THE Temuka Leader. SATURDAY, JULY 8, 1893. THE FINANCIAL STATEMENT.

Temuka Leader, Issue 2526, 8 July 1893, Page 2

THE Temuka Leader. SATURDAY, JULY 8, 1893. THE FINANCIAL STATEMENT.

It is no exaggeration to say that the Financial Statement delivered last Tuesday evening by the Hon. J. Gr. Ward was one os the clearest and most explicit expositions of the finances of the colony ever submitted to Parliament. It was marred by one thing, and that was its length. Mr Ward made the mistake of anticipating the reports of his colleagues and leaving them nothing to say. He appears to have grasped the whole machinery of government, and given a resume of the workings of every department, with the result that as an electioneering manifesto the Statement, owing to its abnormal length, will fail, because it will not be generally read. It is twice as long as it ought to have been, and not half so effective as it would have been had it not been encumbered by so much extraneous matter.

Putting this aside, and dealing only with the financial part of the Statement, we heartily congratulate Mr Ward on his first essay as a financier. The whole colony expected clearness and precision from one who had so successfully financed a large private business, and the colony has not been disappointed. Mr Ward has placed the state of our finances before us in a clear, neat, pleasant, interesting style, which shows that he possesses literary taste as well as a capacity for manipulating figures. It was not unusual to hear Colonial Treasurers in the past called “magicians of figures,” because of the difficulty of understanding their Statements. This cannot be said of Mr Ward’s Statement. “ He who runs may read.” The first thing which we desire to point to is the magnificent surplus of £512,282. The announcement of such a result as this must have been a severe blow to the prophets who predicted the “ galloping to a deficit.” It must have been heartbreaking to them to see the Government bending under the crushing weight of such a splendid surplus. With regard to the public debt, there can now be no doubt as to its position. The gross debt increased by £514,772 last year, and now stands at £39,257,840, but against that there is a sinking fund of £1,113,770, which brings it down to £38,144,070, which is the net debt of the colony. The uninitiated may very well ask, How is it that when borrowing has ceased the debt of the colony has still kept on increasing 1 Mr Ward has given us an idea of this where he says that £328,347 of the increase is due to loan conversions, and how that works out can best be understood by a reference to the transactions with the Colonial Bank. About five years ago Sir Harry Atkinson borrowed £700,0U0 from the Colonial Bank, and £400,000 of this fell due in March last. This was converted into inscribed stock and sold at 95 1, which of course means that the Government got only £95 15s for every £IOO. That meant a loss of about £17,000 on the whole sum, besides the expenses attached to conversion. This loss was made up by adding it to the public debt, and so the Government issued stock for £420,000. Before the conversion of this sum our debt was so far as it went £400,000, after conversion it was £420,000, or an increase of £20,000, but there is another way of looking at it. We were paying 5 per cent, interest on the £400,00U before conversion, now that it has been converted we are only paying 3£ per cent on the £420,000, and thus we save £O3OO a year on the transaction in interest. Thus our public debt was increased by £20,000, but the annual liability for interest was decreased by £6300, so such increases in the public debt are profitable. Of the total increase in our public debt £328,347 is due to loan conversions, and if every transaction is as profitable as the one we have just referred to no one need complain. The next matter to which we desire to call attention is the Public Works Fund. In 1890 Sir Harry Atkinson said it would not be possible to carry on without a loan, and he proposed to raised it locally. The present Government have carried on ever since, and now they have to credit £330,627 16s Id to which they propose to add £250,000 from revenue, making in all £580,627 for expenditure during the year. A tremendous amount of noise is just now being made concerning extravagance in public works expenditures, but here we have the fact that the Government have carried on without borrowing for the last three years, and have still enough to go on with. Still we regret t > see the Public Works Fund t ’ licr SO J ow > because it points to the fact that a l'* n Will eventually become necessary, and lienee ul? objection we have to reducing taxation direction. We have a great objection to further borrowing, believing that it is far better to rely on ourselves aud construct public works out of taxation. We notice 1 Mr Rolleston is of a different nnini u 3 Be, according to the Otago Daily Times, >^ ves further borrowing in preference to tar. he says the political economists' 0 ,® same opinion. The political economist,,. , are all dead, and Mr Roileston is as good as dead, politically speaking, so it is not likely that their opinions will influence live politics in New Zealand now. There is, at any rate, sufficient funds to tide us over another year, and if Mr Ward’s finances prove as successful as those of his predecessor we shall not require to borrow for a long time yet. When it was announced in the Governor’s speech that the tax on improvements was to be taken ofl, we felt that the Government had made a great mistake. However, Mr Wards explanation has in a measure reconciled us to the proposal. He proposes to exempt all improvements from taxation, and make the impost a land tax pure and simple, and by this he will lose £57,000 a year. To make up this loss he proposes to increase the graduated tax so as to yield £19,000 a year more than it does at present. Of this we approve. There are large landowners who improve their land, and others who do not. The man who improves will have to pay loss than the man who does not improve; the man who does not improve will have to pay more, but we think that £19,000 in not enough to exact from them. They hold a monopoly of a large part of the earth’s surface, and they misuse it, aud it is right and proper that they should pay, Mr Ward also expects to effect a saving of $20,000 a year, be-

I cause trienuial assessments of land will I not be necessary when all improvements are exempt. He holds that the prairie value of land does not alter a great deal, so there will not be much necessity for assessment, but provisions will be made for assessing districts in which it has been discovered that land has increased in value. The sum and substance of the scheme is that large landowners will be relieved of £38,000 a year, and that the revenue will lose £IB,OOO a year, and yet Mr Rolleston has the awful assurance to tell the Otago Daily Times that the Financial Statement has been designed for securing votes in view of the coming election. Is it popular to relieve large landowners of £38,000 a year and take not a single cent off the necessaries of life? We are tired of pointing out Mr Rolleston’s foolishness, but we cannot help it. If the Government took the tax off tea and sugar instead of large landowners, then we should say they were doing it to secure votes, but they have not done that; they have done the exact opposite, and yet Mr Rolleston says they are popularity hunting. We do not think they have done either a popular thing or the right thing. There was no necessity for interfering with the laud tax at present, and if taxation was to have been reduced the necessaries of life ought to have had precedence. But the landowners have been clamoring for reduction, while the working classes have borne their burdens unmurmuringly, and the Government have surrendered to the clamor. Their thanks are that they are popularity hunting. This ought to teach the Government a lesson, which they very much stand in need of learning, namely, that they cannot please the people whom they are relieving of taxation, and that it would be far better for them to try to please the people who are easy and willing to be pleased. In conclusion, we desire to again congratulate Mr Ward on having already made his mark as a financier, and we trust he will be spared to deliver many an equally prosperous Financial Statement.