THE FINANCIAL STATEMENT.

Waikato Times, Volume XVII, Issue 1407, 9 July 1881, Page 3

THE FINANCIAL STATEMENT.

The following is the remaining portion of the Financial Statement which arrived too late for insertion in our last issue :—: —

Estimated Expenditure from the * Land Fund 1881-82. I ought, Sir, perhaps to have said before this that in speaking of the ordinary revenue I have not included the proceeds of land sales. If the scheme which I have submitted for the consideration of the committee should be adopted by the House, the Government will propose that any balance there may bo left from land sales, after payment of the charges it is intended to place upon them, shall by law ho paid into the Public Works fund, but without prejudice to the public creditor. The estimated expenditure chargeable against land sales is as follows :— For charges fixed by Acts of the General Assembly, 1,81,986-, for the Crown Lands and Survey Departments. LI 34,584; for rates to local bodies, £27,000 ; for roads and bridges, a sum not exceeding L 150 ,000 to be paid to the Roads Construction Board ; the balance, if any after payment of these charges, to be paid over to the Public Works fund.

Property Tax. I will now, in accordance with the promise made in the early part of this stutoment, again refer to the property tax. The Act, Sir, although requiring some amendment, has been found upon the whole effective, and, now that its provisions are generally understood, it ia admitted thioughout tho colony that the tax is thoroughly fair in principle, and that it has generally worked satisfactorily. I do not mean, Sir, to imply by this that direct taxation is palatable, but 1 venture to say that in no country in the world has direct taxation been accepted more willingly, or paid moie readily, than the property tax has been by the people of New Zealand. I have had prepared for the information of tho House, several very interesting tables, which will, I think, greatly increase our knowledge with ' regard to the distribution of wealth, and especially in reference to the ownership of land. There are, I find, 21,761 freeholder inside boroughs, and 43,033 freeholders of country land, the total number of freeholders in the colony is 60, 65S— being somewhat less than the aggregate of freeholders of borough and country lands, because some owners of propeity hold land under both designations ; but the committee will, I think, expect to hear some particulars as to the cost of collecting the tax. The total expenditure made for the last year, including outstanding liabilities, but exclusive ef laud tax charges, was £31,000, being made up of the following items : Cost of valuation, L 16 ,000 ; salaries, L 7275 ; preparing tables, L 70 0; miscellaneous, including cost of collection, L 7023. With regard to the valuation, I find it has cost about L3OOO more than the lontl tax val.iat-on, the valuation under the latter being L 13 ,000 and under the Property Assessment Act L 16.000 ; but if th« pioposals of the Government are agreed to, and this valuation is used by the local bodies as the basis for their i a ting, the whole of the cost of this assessment will be bayed to the countiy dining the next year, the saving going into the colfeis of the local bodies. In fact, Sir, if Aye make one triennial valuation do for both geneial and local purposes, the cost of it will be so small as not to .amount to 1 per cent, upon the rates and taxes collected. If tins suggestion should be accepted, it would not be fair to chaige more than LoOOO pel annum for the cost of valuation against the pioperty tax foi the three yen-, dining which the valuation continues in foicc. But, admitting that the whole of the intioductoiy expenses and the triennial \aluation aie to be charged against the piopeity tax. even then the >ate percent, for levying and collecting the tax, supposing it to be continued at the rate ol one penny in the pound foi thiee yc j aih, will be veiy moderate. The estimated cost ot the I'iopeity Tax' J)epaitment for the next two yea is is L12,(!00. The total cost for three yeavs v> ill not, I thmU, exceed L-11,000, ' and the total loeoipts for th.it penod, pioVidt'd the piocnt l.xte of one penny in the pound be continued, will ceitainly reach LSb'o,ooo, thus making the total cost of the tax a little over 3 per cent, upon the amount sctually paid into the Treasury, and if a proportionate deduction is made from the triennial valuation on account of the use made of it by the local bodies, it will be seen that the piopeity tax can be collected for leM5 than 4 per cent., a result with which I think we may iest batisficcl. Of coimje, any alteration in the rate of the tax will necessanly increase or diminish, as the case may be, the relative cost of collection. When the property tax A\\ih first imposed, a stioiig fear, perhaps not unnaturally, wis expren-ed by many persons ih.it one of the effects of the tax would be to dm c away foreign capital seeking investiupnt in this colony. I have consulted gentlemen fiotn all parts of the colony who are authoiities upon this subject, and I have not found one who entei tains the opinion th.it the property tax has had any appiecio-ble effect upon the ilow of capital to the colony, and, as a matter of fact, duiing fpw periods of our history has more foreign capital come into the country and Jfouud investment than duiing the last year, afc an equally low rate.

Revenue for the year 1881-82. Before 1 proceed to the consideration of the estimated revenue for the current year, I desire, with permiewiuii of the committee, to refer to one or two important quebtions wbioh are doubtless occupying the minds of hon. members, and the first which presents itself to mo 4 of us is, I thiuk, will it be necessary to impose fresh taxation this year ? I am happy to be able to inform the committee that I can answer that question with an eraphatio negative; and then Sir, tint question having been answered satisfactorily, comes its fellow. Can taxation be reduced this year? The answer must depend on the view the House snay adopt of the action to be taken in the early future towards completing the great arterial communications of the colony. The Government, after the past year's fitudy of the condition of the country under circumstances of exceptional depression, have decided to assume that the legislature will require the finance to be shaped in the senile of continuing its great undertaking. The experience "of the past will enable uh to do this on a surer basis of calcu'ation than hitherto. The general reasonableness of the expectations as well as the dangers of the p<»W oi 1870 is fully exposed in the revenite^urns and trade and population statist^* ol the laafc ten years, and these justify »« in recommending that, whilat avoiding what I will call high-pressure finance, we shonld arrange for the construction of all the defective lines in the Jrunk lines of railway necessarily afc * reduced speed but without intermission. While this recommendation forbids us to »ropos,e any very imposing reduction of taxation, it need not prerent us diminishinsr to at-appreciable amount our demand ob the taxpayer. Hetunnag to i the proodrtr tax. it will be in the recollection of fee-committee that when the Act was «&Bse4it was determined to asked the WslafcttM to bring tbii deluded capital within &c Act .thi« JW/,A gWI Jill to amend .the Property Assessor

Act in tho direction indicated, and for the purpose of directing some faults and unfairness whioft. have appeared in the working of the ikot. Should the Aot be amended as proposed, I estimate that the taxable property under it will be increased by no Jess than £11,000,000, of -which estimates particulars will be furnished when the Bill is under consideration. This amount, at Id in'the pound, would yield, any £43.000, and in the present condition of tho revenue will enable us to propose, first, a reduction in the Customs duties ; second, a diminution of the property tax. We propose to admit free of duty calicoes (white and grey), moleskins, corduroy, coloured cotton sheeting (all in the piece), axes, spades, and shovels, aud to admit free or reduce duties on a variety of other articles which I need not now detain the committee to enumerate. With respect to the property tax, we shall ask for a continuance of the present penny rate till September next, to be reduced after that date to one half-penny for the remainder of the year.

Ordinary Revenue. We have to consider on the above basis the ways and means for the current year, I estimate that the total receipts for the year from all sources in the oulinary revenue account will amount to L 3,297,650., 297 ,650. Of this, £1,826,000 is to be raised by taxation, and L 1,471,630, 47 1,630 is receivable for services rendered, &c. Speaking, then, first of the amounts raised by taxation, we find that the Custom's duties last year yielded L 1,307,635, 307, 635 ; this year we have estimated it at L 1,360,000,, 360, 000, or at an increase of L 53,500, winch, considering the steady and satisfactory improvement in the circumstances of the colony, will, I think, be fully realised. But from this amount it will be necessary to deduct L 15,000 if the remissions which I have just suggested are agreed to, thus leaving the customs' duties at L 1.315,000. The pioperty tax, I have estimated to give L27U.000, upon the supposition that the amendmp Bill of which I have spoken becomes law, but ot this amount L 12,000 is from that part winch remained uncollccted of List year's tax, upon the 31st of Maach last, so that the tax is estimated to yield, this year L' 228,000. When first proposed, it was estimated that the beer tax, at sixpence per gallon, would yield LlOO,OOO, and when the duty of threepence per gallon was imposed, I estimated it to produce L 60,000 a year. The actual receipts for the ton months in which the Act was in operation, during last year was at a rather less rate than the estimate ; but I think we may not unreasonably expect to receive from the beer duty L 60,000. I have therefoio estimated to receive that amount this year. With regard to the stamp duties, I estimate they will produce L 150,000 if the Deceased Persons' j Elites Duties Bill becomes law. This Bill is substantially the same as the one which passed this House last session, and was thrown out in another place. I hope it may become law this session, as the Bill is a great improvement upon the present law. The duties charged under it arc certainly moderate. There id not, I think, a moic legitimate tax imposed than that upon piopoity on the death of its owner. The Bill as it passed last session would have increased the revenue by about LlO,OOO a year, but as now pioposed the increase to the revenue is not estimated at more than L6OOO. There is, I think, only one item in the revenue estimated to be received for sei vices rendeied calling for .special remark, and that is the railways. 1 have estimated the receipts from (he railways for this year at L 910,000. The actual leceipts for last year wore L838,G23, and as we have now about 93 moie miles open for traffic and pi osperity is steadily returning, the estimate may, I think, be considered not excessive. There is no other item of revenue to which I need call the attention of the committee. 1 have s lid that the estimated expenditure to be met withiu the yaar, and hon. members will understand that this now includes outstandiugli,ibilities J isL3,'27o ) r J32, to which I add the deficit at the end of last year, L 5667, making a total of L 3,276,198, and th.it the estimated revenue is L3,'297,Cd0. Deducting then the estimated expenditure from the estimated revenue, we luve a surplus of L 21,452, a result, which ii attained, will, I think, be extremely satisfactory, as showing the steady progiess of the colony, and the wonderful elasticity of our own resources.

Land Fund. Tho receipts from the pales of land are estimated at L 333.000. The Minister of I/mds has given great attention to the subject of selling land by small holdings, and has opened blocks of land for settlement upon the principal throughout the colony with mavked success during the year, and if the proposals of the Government .ire agreed with regard to roadraaking, T havo no doubt that still moie settlement will tako plpeo during the current" year, and that it is probable that my estimate of L 333.000 may prove to be exceeded, but if it should, it will not, under our proposals-, be absorbed ia the ordinary charges ot frovcrnmeut, but be set apart for Public Works. Adding then the balance at credit of the land fund on 31st Mai-'.-h, L 32.373, to the estimated receipts fiom land dile3, we get a total of L 365,372, and deducting therefrom the exponditui'e (246,55!), there remains a surplus of 118,822, which will be payable under our proposals to the Roads Construction Board.

Loan to "be raised in New Zealand. I must now ask tho attention of hon. members to a subject which has been floating in the minds of many people in a more or less definite shape for some time past. Iho feeling has been gradually growing ot late years, not only here, but in the Australian colonies, that the several Governments might with great advantage to the community give some fuithar facilities for the investment of local capital in small amounts than is offered by the Post-office Savings Bank. That institution has been a great success in putting within the reach of thrifty people a place for the safe keeping of small savings, and it is satisfactory to know that notwithstanding the times we have had for the last 18 mouths the deposits have steadily increased. It is also a gratifying fact, well worthy of note, that no less than five-sixths of the deposits are for sums of less than LjO. The Government think it possible that many of these depositors, as well as the public generally, might be glad of a more permanent form of investment if one can be provided, which is at the same time secure and easily convertible into cash. I shall therefore submit for the consideration of the House a Bill authorising the issue at par of a loan of L 250,000, the principal and interest of which will b,e payable in New Zealand only. 1 propose that the loaa shall bear interest at a rate not exceeding 5 per cent., and that it shall bo issued in the form of inscribed stock, with the right to the subscriber to jobtain from time to time bonds payable ibo bearer pf LlO and upwards. The advantages of such a form, of investment will doubtless require some time to be generally understood., but if a local market can be once created (as I think it may be with judjeiqua .managament), the stock would be found a great public convenience, asame^ns of temporary , ag well as of mQre permanent, investment. It is possiblo that the time "for such, a '5 per cent, stock has not arrived, and, if so,

the proposal will fall to the ground, and we shall have learned at any rate nega- 1 tively something about our power of obtaining money locally. The time for making the experiment is very opportune, because the money market is easy, and we are not dependent for money upon its Bucoess. The Government do not propose in auy way to force this loan, recognising that with the object in view, that of supplying % local want, the time necessary for the proposal to be understood by a wide class must be allowed, but they think this offer should be made, and they will use all serious endeavours to familiarise the public mind with its nature. The proceeds of the loan it is proposed to u&e for public works. Authority will therefore bo asked to pay them into the Public Works fund, to be dealt with in due course by Parliament.

Conclusion. Before concluding it may be desirable to glance briefly at the progress of the colony since 1870, and to compare it with that of our great neighbours in these seas. , The population in 1870 was 2i8,000 ; it is now 489,700— that is, it has almost doubled in ten yeass. And what, Sir, have our two powerful and attractive neighbours, Victoria and New South Wales, done during the sa.me ppriod ? In iB7O the population of Victoria was 726,599 ; of New South Wales, 502,961. They arc now 858,582 and 750,000 respectively. Thus showiug an increase in the Victorian, population of 18 per cent., while iv New Zealand the increase has been 98 per cent. Then let us look at the value of our imports and exports in 1870. They were respectively L.1,639,005 and Li,8 < z2,726. Last year, th.it is for the year 1880 they were — imports L 6,162,011, exports, L 6,332,691,, 332,691, showing an increase in imports of L 1,522,996,, 522,996, and in exports of L 1,129,936,, 129,936, a not unsatisfactory result, when the universal commercial depression of the year 1880 is remembered : and, lastly, let me compare the net revenue of 1870-71 (exclusive of land sales and revenue appropi iated to local bodies) with that of 1880-81 In the former year it was L 1,057,218,, 057,218, in the latter L3,123,96C, a difference which ih ample to cover all the additional interest wo h<ive to pay, and with a good margin to spare to pi o vide for the increased cost of Government. It may, however, be said that this increase in income does not aiise from natural growth, but fiom the far heavier taxation under which the country now labours than it did in 1870. But is this bo ? Aie we in truth more heavily taxed than in IS7O ¥ I venture to think we are not taxed more than in 1870. The taxatun per head then was L 3 4s 6d. It is now L 3 Us 9d. But education is now paid for by the State, an additional chaige since 1579. If, therefore, the rate per head of the cost ot education (9s 9d) 13 deducted from the taxation of 1880-81, we find that it is less now by 2s 6d than it was in 1870. For these and other reasons we may claim that our immigiation and public works scheme has been fairly successful. Had, however, the purposes of the loans of the period been more precisely denned and more strictly adhered to ; had *he amount of those loans been limited as originally proposed, and had economy prevailed from first to last, we should havo been able now to affiirm without fear of contradiction that they had been an eminent success. With ! the clear view which is now open of the dangers we have escaped, and of their bources, the legislature may, if it is resolute, make future operations more thoroughly matters of business. With that resolve it will define and fix with all exactness the objects of future loans, and determine their amounts not by the flush of the le venues of most prosperous years, but by reliable averages of a consideiable period. It has other considerable advantages, for the abolition of the provincial system has placed more administrative experience in the service of the colony at large, and the generalisation of the land fund makes the produce of laud sales wholly available for greater and lesser public works, whilst we start with a steadily increasing revenue from railways already constructed, which is an unimpeachable basis for our continued operation*-. The spontaneous immigration to these shores, and natuial increase of present population, with the extcntion of manuiactures already planted, not to speak of others which will spring up of themselves, must alone insure a growth of levenue adequate to support the charges of tho moderate loans necehsaiy for our purpose, and we should not appreciate tho blessing of our climate and soil if we did not confidently anticipate the biith of other most important ruial industries, under advantages which our daily improving system of communication affotds, and, by means of capital which continually flows to our land by an attraction ab certain as that of jrravitation itself. There is anothpr consideration one of mere justice, which should decide us to do all that prudence will to complete our aiterial system — I mean the claims of those districts which have partially awaited the fulfilment of the pledge of the legislature in the schedule of the Act of IS7O. It is not yet time, nor is it my place to submit specific proposah for cariying out the woik I have hero suggested, but I trust the committee will agree with the Government in these opinions that tho finance of the colony should be &o shaped as to make a definite proposition practicable on the meeting of next Pailiament. In conclusion. I must warmly thank the committee for the patient attention with which they have listened to my statement. The circumstances of the time have not permitted me to offer proposals which can excite much enthusiasm, but I believe they are of a practical nature, resting upon a solid basis, and such as will reassure the country and enable it to look forward to the future Avith sober confidence.