THE FINANCIAL STATEMENT.

Wairarapa Age, Volume XXX, Issue 8489, 17 July 1907, Page 5

THE FINANCIAL STATEMENT.

A RECORD REVENUE. AMOUNTING TO NEARLY EIGHT AND A-HALF MILLIONS. A SURPLUS OF £717,825. Last, night the Premier (Sir J. G. Ward) delivered the Financial Statement, in the course of which Sir Joseph said: — In submitting the Financial State-

ment for the year ended March 31st lait it i 3 not necessary for one to give full detailed figures, as the Public Accounts have already been published, and honourable members are, no doubt, familiar with them. The revenue has surpassed that of any I previous year, and notwithstanding the heavy expenditure we closed our books on March 31st last, with a substantial credit balance of £717,825, a result which roust be gratifying to both the House and the country. The revenue for the year exceeded eight millions, the highest on record. The actual amount was £8,399,075, and compared with the revenue of the previous year £7,584,359, shows an increase of £814,716, or a little over 10 per cent. The principal increases were: —Railways £282,978, Customs £243.629, Stamps £164,464, Land and Income Tax £77,637, miscellaneous £31,075, and other receipts £24,822, territorial beer duty £107,582. Comparing the actual with the estimated revenue there was excess under every head. The Customs estimate was exceeded by £241,040, Railways by £121,396, Stamps by £122,227, Land and Income Tax by £58,209, miscellaneous by £26,885, other heads by £25,318, making a total of £598,075 in excess of the estimate. A certain amount of this increase must be attributed to the International Exhibition, at Christchurch, particularly that relating to revenue derived from Railways, Customs and Stamps, but at the same time we must not overlook the fact that the general prosperity of the country is mainly responpible for the results. The expenditure last year also was necessarily higher, the actual sum spent being £7,774,926 or £652,586 more than the previous year. Of this large increase permanent charges were responsible for £128,063, principally caused by payment of interest on new loans, and the cost of the increased payments to Old Age Pensioners. With increased revenue increased expenditure may be looked for, and, therefore, it is not surprising to find that the Departmental expenditure was in excess of the previous year by no less a sum than £484,573. Of this amount Railways were answerable for £254,537, Education required £88,032 and the Post and Telegraph service cost an extra £40,459, and the grant to the Exhibition £49,500, and the maintenance of roads, now charged to the Consolidated Fund, £25,860. The new Sinking Fund established for war and defence loans absorbed nearly £40,000. Comparing the actual expenditure for the year with the amount appropriated we are able to show a saving of £161,383. The charges authorised by the permanent appropriations show, as compared with the estimates, a saving of £12,828, while the votes for Departmental expenditure show £188,505, but as credit has been given to Railways for excess of revenue allowed by law of £121,396, the underspent amount on Departmental votes may be stated as £67,109, after charging £39,950 for the defence and war loans Sinking Fund Account, we have a direct saving of £39,987 on the estimated expenditure for the year. The surplus of £788,795 from the previous year enabled me to transfer from revenue in aid of public works the sum of £775,000, which, if reckoned at 3£ per cent., represents a saving to the State of £27,000 per annum for interest; the largest amount previously transferred on this account was £600,000. The receipts for the year from all sources amounted to £8,478,956, the expenditure being £7,774,926, leaving a surplus on the year's transactions of £704,030, which added to the amount of £13,795 left from the previous year's balance after transfer to Public Works Fund of £775,000, gives us a balance on March 31st last of £717,825. Hon. members will be pleased to know that in accordance with a promise made in last year's Budget £150,000 of the outstanding Treasury Bilis have been paid off thus reducing our floating loan from £700,000 to £550,000- Bills had been renewed from year to year and had practi cally become a permanent debt, and this is the first step taken towards clearing them off. I hope to make further redemptions from time to time until they are all paid off. In regard to the Land Settlement Account the Premier explained that during the past year debentures amounting to £530,040 wore issued for the purchase of estates. The premiums received on sale debentures realised £5,445, £16,000 was received for interest on moneys invested, while rents and other money from the estates came into the account to the extent of £206,103. On the other side the acquisition of estates cost £188,278, interest on debentures £188,012, first payment for sinking fund established for repayment of debentures £50,165, and other expenses £3,l6o—balance of account at the close of the year was £729,320. The gross public debt on March 31st last was £64,179,040, as against £62,191,040 at the close of the previous year, an increase of £1,988,000 for the year. Of the million loan authorised last session for public works £943,600 was x-eceived during the year. The balance of £56,400 has already been placed, and will come to credit during this year. For the purchase of lands for close settlement debentures to the amount of £530,040 were issued under the Land for* Settlements Consolidation Act, j 1900, and £65,975 under the Maori | Lands Settlement Act, 1905. For the j acquisition of land from Maori own- j ers to enable grants to be made to j local authorities, £IBO,OOO had to be j borrowed and £150,000 was obtained to meet the requirements of the Ad-

t vances to Settlers' Olii ce, and £20,000 to carry out the provisions of the Advances to Workers' Act. A further sum of £IO,OOO for scenery preservation was provided, and , £66,000 representing debentures for accretion to sinking funds were disposed of. Conversion operations are responsible for an increase of £2,100. • Notwithstanding the disturbed state of the money market no difficulty was found in obtaining all the money required whether for renewal or new loans on , the most satisfactory terms, a premium of 2 per cent, being obtained for many sales, and as high as 1 per cent, was received for renewals in several cases. £1,188,766 fell due during the year. Of this large sum £1,648,466 was renewed, £255,300 converted at par, £261,800 paid off, and £3,200 remained outstanding, the debentures not having been presented. The importance of securing the fullest protection of the British navy cannot be over estimated. Irrespective of the direct advantages thereby accruing to .New Zealand it must not be forgotten that the Pacific Islands require regular visits of British ships of war. The mining outlook is of a very hopeful character. The export of gold for the year 1906 was the highest for a period of thirty-five years, while the output of coal shows a considerable increase over that of the preceding year, and is about double what it was ten years ago. The increase in the value of our material products for the past year amounts to nearly a quarter of a million sterling. The two State coal mines show a total increase in the output, while the increase in profits is not so large as compared with the preceding year on account of material concession made in the prices charged to the Railway De partment. A comprehensive rnea sure for the consolidation ant general amendment of ths Loca Government law will be introduced, but having regard to the magnitude and importance of the subject anc the many other -matters which must be dealt with I do not anticipate that the Hill will pass this session. It will, however, be circulated sc that its provisions may be fully considered by all parties affected, and ] hope Parliament will, next session, put this important legislation on the Statute Book. The administration of the Industrial Conciliation anc Arbi'ration Act has disclosed certair defects which should be remedied. These lie chiefly in the 'delays which : have often practically defeated the : main object of this legislation. These ! delays have been due part'y to the i long intervals between the hearing j by the Arbitration Court of disputes, | but mainly to the unnecessary and : often vexatious appeals made from the Conciliation Board to the Court itself. The troubles that have arisen regarding the half-holiday in shops and factories will be removed. Bills to meet these points will be introduced. Neither here nor elsewhere has the poll-tax on Chinese succeeded in preventing the immigration of Chinese. It is very necessary in the best interests of the European inhabitants of this country that further restrictions should be imposed. Experience has shown that the more effective and justifiable check is by means of a high educational test. This, it is hoped, with the present poll-tax continued, will have the effect of reducing the number. Legislation on these lines will be introduced. Members will recollect that last year the Government circulated a Bill to establish a system of annuities. The Bill will be introduced again and will contain provision for voluntary contributions to a fund for the establishment of annuities. I propose to submit authority to issue debentures for £BOO,OOO , to take the place of the Imperial guaranteed debentures. This sr.m is to be used exclusively for security purposes as occasion requires. The work carried on by the local bodies is recognised as of the greatest value to the people, whose interest they serve. I am satisfied that in the carrying out of th? work the system of Government loans has proved of great service and it has been largely availed of. It ia only right that the people in the several disti'icts who have shown disposition by local taxation to help themselves should have advantage over those who have relied entirely upon the Government assistance for carrying on local works. To meet this position preference will be given in proportion to the amount of rates levied by local bodies and legislation providing a scale to meet this will be submitted to Parliament. Good progress has been made with roading and opening up by. means cf bridle tracks lands recently taken up for settlement. But notwithstanding that the work done during the year just passed has exceeded in quantity that done during any previous year, the settlement of new land has been so extensive as to render it impossible to provide access to the whole of it as quickly as is desirable.. However, with sustained perseverance and energy and provision of sufficient funds for the purpose it is hoped that roading will before long overtake the needs of settlement. The first essentials to the excellence and purity of dairy products is strict cleanliness in byres, and the highest degree of freedom from disease in stock. These objects can be effected only by increased inspection and for this purpose to pay £B,OOO per annum out of the Consolidated Fund, By this means animals found with signs of disease will be eliminated, thus securing not only purer meat for local consumption and Home markets, but purer milk for dairy production. Railway construction works have continued to make steady progress. On the North Island Main Trunk Railway especially a large amount of very good work has been done. The rail heads at the northern and southern ends 'of the line are now within 28 miles of each other, and the intervening gap is bridged by a I good coach service, so that the I through journey between Auckland j and Wellington by this route is already quite practicable. During the coming summer rails will be laid over a much greater part of the 23 miles gap, so that by the end of the financial year the break between rail heads should not exceed five or

[ | six miles. The expenditure on rai • way construction last year amount* , to no less than £9i3,uSi, and in add ' tion to thi3 £308,150 was expends on additions to open lines, an ■ £117,915 on railway duplicatic . works. I propose to devote £350,50 : out of the £1,000,000 loan for add tions to opened lines, so that ; vigorous programme of providin rolling stock and other necessar facilities may be carried out witt out unnecessary delay. I may mer tion for the information of hor members that workshops are now en gaged night and day on specia classes of work to ensure speed; turning out of further engine powe and rolling stock. It has always been one of the car dinal doctrines of the Liberal Part; in Mew Zealand that the prosperifc; of the community as a whole i directly and closely connected witl the prosperity of our farmers. So fa from there being any antagonisn between town and country they an inter-aependent. Neither can fiourisl alone, and the well-being of the om must react for good on the other Guided by this principle the Liberal administrations of the past hav< striven to benefit both. When th< present Government took office they felt that the existing system oi land tenure had in many respects served its day, and no longer mel the requirements of our people. Wt therefore submitted proposals for a change. These have been exhaustively discussed during the recess, and detailed proposals in the light of information since obtained will be submitted in due course: I may mention that in order to prevent excessive holdings and aggregation of estate& in land, and at the same time leave a reasonable scope for the enterpris3 and energy of our settlers, the graduated land tax will be increased on estates of £40,000 or upwards in unimproved value. The national endowment lands will be disposed of only on the renewable ; lease system. The Native land question envolves two matters of im- : mense importance to the country. First, the proper settlement of the Maori people so that they may become industrious citizens, and, second, the utilisation of the vast areas that are under Maori tenure unused and not likely to be used by the Maori people. The Government was of opinion that before bringing in further amendments to the Native land laws there should be a complete and impartial enquiry into the state of Maori lands, and also an inquiry as to the Maori "views and opinions regarding the utilisation of their lands. It was felt that this could best bs ascertained by a commission that would be above criticism, and satisfactory both to the Europeans and Maoris. I asked His Honor the Chief Justice and Mr A. T. Ngata, to undertake the work. They consented to do so, and they have already dealt with haii a million acres of land, and have forwarded to his Ex-» cellency five reports, which will be laid before Parliament. Tha recommendations of the Commission, if given effect to, offer a hopeful prospect of utilising these lands for the common benefit of , both races by providing sufficient farms for the Maoris themselves, and opening large unoccupied areas for European settlement. Of the land t ,ey have already dealt with, vjs., 526,977 acres, they recommend That 219,115 acres be reserved for Maori occupation and farming, that 307,861 acres be made available for European settlers, and they anticipate that other large areas will be similarly • available, in the near, future. A considerable amount of doubt seemed to exist in the minds of hon. members last session in reference to the areas of lands in the several districts to be set aside for endowment pur poses, and in order that the proposals may be fully understood, I desire to state that the nine million acres proposed to be reserved for endowment purposes are distributed proyonionately in each district as follows: —Auckland, 900,000 acres; Hawke's Bay, 135,000; Taranaki, 90,000; Wellington, 90,000; Nelson, 1; 350,000; Marlborough, 450,000; Westland, 1,035,000; Canterbury, 1,800,000; Otago, 2,250,000; Southland, 900,000; total, 9,000,000. Under the provision of the Land for Settlements Act, frequent references to the Compensation Court in order to arrive at the price to be paid for estates acquired for settlement are ! necessary, and have proved unsatis- ! factory. An alteration in the preser'; ' system is desirable. The House will be asked to legislate so as to provide that the valuation under the Valu- i ation of Lands Act shall be the basis upon which the price is to be ' ascertained with 10 per cent, added' when the estate is valued between 1 £25,000 and £50,000, and 2£ per cent, from £50,000 upwards. j The marked success of the reduc- j tions in postage and telegram rates | during the last few years warrants j further concessions, and I therefore propose to make the following reduc- I tions in rates: —To reduce the post- j age on inland postcards from Id to j Jd, thus bringing the post within the reach of the humblest member of the community; to reduce .the fee for registered letters from 3d to 2d. To further reduce the inland letter postage, making the rate" Id for the first four ounces and Jd for each two ounces thereafter instead of Id for each four ounces as at present. On the telegraph side it is intended to abolish at country places the fee of five guineas per annum at pi*esent charged for telephoning telegrams to the nearest telephone office, and in the principal towns to reduce the same fee to £l. Later on I hope to abolish the charge altogether. It is estimated that these reductions on the whole will mean a concession to the public of about £20,000, but after making due allowance for the increased business likely to result from them, I estimate that the loss to the Department for the three months from January Ist to March 31st will not exceed £3,800. During the crisis which took place a few years ago it became necessary to raise the rate of interest at which the Government borrowed, and this necessitated an increase in the rates on loans granted to local bodies. I think that the time has arrived when the latter rates should be re-adjusted. These local bodies do a great deal to

il- promote settlement and thereby per 2d form a very useful function in th( :i- general work of government. Ir ;u order to further assist them I proid pose, from February Ist next, to rein duce the rate of interest on existing 10 and future loans by one-half per i- cent. Proposals will be laid before a Parliament providing for increased g rates of the graduated land tax in y the cases of very large estates in i- order to induce their subdivision and i- prevent aggregation. To this end 1 i. propose, while making no alteration i- whatever in the present scale of 11 graduated land tax payable by owners y of less than £40,000 unimproved r value, to substitute a new scale of graduated land tax for the present ■- one in respect of owners of £40,000 y unimproved value and over. This y new scale will commence at £4,000 s (unimproved value) with a graduated i tax of 8s per cent, and to rise r thousand by thousand in successive a uniform increments of one-fifth of e one shilling per cent, until the maxii mum rate is reached at £200,000 3 (Unimproved value) when it will be £2 . per cent. To this initial scale will I be added an additional rate of 25 3 per cent, of the scale rate. Busi--3 ness premises in town and country will be exempted from the operation 6 of the above mentioned additional s rate, and in the case of country t estates the principal homestead site i will be similarly excluded. The i amount collected under the sheep tax is barely £20,000 a year, and I propose to ask Parliament to repeal it ! altogether. : CUSTOMS. The complexity of the existing Customs tariff has long been a cause of complaint from merchants, and trouble to the Department. A Bill ■ to simplify it will be introduced, and the Government intend to propose readjustments and remissions which will facilitate trading operations, assist industries, and last, but not least, sensibly lighten the cost of many food articles of general consumption. Encouragement will be given to some of our important industries in cases where foreign competition appears to press unfairly or the capital invested and depress th< wages of the workers. SHODDY CLOTHING. The question of the importation oi articles of shoddy clothing has received very careful consideration. The matter is one of an extremely difficult nature to deal with. The mere imposition of a duty will not suffice and in my opinion separate legislation will be necessary. The whole subject has been examined with a view to submitting proposals to check a system under which our people are imposed upon by not knowing the class of articles they are purchasing. I estimate that the total remissions of duty will amount to about £375.000, but with the expansion of trade and the development of the country it may reasonably be anticipated that, as in the case of the Postal remissions, the revenue will steadily recover. DUTY ON TEA. By an alteration in the weight of the contents of packet tea, the intention of Parliament has been evaded and quantities of packet teas made slightly over the weight have consequently been admitted free of duty. As packing can be done most satisfactorily in New Zealand the duty will be fixed at twopence per pound upon packets containing up to five pounds in weight, and this should effectually prevent the evasion that has been practised. As a matter of fairness to the holders of duty-paid stocks provision will be made for the proposed exemptions or remission of duties to come into operation on November Ist next. Last year the actual Customs revenue received was £2,941.040. In the proposals I am now submitting I.estimate that the reductions in Customs tariff amount to £375,000. This must be admitted to be a very heavy reduction and it will be found on examination to be chiefly in the direction of reducing the cost of the necessaries of life and upon that class of wearing apparel that is largely used by the mass of the people.. Among the principal items are sugar, currants, raisins, figs, dates, unground spices and all articles of infant diet, which are made entirely free; cotton piece, goods, dress prints, and cotton tapestry, linseed and olive oil and various others items are put on the free list. The duty on potatoes is altered from an ad valorem one to £1 a ton, fixed so that the anomaly of the higher the price the greater the duty will be removed to prevent unfair exploitation of New Zealand markets. The duty on agricultural machines and implements is not increased. BOOTS. An alteration has been made with the object of keeping out the cheap inferior qualities cf boots that have been imported, and with this object a specific duty per pair, in addition to an ad valorem rate, is proposed, but the cost of those boots chiefly used by the majority of the people will not be greater than at present, as this has been met in the tariff. Children's boots and shoes remain on ' the free list. FLOUR. I am keenly alive as the desirability of enabling our people to get the necessaries of life—and first among these bread—at the lowest possible price. The question of removing the flour duty been given the most anxious and lengthy consideration. The removal of the duty would practically stop wheat growinglin New Zealand and leave us entirely dependent upon South Australian or other supplies. The removal or substantial reduction of the flour duty would, it is believed, cripple every fiourmill in New Zealand. We cannot lightly make a change which will crush an important local industry like this without direct injury to many individuals. The duty on flour is one shilling per hundred pounds, and its removal would, if the,whole benefit of the remission were given to the consumer, enable him to buy the four-pound loaf one halfpenny cheapeivthan at present. If this could be secured it would be a great achievement, but experience too often proves that the full benefits of

• such remissions are uCt trans.i °rre< ( to the customers, and aa the bakers do not deal in farthings no reductior in the price of bread would resull unless the bakers gave up the half penny per loaf, which is the whole benefit of, the remission. That thej would do so is at least very doubtful, and for this uncertain gain to the community some propose that we should make a change which would virtually extinguish our wheat-grow-ing industry, throw out 'of employment large numbers of men, and ruin our flourmillers. There are some indications that the reason of the present price lies in an entirely different direction. If, upon the very close and thorough inquiry I am now making, I am satisfied that the present price of bread is due to any monopolistic ring or combination, the Government will not hesitate to introduce legislation this year to defeat such a combination and secure to our consumers this necessary article of diet at a fair competitive price. REVENUE. Turning now to ways and means for the current year, after careful consideration, it is estimated that ordinary revenue receipts proper will amount to £8,200,000, or £199,075 less than last year. Railways should reach £2,550,000, Stamps should yield £l, beer duty should return £105,000. On the other hand it is anticipated that with the proposed increase in the new scale the land tax will produce £515,000, income tax £28,000, a total of £795,000, £69,791 more than last year. Territorial revenue is get down as £256,000, £5,100 better than the previous year. ESTIMATED EXPENDITURE. Expenditure out of the ordinary revenue for the present year upon all services is set down at £7.987,347, £212,422 more than the actual expenditure last year. In conclusion I think that honourable members will agree with me that matters of the greatest importance are contained in the proposals I have submitted. I feel persuaded that if given effect to they will add to the general comfort of the masses of our people, and will assist in speedy and satisfactory settlement of land, and will give relief in every home by the substantial concessions that have been made in duties en the necessaries of life.