THE FINANCE OF THE COUNTRY.

Tuapeka Times, Volume V, Issue 246, 17 October 1872, Page 6

THE FINANCE OF THE COUNTRY.

i We publish somewhat fully that portion of > the speech delivered by Mr Yogel on his k want-of-confidence motion. The statement ' is an able expone of the fallacies and errors " of Mr Gillies's statement, and a clear and comprehensive explanation of the Treasury i accounts : — 1 shall trouble the House with a few comments upon the extraordinary Financial •Statement of the Colonial Treasurer. Accepting the Statement as he puts it, I might, 1 without a word of defence, ask the House whether, as compared with the past, it does not show a satisfactory condition of affairs, and whether it does not disclose the hollowness of those gloomy utterances and predictions of the honorable member and his associates, iv and out of the House, by the skilful use and reiteration of which he and his colleagues succeeded in obtaining the seats they occupy. But, Sir, it is my business now to expose the shams of the Statement. Some of them, no doubt arise from a want of knowledge on the honorable member's part ■ of matters of account. He has had particulars placed ia his hands, and through ignorance he has made a wrong use of them, misconstrued their meaning, and misapplied xhem. With some of the shams to which I refer, and particularly with one referring to the liability for savings in certain permanent votes, I am sorry to think design has more j to do than ignorance. The so-called balance sheet of the Colonial Treasurer was meant to induce the Committee to believe that 1 was wrong to'the extent of L 43.908 2s Id in my estimate of the results of last year. The honorable gentleman was good enough to mention the items, the aggregation of which made up the sum of my error. I vrill go through them separately, but first I will ask the House to allow mo to explain, if explanation is necessary, that the Colonial Treasurer does not 'himself keep the Treasury books — the Treasury officers perform that duty, and on the officers of the Treasury the Colonial Treasurer is dependent for the figures he obtaiu3. The first item, L5,3G0 9s Id, is the amount which the honorable gentleman says he has good reason to beliove cannot be recovered from the Provinces out of the sum of L 34.277 18s 4d, which I took credit for as an advance to them. I cannot, of course, take exception to this, because I do not know what part of the indebtedness he means to excuse to . any Province. But this I can say, that at the end of the year the Treasury officers informed me that was the amouut of the advances to the Provinces, and by law it was and is recoverable. If the Treasurer means to remit any part of it he will have to ask the sanction of law to the remission, or, more correctly, he ought . to ask for such sanction, and bring down votes for the purpose. In that case the responsibility of the expenditure would be his, unless there is any very obvious reason for the proposed remission. Very similar remarks apply to the next item of L 13.650 16s lid, the amount which I stated was due to the Consolidated Fund from confiscated lands. The honorable gentleman says the whole item is worthless, and that if it were recovered L 9.373 9s lid belongs to the Special Fund, from which it wag borrowed, and not to the Consolidated Fund. If this last statement is correct I have been greatly misled by the Treasury officers, who again and again brought the item under my notice as a debt to the- Consolidated Fund, 'i ho matter attracted my attention iv more ways than one, and invariably I was led to believe the advance was due to the Consolidated Fuud. I presume honorable members will acquit me of any negligence should the Colonial Treasurers statement prove to be correct. [ presume the information way conveyed to j him, which in good taste he shonld have ! stated to the House, that, if there was a mistake, it was a mistake of the officers, for which I was not responsible. But, Sir, I cannot agree that the honorable member has ., any right to throw upon me the responsibility of remitting this charge — which he in effect does when he refuses to treat any .part of it as an asset. I will not' now urge my opinion that the ill-considered and hastily enunciated views of the Government on the subject of the confiscated lands are likely to be productive of incalculable injury. A few weeks since, when the Tramway Bill was passing through Committee, the present Colonial Treasurer urged that a clause should be inserted giving the Government the power to apply the confiscated lands, or portions of them, to the construction of tramways. The discussion, having taken place in Committee, does not appear in Ilannard, but T recollect a very strong expression of dissent on the part of the honorable gentleman when some one suggested that the confiscated lands should be returned. Since then another tone has been adopted. Ido not believe it has been the consequence of any deep reflection, or of any well-considered and statesmanlike policy, bub rather that it has owed its origin in the desire to conciliate Maori votes to obtain a majority in this House. Nothing will do away with the fact that Her Majesty's advisers have expressed such opinion. My late colleague the Defence and Native Minister) assured me that a sufficient amount would bo received from the confiscated lands i • before the end of the present, year to paj»> off the debt to the Consolidated Fund. I utterly • repudiate the attempt of th« Colonial Trea^ .surer to make the late Government respon- ■. sible for,his policy. vlf he iutends to tear up , this asset, let him take a vote of the House ; for the purpose, and let him take the ; responsibility for the expenditure, for s\uh ■ it will amouut to ; not cast it upon me. The i i item Interest on Debentures, &0., L2,31j. I ■, Ids 6d is said to be a liability for interest on L certain debentures and on the deficiency bills i to 30th June. About one fourth of this, the [ interest on debentures held by tho Bank of i New Zealand, may be correct, but the re- ; mainder is just a samolo of 'that straining [ attor the discovery of li ibilities which cha-< raeterises the ptatemens. The fanciful lia- • bilititß I allude to arc made up of the > supposed interest due to the Trust Fund and \ to the Baukfor Pf ticicucy Eille, Ilie Trust

Fund held, it is true, L 40.006 of the Deficiency Bills and 130,000 ef the Tempo* rary Loan, both of which I hava since paid off ; but before the end of the year the Trust Fund was placed in funds for the amount of interest requiied for the interest-bearing accounts, and I am under the impression - 1 will not put it more strongly— that the socalled liability to the Trust Fund means a payment which will at once revert back to the Consolidated Revenue, #nd is therefore not a bona fi*c liability. In respect to the amount due to the Bank, honorable members will recollect that the sum obtained from the Bank was LtiO 000, under the arrangement that interest should not be chargeable whilst the auiouut was represented by auy moneys to tho credit of all the branches of the Public Account. Inasmuch as the money to the credit of the Public Accounts since the arrangement was made has, £ believe, always exceeded the nominal overdraft, the insertion of the amount of interest as a liability appears to me to be either a blunder or another instance of the desire to make the liabilities appear heavier than they are. The item is, in sboi t, a mere theoretical one. For a moment I will skip over the next item and turn to the last one of L 5.000 additional liabilities. This may or may not be correct. When the statement was made, the L 13.000 put down for miscellaneous engagements and liabilities, including a very old liability for the.. Panama service, was thought to be sufficient. Fresh liabilities may have become known. I beg at once to say, that with every exertion which I have made in former years to bring before the House all the known liabilities, it has been impossible to always take them all into account. Just as in the present year, I had to provide for old liabilities, incurred befcre I took office, for the Panama service, it is possible my successor may find that some liabilities which may have arisen during my tenure of office and which I know not, may arise for him to satisfy. I will nat, therefore, dispue this item. But the remaining item L 17.585 5s 7d savings on Civil List, Native Schools, and Armed Constabulary Reward Fund, except in respect to L 2.362 13s 9d for the last purpose, I not only dispute, but must characterise as a bold attempt to fasten on the late Government a liability for money unexpended, and which need not be expended. If the expenditure takes place it will be by the present Government, and I cannot sufficiently stigmatise the attempt to mislead the House, which is evidenced by the endeavor to make it appear that the Civil List and Native School savings are a liability for which the late Government should be held accountable. Sir, that it was a palpable attempt-- to deceive the House was made evident by the fact that in considering the ways and means for the year the socalled liability was abandoned. Such a de- . plorable specimen of " cooking" has never come under my notice. First there is the liability stated, to make it appear that at the end of last year there was a deficit ; then, when de ding with the present year, the liability is converted into an asset to grace the Colonial Treasurer's own triumphal car. I next come to the Defence and other Purposes Loan so-called balance sheet, " showing the position of the cash raised under that loan as at 30th June, 1872." This is another attempt to make me out in the wrong, which, to my mind, recoils upon my successor. The Colonial Treasurer comes to this conclusion, " That out of the L 634.000 raised under this loan there remained, at the 30ih June last, only L 106.922 19s 7d available for the defence services of the current year, instead of L 155,247, 5s 4d. The honorable gentleman i 3 wrong in his conclusions, and wrong in attributing to me a statement as to the amount available for expenditure during the current year. What I stated to the Committee was "the exact position of the Defence and < >ther Purposes Loan, the amounts raised, the amounts expended, and the balance remaining for expenditure." I showed that the total expenditure was L 477,352 14s Sd., exclusive of liabilities, and that there was lett "a balance of L 155,247 5s 4d available for expenditure, including liabilities." But, the honorable gentleman want 3to make it appear that I was referring to the amount "available for the defence services of the current year," and by a number of ingenious figures he reduces the amount to L 106.922 10s 7d. Both his f acts and his iaferences are wrong. If honorable members will deduct the L 69.617 Is l(hl, which appears under the head of Liabilities for Temporary Loan Bonds (and which I did not include on either side because the money to pay them off was lodged at the bank), from the assets stated by the honorable member, inclusive of the amount due from the New Zealand Settlement Act account (confiscated lands) they will fiud the result to be a balance of L 158.0 11 5s Id, or L 235 19* 6d less than I stated. That L 235 19j Gd is the discount on the sale of the L 150,000 debentures sold at home. So that the amount of assets stated by me tallies with that of the honorable gentleman, only that there is this difference, that I stated that the balance was in cash, whilst the Colonial Treasurer claims that L 9.373 9s j lid is represented by an unreal isable asset 1 in the shape of an advance to that amount to confiscated lands. Again, he mixes up his cash balance with the amount available for expenditure during the year, and after deducting the so-called unrealisable asset, he deducts the liabilities and engagements, L 23.792 17s 4d, and also an advance from Consolidated Fund of L 8.358 lls 4d, and charges me with not having taken the last into account. I was not entering into a statement of the proposed defence expenditure for the current year, I was merely showing the money balance. The L 23,792 17s 4d carried to Reserve Account for liabilities, might or might not include the money with which the Defence Minister proposed to repay the temporary ' advance from the Consolidated Fund. Whether or not it was intended to make the payment from the amount passed to Reserve Account had nothing to do with the statement I was making. The next item, "To balance of amount raised under this Act on account of the Province of Otago applicable to redemption of Otago Dock Borfds, L9.5C3 7s Sd," exhibits in a lamentable manner the haste with which the Colonial Treasurer has rushed to. conclusions adverse to his predecessor's budget. If he will examine the statement I made he will see on page 4 that L 90.436 12s 4d is the amouut which has been borrowed on account of the Province of Otago. It is true there is a power to borrow the exact balance the honorable member states, but the money has not been bo. rowed because the owners of the dock bonds which it is authorised to redeem have not been willing to part with them. To assume that the money must he borrowed without the bonds being purchasable Is about as unreasonable us it would be to issue the whole of the Consolidated Loan before the securities which it is designed to replace could be procured, * entailing the payment of a double rate of interest. So if we had borrowed the money for Otago, that Province would have been liable for the interest on outstanding bonds as well as for .the money borrowed on its' account. And even ban th« money for Otago been borrowed, it would not have lessened the spending power this year, though it would have made necessary the borrowing of a further sum on account of defence purposes,. . The fact is, the honor-, able gentleman has mixed up the question of the cash balance with the amount available for expenditure for the year. The amount available for expenditure je the amount

authorised by law, and to make tip which the necessary amount has to be borrowed. The L 158.009 balance stated by me could no* have represented the amount required for the expenditure of the year, because it included L 23.000 authorised in the last year's expenditure, and carried to Reserve Account for the payment of liabilities. Deducting the L 23 000 from the L 158.000, there is a balance of L 135,000 only, whereas the law admits of an expenditure for the year of L 150.000. The honorable gentleman is therefore entitled to borrow L 15,000 more to meet the current year's expenditure, besides the money authorised to complete the purchase of the Otago bonds, should he find he can procure them. The honorable gentleman has L 150,000 at his command for the year. The L 8,308 advanced from the Consolidated Fund he may be able to repay from the Reserve Account of last year ; or, if the whole of that amount, L 23.000, is required for other liabilities, he may charge it against the L 150,000 for the present year. As to the other asset of Confiscated Lands Advance, which he states stands to the credit of the loan ia lieu ot cash, that would, no doubt, limit by that amount his expenditure for the year, if he does not choose to realise it. But, as I have said,«he has no business to refuse to realise it, unless with the vote of this House ; and if he takes such a vote, it will be for the House, at his invitation, to decide whether or not the amount is to be charged to the defence vote for the year. Assuming that it is to be so charged, and also that the L 8.358 11s 4d due to the Consolidated Fund from the Defence Fund, is to be charged to the current year's expenditure instead of to the Reserve Fund of last year, the two sums together amount to only L 17.732 Is 3d, and deducted from L 150,000 leaves L 132.267 18s 9d available for the year's expenditure, instead of the L 106.922 19s 7d stated by the honorable gentleman. This, comparatively with other years, gives a not unfavorable result, for the amount available will only be chargeable with between L2OO and L3OO for discount and charges, whereas during the two previous years the discount and charges amounted to L 18.327. It appears that the outstanding liabilities on the Immigration and Public Works Loan amounted to L 79.250, leaving L 845.096 17s 6d available for expenditure out of the L1,600,00C already borrowed of the loan. I wonder the honorable gentleman did not congratulate the House on this result, so much better as it is than he and those associated with him professed to believe in the early part of the session. With regard to the various fund 3of the Immigration and Public Works, I am glad to find he is able to distinguish between the cash statement and the borrowing and spending power. The Railway Fund Account is made up in a manner calculated to deceive honorable members. The Colonial Treasurer assumes that the rails already ordered belong to lines not begun or contracted for. In this way he makes the balance available for expenditure less in cash, though he adds to it the value of the stock. The fact is, the rails already ordered are for the railways contracted for as well as for those to be contracted for. The amount, therefore, of L289.G10 may be taken off the amount of the railways already contracted for and added to the cash available for further railways, making the first L 1,296.713 7s 4d, and leaving L 740,000 in cash available for other railway purposes, instead of in cash and stock. I observe that' the Minister for Public Works did not fall into the same error as his colleague, but he professed to have found out further liabilities by which the amount I have mentioned as available is further reduced. In respect to the allegatien that the railways ordered by Parliament will amount t« more than the sum authorised to be borrowed. Honorable members last year were perfectly aware that if all the railways were made for cash, and none by guarantee or by payment in land, the borrowing power might have to be increased. But there is no occasion to do so now. The present funds are amply sufficient for some considerable time to come. I regard the hints which have been thrown out as to insufficient means as merely so many attempts to discourage the construction of railways, and to mislead the country into believing that the representations of the late Government cannot be carriel out. I agree very much with the classification which the honorable gentleman adopts in respect of the rust of the loan, but I notice with the greatest possible regret the abandonment of the subsidies to Road Boards. I now come to the proposed expenditure and estimated revenue of the year. The honorable gentleman takes credit to the revenue for L 9,000 for surplus interest from Trust Fund, and he reduces the expenditure by LIO.ODO, which he tries to persuade the Committee means an economy equal to L 20.000 for the year. In my Statement 1 explained to the House that there was a considerable sum recoverable for interest, and that there was a considerable saving o» the authorised votes. But I placed these two against the. Supplementary Estimates, which are invariably necessary, and against the unauthorised expenditure, which, whether in .the shape of expenditure on objects not provided for, or in excess of some of the votes, can never be wholly avoided. The Colonial Treasurer takes credit for both the aids, but forgets that he may require provision for the Supplementary Estimates and the unauthorised expenditure beyond a margin of L 2.500, which is the one his budget discloses. Why, Sir, his colleague at the head of, the • Government has been making considerable political capital of his intention to spend money on these buildings. The sum of L 6,000 .is the amount required, 'i he Colonial Treasurer fails to provide it, and the sum at once creates a deficiency ; besides that, he has picked up the aids which might have been looked, to, Jbo cover fresh items of expenditure.' As for the assumption that the savings on the votes argue an economy, I am amused at such au attempt to'thrdw dust in the eyes of honorable members. The merest political tyro, the school boy who glances over any Financial Budget, is well aware that in this, as m every other country, there is always a saving on the authorised votes, as there is always unauthorised expenditure. The Estimates always provide for contingencies in excess of the probable actual expenditure. And tho saving the honorable member proposes to make has no more to do with economy than any of the other proposals of the honorable gentleman. I do not desire to discuss the proposal to add 1*12,000 to the capitation payment, in the shape of an allowan.ee of 10s a head to the Maoris,- beyond saying that I recognise its peculiar value for the North Island members, and that it places them, myself included, in a difficulty. With offers of this kind good Government becomes impossible, because one's constituents cannot understand why such offers are made ; they can ooly see that a Government makes tke proposal, and it is the duty of the representatives to take advantage of it. At present I only assure the honorable gentleman that I fully understand its meaning. - I. now turn to what the hon. member said concerning charging the interest and sinking fund on the -Publis Works and Immigration Loan. His propostl ia to charge on the loan exactly the ssme imount as under my pi oposals would ha>e been charged. By my plan, beyond th» amounts paid into i)w : Public Works land from the Consolida* e<? Revenue, the fu»d wm to contribute 131 c»co