Financial Statsment.

Wairarapa Daily Times, Volume IX, Issue 2740, 2 November 1887, Page 2

Financial Statsment.

Major /Atkinson, in delivering the Financial Statement last evening, said he had never submitted one under a greater .sense- of responsibility-and of the difficulties which lay before the colony. The country had been told by Sir Julius Vogel that every possible economy having been practised, additional taxation to the '.extent of £250,000 rnustbe imposed. The House and the country had' decided that further reductions,were The Government approved of this and believed the country was prepared l for the self-sacrifice whioh such a policy involved. To some extent he believed retrenchment might be effected by. greater care in administration, but generally speaking the community would have to submit to sacrifices. The following are the mote interesting portions of his address:

The deficit as given; by the, late Colonial Treasurer for the yea* 1886.87 was £92,298, but if we omit from revenue considerable items which will not recur this' year, namely,'the surplus of £87.859 with which the year. 1886.87 began, and the windfall of £104,749 of released sinking fund, we.

shall find that what >1 .have called the recurrent revenue lell short of the expenditure by £284,901. Bearirg ; this fact in mind, honorable members I will be better able to understand how the late Government, after making all reductions in expenditure they thought possible and expedient, felt constrained to propose no less a sum than a quarter million of taxation over that of the year, ending on 81st March last. I shall now proceed to state to the Committee'what would be the probable deficit of the consolidated fund account at the .close of the present year on a twofold supposition, firstly, that the expenditure continues at.the rate prevailing when the , present' Government took office, and secondly, that no additional taxation is imposed. In the Consolidated fund expenditure (ordinary revenue account) for the year 1887-88,. the estimates for the current year as laid before Parliament by the late Government having been reconsidered in the light of the six months actual experience, with the view on the one hand showing- probable savings, which, under ordinary circumstances, would have accrued on the votes at the end: of the year, and on the other, of.adding to the original estimates the cost of additional service for which no provision had been made, but so far as they did not relate to services under permanent acts, would" have had to be brought down and voted in supplementary estimates. It now appears that the probable expenditure for the current year would amount to £4,118,395, as against the total of £4,088,804 appearing in the estimates of the latter Government. OIiDINARY EeVENUE FOR THE YEAR .' V .; 1887-88 • The revenue proper received for the six months ending on the 30th September last, was £1,510,868., This wa5i16,844 less than was received duriDg the same period of the financial year 1885-86. ' "The customs yielded £29,446 less, the railways £IB'4BB more than the previous, year. To this niust be' added the'proceeds of debentures amounting to L 258.184, raised last April under "The Consolidated Stock Act, 1884," on account of the sinking fund to accrue during the financial year 1887-88, but I do not add the proceeds of deficiency bills sold, because my object is to show what the probable deficit will be at the end of the year. I do so upon the assumption that taxation including the Property Taxis ;not altered from last year. I may remind honorable members that no property tax has been collected, the annual bill not having yet been passed, With regard to the other items of revenue, I have adopted the estimates of my predecessor except as regards stamps and railways. The experience of the past six months leads to* the probability that Btamps willnotreach the estimate by L32 ; 600,and railways byLSO,OOO. Taking these circumstances into consideration I estimate that the revenue for six months ending 31st March 1.888 will amount to £2,019,460, making a total of. £3,788,507 for the year as against £4,156,184 as estimated by the late Colonial Treasurer, which included the proposed additional taxation. THE LAND FUND. I have already informed the Coinmitteethaton the 81st March last year there was a balance of £54,263 at debit of the Laud Fund account. On the 81st March 1884 there was a balance of £80,447 at credit. The land fund expenditure has therefore during the past three years exceeded the receipts by an average of £44,900 a year. Last year the-expenditure exceeded the receipts by £33,879. It is expected that the receipts for the current year estimated by the late Government at £108,890 will be realized and a revision of the expenditure estimated at £170,907 results in a probable decrease of £2600, thus the expenditure of the year, would have exceeded the revenue by £59,417. I may say that this excess of expenditure is exclusive of the outlay amounting to £168,2666 which has been made fi'om loan during the last three years on opening up land before ■Sale,.and of liabilities,£7,ooß,since incurred on the same account; it is also exclusive of £1,891 expended on village settlements to 81st March last, with liabilities of £67,886 since incurred on the same account. This latter expenditure is to be capitalised arid interest obtained for it in the shape of rent if possible. The mouey, however, has yet to be provided,. either fropa loan or consolidated fund, no provision having been made for it byParliament. The revised estimates of expenditure of the ordinary revenue account being,'as I have stated, £411,8895, and -the revenue being £3788,507, the expenditure will exceed; the revenue by £829,888 on the ordinary revenue account, and if .we add the excessive expenditure of the lan'd'fund, £59417, we get a total of £889i805. The late Government proposed .to meet the deficit anticipated on the ordinary'revenue, account by 'additional:'"'taxation' amounting to £250,000, and by a .percentage, redu'evtio'n of- £20,000 from salaries. With regard'to the land fund, they proposed that for a term of years until the increasing revenue will permit the deficiency between the. land: revenue and 1 the land expenditure should be, made up by- charges on the land supplied by such .local borrowing as. may Jje.' required. How the present Government, propose to deal with the deficiency of the consolidated fund-is to treat it as a whole,'and to prevent its reccurence. Maori Lands. ; The'apparently insolvable problem of dealing with the Native Lands in a fair and equitable way in tho interest of the Maories and of the settlement of the Country has-.occupied, probably more of the time of the Government'and Legislature of the Colony than any other question, I do not propose on the present occasion to go at any length into thequeation, I shall only indicate: the broad lines, which the Government propose to follow in legislation upon this subject. In opinion of the Government, there are large districts in the Colony within which many 'Maories are' living where ( the same laws can be applied with ad- ( vantage to the Nativesand Europeans ' alike. We shall therefore in repealing '

as we propose to repeal, the Crown and Native Lands Eating Act, ask for authority to declare districts in which the law will apply equally to individuals of both races. The Maori on the one hand will be liable to pay rates and taxes as his fellow subject of the European race is, and on the other, he will be permitted to deal with his lands as freely as'aJßuropoan after the Crown, title has been obtained, except to' this extent, that he will be retain a sufficiont'.amount of land for the maintenance of 'himself and his family, and of all those possessing large tracts of country it will be required that the land shall be. sold' in blocks. only of a moderate size, In all other districts of the Colony, which are not proclaimed, and therefore not subject to taxation the Maories will not be permitted to part with their lands, to anyone but the Crown, except under most] stringent conditions, Before, however, proposing final legislation on these subjects, wo should in the recess consult the Natives on the several ■points, but we intend at once to introduce a Bill to remedy certain pressing evils. . •'■■• The Tariff. The revision of the tariff is a question which has occupied a goad deal of attention throughout the Colony, and is one unavoidably requiring the early attention of- the Legislature. Until this question is settled with some sort of permanence, the trade of the Colony will, in addition to its present unavoidable difficulties, continue to be disturbed and irritated by what. can, and out;tit to be avoided, the uncertainty from year to year, I might say, for a portion of the year, from month to month, as to what our tariff is to be, and no bon. member, lam sure, will doubt that damage to trade means loss to the whole community. The Government, during the short time at their disposal, have had this matter under their careful consideration, and have come to the conclusion that the question should not be dealt with during the presont session, because it is impossible to deal with it completely. The Government aro strongly of opinion that it should not be touched until it can be so dealt with as not to need further serious revision for a considerable time to come. We have within the past two years made two serious but unsuccessful attempts to largely alter the tariff, resulting in great derangement of trade with all the loss which that brings and without the smallest compensating gain,' and the causes which led the house emphatically to rejrcfc : thoso attempts still exist, and one, at aJI events, the general commercial depression, may fairly be considered, at least in its present severity, abnormal and temporary. Moreover, we cannot, at present, look so far forward in our finances as now prudently to fix what we shall require from the customs even for the near future, for on the one hand the changes the Government propose, ind such further economies as they hope to make, will correspondingly lessen the need for revenue, so that with these uncertain elements at work, and looking at the fact that the time before us is practically very short, and that we have work now before us which if satisfactorily done will certainly mark this as an epoch in our history, it seems to the Government ■clearly right that no attempt should be made to revise the tarriff this session, PROPOSALS TO EQUALISE REVENUE AND

EXPENDITURE,

I have now to answer a very important question, a question in which this committee and the country are at present most deeply interested, how, if possible without further taxation, are the revenue and expenditure to be balanced 1 I have already shown that the excess of the expenditure during the current year over the receipts of the consolidated fund, including land fund, will probably amount to £388,305 on the supposition that the expenditure continues as at present and that no additional revenue is obtained by taxation it must be evident to anyone acquainted with the condition of the colony that something more is now needed to restore confidence than mere trival economy, Our chief difficulties have undoubtedly arisen in a great measure from too lavish expenditure, more especially of borrowed money. That must be stopped, and our first duty, therefore, is to apply the pruning knife with an unsparing hand, • but that is only our first not our only duty. There is another not less important, we must undertake by all possible means to prevent waste both of our ordinary revenue and of money borrowed for public works, but we must also promote settlement and occupation of the lands of the colony by rendering them attractive to persons willing and able to cultivate them and develop their many and varied resources with their own skill and capital, and we must also, as far as practicable encourage all our other indus-" tries by all reasonable moans in our power, that is to say. we must encourage such industries and by such means as will in our judgment .upon a genoral and careful review of- a difficult and complicated subject, really in the long run increase the wealth and prosperity of the colony. In these ways we shall in due course raise an increased revenue without increase to taxation or conversely the same revenue with less taxation. The no doubt concerns the future, but a future, not, I trust by any means far distant. There is no surer way-of lifting the country out of its present difficulties, than by the introduction of of considerable numbers of persons possessed of sufficient means and, knowledge to cultivate the land profitably, not only as ordinary farmers but.as fruit growers arid growers of plants suitable for manufacture, or to supply other industries 7 Our efforts at retrenchment will be)'c.omparatively unavailing to restore prosperity unless we can obtain a considerable accession to our population of persons in a position to employ labor. We think the time for this is very favorable, and If : the House'should approve of the course' we shall propose to it uponthis subject we hope to .see at no distant 'period a considerable accession to our population of persons of the class above re-, ferred to, the time is also apparently is very favorable to the establishment of

pension settlements, Much interest is;beJßj'taken in this subject by leadirig fiMinthe United Kingdom, and a good deal of thought and attention haß been given to the details of a scheme by a gentleman in Auokland, who has devoted a large, amount of time and energy to the matter. The Govern•are of opinion that'every effort should be ma'de' to induce a considerable immigration ofthis class of persons as; the essential' means towards accomplishing the above important objects, and indeed the settlement of the' country. Generally, the Government propose to amend and simplify the land laws and as far as possible make them uniform throughout the Colony to allow, selectors full freedom' of choice as to. tenure and above all, and as the dominant idea to enable the bona fide settler to £jet possession of, and a title to 'his land with- the. least possible delay and expense, and it is perhaps desirable here to declare that the Government fully recognise the wisdom of the principle, which has been acted on since 1879-80, namely, that, the proceeds of the sale, and the disposal of our lauds, should be treated not as ordimuy revenue, but as 0 special fund for opening up the country and promoting settlement.. Railway Management. The management of our railways from the first has never given satisfaction to the public, and it would be a waste of time on my part to endeavor to explain tlio' reasons of the public dissatisfaction. The fact probably is sufficient for us that the public have been greatly dissatisfied with what is called,,'the mismanagement of our railways. I do not share in this dissatisfaction myself, so far as the management goes, believing as. I do, that our officers on the whole ha.vijbeen efficient, and that it is the inherent defects of the system, and not the management, which are at the bottom of the dissatisfaction. The quostion of /placing the railways under what, is called a nonpolitical board ot management has been before the public for.some years, and the introduction of that.'plan into Victoria has enabled us in New Zealand to watch the practical working of the system. It is now admitted, I believe, by all those qualified to judge, that in Victoria the system has proved a groat success. The Board has now boen.at work for nearly four yearß, and I think it may be fairly said that the scheme has passed far beyond the stage of experiment, Looking, there-' fore, to the dieratisfaolion existing in New Zealand with our.present system', and the satisfaction which the Board has given in Victoria, my colleague, the Minister of Public Works will ask ■ fodeavo to introduce an; Act this session.into Parliament, to constitute a non-political Board of Mahigemeut'forthe New Zealand railways, ' The Government believe • they are fully justified in : anticipating from this bhangoalargeincreaseinthe.net profits from the railways. In the meantime wo have to deal with the serious present DEFICIENCY .IN OUB REVENUE which I have stafcpd. Now,. it is obvious that without an increase in the number of taxpayers there are only three ways in which a deficiency of revenue can be met, or rather its continuance and recurrence avoided : First, taxation may be imposed for the whole amount required; second, expenditure may be. reduced to the whole extent necessary, if that be possible 1 third, reduction of expenditure may be made, and additional taxation may be imposed which together shall make up the required sum. Proposed Reductions in Services. It is hardly necessary for mo to say that it will be impracticable to cover tho deficiency of the current year by reduction of expenditure. Seven months of the year have already passed, and' it is impossible for two or three months to come to obtain much, if any, effect from reductions The proposals, however, which I shall Bubmit will I hope prove to be of a sufficiently comprehensive character to satisfy the most thorough reformer. There is an impression in the public mind thatsufficient reductions can be made in the public expenditure by reductions in the numbers and salaries of the civil servants, i but I need hardly point out to hon. members that it will be altogether impossible to effect the whole of the. necessary saving in that direction alone. It will be necessary also to .curtail the conveniences and aids which are now being enjoyed by public and local bodies. I will now state to the committee what our proposed reductions in the service are. Jn the first place we propose to begin with the highest offioe in the colony, that of His Excellency the Governor. I need hardly remind the committee that this reduction cannot takeeffeotuntiltheappointment of a new governor. It has been said the-colony is likely to lose standing and credit in England by reducing the. salary of the Governor, but we have no fear, after careful consideration of the subject, that ill; effects will follow this reduction, wo have no fear but that we shall. still obtain the Berviceß of officers of the same 'high standing as hithertofore,'and, as to our credit we have the fullest confidence that the reductions and other economies' we are proposing will prove the existence of that first condition of commercial confidence, a'deterirnVtiontepayour way. We propose then that the Governor's salary shall remain at LSOOO, but that this shall include the cost of his staff and all allowances; this will be.*a total reduction of L 2500 from the amount at pre-: sent paid. We think, that.the sum I have named above should cover the total cost of the Governor to the colony. In the next place.l will deal with the legis-. lature and executive branches of\the Government, and the Committee will,' 1 truut, excuse me if I take the latter first We propose then j with regard to the salaries of Ministers that the Premier shall receive. LIOOO instead of LlftjO now paid and that the Ministers shall receive LBOO instead of L 1250 at present'.paid ], and we propose to reduce the number: of paid Ministers from seven to six simultaneously with the reduction ; : in the number of. members, of. the Souse of. ; Representative's/which .T shall shortly, mention.' As to travelling allowances it is ; obviously important thajpinisters should travel bo as to make thjß&ißelves personally acquainted with' the, waits and' circuW stances of the .several" districts, but. tHe . allowance should ;be arranged so as Merely. ,tb recoup the necessary outlay, "and''-we., propose to allow £r 10a.,a:day.Vhiie actually travelling on the public service, and limit the total to be paid to the whole Ministry to £I,OOO in any one financial : year. The average amount paid to each Minister for.the last three jears has been ; £l9O, With'regard to'the expenses of '' tho official residences; of Minuteri, we

think that large reductions can be made,* and we think the one known as," Timwv kori Eoad North" Bhould be sold, as**""being too large and expensive; of the others, we propose one should bo retained as a residence for the Premier, the cost of all but the house itself § be

defrayod by the ocoupant, instead of from the public funds as heretofore. With ■regard'to Miaisters' unable to find faaasd' ac'cpinmodatioii owing to the short pft'ei .. we think it desirable this should be pW« '■■., videdforsome.if it can be done with proper safeguards against exceeding reasonable limits 0' expenses, and, that; .' those not obtaining a house : stottld receive a house allowance of £2OO pet - annum; but upon this subject we will - shortly make more specific proposals.... 1 now come to the Legislative Expenditure.

This is undoubtedly a question of some ..• difficulty, but in my opinion, a consider/ able reduction in the Legislative Expenditure ought to be made, and that if thoy made it, and the reduction of Ministers salaries will tend more thaUjtany argument to produce in the. minds offlg*. th'e people of the colony not baly"a ' ; vicfcion of our sincerity on this quostion of-: retrenchment but also for retretiohmeufc \ : generally. Government will, .invite, the .Legislative Council to espross by resolution its ~ opinion; that.' v the honorarium paid to its mem- * bers should not exceed £loo.'.Wa' shall iisk the House to reduce the mo'- ""■' .arium paid to its own members to froOj with an allowance of £SO in consideration of additional expenses, necessarily in-,. curred by tliem. Now, let us consider what reductions are possible in the Civil Service. The total number of persons in the pay of thecolony, including Governor, Ministers,' Judges, and others,• but oxclu.

sive of police, military forces, countrypostmasters, is 71G3, and the amount they...» receive in salaries, £1,004,273 ; of these are receiving weekly wageß, pay or salaries not exceeding £l5O a year, the' total amount paid to this class being of L 365,754 paid to persons in receipt of salaries, over Ll5O a year is the principal amount upon which it is possible to make reductions. At present our principal! proposal will be to limit, the grant to the Statutory amount of L3lsa' a.head. The saving on the education vote we estimate at about LGO.OOO per annum. We propose to take one vote for each of classes and sums mentioned in the second column of the schedule under

head "annualapportions." With regard to the reduction of a sum of L 16.000, which has not been allocated-to any o£& but which will, when given efieot to?Hi ' , distributed over all of them iiijiuch man- v nerasthe Government may determine. A clause will be. inserted in the Appropriation Act which will limit the power of expending under the votes to the total amount of the classos less the sum of ' £16,000. Our proposals, if assented to: by.Parliament will reduco the amount'of> - the classos. Jess, the sum of 116,000.; Our proposals if asßonted toby Parliament will reduce the total amount of departs mental apportions out of consolidated fundfor a full year by £251,500. The.'"' reduotion comprised in tins amouut liavo ' been made up in the probable expeadi; turo for the same service during the - eurront financial year, vmder the estji ' mates aiid engagements of the lato Gov.. eminent.-