PARLIAMENTARY.

Thames Star, Volume XI, Issue 3573, 9 June 1880, Page 2

PARLIAMENTARY.

(Peb Peess Association.)

HOUSE OF REPRESENTATIVES.

Wellington, Thursday. The House met at 2.30.

Sir G. Grey gave notice of introducing a bill to perpetuate the public services rendered by Mr Moorhouse to Canterbury. " • Mr Hamlin gave notice that he would move for a return showing how the vote of £50.000 of last session for roads, etc., in the North Island had been expended. .. Mr Murray gave notice that he would move that the honorarium be reduced to £100 per annum, and that paid to Legislative Councillors abolished; also, that the salary of the Governor and Cabinet Ministers be reduced.

The following bills were introduced and read a first time :— To extend the franchise to women (Wallis); to prohibit processions (Pyke). Mr Dick moved the second reading of the Licensing Act. Messrs Barron, Stewart, and Ireland objected to the proposal to abolish; the bottle license, contending that it had provided public benefit as well as a safeguard against drinking to excess in the province of Otago. , Mr Seddon complained that the provision against sly grog selling was not sufficiently stringent, and that concessions should be made in favour of accommodation houses. .

Debate interrupted by 5.30 adjourn ment. ;i '

At the evening sitting, in Committee of Ways and Means, the following FINANCIAL STATEMENT was delivered:—^ . The Hon. the Colonial Treasurer (the Hon. Major Atkinson) said —Mr Seymour, when in November last I had the honor to submit for the consideration of this committee the usual Financial Statement, it was thought by many persons not unfriendly- to the Government that in estimating the probable deficit for which it would be necessary,to make provision by the Ist April of £800,000, I had taken a far too gloomy view of our financial position. I. regret to say that my anticipations in this respect have been more, than realised, and that the financial results of the last nine months have proved even less satisfactory than I ventured to predict as probable. I, for one, have not the least doubt that the present check to prosperity—a check which has been felt at the same time throughout the civilised world—is a temporary one; yet bearing in mind the effect this check, and other causes which we might have controlled, have had on onr finances, and also the amount of bur public debt as compared with pur population, the duty of economy and retrenchment has become clearer and more pressing. It is therefore gratifying to know that the plain facts of our financial position, which I had the honor to submit to Parliament last session have fully awakened our attention to this vital subject, and have produced in the public mind a determination that the annual expenditure shall be brought within the annual revenue, by reducing the one as far as to make it compatible with efficiency, and if necessary increasing the other so far as may be needed. The Government propose, sir, to ask Parliament to. give practical effect to this determination. My task, therefore, this evening, considering the extravagant habits into-which we have fallen of late years, is ojne of unusual difficulty, in the execution of which I venture to hope for, at least, as large a measure of consideration as the Committee have so kindly extended to me upon former occasions. Sir, in submitting the financial proposals of the Government in the last budget, I said that it would be possible to surmount our monetary difficulties, and escape the danger of our position, without something like a complete remodelling of our finances, both general and local, without careful administration by Ministers, and without the exercise of much thrift and self-denial on the part of all classes of the community. In accordance with the opinions so expressed certain measures were introduced by the Government, and passed by the House, last session, modify* ing very considerably our financial system by leaving untouched our system of local taxation and subsidies.. Upon this subject I said the important question of local finance is far to large to go into this session, therefore I will say no more upon the subject now, except, t>ir, that the Government fully recognise the fact that it is their duty to submit to this House upon its first meeting next session a scheme which shall place local finance on a satisfactory, and something like a permanent, basis—and by satisfactory ' the Government understand placing local bodies iv such a position as will enable them to obtain as far as possible sufficient funds for all necessary works. While drawing a broad and distinct line between local and general finance the Government wiil endeavor to mature such a scheme before the next session of Parliament. Tonight, sir, I shall endeavor to redeem this promise. I trust, however, the committee will not expect too much. The subject is one beset on every, side by difficulties, and nothing but a strong determination on the part of local bodies to rely more on their own resources, and less upon external help than hitherto, wi|| render any satisfactory solution of this question possible. But, before submitting for the consideration of the committee the proposals of the Government it will be more convenient that I should place before them the results of the transactions for the last financial period, which through the change in the financial year comprises 9 instead of 12 months.

the Ysxa, 1878-79. I will first explain the actual financial results for the year ended 30th June, 1879. It will be remembered that I estimated that after payment of all liabilities outstanding at the close of the year, and taking credit for the assets of the year, there would be a deficit of £131,824. The actual deficit on the transactions entered up to 31st March last in respect of the period now being referred to proved to be £69,418. There remained unpaid, however, up to that date, liabilities to the amount of £70,193, including. £50,000 owing to the Bank of JNew Zealand, aa the balance of an overdraft of the late Provincial Government of Otago, whilo on the other hand further assets amount- ! ing to £5281 hare been reduced since 31st March, so that the total deficit, including assets and liabilities, on 30th' June last, was £133,790, instead of £131,824 as estimated. We now come to the expen-

diture of the last financial period. In the statement which I had the honour to make to the Committee last session I estimated that the expenditure would amount to £3,110,262, but this sum was increased to £3,139,539 by the passing of the supplementary estimates. The actual expenditure to 31st March last, excluding advances in the hands of officers of the Government, amounted to £277,276. It will be in the recollection of hon. members that last session I proposed that in future the receipts within the year should foe held to be the revenue of the year, and that*-expenditure made within the year should' be the expenditure off one year. In accordance with the provisions of the Public Revenues Act 1878 Amendment Act 1879 the returns of liabilities outstanding on 31st March amount to £3,142,966, from which, however, I deduct £70,193, already referred to as belonging to the period ended 30th June, 1879, leaving a sum of £272,773 in respect of the period we are now reviewing. Adding this sum to the actual expenditure to 31st March, amounts, as I have said, to £277,266. We get & total expenditure of £3,045,049 as against £3,139,539. The estimated amount there being thus an apparent saving of £94,490. A comparative return of the estimated and actual expenditure of each class with the liabilities added has been prepared, and will be appended to this statement. There are several items rising merely from an over estimate, and which cannot be regarded as savings, such as interest and the 20 per cent, of land fund payable to counties.. On the other hand there are certain payments for services not provided for which reduce the amount of the total net savings for the period under the head of annual appropriations, where alone savings can be effected. The expenditure in eight clauses out of eleven, after including outstanding liabilities, was £92,260 less than the estimated amount. Including as we showed £13,100 for stores purchased for railways and unexpended, the amount was £105,720. In the remaining 3 clauses the expenditure was £9036 over the estimates. Hon. members will recollect that six months of the nine had practically elapsed before Parliament rose, and the Govern* ment therefore thiuk they may congratulate themselves on accomplishing so con i siderable a Saving in so short a time. .'

BEVSNUE FOB PEBIOD ENDED 3IST • MABCH, 1880. ' I now come to the estimates of the nine months ended 31st March, 1880. The total revenue received daring; the period amounted to £2,133,759, to which I add £50,000, receivable on the Ist May from the Land Tax, which the Committee will remember was included in my estimate, making together £2,183,759 the estimated amount being £2,445,200. The revenue, therefore, fell short of my anticipations by the sum of £261,451. The revenue from the Customs did not reach the estimated amount by £47,335. This, although I fear chiefly caused by the general depression prevailing throughout the colony, has also been partly caused as I believe, by the awakening of our population to the necessity of cultivating more thrifty habits, and practising greater self-denial. So far as it arises from these last named causes the committee will agree with me in thinking it a matter for rejoicing rather than regret, though it may result in a temporary inconvenience, so f«r as the revenue is concerned. The stamp duties produced £32,921 less than the estimates; but this large amount does not represent an actual falling off to that extent in the receipts. The revenue, as hon. members know, is now stated, minus the refunds made last year. The gross revenue from stamp duties during the nine months ended 31st March, amounted to £111,057, and the refunds to £18,979, an altogether unusual amount; but an estate which paid £18,405 duty in the year 1878-79 was declared by the Supreme Court not chargeable, and that sum, therefore, had to be refunded in February last, and is included in the refunds above mentioned. The stamp revenue, but for this unexpected occurrence, would have realised £14,516 less than the estimate instead of £31,921. The falling off in this instance is, I think, due to the general depression; but this branch of the revenue will without doubt recover with returning prosperity. The receipts from the railways fell short of the estimate by £112,062, but this loss is counter-balanced to some extent by the not inconsiderable saving of £43,242 effected in the expenditure by my hon. friend the Minister of Public Works. The land revenue, too, I regret to say, producd only £155,108, instead of £246,700. The postal revenue, however, exceeded the estimates by £12,161, but of this sum £6,982 was profit of the Post Office Savings Account, which has heretofore been treated as incidental revenue. There were also small excesses derived from several minor sources of revenue, to which I need not particularly refer. In my last financial statement I estimated that the deficit for the period ended 31 st March, 1880, would amount to £196.886, which sum was increase to £826,163 by the supplementary estimates. Hon. members will recollect that Parliament mode special provision to meet this deficiency by passing "The Treasury Bills Act 1870," authorising the issue of Treasury Bills to amount of £800,000 with the intention of adding that amount to the permanent debt of the colony, and of thus starting clear of floating debt from 31st March 1880, measures being taken to secure equilibrium between revenue and expenditure from date. In consequence, however, of the revenue of the last financial period not realising the amount estimated by £261,441, it became necessary to fail back upon the contingent authority to issue deficiency bills granted by " The Public Bevenues Act, 1878," and bills to the amount of £200,003 were accordingly issued, making the total issue of £1,000,000 of Treasury and deficiency bills during the nine months. The Government propose to deal with this additional sum of £200,000 in the same manner as with the £800,000 to which I have referred to. Parliament will be asked to sanction a bill to enable them to do so. If it were at all probable that the revenue of the current financial year would be able to bear the charge of the liabilities outstanding on 31st March, this mode of providing for them would not be suggested, but it is altogether hopeless to expect that it will. In adding the amount, however, to the permanent debt, Parliament will only be carrying out the policy adopted last session. For the purpose of enabling the colony to take a new departure financially with the beginning of the. current year by finding the whole of the floating debt up to date, \ I will now sir, for the convenience of the Committee summarisejthe results at which *

I hare arrived. The deficit of 1878 79 has been shown to be £133,790. The expenditure for the nine months ended 31st March last was £277,227, and the liabilities on the same date £272,774, making a total of £3,178,840. The receipts forlthe period ended 31st March were £2,133,758. Land Tax due Ist April, £50,000; assets, £5000; total, £2,188,758. Taking, therefore, the total revenue from the total expenditure we arrive at a deficit of £990,081 for the period ending 31st March 1880. To meet this, as I have already stated, Treasury and Deficiency Bills have been issued to the next financial period.

THE PUBLIC DBBT. It is perhaps convenient that I should day a few words about the public debt of the colony, which amounted to £23,222,311. On the 31st March, 1880, it was £27,422 611, or deducting the accrued sinking funds £1,805,498, the net public debt was £25,617,113. This amount. is exclusive of Treasury and Deficiency Bills for £992,000 held by the Public Works fund, and the £800,000 unsold debentures for the loan of 1870 guaranteed by the Imperial Government. Since the 30th June 1879, the loan of £5,000,000, authorised last year has ben raised. On the Ist March last, Treasury Bills to the amount of £442,000, forming part of the public debt on the 30th June, 1879, matured, and were temporarily redeemed out of the Public Works fund, provision having been made under the Treasury Bills Act, 1879, for renewing them to 31st December, 1882, and exchanging them ac that date for debentures with a currency of three years. During the nine months ended 31st March last, additional Treasury and deficiency bills, to the amount of £1,000,000, have been issued in aid of the revenue. Of these, however, bills for £550,000 have also been taken up temporarily by the Public Works Funds, so that the actual addition to the public debt by the new loan, and these bills amount to £5,008,000, On the other hand, the guaranteed debentures amounting to £800,000 have been redeemed, and the debentures of the North Otago District public works loan deducted from the £5,008,000, leaves a net increase to the public debt of £4,200,300. When, however, the Imperial guaranteed debentures for £800,000 are sold, and the whole of the Treasury and Deficiency Bills held by the Public Works Fund, and representing advances to the Consolidated Fund to the extent of £902,000 are issued to the public, the gross debt will amount to £29,214,611, or deducting the accumulated Sinking Fund of £1,105,498, the debt, will be £27,409,130 subject to an annual charge of about £1,535,000. In this statement of the public debt the last loan of £5,C9D,G00 is treated as uninscribed. Should the whole of the debentures be converted on the terms offered to the public, the debt will be increased by £1X03,000, but the interest will be reduced by £10,OCO per annum. Parliament will be asked during the present session to make provision for extending to 31st December, 1883, the currency of certain Treasury Bills amounting to ! £390,000, partly falling due with the current year, and to grant authority for exchanging them at that date for debentures, with a currency for three years. Aa in case of the bills for £452,000, provided by "The Treasury Bills Act, 1879," similar provisions as I have already stated will also be required with respect to Deficiency Bills for £200,000, issued under " The Public Revenues Act, 1878," forming pert of bills amounting to £100,000, issued during past financial period.

THE LABT LOAN. Before leaving the question of public debt, the committee will naturally expect some account of the raising of the £5,CC0,000 loan. In last year"s Budget I saw Government had reason to believe from advices from London, that not more than £3,0C0,000 of the five millions could be successfully floated. When, however, the time arrived for placing the loan on the market, the London agents considered it would be safe to ask for the whole amount at once, and the result proved right. Had they succeeded in floating £3,000,000 only, instead of the whole amount our position at this moment would have been one of grave embarrassment. The Committee will understand this when I tell them that it has been necessary, up to the present time, to use the loan to the extent of upwards of £3,160,000, of which £1,818,000 was for expenditure, and £1,342,000 for advances to the Consolidated Fund on Treasury and Deficiency Bills. Now that these facts are before them, hon. members will easily appreciate the anxiety of the Government last session, when it was considered that no more than £3,000,000 of the loan could be raised at once, and the remainder not for a year at least thereafter, they will understand how necessary it was that our agents should offer loan at such price as would secure its sale. Hon members who are disposed to think the terms too favorable must bear in mind on the one hand that investors would naturally look on the large amount of out a'ready existing public debt, and the utMHually large sum asked for, whilst on the other hand our agents had to consider the serious complication which would have arisen had they failed to ob- ■ tain the loan. Our financial agents in London felt themselves compelled to offer our 5 per cent; loan at 87£. and to insure sale even at that price to leave it optional with the purchaser to exchange it for a 4 per cent, loan at 81J, and (using an authority given them in case of need) to undertake thatj the colony would not for the next three years again enter the London money market. After allowing fo? discounts, commission and accrued interest on the bonds, the price was about 95| for the five per cent, debentures, and 971 for those converted into four per cents.

PUBLIC WOBKB FUND. At the close of the year 1878 79 the balance at the credit of the Public Works fund amounted to £506,205, of which £298,543 represented advances in the hands of officers of the Government. We have issued during the nine months ended 31st March last,- £3,599,881 as follows :—On public works, immigration and other services, £1,750,881; redemption of guaranteed debenture of the loan 1870, which are, of course, available for reissne, £800,000; temporary advances to the consolidated fund on Treasury and Deficiency Bills, £992,000; temporary advances on debentures of Waimea Plains Baiiway Company, £40,000; Wanganui Harbor Board, £17,000; total, £3,599,881. Since the beginning of the policy in the year 1870, we have borrowed for public works to the extent of £18,700,000,

which amount has been supplemented to the extent of £364,794 by stamp duties and other receipts, making a total of £19,064,794 over net expenditure during the same period on services permanently oharged against the fund, has amounted to £15,286.621; to this sum I add the advances in the hands of officers of the Government on 31st March last namely, £315,763, and an estimated sum of £200,000 for discount and charges of raising the last loan, making together £15,802,304, which being deducted from £19,064,794, the total ways and means, leaves balance on March 31 of £3,262,490. The extent to which, at the present date, the Public Works Fund has been applied in aid of revenue amounts to £1,342,000. This will, of course, be apparent to hon. members, that until we can recoup the moneys so applied, the funds available for expenditure on public works and other services are diminished to that extent. Deducting the sum of £1,342,000 from £3,262,490, the balance of ways and means on 31st March last, we have left a sum of £1,920,490 available for Our pablie works and other requirements, until we can sell the Treasury and Deficiency Bills. Having stated the amount of ways and means available, I shall now inform the committee what«re the liabilities, to meet which funds must be set aside. The liabilities of the Public WorkO'undoora r the 31st . March last adgpted to £2,455,313. The large amountof liabilities to which I uiive referred will absorb the whole of the c^sh at credit of the Public Works Fund, a>4 necessitate the sale of £469.000 of: the Treasury and Deficiency Bills hypothecated, to that Fund. ;■•."■■• \ :...,.-■!,••'■••.;■ \-^-.r::%x.

BCHBME OF LOCAL FINANCBOur scheme of local finance, and our proposals for the ordinary aerfices of tbe current year. It will be within the recollection of hou. members that I said last session that the Government would this year recommend the discontinuance of the subsidies. This warning was given because it was then generally admitted that the System of subsidies was not working satisfactorily; that we thought further taxation of the Consolidated Fund could no longer bear this expenditure, o» ing to the annual oharge on our publicdebt hairing become so large, and that the local bodies themselves might hare 'a reasonable notice before any change was made. Great, however, sir, as were the need of the Treasury last session, and great as they are at the present time, the Government hold firmly' to the opinion they then entertained, that this question of local finance, affecting as it does the vital interest of tha whole country, is one of paramount importance which must not be dealt with piecemeal, but as a whole, Our aim is twofold, finance upon t sound footing; second, to put our local bodies to do the work which rightly devolves upon them and which must be done by them if the country is to be prosperously settled. The system of subsidies has operated unequally. It has largely helped the rich and populous districts, while giving little assistance to those which are poor and thinly peopled, tt must also be remembered that they were proposed as part of a scheme to which full effect has never been given, for the land fund has been generalised instead of localised in provincial district, and the expenditure uponpublio works, instead of being limited in amount and'confined to arterial undertakings, has been lavish. We have increased our debt r, for public works within the last three years and m half, the time during which the subsidies have been paid, by £900.000, which means an annual charge of £450,000. In the scheme which I am about to submit, I must ask hon. members to bear in mind that I take for granted, first, that sections 5 and 6 of " The Financial Arrangements Act 1876 Amendment Act, 1877/' which authorise the subsidies and the grants of 20 per cent, of the land fund to the Counties are to be repealed; and, second, that the proceeds from land sales are not to be used for the ordinary purpose of Government. I will endeavoqr to describe in sufficient detail the scheme we propose. To give effect to our proposal, I shall hare to ask authority to introduce to bills—the first will be an Amendment Bill. It will remove the present restriction upon rating —that is to bay, it will permit alf local bodies having the right to rate, to levy rates to any amount they may consider necessary for their local requirements, not exceeding two shillings in the pound, or beyond that amount if pasßed as a special rate. It will authorise boroughs and other local bodies to borrow at any rate of interest the ratepayers may choose to give, to any amount, subject only to these following restrictions:—l. .That the principal and interest of all new loans shall be made payable in New Zealand. 2. That any local body desiring to rahe a loan shall before doing so levy a special rate, sufficient to cover, the interest and sinking fund upon the money proposed to be borrowed, such rate to be continuous, until the debt has been re-paid. The bill will also require that any local body which has already borrowed upon its general revenue shall, before entering the money market, levy a special rate to cover the interest and sinking fund upon the exist*, ing loan or loans, as well as providing by a special rate for new loan. We must see that the ratepayers spend their own money, and not the money of other people. It is clear that all who benefit by the expenditure of rates should contribute to^ wards them and carry out the principle to its legitimate conclusion. We propose that all Government property, including the waste lauds of the Crown, and,, subject to an important qualification, native lands, shall be liable to rating.

CONTBIBtTTIONS FOB NATIVE LAIfDS. Sir, I will first state how we propose to deal with Maori lands within Counties in which the Counties Act is in foroe. It, is a fact which I think should be recorded that some 11 million acres of land in this North Island are still held by less than 41,300 Maories—men, women, and children, and that not one half-penny in the way of rates has been imposed upon the natives by this House Sot the construction of roads and bridges, which are being made throughout the country, and by which their lands are being enormously increased in value. The Government think the time has arrived—and we hope and believe that our Maori friends will agree with ns in the opinion—that henceforth all Maori property in Boroughs shall be subject to taxation to the same extent as the property of their fellowcitizens ; but further than this we do not propose to go. We think, after a careful consideration of all the circumstances of the case, that, on grounds of public policy,, we may reasonably exempt the owners of native country land from the payment of rates. It is clear, however, if this is done, that some equivalent must be found to enable those Counties containing a large area of Maori land to

carry out the duties we are imposing upon them. If, therefore, we aro compelled by considerations of public policy to depart in this way from the principle of the bill, it is clear that tho cost of exemption should fall upon the colony at large, and not upon the localities on which burdens are imposed. Upon the assumption that all the land will contribute its fair share of the local taxation, it is proposed to limit the amount of ordinary land in the district in which they lie, but not exceeding 6d in the pound, and upon waste lands of the Crown Is upon the annual value These lands being practically unrepresented in local governing bodies, tbis limitation is not, I think unreasonable. To simplify matters and avoid expense and dispute, it is further proposed to attach two schedules to the bill, —one showing, for rating purposes, the estimated acreage and value of the Crown land in each County and Road Board district, and the other affording similar information with regard to Maori land. The land in each case will be divided into two classes—pastoral and agricultural, valued respectively at 6s 8d and 20s per acre. These schedules will always enable the rateable value of Crown and Maori lands in any district to be ascertained, notwithstanding that. sales go on from time to time by simply deducting from the amount fixed in the ichedule 6a 8d or 20s per acre, as the case may^e, for all lands sold according to its 'class. The total estimated ▼ajirft'of Maori land is £6 370,000, but of tois only £5,200.000 is situated in counties in which the Counties Act is in operation. All lands then being subject to rating with the exceptions I have just stated, the Committee will naturally wish to know out of what fund the rates on Crown lands and property and Maori lands are to be paid. But; Bir, these are by no means the only objects for which money has to be provided. In any ratisfactory scheme of local finance means must be found to coustruct our main roads throughout the colony, some provision must be made to Tebair damage done by floods and tempest to ouo roads and bridges; and some help must be extended, if possible, to our district roads. This then brings .me to the scoond bill to which I referred as necessary to give effect to our proposal. The title of the bill will be " The Local Public Works Bill." It provides for the constitution of an unpaid board, consisting of the. Minister for Public Works, the Engineer-in-Chief, the Surveyor General, and the Public Trustee. The duties of the Board will be to pay the rates on Maori lands, to make grants in aid of the construction of main roads, and to advance money to construct district roads. This will be done from funds, the constitution of which I will now describe. As I have before said, we shall ask Parliament to set apart the proceeds of land sales for special purpose, not permitting it to be used for the ordinary expenses of Government, charging against it only the cost of its administration, including «urvey«. Now, I think that after this year we may fairly estimate the annual receipts from land sales from some years to come at not less than £300,000. I believe honourable members will agree with me that this is a moderate estimate. Looking at the fact that our unsold lands are estimated" at a low average as worth £12,500.000, I think we may therefore reasonably expect to realise n«t less than £300,000 a year for some time to come.. Charges on land revenue should not ex-, ceed £140,000 a year, so that should we only get from land sales £300,000 a year, there will be a balance to credit of at least £160,000. The bill with which lam now dealing provides that out of the balance at the land sales, after paying expenses of administration, there shall be paid to the board each year the sum of £150,000. It seems to the Government that in starting such a scheme as we have under consideration it would be unwise to attempt to launch it without sufficient funds to enable the board to make a good beginning. The prospects of the surplus land fund for this year reaching £150,000 being but Bmall, it is proposed to ask the Houße to make a grant to the Board of £150,000 out of the loan, so as to place it in funds for the work of next spring and summer. The funds thus created are to be applied to the following purposes:—First, the payment of rates on the waste lands of the Crown and Maori "country lands; second, grants in aid for constructing main roads and repairing damage done by floods or tempest, the rates estimated at a shilling in the pound, supposing every road board and every county to levy a shilling rate, would amount to about £60,000, or about £74,000 if rates on Maori lands are included; but I much doubt if the amount of, rates payable by the board will often reach £50,000 a year, the balance remaining, whether it be £80,000 or £100,030, will be applicable to main roads, and main roads only. The main roads, I should have said, will be defined by proclamation. Suppose, for the sake of illustration, that a county wishes to construct—and construction means forming and metalling road, or building bridges—a section of main road over which it has control, or to repair damage done to a Maori road by flood or tempest, Council must obtain estimate of cost of work proposed to be executed, which we will suppose amounts to £6000. The Council will then make application to, the board for a grant in aid, but before the board can make a grant the Council must show that it has one quarter of £6000— that is £I,soo—at its disposal, which it undertakes to spend upon work, or ratepayers of county must impose upon them-, selves * special rate which will repay one fourth of the £6,000, namely, £1,500, in twenty half-yearly instalments without interest; in other words three-fourths of the cost of construction of a main road will be paid by board, and a fourth by county,either in cash or by way of special rate extending over ten years. Hon. members must bear in mind that waste lands of Crown and native lands are subject to a special rate, as well as private lands. The reason for making no grants unless the county is prepared to contribute a fair proportion of the" outlay will be obvious to the committee, and hon. members will, I think, admit that the contribution has been made as small as compatible with prudence.

LOANS FOB BOAD WOBKB. I now turn to the proposed assistance to be given to district roads, that is, to all roads other than mam roads. The bill provides that a board, for local public works, may borrow from time to time at 5 per cent, interest Trom the Postmaster or Government Insurance Commissioner, any sum not exceeding £100,000, the colony being liable for the re-payment, and lend it to the local bodies for the purpose of constructing district roads. The terms pn which grants are to be nude, are that a special rate

is to be levied by local bodies desiring to borrow, which will produce 9 per cent, per annum on the proposed loan. The interest charged will be 4 per cent., so that '9 per cent, paid yearly will cover both interest and sinking fund, and will extinguish the loan in fifteen years. It will be observed that the rate of interest is very low, and the terms of repayment easy. I think, however, hon. members will approve of substantial assistance being given . to local bodies "for the purpose of constructing roads throughout the country if only we keep within our legitimate means; but the committee will say how can we borrow money at five per cent, interest and lend it at four. Sir, this difficulty can only be got over by the same means as proposed in the case of the fund for the construction of main roads by making a grant from the loan to start the fund. I shall therefore ask for £5,000 to be granted for the purpose. The beard will then be in. a position, should the grant be made, to lend £150,000, or any less sum at four per cent, interest, and at the same time pay 5 per cent, upon such sums as it may borrow up to the limit of £100,000, with a safe margin for contingencies.

BOBOUGW. So far, sir, I have not yet directly mentioned an important branch of my subject. I refer to boroughs. Ido not desire to make light of the present loss to these bodies of the subsidies my proposals will no doubt necessitate for a time a redaction of expenditure; but there will accrue to the boroughs the permanent right to tax : Government and native property of not much less than one million in value. I say permanent for I think no one' can doubt that if once the principle of taxing Government property is admitted by this House, it will never be possible to retrace the step. Bates upon all Government I property it is proposed to charge upon the consolidated fund as being properly included in the ordinary expenses of Government. I submit that our proposals are sound because they are based upon two principles which are unanimously accepted in this house—first, that the proceeds of land sales should be applied to the opening up and settling of the country; second, that land owners must for the future practically find means to maintain the roads of the colony; and it has, moreover, this great additional advantage, that it will enable as to complete the separation of general and local finance. The one will in future be in no way dependent upon the other, an advantage which I therefore think will be of incalculable benefit to both Government and local bodies.

THE CONSOLIDATED FUND 1880-81. Hon. members will bear in mind that the land fund will be treated separately, and that is therefore excluded from the estimates of expenditure and revenue, which I about. to submit for consideration. I need hardly' say, that although treated separately, the land fund remains to all intents and purposes a part of the consolidated revenue, for the purpose of security to the New Zealand bond-holders. The estimates show a very large redaction of charges upon the consolidated funds, as compared with last year, amounting in gross to £541,000; and but for the increase in expenditure over, last year of £100,000 for interest, arid £23,000 for reduction over which, of course, Government had no control, the reduction would have been £673,000; and if we deduct from this the sum of £150,000, transferred as charges against the land sales, there would still have remained the very substantial reduction of £523,000. But even after making provision for this increased expenditure of £312,000 on interest and education, and allowing for £200,000, there will be a net saving of 'expenditure from the Consolidated Ftind of £341,000, and this without impairing the usefulness of local bodies, the efficiency of the public service, or shifting burdens which should be borne upon revenue to loan or other funds. The total proposed votes for year, exclusive of liabilities, is £3,473,709, but of this we cannot spend, and bring into accounts within the year, more than £3,248,709. It will, perhaps, astonish hon. members here that we are now paying over £1,000,000 a year in salaries, pay and wages, and £18,700 for pensions. This includes railway employment and our ordinary compliment of constabulary and police. Of this 'sum £643,000 is for salaries, pay, and wages (?) at £200 a year. Besides several minor reductions my hon. friend the Minister for Public Works has reduced the expenditure of this debt by £36,000, without impairing in any way its efficiency. The Native Minister has succeeded in reducing the expenses of his department from £46,944-T-which was last year's estimate—to £14,262 this year, or after allowing for transfers nearly 50 per cent. The salaries and contingencies were last year £21,164. This year they are estimated at £13,453. The land Surohase department has been reuced from £10,000 to £6,000. Government have under consideration the question of a reduction of the salaries of Ministers. They do not think Ministers* over-paid, and are not prepared at present to recommend a reduction in their salaries, but the question will be carefully considered during the recess; but looking to the financial portion of the colony, and the necessity for reduction, we propose that 20 per cent, be deducted from the salaries for the current year, beginning on Ist July next. We can lay down no rule for retrenchment, but an effort must be made in the interest of economy at once. We shall therefore propose that five per cent., or £50,000, be struck off votes, for salaries, pay and wages, and we shall then proceed in manner I have indicated to make this saving, and if, with the aid of departments, we are unable to make necessary reductions to cover this amount, we shall issue a scale of percentage, showing sum to be deducted for evei'y employee of the Government, which together make up the £50,000. I regret to say that I am unable to take as hopeful a view of Customs receipts as I did last session. First quarter, notwithstanding the large increase in du':ies imposed in November, 1879, Customs receipts for March quarter, 1880, were less by £42,257 than for the corresponding quarter, 1879. The imports, too, were less in the former quarter, than in the latter by £978,734. Tobacco yielded an increase of £7,193 during last quarter, but this is owing to increased duty. Drapery and spirits both show actual falling off during the last quarter. Drapery yielded for the quarter of 1880 £388,662, and spirits £82,482. I don't think it wise to estimate the Customs for the year at more than I havo done, namely, £1,250,000. * I have said that the estimated expenditure will bje made within the year of £3,198,709, and the estimated revenue £3,190,000,

thus leaving a balance of £8709. I would again call the attention of the Committee to the fact that if we made up our acoounts as we have heretofore; there would be a still further amount made giod of £225,000, but as I have said before this will not become payable within the year, and therefore I don't pro pose to make pro?ision for it. I hope hon. members will understand that although this is in no sense putting off a payment which could be made during the year, yet that in future years postponed liabilities at the end could be counterbalanced by outstanding liabilities at the beginning; in other words, though beginning this year free we have to pay less during the year than in any succeeding year by the amount of liabilities which will necessarily be outstanding at the end of the year.

lA.ND FUND. I must, sir, here say a few words about the land fund receipts, of which, from all sources estimated, £335,000 of this £200,000 is from land sales, has not been so included, but in accordance with our proposal of last session, repeated this evening, it being set apart to be separately dealt with charges, as hon members will see upon reference to estimates against this amount to £150,223, leaving a balance of £49,777, which our scheme of local finance, should it meet with the approval of the House, will be handed over to a local publio works board. It was shown that in Customs duties the increased rate has not been sufficient to prevent the decrease in the amount collected, while from many quarters, we have received strong representations that one feature of the Property Tax has been extremely distastefnl to a large section of the people. As discontent exists whether baseless or not, it should as far.as possible be removed. Government, therefore, in accordance with what they believe to be the desire of taxpayers, will ask the House to exempt personal effects, furniture, books, etc., from assessment under the Aot. By this concession, sir, it is estimated that the revenue will lose £40,00 a year. This, then, together with the deficit of £8,709, has to be made good. I fear there are only two practicable courses open to us: we may re-impose tea and sugar duties, or we may tax beer. The Government. have carefully considered which of these courses to follow, and have determined to ask Parliament to impose a tax upon colonial beer^ of 6d per gallon. The financial position of the colony is such as to compel us to resort to taxes which in more favourable times we should not have supported. We also propose to increase the duty upon imported beer 6d a gallon. I hope to obtain from the beer tax during the current year £80,fiC0, or at the rate of £100,000 per annum. The Government have been blamed in this House, and in the country, for stopping expenditure too suddenly, and therefore intensifying the depression under which we are suffering; but during the nine months ended on 31st March last, we actually spent on ordinary services of Government and on public works in hard cash, notwithstanding our strenous efforts to retrench, no less a sum than £4,523,257, of which £2,741,863 was borrowed money. We must make up our minds to three things: to a greatly reduced expenditure, both on public works and from the Consolidated Fund to a complete separation 1 of our local from our general finance, and to submit to increased taxation for some years to come. Sir, the time is not far distant when through the restoration of real economy in bur finance we shall see our way to addressing ourselves seriously to the task of reducing our large public debt, and I trust that the proposals of Government, in part already sanctioned by Parliament, will at least tend towards making such a course possible. The Treasurer concluded by moving that towards raising the supply to be granted to Her Majesty, there shall be levied and charged, on and after the 9th day of June, one thousand eight hundred and eighty, an excise duty of sixpence per gallon on all ale, beer, porter, or other malt liquor, brewed or made in New Zealand, before removal from any brewery, cellar, warehouse, or any other place in which same may be stored, such duty to be levied, collected and paid in such a manner as the Commissioner of Customs may direct; that in lieu, of the duties of Customs now charged' on the undermentioned articles the following duties of Customs shall, on and after the 9th day of June 1880 be charged thereon on importation into New Zealand, or on being cleared from any warehouse for home consumption, viz. :— Ale, porter, beer of all sorts, cider and perry in bottle, the gallon Is 9d; ale, porter, beer of all sorts, cider and perry in bulk, the gallon Is 6d.

la the House after the delivery of the Financial Statement, Sir G. Grey condemned the proposed alteration in the Property Tax as making an unfair tax. Still more so, by benefiting the rich at tUe expense of the poor. Those who benefited by the expenditure should feel the pressure of taxation.. Major Atkinson defended the proposal, pointing out that Grey had previously urged it. Sir G. Grey said he had done so only as one objection to an altogether objectionable tax. Mr Reid pointed out that Mujor Atkinson had previously condemned the Beer Tax as unsound in principle. The Premier said the circumstances of the country had changed. He defended tho Government proposal, and replied at length to Sir G. Grey, who again spoke at considerable length. After soma further debate, in which Messrs Moss, J. B. Fisher, George, Gisbcrne, Seddon, Stewart, Reid, and Speight took part, the motion was agreed to, and the House rose at 12 10.