THE FINANCIAL STATEMENT

Taranaki Daily News, Volume LIV, Issue 67, 9 September 1911, Page 5

THE FINANCIAL STATEMENT

11l PORTANT PROPOSALS. IMPROVLXfi THE LOT OF THE PEOPLE. FARMERS' CO-OPERATIVE BAXKS. STATE NOTE ISSUE.' Wellington. Last Night. Tn the House of Representatives this evening, Sir Joseph Ward, Colonial Treasurer, delivered the Financial Statement. Following is a summary of what is proposed:— Remissions in railway fares Aissistanee to widows Improvement of conditions of railway employees Additional funds for workers' homes Remission# in gift and estate duties State assistance to iron and oil industries Advantages to old-age pensioners (lovernment air to farmers through co-operative banks State note issue Electrification of Lvtte.lt.on tunnel Harnessing and utilising of Waikaremoana Purchase and settlement of native lands Prosecution of roads Development <>f national provident and public services Defence oil practical basis Land for settlement under Land Finance Act Insurance against unemployment Cheapening cost of living Financial assistance to associations of farmers Increase of graduated land tax on kirge estates Land settlement—progressive railway road and public works policy Promotion of agriculture through Dominion establishment of a State farm in tne South Island Maintaining stability of Dominion's i finance I Last year I had' the pleasure of an- | nouneing that a sulxstantial balance of J £432,310 was available at the end of the year. It is with much satisfaction that I state that the present year's results have exceeded that of any previous year in the history of the Dominion. The revenue was a record one, amounting to £10,297,023, the increase from the railways being £-22- r >,492, Customs £350,708, stamps, £280,328. EXPENDITURE. The estimated expenditure for the year was set down at £0,472,278, to which should be added an additional appropriation for railways, £232,755, making a total of £9,70(1.033. Of this amount £!),342,10G was spent, a saving of £302,927 being effected. The permanent appropriations show- n. saving of £29,200, and the Departmental expenditure is £333,007 less than the amount authorised, but of this amount the railWays were credited with £192,490, being the balance unspent after the excess of revenue, as allowed l>v law. was added to the appropriation, so'that if we eliminate railways we. have a direct saving for the year of £141,171 on our departmental votes. RESULT OF YEAR'S OPERATION'S. Balance brought forward on April 1, 1910, was £432,316. 'Hie receipts during the year were £10,297,273; expenditure during the year was, appropriations. £9,343.100. The excess of receipts over expenditure was £954,107. the credit balance including £432,310. the amount carried fo-wm-d at the beginning of the financial year. 'Hie surplus on March •-1 last was £1,380,483. From this 1 transfer tr> the p„blie works fund £B(K).«<M. leaving a balance on March 31, 1911, to begin (]„. present financial year of £380,48"!. In- (.he budget of last year I estimated the surplus at £727,- ! +2l. less the amount required for the Supplementary Estimates. The excess is due largely to widespread revival ot trade both in and out of the Dominion. TREASURY BILLS. As will be seen, (here were none outsending on March 31 last. These from time to tune will have to bo again resorted to. of coii.rse. in anticipation of revenue, for which (he law rightly provides, 'but it must be satisfiicWirv for ion. members to note thai, a.s promised by me, the large amount for several ve-irs appearing under this head, and which had practically become part of our permanent debt,'has disappeared. PUItLIC WO'RKS FUND. The balance from last vear "was £3l° - 300. During 1010-11 it received as loan money,h £1,983.742, transfer from revenue £BOO,OOO, other receipts £OSOO total £3.103,014. The expenditure was, under appropriations £1.892,581. oilier charges C.OJIS, total ,C 1.903 509 The at. March 31. 1911. was £1,140.<H.>. balance loan money to be received C 151.050. available for public works moneys to start current vear with £1,32-1,095. OL.-R PUBLIC DEPiT, as in the case of taxation, is by comparison with other countries very light indeed, so (here is another popular rleu; ,!on v.-h'icli in my opinion requires to !>'■ dealt with: that is, that, our debt is a grievous burden and almost too great to be borne. It is nothing of the sort, and the true position must be stated again and again, at the risk of :tp|nunii«r ti> lv wwirisonio in iteration °" r gross debt is large, but so are our assets. Our national debts must not, refeiml to alone. What has been done with the money borrowed? Are there assets to represent it? What, percentage of it has been applied to increasing the earning power of business? liese are some of the questions which nm-t be answered before an opinion can be formed as to the heaviness or light»"ys of the public debt. The gross public r , • ,K h'ss accumulated •-■n- mg_ iiinds. £ 1 ,"240,734: net debt Ci!).s:;,.nss. I desire to point out tint. there j s now a sinking fund for all our existing loans, and every future i l: ' ,rls bilking fund provided for it. without introducing any separate legislation to establish the same. We are rn this rcsiirct, in a singularly strong position. Xo other country in (lie v.oinl occupies so salisfaetorv a position Dl\ ISKIiX op I>UHLIC DEIIT ,1. "OW Miow (he. division of our debt »»:Wi is self-supporting and earn ing in,1 5, .~ A " ,0 " nil - expended on railways, £-'.i.1i<i2.:!48; loans to Wal bodies, £4,- ■ s.:UMII: t elegraph and telephone lines, ' ' = reserve fund securities. .LSOIt.OfM; New Zealand Consols. P4(P - Advances' 1 ' /''W" 1 >"' olit «"'»»*" P-set tiers and workers, ■El..!.!;!.,*)!): 1:111,1s for settlement, £0.303,4n->; I .auk of \ew Zealand shares, £500,- ( »;0: insurance. £2000; total, r -''li-'oic C H Wi " l,lus SP( ' n t,iat I-L„)4f, n f our debt pays interest, and some of (Ins gives more than the interest, paid lor its use, being actually profit producing. If from tl,i s is A l '""•ted the sum borrowed to help local bodies, whieli when due will he paid |,v the JJominiion, (here remains a sum of U3.1141,!)■](! wliicli 1, no burden from .;;; v r " f 1axa1i,,,,. and never "ill he to the taxpayer. Of (he remaining portion of the public debt some is indirectly interest bearing. The loans that are non-interest bearing are:—Loans for roads and brido-ps £0,871,251; immigration, £2,403,002-

Maori war, £2,357.000; defence, £2,783,727; harbors and lighthouses, £573,083; development of gohltields and coalmines, £087.598; tourist and health resorts, £U11i,507; scenery preservation, £40,000; charges and expenses of raising loans, increase by conversions, etc., together with provincial liabilities taken over on abolition -of provinces, £9,244,990; total. £25,452.758. THE DEBT SUMMARISED. The public debt may be. summarised thus—(l) paying interest, and making profit, £47,923,940; percentage of whole 58 per cent.; (2) indirectly interestbearing, £7,701,418, 11 per cent.; (3) non-interest bearing, £25.452,758, 3 per cent. If the period of the Dominion's borrowing is divided into two, that before 189.1 as the first and after that date the second, it. will be seen that the burden of our debt is really decreasing, altlumgh the 'total has largely increased. Tn ls9l 49 per cent, of the debt was directly interest-bearing, and 51 per cent, non-interest-bea-ring. Since 1891 our debt has been increased from £38,830,350 to £81,078,122, but it will be seen that more than 80 per cent, of the increase is self-supporting. These facts speak for themselves and should be remembered by those who are so ready to cry out against our financial position. THE RATE OF INTEREST. The average rate of interest paid on j our loans was considerably more in 1891 than it is now. On March 31, 1891, it was £4 10s 3d per £IOO. Since then it lias decreased by about \7'/ 2 per cent., and is now about £.3 14s Od. Taking tha difference in population, the. rate of interest per head on the non-interest-bearing portion of our debt is much less now than 20 years ago. That which is earning interest, it cannot be too often repeated, does not oppress the taxpayer at all. In 1891 the population of the Dominion was 034,058. It is now 1,008,407, a,n increase of over 59 per cent. The non-interestrbearing debt 'has, however, increased bv only I2°B per cent. In 1891 it was £19,810,350. It is now only £25,452,758. Twenty years ago the interest paid per head on the whole debt was £2 las 3 l / s d; it is now £2 10s s'/4d, a decrease of 8 per cent., but in 1911 only 31 per cent, of the debt can be said to be dead-weight, while in I'B9l 51 per cent, of it was of this nature, and the amount payable on it has fallen from £1 8s to 18s 7%d per head of the population, a decrease" of 19,4 per cent. It is the duty of every person who speaks as one having authority in public matters to make himself acquainted with the truth respecting our debts. The more minutely they are examined the better it will be found that they are a. diminishing load for the taxpayer to bear,, that they have been on the whole well expended, and that the inhabitants of tho Dominion have benefited enormously by the provision now established by which they will be wholly extinguished in 75 years. [ have considered' it desirable to go somewhat lengthily into the position of our indebtedness 'owing to the persistent misrepresentations •mule alwiut the financial position. During the last few months there appears to have been almost a widespread conspiracy of defamation of our country's financial condition. WEALTH AND ASSETS. ' here are so many wrong impressions conveyed regarding the genera! position of New Zealand that I thiirk it will be recognised as of use to our people if 1 set out an estimate of private wealth in Hill. Our position may be seen at a. glance by comparing our liabilities with some of our assets: Liabilitie9£79 - 837,35S (of which only £25.452,75S is dead-weight debt); assets: Crown kinds, £22,000,000; educational lands, £5.030,150: (lovernment railways open and under construction on March 31, 1911, £31,■I0:>.9;;0: other public works, telegraphs, lighthouses, harbors, water supply on «oldtiehls, aUKM.IMHI; value of lands held as security for amounts borrowed for advances to settlers and workers, £20,. f!'"l.00t>; value of lands held under Lands for Settlement Act, CO,000,000; liank of Xew Zealand shares (say), £2,01}'.),(100; reserve fund securities*," £800.001); total. C9.5.348,.)75. This does not cover all the assets, private land and mortgages being taxable as against the public debts. If we include all our wealth such as laud, live stock, bank timber, etc., the total exceeds £050,(HiO.WX). The sales of lands have shown that valuations are very much below that of actual sales, so 'that no exception can be taken to valuations under this head, as they are well on the low side. I am not taking into account incomes derived from salaries and professions. which now approach about four millions sterling per annum, nor do I take into account the earnings of wage earners, the estimated total income of which is £30,000,000 per annum. The public and private wealth in the Dominion is over 050 millions sterling, and 1 would again call the attention of hon. members to the fact that for every million increase in the public debt tiic assets have increased rather more than ten millions, so that: when the position of the country is being criticised, those who recognise" that the future construction of railways and proper provision for the public service of the people; requires borrowed money to do a portion of it, they should not shut, their eyes to the other side of the ledger, a glance at which proves conclusively that though our debt is increasing, due to the expenditure of money on well-considered proposals for general benefit, of the people. the financial stability both of the country and its people is beyond all question, and per capital of the population our assets and wealth to-day are the highest in the world. The'large increase in the private wealth of the people of the Dominion from year to year shows that our per capita" wealth is increasing much faster than our indebtedness. THE SIXKIXd FUXI). A great deal liasi been said from time to time as to our indebtedness affecting adversely Hie credit of the Dominion! The best answer (o this will be found in examining the price of our stock compared with that of other dominions. The amount, that will he required (o be paid out of tlie Consolidated Fund for the liquidation of public debts will this vear be £1.44,885. The scheme has conic well out, of the criticisms, friendly and otherwise, to which it has been subjected, and the more carefully it is examined the more satisfactory it. will appear. 1 Jiad the pleasure of fully explaining the system to financial experts in London, and I am glad to say it, met with general approval. Enquiries have been made about the system from Commonwealth States and oilier countries. The mischievous statements recently made with such persist - ency in this country about present and past (.'overiiment seizing, or, as it has been inelegantly termed, "collaring," sinking funds deserve the strongest censure. I assert with emphasis that, at. no time in the history of Xew Zealand has any (lovernment. improperly used one single penny of a fund set aside for repayment, of a loan. K'IYE MILLIONS LOAX. I learned upon returning to the Dominion that there had been much criticism by those opposed to (he (iovernnient concerning (he llotalion of the five millions loan. When in England I ascertained that, the operation was regarded as the most successful, nor did the fact that the underwriters of the loan retain a large portion o! il in any way weaken (.lie credit or do any injury to tho Dominion, The fact tliut

the underwriters worn within a comparatively short time able t*> dispose of as much of their holdings as they desired to the investing public at a profit showed conclusively that the disparaging statements as to the success of the loan made at this end were without foundation. Iti fact, we obtained a higher price for the loan than any of the other countries that were borrowing for some months before or since that period. RAILWAY CONSTRUCTION. The expenditure during the year on railway construction and improvement amounted to over one million pounds, la )ADS EXPENDITURE. The expenditure during the year on the formation of roads and- tracks and the erection of bridges to provide means , of access to comparatively new settlements was hardly so heavy as anticipated, owing to the dearth of labor during the summer, when road construction in tho more remote districts can best be pushed on. The services of county councils and road boards throughout the Dominion have again been utilised to carry out the larger part of the expenditure and to undertake the supervision of the works. Some minor difficulties were encountered when the system was | initiated, but they are gardually being overcome, and it is probable that local bodies will during the current year lie entrusted with tho expenditure of increased proportion of votes. IRRIGATION. Satisfactory progress has been made with tli.e development scheme of irrigating lands in Central Otago. MIXING OUTPUT. Minerals for the year show a slight decrease over that of the previous year. This decrease in other minerals was balanced by the large increase in the production of coal, so that the total value of the output of underground wealth of the Dominion shows an increase for the year. POST AND TELEGRAPH DEPARTMENTS. The returns of the Post and. Telegraph; Department indicate a very successful year. For the first time in the history of the Department the revenue exceeded one million pounds. Tho balance of revenue over expenditure for the year amounted to £l-2a,li)G 9s sd. The Savings Bank deposits reached the sum of £ 1f1,?08,9,38, bringing the balance to the credit of depositors up to £'14,104,98!). The turnover of Money Order and Postal Note business for the year exceeded five and' a-half million. The figures show a very healthy state of business in the Dominion. Steady progress has been made in connection with extension of the telephone system to remote districts. The recent decision, under which tho Department takes half the risk of the estimated deficiency on Hues applied for, has been the means of providing communication to many places where business would not have warranted such facilities unless on payment of a comparatively heavy subsidy by settlers. LAND SETTLEMENT FJNANCE ACT. Very satisfactory progress has been made under this Act. The amendments introduced' last session have somewhat simplified' the procedure, but further amendments are required to complete the measure. The total number of associations incorporated or approved under the. Act is eighteen, with a membership of K)7, and an area of 14,9115, valued at £■20!),577, lias been dealt with by them, 'hi addition, there are live other associations under consideration, and eleven proposal.-, to form associations and purchase lands ,have been declined for various reasons. The Hoard has had to exercise very considerable care in dealing with the formation of associations, as it is fomwl that the members are apt to enter into an agreement without due consideration. The responsibilities 1 wJiich each member is supposed to undertake are not well understood, neither are the conditions of purchase in some balances being complied with. Further safeguards are still very necessary. The system of land purchase and closer settlement provided for by the Act will have a great development when better understood. LAND FOR SETTLEMENT ACT. There have been a considerable number of estates purchased during the year, of a total area of 14,399 acres, and valued at. £l-58,790. There is an increasing demand for land, both pastoral and agricultural. Every eirort is being mil do to secure suitable areas at anything like a price that will leave a living margin to settlers. NATIVE LAND SETTLEMENT. The activity of the Native Land Court and its effect upon the progress towards settlement of native lands during the ]iast. year has been most marked. The settlement and occupation of native land is being proceeded with at a rapid rate. If it were to continue for a very few ycars'not one acre of native land would remain. DEFENCE. The new Defence Act which is now in operation provides for the gradual mili-tary-training of every male above the age of fourteen in New Zealand, and the enormous amount of work involved in connect ion with the putting into operation. of this Act is, I think, quite apparent to lion, members. Tt is to be hoped that we shall eventually be able to build up a citizen army, which, in its organisation, training and efficiency, will enable us to preserve our shores inviolable from invasion by a foreign foe. Special efforts are being made to ensui3K":that the building up of this force will-lie carried out with a minimum of inconvenience to .employers and employees. and without in any way interrupting the ordinary routine of trade and commerce. STATE GUARANTEED ADVANCES. T-lib amount, granted to settlers during the year was 111,'201.310, an increase over the previous year of £109,190. The number of applications received proves the large demand still existing for cheap mom v. ADVANCES Tt) W-ORKER.S. This branch shows a record in business. the amount granted to workers for building or acquiring homes during the year being , I'-h 1.7.700. I a.ni glad to say that the system by which a worker can obtain a home for himself by paying a deposit of .u.lo is being largely availed of. Since the legislation passed last session, hs(M) applications under this beneficient scheme have been received ADVANCES Tt) LOCAL AUTHORITIES As anticipated, a large amount of business has been done in 'this branch, the total amount, applied for during the year lieiu;; C 3.701,31-2. Of this £1,8.')7,3!)4 was provisionally approved and A.'l,S-J3.!)IS declined. LOAN OF £1.500,000. I propose to ask Parliament to authorise loan oi C 1 .-vOO.OOO for construction of railways, roads, bridges, and additions to open lines and other public works.