INDEBTEDNESS OF THE COLONY

Westport Times, Volume VIII, Issue 1143, 20 January 1874, Page 2

INDEBTEDNESS OF THE COLONY

We have to acknowledge with thanks the receipt of proof slips of the Honorable Premier's address at the banquet given him at Dunedin. It is to lengthy to reprint but the following extract therefrom on the indebtedness of the Colony will be read with interest. —" Because certain gentlemen have chosen to enter upon various problems or speculations as to what might be the indebtedness of the colony in certain circumstances, it has been assumed in some places, and especially it has been assumed outside the colony, that we were ignorant of our indebtedness. Let me take a homely example. If any one of you were called upon to pay the price of a dress for wife or daughter, you would know the amount when the bill was placed before you ; but if you had presented to you an infant girl, and were asked to calculate the cost of dressing her from the cradle to a presumed old age —(laughter)—you would think it a very difficult calculation to enter upon, and at any rate, you would agree that the possibleamount would be very different from the present cost of the child s outfit. (Hear, hear.) But, while making the calculations to which I have referred, as to the indebtedness of the colony, the makers of thorn have claimed the right to speak potentially upon financial questions ; and they have insisted upon their right to mix up present liabilities with possible indebtedness for indefinite purposes, wheu some undefined time shall have arrived. I shall state as briefly as possible what are the facts of the case. The amount of our debt on the 30th June last (after deducting the amount invested in New Zealand securities on account of Sinking Fund) was—On colonial account, £0,465,900 ; on provincial account, £3,150,200; or, together, £9,022,100. As far as the provincial indebtedness is concerned, the amount is, no doubt, ultimately a colonial liability; but, at the same time, it is secured, primarily, upon the Laud Revenue ot the colony; and the nature of that security you may gain an adequate idea, when I tell you that, between the Ist July, 1872, and the 20th December, 1873, the land revenue of the colony, exclusive of receipts on amount of Gold and Native, amounted to £1,370,000. When you know that in a year aud a-half the land revenue, subject to the exceptions named, yielded £1,370,000, you need not, I think, be fearful as to a liability of a little over £3,000,000, with such a security at its back. (Applause) There remained on the 30th June, to be negotiated, £2.352,600 of loans already authorised ; thus making a total, when all the loans authorised up to June last have been negotiated, of £11,974,000. Beyond that amount, there was required to complete the railways authorised up to the end of the session of 1872, or 767 miles of line in all, £1,880,900; and adding that amount, the total will be £13,800,900. But that is not the amount of our present indebtedness. It is the amount of the debt that will exist when 767 miles of railway have been completed; when £1,000,000 has been expended on immigration; when £200,000 has been spent in acquiring native lands ; when £400,000 has been devoted to making roads in the North Island; and when £300,000 has been spent in works upon the goldfichls. Then, and not until then, the total indebtedness of the Colony may be estimated at £13,860,000. That debt will include £6.000,000 for public works, of which, at the date I have mentioned, only some £2,000,000 had been expended. When the question is raised, What will be our position when all that money is expended r 1 no one is entitled to take the present position of the Colony as the sole test, and to ignore the fact that by the expenditure of £4,000,000 on public works during the time that has to elapse, to say nothing of natural and ordinary progress, the prosperity ol the colony must be increased, and a state of things be created different from that which now exists. (Applause.) It is absurd to suppose, if anybody does suppose, that a trunk railway through each island is to be constructed for £2,000,000 or £3,000,000. By the time the trunk line is completed, with the various branches already commenced, the public debt must be very much increased ; but it will be a misfortune to the country if you fail to see that you will then have good value for your money, in the immenso addition to your population, and the means of traversing the country from end to end which will have been provided. (Applause.) What I have next to say will at any rate not be uninteresting, as an evidence of what we may look for in the future. I have obtained a return of the revenue received during a little less than sixmonths —from the Ist July to the 27th December—together with returns for corresponding half-years. From the Ist July to the 31st December, 1870, the

receipts into the Consolidated Fund were £474,000; 187 L, £485,000; 1872, £494,000 ; and for 1878, for a few days less than the half-year, the receipts reached £025.000: being an increase over the corresponding period of last year of £131,000, or at the rate of £202,000 a year. 1 ask you, then, to recollect that if we have to yny additional interest because of an increased amount of borrowed money, we have additional means out of which to pay it. (Applause.') The Land Revenue returns are yet more remarkable, as an indication of the prosperity of the country; In 1870, the land revenue amounted to £194,090 ; for 1871, it was £230,000 j in 1872, it reached £500,000 ; but for 1873, it was no less than £1,116,000. In fact, the receipts during 1873 exceeded those of the previous three years. (Applause) Before I leave the question of the financial position of the colony, I will ask you to recollect that the trne indication of the pressure of a public debt is not to be found in any more statement of figures of amount without considering surrounding circumstances. The mere amount of debt tells nothing; the annual amount which is to be paid as interest tells little more ; nor does even the division of that amount amongst a stated number of persons tell anything conclusive, unless you go also into the question of the means out of which it is to be paid. A person who earns £SO a year may be less able to afford to pay £5 than another who earns £7O may be able to afford to pay £lO. I speak not unadvisedly when I say that, in dealing with the question of the pressure of a debt, you have to consider Grst the number of persons who have to meet it, and then the amount of the earnings of those persons out of which they have to satisfy the requirements of the revenue. Then, and then only, you are able to arrive at a fair conclusion. When that test is applied you find that New Zealand does not by any means compare badly with other colonies, or even with large nations. I entered into this question very fully last session, and those who care to study it will find in Hansard a long dissertation upon it. I will now simply state to you a few figures representing conclusions to which I came. Taking the amount of the interest on our debt, exclusive of that for public works and provincial, the charge amounts, as far as I have been able to ascertain to 12 per cent, of the average earnings of the population ; inclusive of public works, but still excluding provincial, the annual charge is TO per cent, or, including both public works and provincial, the annual charge amounts to 24 percent, ou the average earnings population. But I ask you to recollect that in making a comparison with other countries, it is in most cases fairer to take the amount of the indebtedness exclusive of provincial and public works, because from the sale of lands, and from the works, there are special revenues from wh'ch to meet the indebtedness excluded. With some exceptions these lie not elements of revenue in countries with which we have to compare our public debts ; and when we take the amount of our debt omitting that portion of it which is either charged on the land or is for works which elsewhere are provided by private enterprise, the annual charge is, as I have stated, I*2 per cent, an the average earnings of the population. If we make a comparison with the United Kingdom, we find that the average there is 2'S per cent, of the average earnings of the population. In the United States it is 27 ; in Russia, 25; in France, 23; in Austria, 2.2 ; and in the German Empire, 1."

[We shall give further extracts hereafter.]