The Treasurer's Statement.

Thames Star, Volume XVI, Issue 5126, 22 June 1885, Page 2

The Treasurer's Statement.

The remainder of the Statement delivered by Sir Julius Vogel on Friday night was to the followiug effect :— In connection with the Civil Service, as regards the conditions of future entry to it, we hold that as it is open for off cers entering to accept or refuse them, there can be no hardship in giving our own conditions; those should be a right to only one month's notice, or salary, if the officer has been not more than eighteen months in the service, and to only three months after a longer service. We propose further that it shall be a condition of any officers joining the Service in future that ten per cent, salary (•hall be impounded, to be invested at compound interest, and to be given to him on his leaving the serfice or to his representatives on his death. We propose to introduce classification in a manner that will make its effects gradual, and to deal with seven classes—the industrial (which will comprise the non clerical), the cadet?, and five others. An increase of £10 to £1210s per year will be allowed, but they will not increase beyond £80 unless they .pass the first examination. Class 1 will commence with salaries of £120. and there will be four anntal rises of £5 each, and four of £10 each up to £180 Class 2 will commence at £190, and there will be four annual rises of £10 each to £240; class 3 will commence at £250, and there will be six annual rises of £12 10s each up to £350; class 4 will commence at £340, and there wilj be four annual rises of £16 each to £400; and class 5 will commence at £420, and there will be five annual rises of £16 each to £500. We purpose that this year the only effect beyond the classification of the officers at

their present salaries, and the rise in the industrial classes, will be given to class 1 and 2 a bonus of £3 to each officer, and that next year the rise according to scale will commence with those classes on the salaries of this year without bonus. The classification will not include the officers of the Legislature, nor those of the gaols or working railways, which already have their own system of classification. We estimate the cost apart from the rises of cadets, to which they are already entitled, at about £6,500 this year, about £10,000 next year, and thereafter there may be about a like rise for a year or so, and then a gradual reduction. On the whole the increases will not much exceed those which are as a rule spasmodically made.

Land Fund expenditure for tbe current year is estimated at £208,971; this in eludes tbe usual charges under special acts such as the third of the sales of land on deferred payments, New Plymouth Harbor Board endowment, and the other charges; also, the Land and Surrey Department, and rates on Crown and native lands. The revenue for tbe year from land sales is estimated at £163,960, so that taking into accouaT^be credit balance of £31,931, at the end of last year, we shall hare a deficiency on 31st of March, 1886 of some £13,000, which is likely to be reduced by tbe pay* ment not being made within the year. The estimated ordinary revenue of the year, with the charges on customs and stamps totals £3,817,194. I bare sufficiently enlarged on the changes we pro pose in the revenue, and will pass on to the balance between revenue and expenditure. The ordinary expenditure of the year already described already amounts to £3,972,133. I have three items to add to •this, viz., £6500 for the proposed Civil Service amendments; £75,000, which is about the amount to come in for payment on account of subsidies to local bodies, and I propose to pay off £50,000 of deficiency of 1883-84. We must either begin to pay this deficiency off or resolve to fund it, a decision I should much regret. These items bring up the expenditure to £4,103,633. On the other hand there is a revenue of £4,115,000 and the surplus of £19.891 at the beginning of the year, making together £4,135,290, and leaving a surplus on the year's trans* actions of £32,158, which is not unlikely to be largely absorbed by Supplementary Estimates.

There is little more about which tode* tain the Committee, beyond the consider•tioo of public works expenditure. I

hire already s:"<1 thai, taking into account the million and a balf loan, there are about two millions of money available for expenpenditure, subject to advance, in the hand* of officers, to be accounted for, the details of which my colleague, the Minister of Public Work* will set before you ; we estimate there will be an expenditure of about £700,000 this year, which will include about £170,000 on harbor defence ; it will be seen that after accounting for advances there will be but a small sum left for expenditure at the end of March next. Out of the North "Island Bail tray Loan there will be the same amounts re-payable for works defrayed out of other, loans. A« the Committee are aware, we intend proceeding with that railway as fast as possible, but tha actual expenditure up to the end of March is not likely to much exceed £10,000. The defence expenditure from present loans will bare to be repaid- It will be apparent, therefore, that we have provision for little beyond March, and scarcely enough to carry us on until the House meets in the ordinary coarse next year. With regard to the general questions of borrowing: When -the Minister for Public Works brought down his plans in 1882 for the three million loan, he stated that if he were to stipulate ■ for votes to complete all the works be proposed, he might hare to ask for ten millions more or less. We inherit these obligations, together with''often which have grown up since, and the plain meaning is that we shall. continue year after year the construction of great works to such extent as Parliament thi»kt advisable. It is Decessary to look the position fairly in the face, and to draw a line as to the purposes for which mono^alioattb* borrowed. "When we proposed the million and a half loan last session, we drew, attention to the enormous proportion of it that would be absorbed by roads and bridges. One of the objects of our policy is to set a limit to borrowing for indiscriminate purposes. As soon as we can end the engagement at present contracted, we hope there will be little money borrowed by the Colony for roads and bridges, but we rrcognise the great objects these works fulfil, and propose a sufficient finance to local bodies to carry them out. As regards railways besides the Main Tnok lines, there are hundreds of miles for which a cry comes up. We propose that in future there shall be three classes of railways : Forest railways, the cost of which the state forests will defray; district railways, for which the local, bodies recommending them shall defray half cost —with half the yearly interest in excess of receipts; and main trunk lines, for which the colony shall be wholly liable; In his statement last year, the . Minister for. Public Works laid down certain/principles which should guide the House in relation to future borrowing; the railways have not yielded the revenue anticipated! Last year the Government deemed it expedient to make some reductions in rates, believing that the tariff should not be framed solely with the view of exacting the utmost possible receipts; there were other causes which led to a lesser revenue —these will be explained in the; Public Works Statement, but it may be said this is a good time to borrow. The market has shown that New Zealand loans are welcome, m by not take advantage of this disposition and borrow largely. I emphatically urge that no such view should prevail—we 'don't borrow to suit markets—just as I would urge that, if we really wanted money we should borrow, although the market were not disposed to take our loan on favorable terms, so I urge with equal strength we should not be advised into borrowing, because the market is favorable. It is pleasant to get a high price for our loans, bat we must not attach too much importance to securing a little extra from the sale of a loan. A year's interest,, soon disposes of that if the money is not wanted. lam sure it is better to put on one side the market feeling and to judge' ourselves on the broad grounds of public policy—what are our wants, and to what extent we shall supply them. I take it that the House means to carry out the work of defence, and that during this and the two succeeding years not less than £300,000 will be required for the purpose. I presume that we shall not permanently need assistance to nominated immigration, and that we shall be less munificent with respect to expenditure in roads and bridges out of borrowed money than we been lately. We must redeem engagements and provide a portion of the subsidy proposed. We require to provide for the purchase of native land, and we ' may conclude, I suppose, that there is no intention to discontinue the construction of railways already commenced, and the. consideration on their merits from time to - time of other railways subject to the conditions I have suggested. As to main and district lines it may be urged that all -. these objects would justify our «sk%ing for a considerable loan to be expended from time to time, at authorised, but we are of opinion that it will be better to confine ourselves in their narrow limits, and to test the effect of the ready justment of taxation, and of the subsidies to local taxation, and of the •■-■ subsidies to local bodies. We shall therefore ask authority for only one million for 1886-87 of which £250,000 will be for defence for that and the previous year; £50,000 will be for immigration; £200,000 for roads, bridges and buildings; £100,000 for the purchase of Native Lands: and £400,000 for railways i| .may be as "8 whilst lam on the subject of borrowing ■ that I should fay the Government hare not adopted the idea shadowed forth during the recess of borrowing money to lend in small sums to farmers: on freehold security. When I spoke on the subject, I did so with reservations, which I expressly made; on further examination I found that the English Goveminent had ceased to make direct advances on land improvement, and had substituted for it a system of authorizing the issue of mortgage debentures, for which the State was not liable. This system works excellently in Great Britain —far better than the old one of direct AdT??i Mi.!rt nit the. Sh»te has n o liability. A Hill will bo submitted to the House for gi'jn* affect to this, English system; it will, I think, go some way towards satistymg the demand for cheap money, for the securities of local bodies, and for land " improvement.

In conclusion, I would remark that reference lias been made to so many questions, that it is desirable to summarise the salient points of tbe subjects and proposals I hare brought before the Committee, as well as to make clear some details. The operations of last year on the ordinary revenue and expenditure - ' account left a oredifc balance of £20,000; **-' .. the public works expenditure amounted to "' v£1,336 000, and taking into account the million and a half loan, there was at tb.«

end of March lost nbout two millions tn begin this year with—-taking the advances omtstanding in the bands of officers. Tho negotiation of our loans bas proved vrry satisfactory, and that for the laat million and a half we netted more than did the Governments of Victoria, Queensland, and South Australia for loans floated about the same time. The Act of last session dealing with loan conversions and the sinking funds, bas proved a great success, and is free from any suspicion of having adversely affected the credit of tho colony ; through the conversions effected under its authority, we bave already been able to pay off £71iCCO of the debentures created the last year to represent the growing accreditions of the sinking funds The financial machinery of the Westport and Greymouth Harbor Acts has proved successful; the Government highly appreciate the services of the loan agents and of the Bank of England; the Customs requires to be revised, because of the satisfactory fact that it bas become affected by the diminished con* sumption of spirits, and by the increased local production of dutiable articles ; that it be adjusted on the principle that whilst the primary object is to serve fiscal purposes, and whilst we by no means commit ourselves to state protection, we should not be unmindful of the services the tariff may render to local production; the various articles named in the list of dutiable articles, should be clearly and ex plicitly described ; moderate and reveuue producing, and not prohibitory dutifs should be imposed on all articles which can be produced or manufactured in the colony; raw materials used in manufac tures and special articles required for manufacturing purposes, which cannot at present be produced in the colony, at moderate cost, should be exempted from duty ; all free goods Bhould be especially •numerated and unenumerated goods should be liable to advalorem duty; the succession duties should be increased, but still be kept less than they are charged in Great Britain/and that the present exemptions be retained ; stamp duties be increased in one particular—that of duties on con veyances—whilst precaution should be taken to guard revenue from ingenious efforts to impair it; we cannot afford to part with population, and must recognise that the several classes of the community should help each other; roads and bridges construction is essential to opening up the country, but that we cannot continue to throw the whole cost of it on borrowed money; the local bodies must manage their own affairs, and have a finance on which they can depend, and that for this purpose the consolidated revenue shall be charged with a fixed subsidy for twenty-five years; to localise direct taxation in the districts in which it 13 raised would not answer the condition required to be met, as it would leave the least provided for the bodies that most want help—the division should be made on a carefully considered self adjusting scale; special assistance should be given to goldfields counties; manufacturers are essential to the wealth of the country ; we must attend and put to the best uses the great resources the colony posesses in its forests and fisheries ; we should introduce • moderate and gradual system of Civil Service classification ; the Property Tax should be altered so as to effect acornpromise between its advocates, and those for a land and income tax, and that for this year it «hall be fixed at 3s 4d ; we should pay off £50,000 of the £'150,000 deficiency of 1883-84; after that the provision for •übtidies to local bodies and for the increased cost of defences and education, a surplus of £32,000 will remain, which will be subject to reduction by supplementary rotes ; we should not allow the favor in which our loans are held in the London market to induce us to borrow more than we consider to be wise; we should endeavor to fall into • system under which we should reduce borrowing for indiscriminate purposes; that we should have three classes of railways in future, viz.: main trunk, district, and f< rest lines. The last to be charged to the State forests, and half the annual charge of the district railways to be borne by the districts benetitted ; the expenditure upon permanent defence should be charged to loan ; we should authorise a loan for one million to be issued next year to serve up to the end of the financial year 1886-7, that £250,000 of this loan should.be for defence, £50,000 for immigration, £200,000 for roads and bridges, £100,000 for the purchase of native lands, and £400,000 for railways. We attach great importance to giving sufficient inducement to private capitalists to construct the East and, West Coast and Nelson Eailway ; to meet the demand for cheaper money for land improvement, and for loans to local bodies; we will submit a Mortgage Debenture Bill, which will embody the system which has been found to work advantageously in Great Britain, without entailing any liability on the' State. Let me say, in conclusion, that I am sensible I have had to communicate most important views and proposals to the Committee, probably I have not done so in felicitous language, but I stand upon the justice and generosity of the Committee, and I ask bon. members not to take heed of all the expressions, but to consider the proposals I have submitted from the highest; standpoint. L am far from deprecating the lines of party, but there are some subjects that may with advantage be considered with a temporary emancipation of party objfcations; at any rate, the Committee wnHlo justice to my desire to place before hon. members free from all acerbity, views which I conscientiously believe are worthy of their consideration in the interest of-the colony. '"At the conclusion of the above the Treasurer presented a list of tariff duties, which is too lengthy for publication here.]