House of Representatives.

Thames Guardian and Mining Record, Volume I, Issue 18, 27 October 1871, Page 3

House of Representatives.

WAYS ANB MEANS. Why should we suppose, when Ministers tell us, in His Excellency’s speech, and on every other occasion when the subject is touched upon, that the credit of the country never stood higher—that we must act under that system ? AVliy should we be forced to give a certain advantage to contractors when our credit is said to be so high in the money market that we can get whatever money we desire, the disposition of which, as to where and in what shape, or to what extent, we should expend it, would be entirely under our control. If arguments are needed to convince the House of the impolicy of the guarantee system, I may refer to the experience so largely and ruinously gained by the Imperial Government, with respect to railways in India, which was referred to when it was necessary for the Colonial Treasurer to obtain a favourable opinion with respect to these contracts from a London solicitor. I refer to the Indian contracts. I find, upon reference to a debate in the House of Lords, in 1869, certain statements made by the Duke of Argyle, Secretary of State for India, in a debate on the affairs of India; he shows how it came to pass that the railways had been originally commenced in India on the guarantee system —not by the Imperial Government, but by the East India Company. He then goes on to show what has been the result in these words :—“ The other day, upon one of the most important linesin'lndia—the Great Indian Peninsular Line—the bridges and other extensive works necessary for carrying the railway through a difficult country came down by the run. These works were found to be of so defective construction that they were wholly insecure, and when the engineers began to mend the bridge they found the structure so rotten that it was necessary to take it down. More than £1,300,000 sterling had been paid for the reconstruction of these works, on every shilling of which the Government have had to give a guarantee of 5 per cent. This is a most extravagant system. The railway shareholders have hardly any interest in the working economy of the lines. It is the 5 per cent, guarantee which gets the money, and the shareholders calculate very little as to whether twenty years or so hence there may be a surplus above 5 per cent. With regard to the construction of the lines, I may remark that the companies have their own engineer, and.the Government a consulting engineer; the result being that there is a division of responsibility between the two, and there are frequent disputes in consequence. For instance —there is a dispute now going on between the engineer of the Great Indian Peninsular Company and the consulting engineer of the Government as to whose fault it was that such bad works were constructed on the line ; and you will, of course, always have such disputes as long as there is divided responsibility. Let the Government undertake the con ■ struction of the lines, and you will have single responsibility and single management ; and it will be contrary to the nature of things if you do not have a considerable reduction in the cost of Indian railways.” That is an illustration of what we shall have to pay under the reconstruction and restoration clauses in these contracts. In the same debate I find that Lord Lawrence, the late Governor-General of India —than whom there can be no better authority—gave his testimony to the same fact; after having stated how necessary it was to extend the Indian railways, and what a frightful cost had attended those which had been constructed, he then gives it as his opinion that a saving equivalent to 50 per cent, would have been effected if the Government were to construct the railways with money borrowed by itself. His Lcrdship further said : “I am convinced, not only from my own observation but from consultation with every class of people in India, English or Native, that the present railway expenditure in India is enormous, excessive, and unreasonable, and that if we took the works into our own hauds we could carry them out at a very considerable reduction. .

If that result could be effected, instead of the guarantee system which now entails so serious a burden on India, we should not only repay ourselves the interst on the money we have had to borrow, but we should have a margin whereby to repay the capital invested. For these reasons, my Lords, I trust that the authorities in India will take worlds of this nature more immediately under their supervision.”

In the neighbouring colony of Victoria, a long and searching inquiry into this question, followed by a careful report,

resulted in a complete condemnation of the guarantee system. Why should wo shut our eyes to the experience of other countries ? Arc we so brilliant in genius, so superior in devising schemes and plans nml modes of administration, so very superior in supervising the construction of public works, that we will blindly shut our eyes to the experience gained by other countries in largo experiments? I should despair of New Zealand if it allowed itself to be carried away by any scheme, however imposing, so as to disregard the dictates of common sense and prudence.

the control of public works as far as possible from the influence of the political feelings and prejudices of tha moment. If our proposal is faulty, our object is clear, and the Government will hope to receive the assistance of the House in making the Board of Works in reality what they have desired to make it—a tribunal with sufficient independent power to guard from political contact the guidance of the public works of the country. I must apologise to the House for having been, perhaps, more diffuse than was necessary. The honorable member’s speech was necessarily very carefully prepared, while I have had to reply almost without notice, and under circumstances of some difficulty, arising from health, as to which I will not trouble the House. I thank the House very much for the patient hearing given to me, and I can only hope I have succeeded in persuading honorable members that it is the earnest desire of the Government to carry out in the most efficient manner possible the very large policy they have had the honour to initiate. Mr. Gillies. — Sir, I have no doubt of the desire of the Colonial Treasurer and his colleagues to do that which they think the best for the country. But I think the question for this House is, whether they have shown themselves capable of effecting that desire, and of doing that which is best. I cannot but admire, though I do not envy, the happy audacity which the Hon. the Colonial Treasurer has shown in escapin froing every thing of an unpleasant character : in turning the point of every argument brought against the present Government by reference to the action of previous Ministers, and by carefully avoiding everything which he might find difficult to answer. I wish the House and the country to understand what is the result of the financial policy of the Government for the last year and for the previous year. I ask the House to look at a few of these results. In July, 1869, the Colonial Treasurer told us that, after a most careful estimate, we might calculate on a surplus of L 16,000. He said, “We may thus presume on a surplus of about L 16,000, after providing for all services to the end of the year.”— Hansard , Vol. VI., page 162. Now, how is this realised ? In July, 1870, lie admits that, instead of this surplus, there is a deficiency of L 35,591. He says, “We have ... a total of receipts ... of L 1,324,862. The expenditure, including all liabilities for the year, will be ... £1,360,454 Is lOd, and showing a deficiency of £35,591 9s 3d.”— Hansard , Vol. VII., page 100. And when we come to the present year, instead of an estimated surplus of £78,688 15s 10d‘ there is a deficiency of £136,000. I take his own words. In June, 1870, he says, “ after giving expenditure and revenue, making a total estimated surplus at the end of next year of £78,668 15s lOd.” — Hansard, VII., page 114. And now, in his statement, page 7—as lie indeed admitted to-night—there is a deficit on this year to be met of £136,000. These are plain facts which cannot be gainsayed. They prove, conclusively, the erroneous expectations or calculations or financial poliey of the Treasurer. Let us look at the results of this policy from another point of view. It will be admittd—it is in the Treasurer’s statement of tables—that the colony is indebted this year £1,200,000 beyond the indebtedness of last year, besides the dificit of £136,000 for tbe year. That means, on both, an increased annual charge on the colony of £80,160. How is this additional burden on the colony to be met ? We find in the financial statement, page 18, that the estimated increase of revenue for this year is £55,000, besides £7,500 from the cereal duty. In all, an increase of revenue of £62,500, to meet on increase of burdens of £80,160. That means a. further deficit next year to be put upon loan and yet we are to borrow £IOO,OOO for roads, or what is the same thing, incur £6,000 per annum more of annual burdens. The fact is, we are getting steadily into debt without the means of meeting it. Another result he wished to put before the House was this. We were last session told that the Provincial Governments were to be better off than ever, and that they were to receive £2 a head, decreasing annually to 30s. by way of capitation allowance. This allowance was to have the great advantage of fixity for five years, the provinces were to know exactly what they could calculate upon, and an Act was passed for that purpose. Now, we fiud that it is to. be altered this first year. Not only is this act to bo repealed, but the amount payablo to the provinces is to be reduced to the sum which they might have expected five years hence,—a time when they might naturally expect a much larger population than at present exists. But how this amount is reduced to 30s at once—lss capitation plus provincial charges, which amount to about other 15s. Another result I must call attention to. In his financial statement of last year, after making the. most wonderful calculations as to the interest, returns, &c,on railways, the Colonial Treasurer said :—“Forthefirstthreeyearsthepayments will be so inconsiderable as to leave little room for apprehension of difficulty in finding the money. After three years, supposing that extraordinary sums are required, will it be a great hardship to increase the stamp duties, &e. ?” Now, what do we find ?—that at the end of the first year we are compelled to increase the stamp duties, which we were led to suppose might possibly only be required at the end of three years. Look again at yet another result of this financial policy. Last year the outdistricts were bribed by the Road Board vote of £50,000. It was then to be paid out of revenue, and was then promised to be so paid for seven years. He said Yol. VII., Hansard, page 109.

What is the result? This year tho bribe is raised to £IOO,OOO, to be paid not out of revenue, but out of loan. Nominalily by one of the Bills before us this is to continue annually till repealed, but who amongst us is so sanguine as to believe that the Road Boards will ever receive it again? That is the result. Wc have to borrow for that which is purely annual -work, to borrow to meet a current annual expenditure. These are the results of the Ministerial policy. These facts, which cannot be denied, prove either that the financial policy of last year was not well calculated, or that it was not well carried out. Financially, the policy has been a failure. It has increased our burdens, and has not shown us any way to meet them. In short, V'e are financially worse off now than anyoa expected us to be. (To bo continued. )