FINANCIAL STATEMENT.

Wairarapa Daily Times, Volume VII, Issue 2021, 20 June 1885, Page 2

FINANCIAL STATEMENT.

Sir, Julius Vogol delivered his-Financial Statement last night, and in his opening ■remarks'said he felt certain that hon. members would give him "a kindly and considerate hearing. REVENUE. The year 1884-85 was started with a deficit of L 152.112 . ;' For L 150.000 of this amount deficiency bills were authorised to he issued, maturing on the 31st March, 1886. -The balance of L2,ll3was discharged out of the year's revenue. He proposed last year that the L 150,000 should not be turned into a permanent debt, and still held to the same view. The transactions of the consolidated revenue for the year 1884-85, after discharging the deficit of L2,U2,and leaving outstanding the L 160,000, shows a credit balance of L 19.891, or, exclusive of the small deficit paid off, a surplus of L 22,003. The total consolidated revenue ,of the year amounted to L3,5G9,494. 'There was a deficiency in the item of stamps, principally occasioned by an expected increase of postal revenue having by accident been twice credited in the estimate 1 The railways' also Bhmved some /whilst customs exceededtoasmall extent the estimate. The total deficiency :in the estimate was 122,016! \ The expenditure, oh the other hand, was less'than the.amount voted by 123,852, inclusive of 1(5,982 expended on services unprovided f of jvao that the result'was the surplus in ; the year's transactions' whioh he had already stated. Tho surplus of Lb'o,ooo anticipated in the Budget; last year was reduced subsequently by the supplementary estimates and votes, In the revenue was included an amount of L 247,700, the proceeds of

debentures issued under " The Consolidated Stock Act," 1884." This amount was isslled to represent the equivalent of the, increase of the sinking fund for the year. -The; expenditure for 1884-85 included the' undiseWged liabilities for tho previous year,' according to the plan introduced in 1880 of bringing into the year's/accounts tlie actual expenditure and receipts within that period. Land Fund, The Land Fund accounts at the close of the year 1883-84 showed a balance of L70,447i The revenue received during tho past yeai'Jamounted to L 100.969, of which L 92,482 was for cash sales of land, and LG8,637 for sales on deferred payment. Tho expenditure amouuted to L 309,485, so that at tho beginning of tho present financial yeifr there was a credit balance of L 21.931. PUBLIC WORKS FUND 1885. The balance' at credit of the Fublic Works fund at the end of March 1884 was L 488,912. From the instalment of the loan of one million, negotiated in January 1884, L 389.000 came to credit after March of that year, and from instalments of the million loan, negotiated in January last, L 845.000 came to credit before the end of March 1884, There was also an amount of LIOO,OOO from Deficiency Bills authorised to be issued last year in aid of the Public Works fund, redeemable at the end of the present month, and we further obtained L 500,000 of temporary advances, The total amount placed at credit of the Public Works Fund during the year 188485 was L 2,327,025. . The expenditure amounted to, L 1,336,727, leaving L 990,298 at the end of March last with which to begin tho year. In addition thereto we have the balance of the third instalment of the three million'loan to receive (L 155,000) also the new loan of L 1,500,000 recently raised, amounting in all to L 2,645,298 subject, however, to the redemption of' Deficiency Bills of LIOO,OOO, the repayment of temporary advances L 500,000, and the advances to be accounted for in the hands of officers, L 25.000. THE PUBUC DEBT. The amount of the public debt on the 31sfc of March, 1884, less the sinking fund account, was L 29,574,903, The amount of that debt'on the 31st of March 1885, was L 30,049,099, It was increased by fresh issues and conversions, the conversions from a higher to a lower rate of interest of course having a tendency to a larger principal amount, but a less annual charge, The annual charge last year was L 1,507,989, whilst this year it is L 1,593,992, exclusive of interest on deficiency bills and on, the million and a half loan. The increased annual charge is to be accounted for by the interest on the additional million, and by L64;004 which, owing to the conversion operations, escaped coming into charge during 188485. LOAN CONVERSIONS. The loan conversions transactions during the year comprised, amongst others, the paying off the unconverted balance of 5 per cent. 4-30's, L 742.600. They had also converted L3,G42,100 of consolidated drawing debentures. TAXATION. We have arrived at a period of our history when it is necessary to carefully consider the nature and effects of taxation on the colony, Thecustomsrevenue, whigh is the most important branch of tho revenue, required to be revised by reason of several} circumstances which have come in ordinary course to largely effect its natural growth. He need only mention two of those circumstances, the one that the increase of production in the colony had the tendency to sensibly diminish the import duties on many articles which have yielded large amounts in the past, and the other that alcoholic beverages, from which the heaviest customs returns have hitherto been received, are showing a diminished consumption. Both theso facts were eminently gratifying, the latter from a moral and social point of view, the exceeding value of which' it would be impossible to exaggerate; the former for both utilitarian and social reasons of only less importance. To put the case briefly, a less consumption of intoxicating drinks meant increased happiness and social well-being, and larger local production means increased prosperity. It was clear that both these causes argue an increased power to pay customs duties on whatever articles it was considered desirable they should bo levied. The returns of customs duties on spirits during the last three financial years were suggestive. They are as follows : 1882-83, L 410,517; 1883-84, 1403,500;' 1884-85, L 377,690; and for the first two months of the present financial yefr the receipts have been at the rate of only L 360,024 a year. Those persons who refuse to see in the conditions of a new country the special circumstances which render, inappropriate their ranging themselves under the old world- banners of protection or free trade, may at least meet on this common ground that fiscal requirements are the primary object of customs duties. He ventured to go a step further and say that i there is no taxation more fair, just, and logical. He asked protectionists to agree with him in this, although they may see in customs duties an ulterior object in the encouragement they givo to local production, and from free-traders a like acquiesence, although thoy argue that the remission of duties tends to lighten tho cost of living. In short, customs taxation was a natural and obvious species of revenue, and the freetraders who would specially diminish it, and the protectionists who would specially increase it, seek to modify natural conditions by artificial means, OPENING THE COUNTRY. The time had come round when they must consider the general opening up of the country, and especially those parts in which the present means are small. To base the aid we render on the present means of the recipients, would, be to give, to those who liavo rather than to those who want. Hence he was free to confess that he recalled a great deal he had said ■last session about each district depending upon its own taxation. Their proposals were settled subsidies extending over many years, but divided after a plan which will givo greater consideration to the poorer districts. The scale would adjust itself—that is., as a district becomes* richer its receipts, though perhaps larger, would be based on a lesser scale. It was necessary to explain that the long term of years to which they proposed the colony should bind itself has for its object to settle the finances of the local bodies, and enable them to borrow on the security of the subsidies. They were distinctly of opinion that the local bodies should ho released from tutelage. The conditions under which the subsidies. should be expended should be prescribed, and the Boards bo held responsible for the proper expenditure of the money ; but they do not approve making the expenditure subject to the supervision of the Government. The experience of the Roads and Bridges Construction Act, and the enormous labour it has devolved on the Public Works Department, show. the fallacy of a system in which the responsibility is divided. They could never have a satisfactory system of local government unless the ratepayers are made to feel that they have no one but themselves on whom to depend for a wise expenditure of the corporate funds. .They should, by mean's of the subsidies, be constantly adding to the amount of property

available for direct taxation. ; The unequa' expenditure during the- past three years on roads,' bridges, and analogous local works; was a striking plea in favor of tho more regular system now submitted, They proposed to repeal the Road 3 and Bridges Construction Act, but to fulfil the obligations incurred under it. They proposed that part of the charge of the subsidies shallfor five years come out of loans, but the sum proposed from this source will bo very much less than they had grown into the practice of taking for these purposes from borrowed money. Tho amount of subsidies to local bodies they should admit was a sum not exceeding 1300,000 per annum for twenty-five years, of which one half for five years shall be loan. They should give power to thetJovernor toarrange with local bodies- for making roads specially required to open up land nowly sold, or about to be sold. They desired to give local bodies the power to erect dwelling houses with small areas of land attached for laborers all over the country at moderate rents, or on terms of purchase by instalments. They proposed to exempt these dwellings whilst underlease from seizure for debt. 'They may be erected by hundreds ail over the colony. They would give to the laborers resources and means of comfort, the want of which has been apparent in older countries. It is intended the subsidies shall only be one half for the present year. The reason is this, that it is necessary to fulfil all the engagements for roads and bridges, either promised or entered into) 1 including those under Roads and Bridges Construction Act. The amount required for this purpose was very large, and a half-year's subsidy for the present year seemed sufficient. The amount of L 300,000, which l l have mentioned is the' maximum amount which will be allowed is based on rates. . " MANUFACTURES. They were neither freetraders nor protectionists in the sense in which those terms are commonly used, and did not believe the circumstances of the colony are such as to make it politic to adopt simple free trade principles, which resolve themselves into c ' giving no .advantage whatever to local producers, and to applying excise to countervail import duties. On the contrary, they thought it is' so important that all sections of the population should be profitably employed, that it was impossible to apply any theory that dependslor its basis on the supposition that the population, if it cannot find one occupation, must look to another, and be content do contend with the popula-. tion of other countries on equal terms, no matter what may be the condition of labor in those countries. On the other hand, they distinctly abjured a policy of protection which would give 'to the followers of protected pursuits a Stateaided guarantee of success, no matter how,unsuitable those pursuits might be. Any policy.of the kind which would cany with it a guarantee of tho State, direct or implied, through the thousand ramifications of manufacturing operations, would bo a system of unhealthy forcing, fraught with possible ultimate disaster. He said to the manufactures throughout the country that they would bo unwise if they invested large sums in industries under the idea that these will be continually bolstered up by tariff arrangements. They may reasonably exercise their judgment as to the probable duration of the duties, which at the onset will assist them ; but their calculations should be made on the presumption that their industries within a reasonable period can defy competition. The Government, whenever it can prudently do so, should encourage local in preference to outside production, It should do so in the interests of economy, that is to say in the prospect that the local producer will be able to supply it in the end much more cheaply and satisfactorily. In order to remove the misconception as to competing value which now surrounds all Government imports, they should propose that all Government imports shall not be free from customs duties, nor from reasonable wharfage charges. THE TARIFF. Without going at length into the nature of the new tariff he would say itwas framed on the principle of yielding revenue, and in tho interest of simplicity. They made as few distinctions as possible. The free entries were enumerated, and the articles not enumerated would be subject to a ten per cent, duty, They slightly increased the duty on spirits, put a duty on foreign coal, and an extra duty on tea; but they did not increase the duty on sugar, DIRECT TAXATION. The Stamp Duties requited revision, principally with the view of surmounting the cleverness of those who, under present circumstances, manage to evade them. Tho Succession Duties were altogether inadequate, and much less than Great Britain, .and it cannot be alleged that in that country there is an undue want of consideration for possessors of property. They had also to defeat the ingenuity of those who, with ruling passion strong in death, pass the last days of the lives they have devoted to the acquisition of wealth, in marvellous devices to deprive the State of the revenues which Bhould be' payable on their decease. With regard to direct taxation it was no secret that Ministers preferred a land and Income tax to a Property tax, and that the House'and country are divided in opinion. on the subject. They had come to the conclusion that a compromise is necossary and expedient, Tho property Tax may bo so modified as to deprive it of some of the features which aro obnoxious to the views of those who prefer a different system of taxation, and it was their intention to mako proposals in this direction. The primary alterations were to provide for the exemption of agricultural improvements up to a certain sum, and also to provide for the exemption of machinery up to a certain amount. He should prefer a simple land tax, in assesinent of which valuation of improvements was excluded, and an income tax, if the land tax required to be supplemented. ESTIMATES. This year's estimates of expenditure during the current year, as compared with the estimated and with the actual expenditure last year:—Summary of services chargeable on the Consolidated Fundpermanent appropriations civil list, 1885-86, 129,750; 1884-85, voted, 129,750; expended, 131,598; interest and suiking fund, 11,067,873,11,559,115, 11,570,989; under special acts of the legislature, 1102,474, L 53.724,165,093, 1885:86; total, 11,800,107; voted, L 1,642,589; expended, L1,C67,680. Annual appropriations-Class 1., legislative, LC7.572,167,767, 166,943; Class 11., Colonial Secretary, L 221,568, 1241,854,1251,703; Class 111., Colonial Treasurer, 149,321, L 52.688, 158,166; Class IV., Minister of Justice, 1116,660, 1118,754,1117,405; Class V, Postmaster General and Commissioner of Telegraphs, 1279,518,1262,802,1255,161 jClass VI., Commissioner of Customs, 186,874, 185,288,180 979; Class VII., Commissioner of Stamps, 126,451, 127,496, 125,964; Class VIII., Minister of Education, 1361,186, 1340,482, 1334,197; Class IX., Minister for Native affairs, 119,944; 1,18,611, 117,934; Class X., Minister of Mines, ,124,610,, 123,808 115,585; Class XI, Minister for Public Works', 1756,591, 1751,438, 1714,846 ; Class XII, MinisterofDefence, 1211,745, 1185,466,1182,586; Total expenditure

on ordinary revenue account, L 3,972,138, L 3,819,043, L3'789,209. LAND FUND, The expenditure for the current year is estimated at 1208,971. This includesthe usual charges under special Actsjij such as the thirds of the safes of lands" on deferred payments, also the Land. and Survey Departments, and rates on Crown aud Native lands. The revenue for tho year from land sales is'estimated at L 163,960 bo that taking into account the credit balance of 131,931 at the end of last year 1 , we shall have a deficiency on the 31st March, 188G, of some 113,000, which is likely to be reduced by the payments not being jnade within the year. 1

REVENUE; OK THE YEAR. The estimated ordinary revenue of th year, with the charges on customs an stamps I have indicated, and with a f Property Tax, is as follows:—Revenuer customs, 1885-86, estimated 11,500,000 1884-85,' estimated 11,375,000; actual 11,411,102; stamps (including postal cas .receipts), 1538,500,1527,500,1510,019 property tax atfd, last year jjd, L 270,00( L 144,000, 1145,380; beer duty, L55.00C L 55.500, L 55,715; railways, Ll,ll6,00( 1/1,120,000, L 1,050,743 j telegraphii 1103,400, L 94,000,195,788; registratio and otherfees, 134,000,137,000,1/36,446 marine, 114,000,116,000, 113,393;. mie -cellaneous, 132,000, 135,000, 157,730 totals, 13,662,900,13,403,500,13,376,315 depasturing,"'. licenses, rents, -, etc. 1195,000, LIBB.OOO, L 183.175; accretion of sinking fund, 1258,000, 1247,70( 1247,700; totals, 13,U5,900,13,839,20( 13,817,194.

BORRO'WINO.... ; /\\ ' With regard to the general question of burrowing; -he must say a few words. When the Minister for Publib Works brought downliis plana in 1882 for the thro e million loan, he stated that if he were to stipulate for votes to complete all the works he proposed,hesaidhemighthaveto ask for L 10,000,000, more or less. We inherit these obligations, together with others which-have grown up since,,and the plain meaning is that we shall continue year after year the construction of great works to such an extent as Parliament thinks advisable, . In conclusion Sir Julius Vogel set forth: —(1) That the operations of last year on. ordinary revenue and expenditure account left a credit balance of 120,000. (2jH that public works expenditure amounted last year to 11,330,000, and that, taking into account the million and a half loan, there was, at the end of March last,, about two millions to begin this '■ year with, taking advances outstandih? hi' the hands of officers as cash. (3) That the negotiation of ourloans proved veiysatisfactoryand for the last million and a half, we netted more than'did the Governments of Victoria, Queensland, and : South Australia for loans floated at about the Bame time. (4) That the Act last session dealing with loan conversions, and with sinking fund, lias proved a gveatrsuccess, and free] from any suspicion of having adversely '> affected the credit of the colony j that through conversions effected under its authority, .we have been able to pay off 171,000 of debentures created the first year of the sinking funds. (5) That the financial machinery of Westport, and New Plymouth Harbors Act has proved successful. (6) That the .Government highly appreciates the services' of the loan agents and Bank of England. (7) That the Customs tariff requires to be revised because of the satisfactory facts that it has becoms affected by diminished consumption of spirits, and by increased local of dutiable articles, (8)! That it is adjusted on the principal that whilst the primary object is to serve fiscal. purposes, and whilst we by no means commit ourselves to State protection, wo should not be unmindful of the services the tariff may render to local production (9) That the Succession Duties beincreased, but still be kept less than they are charged in Great Britain, and that present exemptions be retained.; (i 0) That Stamp duties be increased in one particular, that of duties on conveyances, whilst precaution should bo taken to guard the. revenue from ingeuiousefforts to impair it. (11) That we cannot afford to part with population, and must recognise that the several classes of the community should help each other. (12) That Roadß 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. (13) That local Bodies must manago their own affairs, and havo a finance on which they can depend j that for this purpose the Consolidated Revenue shall be charged with a fixed subsidy for 25 taxation in districts in which it is raised, would not answer conditions required m be met, as it would leave least provide! those bodies that most want help. (ID) That the division should be made on a carefully considered self adjusting scale.: (16) That special assistance should be. given to goldfields counties. (17) That! manufacturers are essential to the wealth of the country.

The remainder of the speech is merely recapitulatory,