FINANCIAL STATEMENT.

Temuka Leader, Issue 2377, 2 July 1892, Page 2

FINANCIAL STATEMENT.

The Honorable the Colonial Treasurer delivered his financial statement last Thursday evening. The following is a condensation. REVENUE. The revenue actually received, during the year, amounted to £4,361,08716s 6d, or £87,287 16s 6d more than was estimated. The principal items of excess were from Customs £90,271, railways £7990, miscellaneous £4854, and property tax excesses, £4326. On the other hand stamps produced £14,950, beer duty £2205, and depasturing licenses £3004 less revenue than was estimated. The actual expenditure was only £4,192,947 6s sd, or £26,584 13s 7d less than was estimated. Interest and sinking fund was underspent by £17,380, owing principally to an over estimate of the amount required for payment of interest on 3£ per cent stock, and on debentures issued under “ The Government Loans to Local Bodies Act, 1886.” Subsidies to local authorities were also overestimated by £17,239, the local bodies not having put in their applications to the extent they did the previous year.

The Ministers of Mines and Lands had effected a saving of £7531 on the votes under their control, principally made in the stock branch. In the Defence Department a saving of £6299 had been affected, to which the police contributes £2279. Other Departments, including the Civil List, expenditure, contribute small savings, amounting altogether to £13,036. The figures produce a total expenditure less than the estimate, of £61,485. Under the Permanent Acts there has been an excess of £23,076, arising from an under estimate of amounts payable to Harbour Boards and other local authorities, and of the amount of compensation payable to officers of the Civil Service for loss of office. On some classes the animal expenditure has been exceeded, principally in the Postal and Telegraph Department, which shows an excess of £7586. Some other small amounts and services not provided for bring an excess of expenditure over the estimate of £34,900 the result being a net saving of £26,584 13s 7d. The actual revenue of the land fund amounts to £103,24015s 6d, while the estimate was £92,700 resulting in an excess of £10,540 15s 6d received from cash sales. The estimated expenditure was £118,174, the actual figures were £120,031 5s 4d, or £1857 5s 4d more than the estimate. The actual receipts, as before stated, amounted to £4,361,087 16s 6d, and the over expenditure to £168,140 10s Id. The surplus from last year together with this year, after paying off £IOO,OOO of our debt, makes a total surplus on 31st March last of £165,573 18s sd, which is sufficient demonstration of the elasticity of out financial resources, and affords ample proof of the care exercised by my colleagues in the administration of the departments committed to them.

PUBLIC WORKS FUND. SUMMARY. Although Parts I and II are in every respect separate ways and means, it may be convenient to show an analysis of their several balances, and of the total produced by the two thus : . Cash in the Public Account Part I, £125,32210s 3d; Part 11, £16,878 14s 3d ; total £294,201 4s 6d. Fixed deposit in London, Part I, £30,000; Part 11, nil ; total £30,000. Advances in the hands of Officers of the Government, Part I, £60,777 10s; Part 11, £2098 5s sd; total £62,87515s sd. Temporary investments, guarantee debentures of the loan of 1870, £10,000; Part 11, £106,000 ; total £116,000. 4£ per cent stock of 1884, £5600 ; P.art 11, nil’, total £5600. Government loans to local bodies debentures £23,000; Part 11, nil ; total £23,000. Westport Harbour Board debentures, Part I, £28,000; Part 11, nil’, total £28,000. Greymouth Harbour Board debentures, Part I, £16,000; Part 11, nil ; total £16,000. . Balance of assets under section 31 of the “ Government Loans to Local Bodies Act, 1886,” Part I, £B7B 8s 9d; Part 11, nil : total, £B7B 8s 9d. Totals, Part 1, £299,578 9s Od; Part 11, £276,97619s 8d; total, £576,555 8s Bd. CONVERSION OF STOCK. Briefly the results of stock conversions have been these: debentures amounting to £589,600 have been converted into £622,633 of 3J per cent inscribed stock. The previous annual charge for interest and sinking fund was £45,363. The annual charge for the conversion is now £21,792, and the consequent annual saving will be £23,571. A large conversion takes plape this year, £43,600 due op the 15th danpapy, and £4,214.100 due on flie 15th April, of 5 per cent debentures, become convertible into 4 per cent stopU at the respective values of 110 and 107. The operation result the public debt being increased by nearly £300,000* but there will be an immediate saving of £30,000 per annum for interest. Of the £482,000 of debentures issued under i “ Government Loan to Local Bodies Act,” £449,000 became due on Ist Marph last, and were converted into Consolidated Stock debentures under the Consolidated Stock Acts of 1884 and 1891, and the operation was a convenient one for obtaining a concession in the rate of interest from 5 to 4£ por cent, per annum. During the past year £79,408 was paid over to local authorities, making a total of £384,772 advanced to the 31st March last. THE PUBLIC DEBT. Irrespective of the accumulated sinking funds, the public debt on the 31st March, 1891, was £38,830,350, in respect of which the charge on the Consolidated Fund for the year 1891-92 was £1,892,929. On the 31st March, 1892, the debt stood at £38,713,068, being £117,282 less than it was on the 31st March, 1891, and the charge on the consolidated revenue for the current year is estimated at £1,835,770. By means of the sinking funds set free by the conversion of a portion of the debt 1 have been enabled, under the provisions of “ The Consolidated Stock Act, 1884,” to redeem debentures to the amount of £350,671. I have also redeemed from the same source, in accordance with my promise last year, a further amount of £IOO,OOO,

making in all £450,671, and as I have previously stated, the debt has been further reduced by £IOO,OOO out of the surplus of the year 1890-1891. The debt under the Consolidated Loan Act, 1867, has been also reduced by £54,500, this being the amount of the bonds of that loan held by the public in England, drawn for redemption at the March 1891 drawing. The debt under “The New Zealand State Forest Act, 1885,” has been reduced by £IOOO, and the whole of these debentures are now paid off. These reductions amount iu the whole to £606,171. The additions made to the debt during the year have now to be taken into account. £282,300 of debentures under “ The Consolidated Stock Act, 1884,” were issued for the estimated increases of the sinking fund of the year, and £157,000 was raised under the Government Loans to Local Bodies Act, 1886, By the conversion operations the debt has been increased by £49,589. These additions amount to £487,889, which deducted from the amount paid off, namely £606,171, leaves a reduction of the public debt of £117,282 on the 31st March last, as compared with the amount on the 31st March, 1891. Other transactions took place arising out of the renewals of debentures falling due, but as these operations were effected at par they did not alter the amount of the public debt, although advantage was taken at the time to reduce the rate of interest being paid. As I have just stated, the public debt on the 31st March, 1892, in respect of which we are paying interest, was £38,713,068, but as the accumulated sinking funds are estimated at £1,035,449, the net debt at that date is stated at £37,677,619.

ESTIMATED RESULTS OE THE YEAR 1892-93. As I have already stated, the net surplus brought forward from last year amounted to £165,574. After paying off £IOO,OOO of floating debt, and transferring £30,000 to the Public Works Fund for construction of roads and bridges, and after having made good the deficit of £16,532 in the land fund account, the estimated amount of revenue for the year is shown at £4,326,100, making a total revenue of £4,491,674. The estimated expenditure, as I have shown, is £4,161,397, and, deducting this from the revenue, we have an estimated surplus of £330,277 at the . end of the present financial year, subject, of course, to any supplementary estimate. ACQUISITION OF NATIVE LANDS. It is proposed to submit to Parliament for consideration a measure intended to provide for the acquisition of native lands to an extent not exceeding an expenditure of £50,000 a year on the selfacting principle, which will permit onehalf the purchase money to be invested as an endowment, bearing interest at 4 per cent., for the benefit of the owners. Thus the tribal owners will, in the first place, be provided with sufficient reserves to enable them to protect and maintain their material independence from the possibility of want, and, in the second place, every seller will have secured to him an annuity for life, transmissable to his descendants. Both colonists and natives may in this way combine to carry out a scheme which will secure, on the one hand, the settlement of the country, and, on the other, the permanent welfare of the Maori people, and which will have the effect of gradually bringing both races under the one law. ACQUISITION OP PRIVATE LANDS. The Government believes it to be a matter of the first importance that the work of colonisation should be renewed in many parts of the colony where landed monopoly prevents the increase of population, or where the consolidation of estates draws people into the towns or out of the country. To acquire land to be settled in moderate-si zed and small areas a Bill has been prepared to enable the land to be purchased, subject to su«h checks and safeguards as will absolutely prevent the possibility of the system being abused. For the present the measure need not provide for the compulsory taking of land. This may become necessary in the future, but it is believed that voluntary sale will provide sufficient land to enable the system of recolonisation to be fairly tried before another step in advance has to be taken. The argument generally urged against the purchase of private land for settlement is two-fold. It is maintained that while there is Crown land still open for sale in any part of the colony it is not a wise policy to make purchases of private estal.es, and that it is impossible to provide protective checks sufficient to prevent abuses arising in the purchase of private lands. To the first contention it may be replied that if land is not available for settlement in Canterbury or Otago the unplaced population may prefer an Australian colony to another part of New Zealand ; while with with regard to the second objection, the settlement of the land by a numerous population, paying a 5 per cent, rent on their price, is a complete answer. It is also beyond dispute that the cultivation of small areas enables a higher rent to bo paid than the cultivation of large ones. In this instance the State, as a coloniser, seeks no profit save indirect profit and the national advantage of a thrifty and industrious people, contributing their fair share to the general revenue of the colony. The Government looking to the absolute requirements of the South Island attach the greatest importance to the measure, and hope Parliament will determine to, give it the force of law in the present session.

LAND AND TAX. The committee will no doubt be glad to 'same approximate results of the assessment of land and income. The obtaining of returns of income has been a difficult matter, chiefly because i here was not trustworthy information as to persons who should pay income tax, and consequently forms could not be delivered. Again, many porawm who should send in returns are more <xr less ignorant of the provisions of the law ; hence they have not forwarded them. However, enough information has been gained to indicate that it is not probable that the estimates of £40,000 from business and £16,900 from emolument and employment (founded on 6d up to £IOOO and Is above this amount, with an exemption of £500) will lie reached. I do not anticipate that the result will be seriously below the estimate, for it is expected that the number of X'eturns will be largely augmented, and an examinatian of many of the incomes and the deduction therefrom will result in material altera. tions in the direction of a large* assert*, uit. The estimate of £47,000 for companies will probably he somewhat exceeded, but exact figures are not yet at my command, though I am able to say it is certain that, the estimate will he reached. The graduated land tax may be set down as about equalling the estimate, and may be taken as producing £60,000, possibly more, for here again the exact figures are not obtainable in consequence of the reduction made by Boards of Review not having been taken into account. The ordinary tax on land that is under mortgage, and on land loss improvements to the value of £SOOO for each ownei^

certain deductions by way of exemption was the part of the new scheme of taxation that was most severely criticised by the opponents of the Government. My forecast of the result was freely criticised. It was alleged over and over again that the calculations must have been made on a wrong basis. Elaborate statements were prepared to show that I had been over sanguine, if not reckless, and 1 understand that it has been by many looked on as certain that I shouldhavetoannounce a serious deficit in this source of revenue. I was aware that the asssessraent of improvements would be a difficult process, and that ow no rs and assessors would frequently differ widely in their calculations as to the value of improvements, the benefit of which was exhausted. I have pleasure in stating that information has been most readily accorded by the great majority of owners, they have assisted the officers of the Department in arriving at the fair value of land and the improvements thereon, and I am able to state with confidence that the assessment is the best and most accurate that has been made in the colony. I am happy to inform hon. members that the result has been so far satisfactory that there will be a surplus under this head, which will secure a small excess on the whole scheme. When further information is obtained I shall submit some amendment in the Act for the consideration of Parliament.

CIVIL SERVANTS. Mr Ballance unfolded a scheme for providing retiring allowances for civil servants. He proposes to deduct 5 per cent, from their wages to provide a fund for this purpose. Police, school teachers, and other permanent public servants could avail themselves of this scheme, and it would also be opened to the general publis if they desired it. A system of classification will be embodied in the ucheme by which youths entering the Civil Service can rise to £IBO a year, where they will stop until promoted. This will lessen Expenditure.

PUBLIC TRUST. There was on the 31st March last 3185 properties or estates under administration, of a total value of £1,461,163, as compared with 2916 on the 31st December, 1891, of a total value of £1,463,027, and 2491 on the 31st December, 1890, of a total value of £1,393,413. This was due to the legisla,tion of last session, which gave State guarantee. GOVERNMENT INSURANCE DEPARTMENT. The Government Insurance Department continues to make satisfactory progress, and shows an increase in the new business for the year, while there is at the same time a diminution in the ratio of expenses and a marked dcrease in the number and amount of the lapsed policies. The amount of new business reached, in round numbers, was £700,000. The income for the year was £330,895, being an increase of £17,470 over the previous year. The accumulated fund has increased during the year by £132,603, and by December next will probably exceed two millions sterling. The valuation for the five years ending with 1890 was duly made by Messrs Bailey, Hardy, and King, the consulting actuaries to the Department in London, to whom the data were despatched in March 1891. The results of their investigations were cabled from London at the end of October last, and disclosed a surplus of £239,475. This result is all the more gratifying inasmuch as the valuati®n was more severe than on any previous occasion, the computations being on a 4 per cent, basis instead of 44 per cent, as formerly. The report of these gentlemen will be laid before Parliament. BUREAU OF INDUSTRY. The number of persons for whom this Department found employment was 2974, of whom 2000 were erayloyed by private individuals, and 974 on public works. There wore 189 officers connected with this Department, but they were chiefly policemen. The cost of the Department was £2318, of which £330 was salaries, the balance being for railway fares. It was the intention to establish one or two State farms, where persons not fit for arduous work may find suitable employment.

AGRICULTURAL. ' The Government have proceeded, in accordance with the expressed intention of my colleague the Minister of Lands last session, to organise a Department of Agriculture, and have appointed as secretary the officer who has performed his duties so satisfactorily as the Chief Inspector of Stock, and who is particularly qualified to be the permanent head of the new Department. It will be the duty of this officer to collect and distribute information on subjects connected with agriculture among the settlers, by means of lectures and pamphlets, and generally to study and promote the welfare of the farming community. Aid has already been given in developing the dairy industry, and it is proposed to continue giving instruction in this subject. It is satisfactory* to note that there is a large increase in the export of dairy produce during the past year, and from i the reports received from Home the T prospect for this next season are very encouraging. Complaints have been made in a few instances of false packing and branding, and it is the intention of the Government to introduce a Bill dealing with this and other matters appertaining to this important industry. A fruit expert was appointed late last year, and although only a short time in office he has visited and lectured in some of the fruit growing centres of the North Island, Marlborough and Nelson Circulars have been sent out from time to time bearing on the subject, inviting information as to different methods employed in combating different pests affecting this industry. A great many replies have been received y , and advice given in return. The Golf vernment are now considering the P question of employing the usefulness of the experimental farms, and an endeavour will be made to establish several of those useful aids to settlers in deterraing what trees and fruits to grow. Bills will also be introduced dealing with the adulteration of manures, the destruction of noxious weeds, and the giving great facilities in the way of draining agricultural lands by providing a system of local administration. SETTLEMENT. The progress of settlement may bo estimated from the following figures, which give the transactions in laud during the past year : Pastoral country leased, 1,004,410 acres, in 200 runs. ! Settlement lands leased, 280,753 acres, in 1033 properties. Settlement lauds sold on deferred payment, 42,573 acres, in 159 properties. Settlement lands sold for cash, 40,838 acres, in 420 properties. Town lands sold for cash, 91 acres, in 161 prof erties. Total lands dealt with, 1,374,071 acres, in 207'9 properties. The revenue collected was £324,470, including £1954 in scrip, but not including £5600 collected on behalf of j endowed bodies. The opened for 4 optional selection during the year was 47,957 acres, and the area proclaimed for small farm associations was 99,250 acres, but applications approved during the

year were for 342,000 acres, the membership being 1741. These figures represent the value of the work which is being performed in the settlement of the country, and are an indication of the progress which may be expected when the lands being taken up are occupied and contributing their quota to the export trade of the colony.

CO-OPERATION IN PUBLIC WORKS. The system of carrying out public works on the co-operative inaugurated by ray colleague the Minister for Public Works, immediately upon the Government taking office, has been in every respect successful. The principal object of the system was to supersede sub-contracting and prevent the “ sweating ” so often resorted to by the contracting middlemen. Before the new system was thoroughly understood it was objected to on the alleged ground that it interfered with the ordinary labor market, but as time went on and the Labor Bureau was able to equalise the supply of labor throughout the country, the false impression was removed, and the construction of public works upon a system of co-operation has become a permanent institution in New Zealand. BORROWING. Mr Ballance then dwelt at considerable length on the inadvisability of going to the London market to borrow more money. The securities of the colony were now as high as any, but it would not be wise to borrow money in London now. They, however, proposed to open up the country, build roads and bridges, and render it suitable for settlement, and for this purpose would devote the sum of £200,000 out of the surplus to the Public Works Fund, in convenient amounts from time to time within the year. “Of course this limit means a reduced rate of expenditure, and it will impose great care, moderation, and self-denial on hon. members, but by way of compensation, if this be needed, it also means that for the first time we have determined on true self-reliance, the only policy, I firmly believe, to make this a great country. Whether the policy thus inaugurated can be continued will depend on circumstances which may be beyond the control of Governments or Parliament, but we confidently ask for it that sympathy and support which it has a right to claim from every man who wishes well to New Zealand. The practice of the Government has been to devote out of ordinary revenue sufficient to cover the anticipated deficiency in the Land Fund, and I shall have to transfer for this purpose about £36,000 out of the surplus of the year to give effect to our policy of carrying on public works out of revenue instead of borrowing. The £200,000, as I have indicated, will be transferred from the Consolidated Fund to the Public Works Fund. Deducting this £236,000 to be transferred from the anticipated surplus of £330,000, we have the sum of £94,000 left to provide for the Supplementary Estimates and contingencies, which will be ample to meet all probable charges over and above the votes on the ordinary estimates.” There was to be no change in the customs duties this year, as the revenue would be required. Those who may complain of the duty on tea, &c., would be compensated for it by getting good employment and keeping up the rate of wages.

FINANCIAL. At present no sinking fund was provided to meet the loans to Local Bodies, but for this he intended to provide by paying into a fund to the Public Trustee one per cent, so as to provide for the day of reckoning. The Agent-General had effected arrangements with the Bank of England which would save the colony £IOOO a year. Unclaimed deposits lying in the banks would be transferred to the Public Trustee. Foreign insurance companies as a guarantee of good faith would be required to place in the bauds of the Public Trustee certain sums of money, on which they would be allowed 4 per cent, interest. In the case of life offices the amount proposed for each is £25,000, and fire offices £IO,OOO. Considering the advantages enjoyed by these offices I cannot think any reasonable or valid objection will be offered to what is only a measure of precaution in the case of some of the smaller ones, and of fairness to all.

THE WORK OF COLONISATION. If I bring together the various amounts of money under the different heads paid last year for the opening up of the country by means of roads and bridges, apart from railways, the committee will understand the heavy obligation resting upon the colony, and the great necessity for seeing that the expenditure is made only on the most reproductive works. The expenditure under the several heads was as follows

On various roads, £30,098 Is 9d, On roads to open lands for sale, £27,992 Is lid. Lent to local bodies under the Act, .£89,438. Subsidies, £47,700 15s 3d. “ Thirds” and “fourths” from deferred payment and perpetual leases paid over to local bodies, £34,180 4s 4d. Roads to give access to land adjacent to the North Island Main Trttnk Railway, £30,220 0s IdTotal, £260,259 i7s 4d, Here is a total outlay of £260,25917 s 4d provided by the Government for roads and bridges which seems to have become necessary to parry on colonisation or the settlement of the country, It is probable that so large an expenditure will be found to exceed our means and that it will have to be curtailed, but the work of placing the people on Grown lands cannot stop and money will have to be provided to open up new country, I have shown how we propose to achieve that object in the present year, and I have only to repeat what has already been urged, that some self-denial on the part of the districts will have to be exercised. While the duty will be cast on the settlers of assisting themselves to the utmost of their ability the Government will do their part, but their power is necessarily limited, and all must combine to bring about these results on whioh common prosperity depends, CONCLUSION. Mr Ballance spoke at length on the subject of frightened capital, and clearly showed that it was a cry got up by those who wanted to raise the rate of interest. He also showed that the Economist and other financial papers were coming round to see the error of the attacks they made in the beginning. Ho continued to refer to finance, and said it was no HinaU matter they they had beou "hie to pay off £IOO,OOO of the national debt, while still having a surplus of £150,000. The fact that the Customs Revel l , pi) had increased showed the people’s Spending powers were, grtjatpr. The new system of taxation had proved successful beyond anticipation, He wound up as follows ; —I have noticed at some length the policy of self-reliance on which we have entered., and it will be unnecessary in conclusion to do more than remind the Committee of the state of affairs from which we aro trying tq emerge, and of the opinions widely entertained of this eojony, b.pt recently, in the capital of the Empire, It is not more than live years

since a powerful journal, the London Standard, wrote of New Zealand in these terms:—“ Here is a colony wasting millions of loans because it could not pay its way without them. A colony in the true sense is not what we find, but a soil in the grasp of speculators; a people huddled into towns dependent upon public works for subsistance; municipalities joyfully dispersing other people’s money; a land of banks, mortgage companies, and finance companies; a community whose very life is jobbed away on the Stock Exchange with no more thought than if it were so much hemp.” The indictment is fierce and bitter and overdrawn, but to some extent unfortunately it was not entirely unfounded. If Parliament is resolutely determined to remove every trace of the charge contained in the indictment it has in its power to do so. It may in spite of every possible release the land which is still in the grasp of speculators; it may coinmen ce to erect a structure of financial independence, and at length restore their heritage free from the hands of the spoiler. I sincerely thank the Committee for its attention.