THE FINANCIAL SATATEMENT.

Temuka Leader, Issue 1240, 18 September 1884, Page 2

THE FINANCIAL SATATEMENT.

Sir Julius Vogel delirered his Financial statement on Tuesday evening last, of which the following is a summary : INTRODUCTION. The year 1883-84 was commenced with a surplus of £35,549, and it ended with a deficiency of £152,012. This result was represented in entries at the end of March as follows :—There were outstanding deficiency bills still current amounting to £398,000; to meet them was cash £203,447, and imprest advances in the hands of officers of the Government, £42,441. Taking the last as cash, it will 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 consolidiated fund, show that during the past year the payments exceeded the receipts by £6217. The balance of £86,464 with which the year began, and which was chargeable with a sum of £75,203 transferable in respect of tho 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 became £80,447 at the close of the year without the repayment to the Main Roads Fund being ! maie. The £75,203 due on the transactions of 1882-83 therefore still remains unpaid to the Main Roads Account, as on the 31st March 1883. There was in the Public Works Account (I quote my predecessor for the remainder of the sentence) "an unexpended balance of £877,912, but of this £202,484 was advanced in the hands of officers, and as hon. members who follow the public accounts know, advances outstanding, though included in the balance in hand, are not usually available for expenditure." The balance included the whole proceeds of the second million of the three million loan, and also the proceeds of that odd little colonial inscribed loan of £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 funds accrued, amounted to £29,574,902, the annual charge in respect of which (includ ing the contributions to the sinking funds) imouDts to £1,578,799. This debt wis exclusive of the deficiency bills amounting to £298,000 issued in aid of revenup, and of those remaining outstanding at

tlis close of the year, as also £400,000 oi deficiency bills issued to facilitate remittances which I consider a contingent, though remote, Jiabilily. The colonial Treasurer (Major Atkinson), after procuringHisExcellency's assent to a dissolution, obtained temporary Supplies, and in ordei to provide for them secured also authority to issue extra deficiency bills to the amount of £400,000 to represent, first, the deficiency of the past year, amounting to £250,000 ; second, £50,000 additional to the £400,000 of bills already authorised for the current wants within each year, and thirdly, £IOO,OOO in aid of the public works funds. These aids the Treasurer thought would carry him on to the Ist September, and he v\as 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 them. It must be understood that the Statement is not a book-keeping one, obtained from the balance of the accounts, but merely an estimate of the cash requirements. The Estimates showed that, taking into consideration the probable incomings oi 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 are issued and disposed of. There is a further amount not estimated which has come in for payment, but about this I shall sey nothing at present. As regards the Public Works Fund, the Estimates showed that at least £IOO,OOO would have to be borrowed in some shape 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. MISCELLANEOUS. Ho then said that the conversion oi stock which had already been carried out would effect a saving of £300,000, and £6OOO more would be saved by the conconversion of the balance. He proposed to reduce the Armed Constabulary by £20,000, and to add 5s to the Capitation Grant of Volunteers, and also a sum to defray the expenses of Fire Brigades attending demonstrations. He would reduce the Education GraDt by 5s per head, but as it would take effect only during the last quarter of the year i* would only amount to Is 3d per head. The Westland Schools wouM be excepted. Non-political management of railways would not be dealt with. He would effect a saving in the audit department by amalgamating offices. He would keep telegraph offices open till 8 p.m. and closed for half an hour in the middle of the day. Ordinary Revenue Account. Receipts. Customs ... ... ... £1,375,000 Stamps ... ... ... 527,500 Property tax ... ... 275,000 Beer duty ... ... 55,000 Railways.';. ... ... 1,120,000 Telegraphic ... ... 94,000 Registration and other fees ... 37,000 Marine ... ... ... 16.000 Miscellaneous ... ..... ... 35,000 Total ... ... £3,534,500 ' Territorial Revenue.— Depasturing licenses, rent, etc. £IBB,OOO expenditure. The expenditure I estimate as follows : Permanent Appropriations Civil list ... ... ... £29,750 Interest and sinking fund ... 1,559,115 Under special Act of the Legislature ... ... 53,724 Total ... ... £1,642,589 Annual Appropriations— Legislature ... ... 68,510 Colonial Secretary ... ... 238.435 Colonial Treasurer... ... 51,643 Minister of Justice... ... 117,265 Post Office and Telegraphs ... 159,322 Customs ... ... ... 79,081 Stamps ... ... ... 27,491 Education ... ... 328,102 Native ... ... ... 18,310 Mines ... ... ... 21,308 Public Works ... ... 740,660 Defence .. ... ... 183,427 Total ... ... £2,132,563 Grand total... ... £3,775,152 The Committee will observe that this shows a deficiency of £52,052. Let ua I now see what we may do iii the way of convarting the deficiency into a surplus THE IOANS AND SINKING FUND. He proceeded to say that our total net indebtedness is £29,574,902, on which we are paying annual charges for interest and sinking fund to the amount of £1,578,799, or in other words 5.33 per

cent, although our 4 per cent inscribed stock is quoted in London at 103 f. If we bring our loans down, as we may well do, to a basis of a little over 4 per cent, we may have <m annual saving of over £300,000. On the 1856 loan there is a net balance of only £23,009, yet on this we are paying £20,000 per annum interest. We are paying an additional £IO,OOO for sinking fund. We are paying interest on this at the rate of 8.69 per cent. The next loan is that of 1860. In this case there remains a net indebtedness of £14,094, with an annual charge of £7448. There remains on the laive loan of 1863 a net indebtedness of £937,940,

with an annual charge of £96,792. The New Zealaod consolidated Joan is yet large. On a net indebtedness of £5,807,607. There is an annual charge of £436,986. The chief disorganising fact was the sinking fund which I proposed to abolish 17 years ogo. I proposed to abolish tlnV, which would rolieve us to the extent of

£244,ooo. He also referred to the inscription of Stock which he had instituted in 1875, and got aft Imperial Act passed, of which all the colonies had taken advantage. By the aid of this Act it is that I propose to save the colony some £300,000 a year. It cannot all be done sit once, but effected it will be as the market will allow its being done, and my proposal is to accept the debt as it at present stands, not vainly to tax colonists to pay it oft, but by conversion to approach the result of saving £300,000 a year. This means that without further nnuual charges than at present you may borrow seven and a half additional millions. The late Government did something in the direction of conversion under the Inscribed Stock Act, as I have already j related. The principle on which the great profit is to be made, apart from i saving the colony the burden of the sinking fund, is the higher market value of inscribed stock. Whilst it rules about 3, | over par, bearing only 4 per cent',

r i interest, 4£ and 5 per cent debentures ■ rule at not much over the same market , [ price. It is probable, also, that large I masses' of the accrued sinking fund will be set free during the process of conver- , sion, and, subject to the control of the • House, will become available for public works in lieu of fresh borrowing. The s Hon. Member for Egmont has again and again claimed for his Govern- ■ tuent the credit of raising the value of New Zealand inscribed stock from 80 to 100. This is a very disingenui ouß clnim. The facts are simply these : I In 1879 the Government found they had i brought the colony to a financial condition i which made a lo*n of five millions imi perative. Such an amount for a colonial - colonial loan was then unknown- 1 The r Agents, of whom I was one, were told the i price was not to bar the way. They i found there was but one mode of doing it, and that was by the agency of the ; Inscribed Stock Act. "We were able to i effect the operation by giving option to ' subscribers to exchange their scrip or debentures for inscribed stock at about 80, > bearing 4 per cent interest, equal to borrow- - ing the money at 5 per cent. Even then we had to give an assurance that the , colony would not borrow further for ' three years. That three years' interval, 1 and not the Government, was the secret of the rise, together with the fact that all colonial stocks rose as the probability of I an early conversion of consols became apparent. Again, part of the rise was due to the popularity of the inscribed s slock, as may be seen by its comparative I value to which I have already alluded. i It may soothe the ruffled vanity of my > hon. friend if I add a few words. When ! I took office a few weeks since a romarks able increase in New Zealand securities ; took place on the day the news reached Loudon. Mr friends were good enough to ascribe that rise to me. It was merely : a coincidence. I had nothing to do with the rise. It was due to Mr Calder's I operations for converting consols. AH . colonial securities rose. The Stock Ex- [ change and money markets are, I believe, , quite indifferent as to whom Parliament , honors with the charge of its finance. , They rely on the fittest person being, ( from time to time, selected. I THE RAILWAYS. With regard to railways he said that in 25 years our debt would be nothing compared with their value. The following is a statement cf the principal traffic in local products for the past five years:— 1879 80—Wool in tous 41,895, timber in tons 149,428, grain in tons 240,144, ; minerals in tons 321,060, horses and cattle in number 30,393, sheep and pigs in number 260.81 G. 1880-81—Respec-tively 42,387, 169,695, 421,142. 406,266, 27,230, 280,683. 1881-82 192,905, 375,725, 433,659, 22,511 319,837. 1882-83 367,428, 510,088, 37,455, 449,470. 188384—72,066, 183,449, 432,223. 574,313, 35,948, 656.612. He held it was legitimate to pay interest on the cost of constructing public works out of lo»ns for the time during which the works were being constructed, bnt the state of the finances did not require it. XOCAL INDUSTRIES With regard to local industries, he ridiculed the idea that labor was too dear, and said the high price of labor had stimulated the people to discover laborsaving machinery. An eminent Engineer said to him ooca Le would rather pay 10s per day for labor in America than 10s per month in India. Our object should be to produce for export to the South Sea Islands and India, and he mentioned amongst other articles mutton and wool. The Government proposed to hold exhibitions of industries at the various centres of population every year or two ; the first to be held in Wellington next year when Parliament meets. They would also encourage the development of beetroot sugar through the Customs, by passing an Act declaring sugar produced in the colony shall be exempt from duty, and that the present import duty shall not be reduced. PROPERTY TAX. The £244,000 got from the sinking fund would enable the property tax to be reduced to one-half what it is at present, and this would be done. THE NEW LOAN. The nmount tlie Government intended to borrow was one and a-half millions sterling, and the following works they intended to pusb ahead : -The North Island Trunk Railway is of supreme importance, and must be proceeded with as rapidly as possible. Large blocks of land would be secured along the line of route, and made the subject of special settlement. Also the Otago Central and the short piece that will place the Napier line in connection with the line from Wellington northwards. They would introduce a Bill to authorise the Govern-

nifjut to enter ioto sn agreement with a company or syndicate for the construction of 'lie line between the j£»st and West Coasts of the Middle Island, and to enter into an agreement on the same conditions n'iili the same or another syndicate or company for the extension of the lino from Nelson to connect with some point of the through East and West Coaat line, thus giving Nelson communication with both coasts. IAGAL GOVERNMENT. The Government would appoint a

Royal Commission on Locil Govornment during the receun. He believed with this policy the colony would progress by leaps and bounds, and concluded l>y saying the finances were not in a bad condition, but that they were only mismanaged.