentally afflicted, increased expenditure on rail-; wavs consequent upon increased revenue coming in, lastly towards development of lands by survey, etc., and we shall find the who'c of the increased expenditure accounted for. Small increases amongst minor Departments are counterbalanced by savings effected in the Defence and Public Health Departments. Comparing actual expenditure with the estimates, it will b p seen that permanent charges were exceeded by . £IB,BOO, while under Annual Appropriations a saving of £189,000 was

effected. The tables attached to my Budget give very full particulars both of actual receipts and expenditure, and also for the purposes of comparison the 1905-06 balance. As 1 have already stated, the revenue proper, together with other receipts, amounted to .£7,650.009. To this amount the balance brought forward from the previous year must be added, namely £761,056, making a total on the receipts side of /5.411.135. The expenditure, including payments of surplus revenue to the Public Works Fund, amounted to 622,340, which amount, deducted from ,/X411.135. leaves a balam" of Tl'i." is a considerably comfortable *um to commence the present year with, and 1 may mention is the largest balance brought forward at any time in the colony's history. PUBLIC WORKS FI ND.

The Minister for Tublic Works wil; pr'-scntlv have an opportunity of pUrinjf tx-f. re lion. m<-mbors a com pl.t.- statement of transactions 'li the Public Works Fund. It will, there&if. he sufficient for rae .0 briefly outline the financial opcrati'in». Wi: openfd last year With a balance of ;ln 'J fceivtcl £<Sso,Xsi of loan moneys uf miscellaneous rect.p's. /"s'<i.coo was also transferred from surp.uof Consoli'Jat'd Fund, thus makinp a total of £2.215.-00 on ihe rrcr p's side of the arcount. On tie expenditure side, Annual Appropriationabsorbed ,£[.7.: 2.51)0, and .tle'r charges /jn. making a total exjieiv diture o( leaving a balance available of £ji)2,2<y) to C'mrnence the curr'T.f var with. In addition to this, a balance ' f of the it>.>s loan of . million hat 1 to be received, which will give a cash balance f• r tlv Pubflc expenditure nf irr'sji. ciiv of contribution; nltf. li_ Piav be madfrom the Con-'iljdate-l. Fun-l during the present year. LAND FOR SFTTI F.Mi NT ACCOUNT.

The acquisition 1 t land- for < 1 settlement was forward during the p.i-t >ear. wit' the result tha: pur* ha-e morii-\- ■

estates and incidental expenses in relation thereto represent a t tal out'ay

of £8:0,652, or very nearly double the amount expended during the previous year. The position of the account at the close of the past year s'.nud tWus : —Balance brought forward, £7l 6,695"■ loan and oilier receipts, £492,428; r"ceipis derived from estimates, £185,763, making a total of £1 The expenditure was reprcsentc.! by purchase money, £820.^52; management expenses. /---45 ; charges and expenses of rais.ug loans, £4957, and £162.760 for interest, making in all £',<)o.,St4, thus leaving an available balance of £404,075 at the close of the year. I.OAXS TO LOCAL BODIES.

Up to 31st March last the tota. amount of debentures created and carried into this account was £2,563,100. The total net disbursements have be«'n, to local bodies £2,046,023, to Lands and Survey Department towards opining up blocks of land fur settlement £426,403, and to tl.e Public Works Fund £89,800 in exchange f, r debentures under the Roads and Bridges Obstruction Act, 18X2, or in all £2,5 .2,3 [6. At the end of the year th- te was a balance of £7X4 to the credit of the account. The following ligures indicate the rates ar.d amounts thereunder of loans granted at 5 per cent., £22,102; at 44, £"1,050,423; 4, £'110,582; 3i, £472.007: total, £2,155,114. On account of the strain caused by the constant demands for loans, applications amounting to £70,465 were declined in order that assistance might be distributed amongst areas in the backblocks where the necessitous condition of roads and bridges must claim priority. PUBLIC DEBT.

On fiie 31st March last, the gross public debt stood at £62,191,040. At the close of the preceding year the amount was £59,912,000, showing an increase of £2,279,040 for the 12 months. The net public debts show an increase of £2,266,839 for the same period. Over two millions and a-rjuarier of increased debt for a year is undoubtedly a large sum, but I am satisfied that hon. members, having the advancement and welfare if the colony at heart, will not find fault when the additional items are explained to them. With the exception of £i.ooo.uoo for ordinary PubAc Works, the money borrowed should be deemed to be directly remunerative. The grand total of reproductive loans shown in the Statement is £36,142,962, non-reproduc-tive £26,048,078, total debt on 31st March, 1906, £62,191, 040.

RECENT LOAN TRANSACTIONS. Concerning the raising of the million loan for l'ublic Works purposes, 1 may inform lion, members that after careful consideration of the siate of the London money market, it was decided that it would not be wise to place a loan there at the time it became necessary to augment the public works ways and means, more especially as at that juncture valuable offers of assistance were received irom prominent brokers and moneyed institutions in Australia. As a result of these offers, the Government was able to arrange for the flotation of a 4 per cent, loan of £500,-■jv-o at a premium of £1 5/ per centum. Upon opening the tenders it was found that £814,300 had been tendered for by the public. The average price 11 the accepted tenders ,\as £lOl 16 11 per centum, and as the cost of flotation was only £1 15; per cent., there remains a yield cf something over par. I think our venture in the Australian money market may beconsidereda pronounced success, more especially as one of the State Governments issued a 3& per cent. loan of £1,600,000 at £97 about the same time, but which cost ihem £4 2/10 per cent, per annum. With regard to the balance of the million loan, an offer of £500,000 at 4 per cent, at par was accepted without commis.-ion or other charges, with a currency to isi July, 1916. A considerable business has been done in "over counter'' salts of 4 per cent, debentures at par. and these sales have enabled us to supply funds for the purchase of lan:ls for closer settlement, and for Maori land settlement purposes. Til" saies have been gradual, and very plainly indicate that our thrifty and successtul colonists look on these securities as a satisfactory means of investment ■f their savings. lam now asking, and have obtained a premium of £2 per cent, upon all sales, whether in Australia or in this colony, but I do not anticipate doing much business in New Zealand at the premium quoted. I am looking forward, however, to an early lowering of the Bank of England discount rate, which when it takes place will enable us also to reduce our rate of interest oh Government issues, and this may have the effect of lowering interest rates all round. DEFENCE.

As the- Commandant's term of office is on the point of expiry, this appears to be a convenient time for considering many matters in connection with the defence forces, with a view to increasing the eihcVncy of the service, making it more popular and devising means by which the colony may get greater value f> r moneys expended upon defence. In England the control and administration of the Army has been handed over to an Army Council, and the Government is considering th #> expediency of establishing a similar Board in New Zealand for the control «»f d-fence affairs, but subj'<t to the authority of the Minister of Defence. The adult and cadet corps vail \y eii l . >ur»kged to fake greater mu-re>t in their work. The capitation of cadets will be increased. Every adult volunteer will have a uniform, overeat, waterproof sheet and mes< tin. Efforts wiil be made to induce the volunteers and members of lille dubs to give greater attention to rifie pra< tice. and al-o to get tin uiaie p puiation of the colony to take up rifle shooting as a national pastime, as in the case «>f football and cricket. Ttr volume*r regulations will be altered so that the earning of annual capitation shall depend upon the individual volun ! «"T and not upon his comrade?. A School of Instruction for otiio rs.mm-commi-sioi-edolftcei's and men will «honly be established up m a sourd ba-is. A transport and supply service will be inagurat<d. A training ship is being put in commissi- n, which will accommodate -ome eighty youths. From numei•>us enquiries, and interest evinn d m her fiom ah parts of the colony, it is believed thai another and largT tiain'.ng ship will soon be r quired. The Government also contemplate the establishment of a Naval Training College in eonm«Hon wi'ii the

training ship. It is prnpnv.l jn- ' rr.t>»- tin- rt-cr.v in th«' < • /<»ny ol -;naK «itni- ti'. n lat'>t pa f t<iii, a'-o i• >-<-rvtr 'f Muall animuniPROSIXTTK)\ or XI-;\V RAILWAYS. Willi th<* companion of the Noith i~l.sn<i Mam Trunk Railway at th' 1 "i '\<y>' s . ~;.m \\w (oinia'vi* n «•( t!k■ M : Ji.i{wf Uaiiu ay finished b\ 'iii- >am<- p-ri:«l. together with 'i-r I :-t 'U.ii .li- (>\'ig<• Central Kailway i,! h.-.v I)i>. n caire'd in thi-pp--ent P"im ot stoppage by the mk! M.iT'll T1 ♦' \ t. !l'U;. mrlllljrt- V.ll'l -«•' that ihi'-'- of r|i- iaige>t iaJ\va\ works in hand at pievnt an- now within sight of < ompletion. Wph th«*n* thre< gp'at \\<>rk- <»ut of hmv.l. the remaining lints can b*- pushed ' n with more vigour. and by the expenditure of a much larger -urn up"n them individually than has hitherto b<en possibh". Tii" colony can only -<■: ,?Mde a certain ain-.unt f r the rj >-*»<• u f : : ">n o\ iv\v jadways yearly, and it ui.l be imprudent io increase .!i" .<n:<iunr beyond what we aje now •p'-i.'.bng .but 1 \v- pe that t-'.e nex' •Vv. y. .• rs v.iil see a greater impetus givn to the ron-truaion of railways. . th' re ought not to be any dii'tiiulty in i braining the necessary rt''pi'ied for tlipurpose • iihofit guinv up<>n the l."iid- n :«'*'irfv -r.;:rk't. KMADiXi; Tin: backiii.ul'Ks. X'-' v. if : i oil th ' unfavourable " * « xpen-n< ed m many part.* • t the '"!o!j ; .-. fair ha- b«vn i:uide and ih«• r<■ wiil b- provision in i*• iT>ii< W-.tk- J-Xuniafc 11>1 conMiniiif; mad formation in the backblo< k- and reuiy -rfiVd districts, ti-.n. im-.nb'T- an- a'\aie thai the po\\«i- > i tunnies under tlu- liodi''- '.a!i> Act arc !in>i; •d r lrrc^pectjv 1 ot \he urea aiui iaieable value. The Government pppjs.s to ex-cnJ th': in tin*

larger counties, which arc at present restricted in their operations. RAI LUViY CON STK U CTI ON. The work of railway construction has been steadily proceeded with throughout the year. The expenditure 011 new works under tt;e control of the Public Works Department having amounied to /.<>70,2J1. In addition to this a considerable sum was expended by the Working Railways Department on additions to open lines. On the North Island Main Trunk Railway the rail heads at the north and soma ends of the line will advance during the coming suminet to within forty miles of each other, and work 011 the intervening section will be vigorously pushed on. A coach road will also be completed between the two railheads, so that it will be possible to travel overland from Auck.and to Wellington by the route of the North Island Main Trunk Railway. The complete n of the formation, including the viaducts and bridges on the Central section, and the laying of the rails thereon, may be looked forward to by the end of iyoS. With regard to the Midland Railway, the Minister for Railways hopes to be able to run passenger trains to a temporary station at Broken River in November next. A coach road has been formed thence to the Cass, so as to admit of the through journey between Grcymouth and Christchurch being accomplished in one dav. Good progress has also been made with the Otago Central line, and a section between Omakau and Chatto Creek has recently been opened for traffic. The railway w r ill be available for traffic to Alexandra by November next, and to Clyde by the end of the financial year. OVERSEA TRADE.

I ain pleased to state that Government, conjointly with the Canadian Government, has concluded a contract with R. A. Alley and Co., of Tamoca, for a direct bi-monthly cargo service between New Zealand and Canada. The company's steamers have already taken up the running, end it is anticipated that good results will follow. As the oppositeseasons of the two countries offer excellent prospects for the export of our butter .frozen meat, etc., in order to facilitate trade in these products, negotiations an? now in progress for the substitution of boats fitted with refrigerating plant in lieu of those at present employed in the services, and arrangements will be made to prevent them fromcombining with other lines of steamers trading to Vancouver, so as to ensure the lowest possible rates being obtained for the producers of tlie colony. The possibilities of establishing an export trade in the Far East is receiving the attention of the Government.

Inquiries have already been instituted in the direction of providing for a direct steam trade service from New Zealand. The advantages of having a line of steamers trading fortnightly from Great Britain to New Zealaed, via Suez, are considerable, and the High Commissioner will be instructed to enter into negotiations in order to arrange that the steamers which are now being built to carry out the contract with the Commonwealth of Australia shall come direct from Adelaide to N e w Zealand. Should these negotiations result in tangible proposals, they will be submitted to Parliament for ratification. The_Trade Commissioner, upon his return from the East, will be directed to proceed to Canada in order to assist in the development of trade- from New' Zealand to that country. SCIENTIFIC AGRICULTURAL METHODS.

Following the up-line of scientific development and application of most up-to-date methods to agriculture, the Government intends to establish at an early date a complete experimental station and school of instruction, in which the scielific lessons of other countries will be analysed and investigated under New Zealand conditions of food, climate, and soil, and the necessary modifications obtained and applied to the production of bultcr and cheese. liv this course only can the top position be obtained and retaine d on the London market for our produce.

CO-OPERATIVE WORKERS' HOMES.

As the lime is appr-adiing when some of the principal railway lines in tin? course of construction will be completed. and the consequent reduction in the number of men employed on them will take place, lion, members will agree that some practical scheme should be devised to enable those mployed on these works to secure homes for themselves and families. For this purpose, Parliament will be asked to set aside :0,000 acres of land along the North Island Main Trunk line, the Otago Central, and the Midland Railway'lines. Assistance will be given towards erecting suitable dwellings for those settling on this land. NATIONAL PENSIONS. The Government hopes to be able to circulate a Hid containing matured provisions for this laudab'u object. lam doubtful whether there will be sufficient time to enable it to be placed on the Statute Bonk this .vssion. It however, give opportunity to hon. members and Ue people of the colony 1 0 caret ul v consider it. POSTAL REFORMS. My attention has for some time been given to the anomaiie-* of the P'».>iai rates under which inland letteis aie charged eight times as mut h .is i umm-Tua! papers an 1 book pae-k'-t-. lie - me'iiiid ul charging f r iett'-r-. by stages i-, a survival of the time when modern s\stein- o[ tranportati' n w< re unknown, and there is nu reason, oilier ihan the traditional one, why this should cun-| tinue. I have decided, then-fore, j while not interfering with the Jdi rate for book packets and other articles not over 2' z in wcighi, and fur newspapers, to abolish all other disi Unction*, and fix a uniform rate »,f postage for inland Utters of id for each 407. It is estimated this will mean an immediate concessit,n to the public of jt.17.u00 per annum, but experience has shown that every concession in postal rales creates a new class of biiMne-s which is ultimately to the profit *jf the Post Office. It is intend* d to bring- this concession into force on November ist next, in commemoration of the opening of oui International Exhibit!- n. As the new I' I 't'' j* rales will be <h'ap't lhan I he present inland parcel postage, 1 have un<!'-r r- n -id ra: ion 1!e de"i» abi!ity "i icdii, inj.,- 1 ji«• hitter. 'l'll,. 'j"e~t!>in oi ii-du»iiig 1 i»>- commission '■l) nionev orJeis i- a!,.! being considered. I liave h'm pleasuie in

iintVMim ing that \he initial wi hi of ]''tii'i s I.) pJa< (? s bi-yuncl l)ie colony will be raised to one mmcc, and that th*' postage rates to which do not yet accept our penny

■ <tu-i\> ,uili be reduced after the firsi 1 r un<'■. I luis a l.'ttei for (leniianv, "''ishin" tvvo ounces, which at present <, Ists tenpence, will uSitl'r the new .0 ranj;eniem v-\ fourpenre. Mie «ii.ui>." ;i> ie;.;;u cls the British l/oiuiui.in, m;.y, 1, is h-iped, by mulual airaiijfeniem c. me into force e.'Oiy in lli'- \ea.', iuul liquids (-). i'ij;n eiiuntries 011 the Ist October loHre'ing-. TF.I.Kf;UAI'II Ui;;)I'CTIOXS. J he of sixpennv introclu. d ill i.Vj li;i- been iriiia. Il e ( l I inn iii-iilie<l in now an ll'e j tie: II e' a ledlKiiou f 11)11] Ist \o'■etllljef lievt o| r .„,. ~|,a r, .„| a f,,. r ,h, \ i, i, p;.i(i ,-d 'o ii-du'e thi-« 11<»rn k! ( n <,<_] % n\-iking a uniloim ra'e of Ad p ( -r woi-.1, with a minimum 1 li.:rj;e m sisp m... Ti lr imuie'.ll.ite V. 11111 ■ lo 111,. ] nil) ie of tills confession wi:| lie about yju.ooo. J expect lo lind th;il the who 1 ,- of t|,e levenu" v.i l ! Iv mn-'e tip v.iihin tue'vi' or, at tie' ou'side, ei B !it,.r„ niomhs. In eonreetloii with llie-e tioiis, ■ et.l i f frankiti;; lei, grains and let. 'el's by the a rioils (~ pat I shall lioim i .1 |.,nn- ■ i\' re,'. Wlen tin- reforms 1 have -!:e!'h-'l aie j.iven '(T.-, 1 to, _\e« Z.J.okI v. i: 1 have one of th.- nios: bbera.l air' e,p lo (bn'- ii'-siai ;tml le'enraph s\st■ nis in t'le Workl. \\ IKFI.KSS TKI.I"i;i<AI'!iV, As l'ai liaitiehl lias been nivcn aut'loriiv "i establish this system, 1 hope s |,. rily to have tenders invited

with a view to this most up-to-date system being adopted. TELEPHONES TO OUTLYING LOCALITIES.

As telegraphic and telephonic communication is a matter of great importance to our outpost settlers, who make great sacrifices in comparison with tliosu who enjoy the comforts and conveniences of town life, authority will be asked for a special vote of £25,000 for the provision of telephnes ill more remote parts of the country. In cases where the construction of telephone lines in tl.e ordinary way is not warranted, material will be supplied free to those willing to undertake the work Arrangements will be made for all places connected by telephone to be within communication of a medical man both by day and night all the year round.

CLASSIFICATION AND SUPERANNUATION.

I hope to have the opportunity this session of placing before hon. members proposals for the classification and superannuation of the whole of the Civil Service. AUDIT. Criticism has at various times been directed against the system of audit in the case of several Departments. Thoueh I am satisfied that there has been no genuine cause lor this criticism, yet it is felt 110 good can result from its continuance. In order to remove the cause, 1 propose to put the whole of the Government Departments tinder the Audit Department.

PROPOSAL TO ESTABLISH SINKING FUNDS.

I am aware of late years it has become an axiom that while a young colony is borrowing for public works and purposes, it is not sound finance to set aside moneys as sinking funds for such loans. lie that as it may, there can be no dotrbt that such an axiom cannot be held to apply to loans of absolutely non-remunerative character, such as "war" loans, and moneys obtained for kindred purposes, such as tile defence of the colony. 1 find that in respect of our old war loans, £2,357,000 is set down as a liability, and for defence purposes £1.638,000. In my opinion we ought to set to work absolutely to pay off these non-productive loans, and not leave them indefinitely as a legacy to our successors. I shall therefore arrange to provide a sinking fund of one per centum per annum, which ought to extinguish the liability in about thirty-five to forty years hence. In more recent years we have borrowed largely for the purpose of acquiring lands for close settlement.. In carrying out this closer settlement policy we borrowed some £4,560,000, which is returning in rents a very large income and proving a remunerative investment; but thus far no attempt has been made to establish a fund for the repayment of these loans at maturity. Under these circumstances I propose to make a charge upon the Land for Settlement Account at the rate of one per centum per annum" as sinking fund. This amount safely invested and improved at best rates ought to extinguish the debt in about thirtv-five to forty years.

MINING. With respect to the mining industry, the outlook is of a vry hopeful character. It is intended to give additional assistance and special facilities in order to enable prospecting' for gold to be carried on more generally. There must be other mineral deposits awaiting discovery in this countrv. ENDOWMENTS' FOR EDUCATION, OLD AGE PENSIONS AND HOSPITAL AND CHARITABLE INSTITUTIONS.

The Government is strongly of opinion that in the interest of these imporoiiu ,ro.iters a specific fund should be earmarked for them, instead of leaving tli':n to be wholly provided for ovt of ordinary appropriations. For t\it purpose we propose to make a 1 eg'inivng by setting aside as an endowment all ordinary Crown lands now unsold cr unleased. The net proceeds will be paid into an endowment fund within the Public Account. The fund will be, available solely for the purposes of education, old age pensions, hospital and charitable institutions. and, of course, will only be drawn upon, pursuant to appropriations by Parliament, until it becomes self-supporting. It will be supplemented by ordinary appropriations or be available in aid of them, ft is confidently anticipated that with the expansion of llv colony, the fund will grow until in time it will suffice to meet all charges. Meantime it is a first step towards making specific provision for these important services without c'jsturbordinarv finances. REFORM OF LAND TENURE. As part of our scheme of land reform, all existing waste lands of the Crown are to be set aside as an endowment for education, old age pensions, and hospitals. So far as relates t land tenure, the scheme extends to ail Crown lands, and whilst sacredly preserving existing contracts, will in its main principle be as follows:—(a) Sale of Crown lands to be discontinued except in cases

specified below ; (b) the lease in perpetuity system io',9) to be discontinued and term of 66 years substituted, Willi valuali' 11 for improvements at the end of the term; (c) the tenant under a 66 years' lease to have power to pav th capital sums to the extent in ad of not more than 90 per cent.

of the total capital value oft he land, the rent being reduced by the interest on the so paid; (d) when 50 per ceni. of the capital value has 1,1 ell so paid, all restrictive covenants to be removed, and the tenant lo hold thereafter on terms of paying the abated rent ; (e) all capital sums

so paid lo bo r« funded al tin* end of lb,' term ; (f) at the end of the term the land lo be offered for ii■, burdeivd wiih the value of imjM' 1 ivciuriiis to he paid by tin; incoming i«» the outgoing' tenant; \yj pnanis under ij'jo years !ea-e, (including leases under the Land fur Settlement Ail to haw the option of converting into the new, and this at either the original or the present value; Ui) tenants itnd< r the old leases (not including under the Land for S •lilemmts Act) to have the additional option of surrendering th ir leases, when the land will be sold by public: competition, burdened with valuation for improvements, proceeds from all such sale to be paid into the Land for Settlement Account, so as to be solely liveable for acquiring improved lands for disposal under the Land fir Settlements Act. This means ihiit ihe tenant or a Land for S ! 'tt!o-

men. iea>e m.iy c. nvett, but (annul Mirh'inl'T. Oilier tenants may either ( unvcit «.r hui t'nder, and if they surrender lliry \-i!| n-ieive llir valir of their isnprt ivt'nifinwln-n land is sdlr). Aii'iilu ]]ioc!ili( ation of the Saw will !)■• made. enabling a person i<» add I" hi- holding in eases where its area d<>es not exceed the statutory limit. The Government i* sM'.pqly of opinion that the UffftTonation <>! aieas in single hands is ncit to tho advantage of the Stat'*. H therefore proposes to fix [i limit, say. /J50.000 capital unimproved va-1 lu<\ 1 rvfind which it shall not be | 'awful lor any pi rson to hold land with a pr< vi-.im for the gradual re.-1 diiction say. within ien year*, ot •;vc;-s um\v h\ t'xn'-s of ihc limit. The nv-'d'-nhal conditions of tho 'l.and Act are osr-eiiiial to the satisfactory soltl'-ment ( f hind, but ihe Gove rnrvnt thinks ihey mav l>e modified in f-iv»i:i* of imji-ons whost< avncaii \t< conhue them to town, but an' d' ,k «irons «»! taking uj) land as a ptcvisjon for t'lemselvn or tleir families-. I'ioj :<i-n will be submitted I; r v.'rani ini*; thi c (mccs ( sif>n under jet'ulaiion cai'fu!!y framed In prevent ahus<\ \.\TI\T I.AXHS. 1' is ivt only desirab If io settle native tu'es as ouickly as possibK but aNo t rj devise some means to brinir tl"<. l.nvl imd'T cultivation in the meantime. 'Co meet these points the j''• I'e\* of fhi* Government is (t) 1 asi'V a -u 1!m i<*ll< vof native hinds f'O ma'!it' nan. e of natives t (j) to ns t.;r p-s<-ihV ui\'e natives "a " Wi f:um ih<\ lands and to e; etc lluun m in 'knyi.' the lands.prof; io ihr.w the ]»• n for ~ cti!'':!!cnt and enhivati- n bv 'a} puh a-an e' ;*l (',< ivrnuvnt valua't'on, (1>) \wiit in Hoards for leaso in limned n»e"s for terms nor

rvcenlinr fa'- ;•» ;>rs, 'ci all- v.ioff na'i\'es to leaco it ihernse ! ves for stmh a term under the supervision of

Boards, (d) to settle all disputes in native titles as quickly as possible by the Land Court, (c) where natives cannot be dealt with individua !y by the Crown on account of pcnd'ng appeals, partitions, etc., that the Crown deal with them collectively in the meantime and open their land for settlement, so that when their cases are disposed of by the Court they will get resulting revenue. ADVANCES TO SETTLERS. The cumulative authority amounting to £4,000,000 for borrowing purposes are almost exhausted, and will have to be extended to £5,000,000 in order that settlers may have the benefits of the cheap money scheme. MAINTENANCE OF ROADS.

At various times comment has been made upon the system of mak in;; provision for repairs and additions to public biddings, and foi maintenance of roads out of the Pub lie Works Fund. 1 propose to make an alteration by providing for repairs and additions to public buildings, auell as for maintenance of roads, upon the C< nsolidated Estimates. For these purposes the amount this yeai will be about £35,000, FURTHER LOAN FOR PUBLIC WORKS PURPOSES.

It is our policy to vigorously push on with the works in progress. The large undertakings in hand must as rapidly as possible be brought to completion, in order to reach a remunerative point, The Government therefore decided to ask for authority to raise £1,000,000 in aid of Public Works. At the same time, it is not proposed to go to London for the loan. There i little doubt but that it can be easily raised locally at a reasonable rate of interest. CONCLUSION.

The policy of this Government is a progressive development of what has always been the policy of the Liberal l'trty—to advance, but on safe lines, sparing 110 effort to further the social, industrial, and commmercial welfare of the colony, and taking care to keep on lines that are financially and economically sound.