THE FINANCIAL STATEMENT.

Waikato Times, Volume XVIII, Issue 1553, 17 June 1882, Page 2

THE FINANCIAL STATEMENT.

[lit TKLKOUAI'II.- OWN COTVRKSPONDKNT.] Wellington, Last Night. In Committee of Supply, Friday, 16th June, 1882, the ' Colonial; Treasurer, ' the ' Hon. Major Atkinson delivered the following statement : — Mr Hamlin : I am presenting the Budget thus early befca'use* the Government are anxious that the House shouldJiavo ample opportunity of. carefully considering and discussing the' financial position and lequirement of the colony. I hope to place the estimates in the hands of hon. members not later than 1 to'-inWrow, and I venture to express the h6pe 'that the House Will ' consent to the appointment of an early day: foi" going into supply. The committee will be glad to lfcarn that the reports which hjwe been in circulation for some time pastf to the effect that there is a considerable surplus standing to our credit upon the transactions of the year are substantially correct. - ' (

Expenditure of the Ordinary Revenue of the year 1881-82. The expenditure for the year under permanent acts of the General Assembly was estimated at £1,570,919 including £1,499,318, for interest and sinking fund, while the amount voted for departmental services was £1,757,660. The total estimated expenditure sanctioned by Parliament was therefore £3,328,579. The actual expenditure was £3,278,820, being £49,759 less than the estimated amount. There are no items of this expenditure which appear to call for special remark. Hon. members on referring to the appiopriation account presented to the House pursuant to the Public Revenues Act will be able to see the services in respect of which the expenditure has been less or more than the amount noted. The outstanding liabilities on the 31st March, 1882, amounted to £164,394. At the close of the preceding financial year, the amount was £265,514. I may inform the committee that included in the liabilities on the 31st March last, is a sum of £24,000 for sinking fund to the 13th March, 1882, in respect of the £SOO,OOO unsold debentures of that portion of the loan of IS7O, amounting to £1,000,000 which is guaranteed by the Imperial Government. The Imperial Act provides for a sinking fund of 2 per cent per annum on the entire amount of the guaranteed portion of the loan, so much of it as raised for the time being commen* cinq at the expiration of 10 years from the passing of the act when the first remittance of sinking fund was made, namely for the half year to the 13th March, 1881 ; it was considered that provision was required only for the sinking fund payable in respect of the debentures for £200,000, which had been sold, and not also for the debentures for £800,000, which, though created, had not been placed in circulation. The question was, however, reconsidered upon the receipt of a despatch from the Secretary of State for the Colonies to His Excellency the Governor, and the Government determined to provide a sinking fund for the whole guaranteed loan of £1,000,000. Remittances have now been made accordingly to the trustees , of the fund.

Ordinary Eevenue for the Year 1881-1882. The estimated revenue of the year, exclusive of the revenue derived from sales of land, was £3,297,650. The actual amount paid into the public account was £3,498,170, being £190,520 in excess of the estimate. Hon. membei s will find on reference to the comparative return which will be appended to tins statement that we are indebted to the Customs revenue for the larger portion of this excess, £125, 107 having been received from that source. The revenue from stamp duties was £11,115 in excess of the estimate, Miscellaneous receipts were also in excess £34,243, while from depasturing licenses, rent, etc., we obtained £56,832 more than we anticipated. On the other hand, the amount derived from the property tay fell short of the estimate by £19,025. Of this sum £9270 has yet to come in. The amount estimated to be received from building societies was£22oo, which were afterwards rendered exempt, and 7556 is an overestimate. The revenue from railways proved to be £25,266 less than the estimate, but hon. members will be glad to learn that the net receipts from railways which were estimated at £304,744 amounted to £368,927, or £4,184 more than the estimate.

Land Sales of the year 1881-82. The following course was approved by Parliament in the session of ISBI-82 : — A separate account of land sales has been kept. The expenditure charged against the fund during the year amounted to £338,076, including £136,861 for subsidies paid to local bodies. The amount voted for departmental services chargeable on the Land Fund was £154,519, and the amount actually expended was £137,237, being £17,213 less than the vote. The liabilities outstanding on the 31st March 1882, were £25,138. as against £26,561 on the 31st March 1881. The receipts for the year from land sales were estimated at £333,000 ; the amount actually received and paid into the public account was £317,063, of which £282,136 was for lands sold for cash, and £34,927 for cash instalments for sales on deferred payment. Adding to the receipts for the year the balance at the ( credit of the laud fund account on the 31st March, 1881, amounting to £32,373, and deducting, the expenditure, we have a balance on this account of £11,360 at credit on the 31st March, ISB2.

Public Works Fund. Appropriations on this account for the year ending 31st March last amounted to , £1,892,554. The actual expenditure, however, was only £979,886, including £454,224 for railways. Particulars of this expenditure will be found in the , tables annexed to this statement, but fuller information than these will be laid before the House when my hon colleague, the Minister for Public Works makes his annual, statement. The liabilities outstanding at the , close of the year' amounted to £880,276; particulars of which will also be found in the ' tables appended. A During the year special receipts and ''recoveries amounting to £42,378 came to the credit of the fund," ': and on the>3lst March, 1882, the balance remaining unexpended, subject however to th'eliabiliti'es'l^ha\:e just * mentioned,, was L 924.864, consisting of cash in Bank \ „< of N.Z.,-.L647,,646 ; adyances s hy hands of ' ; officers of, Government, I^g^l^j^debeW tures of loan of'lSVO^gwarapteedlbj^m^t' perial > Government, Ll3o,3oo, ; ,^amount „, inYestedjn:deb v entures ,of . ihe > J$ { Z % rJ (|o- \ vernment, L 44,000, and . temporary adyatipesjm^de.pn, certain sepuritie^,y> < L 376.600. The balance^atjithe, credit Jof the fund^on ,31st Ma&h,;^lBBJ<i vml ?. diminished during the' e; year;^aB,%there.^ fore;f^3a^Br. u %ese A^W&t ( f th;ej|u^d|iha4^eenv.cj,re|ully^|usb^,iic edjj tt

'ttjie same rate at which they-jhave been prosecuted during last year. Included in liabilities of the public works fund at the end of the year is a sum of L 338.876 for the purchase of native lands, particulars of r wfiicir will shortly We placed Before the Hoiue by my 'colleague the ' Native"; Minister, who will also state the" proposals of the Government with reference to our future policy in the purchase of native lands. In the meantime, I may' inform the committee that the amount whichwill-be required this year to complete the purchase of those blocks which the Government have decided to acquire, will probably not exceed LI 00, 000. The Public Debt.On the 31st March, 1881, the gross public debt ot the colony amounted to £29,163,571 subject to a deduction of £2.257,242 for accrued sinking fund. On 31st March, 1882, the debt was £29,946,711, and the sinking fund had increased to £2,266,418 the next debt being thus £27,680,292 or £572,024 more than it was in the previous ' year. This increase of debt is thus explained : — Of the Treasury Bills which on > the 31st March, r lBBl, formed a portion of the Public Works Fund sales to the amount of £431,300 have taken place. These bills had been taken up in 1881 with money standing to the credit of tha t fund, as there was then a large balance, not wanted for immediate expenditure, requiring temporary investment. They have now been sold, and the proceeds paid into, the Public Works Fund as money was required for works authorised by Parliament. The debt has also been increased during the year by further advances to £364,700 obtained in London upon the security ot the debentures of the loan of 1870 guaranteed by the Imperial Government. With reference to the LBOO, OOO Imperial guaiantecd debentures, I may perhaps remind the committee that although speaking of the amounts of Public Woiks Fund they aie always treated a& cash, they have as a matter of fact never been sold, but are used to provide a working balance to s>ave intei est by borrowing upon them from time to time only &uc!i .sums as are requiied according to the state of Public Works Fund. I may mention on the other hand that the debt has practically been reduced during the year by the addition of L 209 ,176 to the accumulated sinking fund, to Avhich has to be added L 14 .800 for debentures of the Noith Otago district, public works loan of 1872, redeemed. The net increase in the total amount of debt is thus, as I have said, L 072,024. Savings' Banks and Government In-

surance Department. Before I proceed, Mr Hamlin, to sum up the financial result of the year ISSI82 it might not be out of place for me to state a few facts in connection with the Government Savings Bank, and the Life Insurance Depaitment, by way of illustrating the steady progress of the colony, the rapid advancement of these institutions, and the growth of habits of prudence amongst the people during the last 10 years. In 1871, with a population of 266,986, the amount standing at the credit of open accounts in the Government Savings Bank was £377,654. These accounts were 10,549 in number, and the average amount at the ciedit of each was £33 18s Id. In the Savings Bank established under "The Savings Bank Act, 1868, the total amount at the credit of depositors on the 3lst December, 1871 was £97,312 distributed over 3,726 accounts, the average amount at credit being £26 2s 4d. There were thus a total sum ol L 454,967 in the Savings Bank in IS7I at the credit of 14,274 persons, the average amount for each being £31 17s sd. On the 31st December, 1881, the population of the colony was •300,919 ; there were 51,008 open accounts in the Government Savings Bauks,aggrating an amount £1,232,758, or an average of £24: 3s 4d at the credit of each. In other Savings Banks there were on the same date, 10,046 open accounts, the total amount at credit being £316,717, or an aveiage of £31 17s Id for each account. The total amount of deposits in the Savings Banks m the colony at the end of the year 1881 was therefore £ 1 ,549,5 1 5 belonging to (51 ,044 depositors, with an average of £25 7s 7d to ciedit of each, ab against L 454,966 m 1871, and 14,275 depositors with an average of L3l 17s sd, the population during the ten years intervening having increased from 266,986 to 500,910. These figures aie well worth the careful consideration of hon, members. They show the remarkable extent to which the advantages of the Savings Banks are being taken by the people for whose benefit they were established, the population having barely doubled itself since IS7I, while the number of depositors has increased nearly five-fold. Intimately connected with the subject of the prudential savings of the community are the questions of life-assur-ance, and growth of the Government Insurace Depaitment, established in 1870, at a time when public confidence in many English assurance companys was severely shaken, and with the avowed object of giving to the assured absolute security of the colony. The department has since exhibited a progressive advancement winch warrants the statement that the experiment; sanctioned by the Legislature twelve years ago has now been pioved a success. This scheme may be justly described as the only successful institution of the kind set on foot by any Government, and the example thus offered has attracted the attention of various other colonial Governments, and also the Imperial Government. The premiums were from the first fixed at what were deemed the lowest rates commensurate with a proper regard to safety and without any idea of profit, but notwithstanding these low charges careful mauagement, together with favorable influences of a healthy climate and comfortable social conditions, have produced results more satisfactory than was anticipated. The ten years of its existence gives a profit of business of the department in the first L 77,000. as shown by the valuation report, of, the London actuaries which was laid before Parliament last session. The business done has increased from '460 policies issued up to June, 1871, insuring L206,0p0, to a total of 16,000 policies, issued during the eleven years ending June,, , (1881, , insuring upwards of L 5,800,000,, 800, 000, "being equal to an annual average of 150 policies. ' The business of the s year now approaching its. close will, lam informed;':, considerably exceed the average, ,and," wilP probably reach L 600,000. The growth of the assurance 'fund 'is* not less satisfactory thau ha's been tlie progress of the annual business. From a sum of L5OOO in hand in June, 1871,, ihe'accuniuhtt^d futfdlby Jtmej 1881,' had. '.expanded lib" over Jid57,600,' ! , and now it ''.Ha^ J feach TT e s d^nearly c li6siooo; 'Agreeably to the' wishes' of'the^PalrlUwnenV as ex- - Ipt-essed > -last { i 'session; ".an-"* jD,dustria;l enabling pet'spns to insure^their Mv'es ? for sums'rangin^'frbm'LS upwards;by * means' <! 6f '[weekly '/payments'; ! 4 -was opened in ,the" early .part of v March last.; 1 'the r #irteen :Med\£f? tfifrt* have, *sin*6e r<flifi&SB&2j lO^^ln-dustriai^policies «ed<yforja^

[i which postage stamps can be affixed until 11 the amount of the quarterly- premiums is c reached, and the cards can then be r deposited in post-offices, where credit s will be given for the premiums they c represent. Arrangements are "also being e\ completed by which Post-office Savings i- Bank depositors may make payment of c premiums out of their deposits by means f of an instruction to postmasters for that y' purpose, thus saving trouble, and securing t the maintenance of the policy. These ■ facts and statistics show the remarkable !i growth and still increasing progress of , the Department, which is evidently supplying a great public want, and is now so far advanced that the Government, as I have on a former occasion mentioned to s the House, decided to ask Parliament to J place it under the conduct of a board. A bill to carry this object into effect has 1 been prepared find placed before niem- ? bei'B. Before leaving the subject of life iusuiance, I may offer a few additional ' figures showing further the remarkable ' stimulus given to that form of family ? provision since the establishment of the f Government scheme in 1870. The number of life policies in New Zealand lias 1 been established at 2000, msui ing about £100,000. Last year there were in force, ! in round numbers, 24,000 policies,-insur- ' ing £830,000, of which more than onehalf was in the Government Insurance ' Department. This gives an increase for > the period of 22, 000 policies,ancl £730, 000 in the amount assured, or eleven times } the number of persons, and more than I seven times the sum assured in the colony eleven years ago.

Financial Results of the Year 1 1881-82. The Committee will remember that ' Parliament finally determined in the session of 1881 that in future the revenue of the year should be the actual receipts paid into the Treasury during the year, 1 and that the year's expendituie should be 1 the actual money paid away during the yeai, thus obviating the necessity foi ■ keeping open the year's accounts in ordei that assets might be realised and liabilities paid befoie a final balance could be 1 struck. The new method was accordingly 1 introduced in the accounts of theyeais ! ISBI-82, and I venture to hope that the greater simplification of accounts which 1 haa beenelfected by the change will commend itself to Parliament. Hon. members will find, on referring to the financial ■ statement which I had the honor to make last year, that, excluding the land sales from the consolidated fund, there was a deficit on the 31st March, 1881, of £5,667 ; but that, including the land sales, there was a surplus balance of £26,706 to the credit of the colony upon actual transactions completed within the year. As I have stated already, the ordinary revenue of the consolidated fund for the past year amounted to £3,455,170, and the expenditure to £3,278,829. The ordinary revenue, therefore, exceeds the expenditure by £209,350, and, deducting from this sum the deficit of the pievious year (£5,667), we have a ciedit baknee of £203,683 at the close of the financial year 1881-82 on this division of accounts. But though, for reasons which have been frequently stated, it was determined th.xt a separate account should be kept of land sales, it must be borne in mmd that the revenue from that fund still remains, within the consolidated fund, and is liable to meet the charges of public debts should it ever be necessary to use it at any time for that purpose. But the colony now no longer relies upon land sales in any way as a means of obtaining revenue to meet the ordinary services oi Government, and has thus removed one condition which made sound finance impossible. When we come to consider the whole transactions of the year it is clear that the products of land sales and expenditure must appear in the account. We find, then, that ihe total money received and paid into the Public Account during the year, including land sales, was £3,50,">,223, and the total expenditure, iiK-luding the charges on the land sales, was £3,616,895. The receipts were thus £ISS,33S m excess of the expenditure, and adding to this sum the surplus at the close of the yen 1880-81, £26,806, we find that we have a credit balance on the 31st March, 18S2, of £215,044. This result is one upon which I hope I may be allowed to congratulate the Committee It fully bears out the opinion expressed by the Government m 1879 that the grave depression and deficit then existing were temporary and remediable, and shows us that the course then determined upon by Parliament of rigid economy and sufficient taxation has restored the finances of the colony in a remarkably short time to a thoroughly sound condition. We may well, Mr Bamlin, be proud of belonging to a people and a country which can in such circumstances produce such results in a period of two years.

Local Finance. The question of local finance has been again carefully considered during the recess, and the Government have thought it advisable to issue a circular to the local bodies asking for their opinion upon this subject, and also upon some important questions relating to the constitution ot county councils and road boards. I shall shortly ask leave to introduce bills to give effect to such alterations as Government think necessary in the constitution of these highly useful local bodies, and also to make sufficient provision for their financial requirements. I do not propose to trouble the Committee with any paiticulars of the proposed bills, as it will be more convenient to do so when the bills themselves are under consideration. I ought, however, to say that the principles which Government have taken for their guidance in preparing these measures are, first, that local bodies should be left as free as possible from central control ; second, that they should have conferred iipon them all powers which can be advantageously exercised by,such bodies; third, that their finances* stand be as distinct as possible from colonial finances, and that their revenues should be sufficient. The necessity of dealing with this subject during the present session is admitted upon all sides. The question is not one that should be treated as a party question, and I hope that Government will receive the hearty support of both sides, of the House in providing county dis tricts with means of performing the important duties which have heen imposed tiipon them of making and maintaining a large r proportion of the roads of the colony.' •' ' • ■ -

Estimated ' expenditure from ordinary revenue, 1882-83., J now come, sir, to, the ' consideration ; of the estimated expenditur^of, ordinary .'re^uue for the, current year. ' This may oe conveniently divided^' following the usual custom into two parfesl the permanent charges and annual appropriations, The permanent s charges amounting to Xil^6|27i 5J2, "^ include pension payments under the" Civil list' and other . acts,' and the large item* of and sinking fund which this >yeai ; ..will- amount. ? to L1;554,845.^ Included in" this'- howevjeif is^the^'hV^of T^ooo:aue'^arrears',,of, 'sinking f thT Inoben^ iguar^nteed4oan of :EI.OOQ,OOQ;6f 1870;! tor ri^hich^hav^alreaUy^rdto

'L1, 284,848i0r interest, and L 27.000 for ledemption of debt. This point is often overlooked when we speak of the annual charge of our debt, but as hon. members will see it is one of some importance when \\re wish* to ascertain exactly our financial position. The estimated annual appropriations for this" year amounts to L 1,851,127., 851, 127. This shows an apparent increase upon last year's votes of L93.4G8. I say apparent because services for which a laige portion of this extra L 93.468 is is required, were paid for last year out of loan. Hon. members will find on referring to the public account that the votes for militia and volunteers, police and constabulary, for la3t year charged agasnst consolidated fund were only" L 142.015, whereas they are this year L 214.007, a difference of L7l/J94 which previously was paid out of loan. This L 71,994, then, -is not an increse of proposed expenditure, but really the transfer of a charge from loan to consolidated revenue, of what, I regret to say, is for the present necessary expenditure, although happily the cause for much of it is, as we believe, fast passing away. This transfer I am sure the Committee will approve, for although such expenditure being temporarily extraordinary,may be considered a fair charge against the -loan — still it is very desirable to pay for services out of the revenue, whenever the revenue will bear them, as is now the case. Of the balance of L 21.474, LlO.OOO is for the abatement of the rabbit nuisance, AvUich last year was pro\ ided for in the land fund estimates. The remainder may be said to be comprised chiefly of increased charges for working some newly-opened sections of railways, for exchange on remittances to London to "pay interest, and or some necessary increases in the smaller salaries of civil servants. I have been thus particular, Mr Hainlm. in calling the attention of the Committee to tins apparent increase, because the Government n re anxious that a watchful eye should be kept upon any proposal foi increased expenditure, which should not be permitted unless shown to be absolutely requned in the interests of good government ; for it is certain that unless we exeicsse great care in this manner the return of prosperity will again lead us to extravagant expenditure. I must heie point out the tact, winch I hope hon members will bear m mind, that in this estimate oi expenditure, 1 have only pioxuled the sum of £40,000 for hospital Aid, the amount voted last year. Upon this important question I shall speak more fully piesently.

Estimated Revenue for the Year 1882-83. I will now ask the Committee, Mi Hamlin, to turn its attention to the consiclpration of the revenue for the yeai 18S2-S3. I anticipate, if taxation is to remain unalteied, with the Property Tax at one half-penny in the £, that we bhall teceive a total ordinary levenue of £3,393, 000, exclusive of land sales. I thought it piudent to estimate only a modct ate mci ease on these\eral items of revenue, full paiticulais ot which compared with the actual receipts of last year will be found in table No. 7 ,itt iched to this statement. It is possible that the .revenue may exceed my esti mate, but considering .all the circum.stances of the colony I think it bettei not to speculate upon increase which, although possible, may never aiise. 1 estimate the re\enue then at L 2,393,500. Vo this must be added the balance of £293,683, which stood to our credit on the 31st March, and -\\e then get Die sum of L 3,397,153 as the total amount available for the sei vices of the year. Now, if from this we can take L 3,478,639, 478,639 the estimated expenditure to which I have ah cad y referred, thtiie -will lomaiu a balance of LI 18, 544 at the end of the cut rent financial year. Ho far, Sir, all we h ive had to deal only with facts and with estimated results, which appio.ich to something like a certainty ; but we ai c brought face to face with a urobk'in by no means easy of solution. How can this surplus be dealt with to tiic gieatobt advantage to the community ? What relief, if any, can lie given to the taxpayers of the colony ? But, before these questions can be answered satisfactorily it will be necessary foi me to revei t to the question of hospitals and charitable aid, as I promised to do. The total public, and known private expenditure upon hospitals and in charity, last year was in lound numbers LBS, OOO, and for practical purposes we may assume that an equal amount will be required this yeai. Tins sum was made up by contributions from the consolidated funds, 1/29,000, stoppages from subsidies from local bodies, L/ 37,000, contributions from the local bodes and the public, L 22,000. The present system, or want of system I might rather say, of providing the necessary fuuds is mutating and unfair to most, if not all parties cencerned in the charitable administration ,of the colony, and it is I think, clear that the tune has come when this important subject will have to be dealt with upon some corriprehensivo piinciple. It may bo taken for granted that the indigent and the sick poor must be fed and clothed, and properly looked after by the community. Should private charity fail to make proper provision, and that private chanty will fail to make a sufficient provision is only too evident, the State then, as the State, will have to undertake this business in some form. This being so, it would seem that there .are practically only three causes open for us to follow. The indigent and the sick poor will have to be maintained by a poor rate supple mented by private benevolence, or by large grants from the consolidated fund, supplemented by a system of national assurance. It may be impossible to deal with this large question during the present session, but as there is a great, and, I believe, a very general repugnance to a poor rate, with which I strongly sympathise, and as grants from the consolidated revenue are, to say the least, very undesirable, I propose to submit a scheme of national assurance for the consideration of the House, v which I believe to be thoroughly practicable, within the means of our people, and which M'oild make necessary provision for the sick, the widow and orphan, and the aged. It is possible that my enthusiasm has carried me too far upon the subject, and has made- me too hopeful, but I have given the question much thought, and am confident that the scheme which ,1 shall at an early ■, date • submit to the House is within the bounds of practical politics for us in" this colony. 1 ' Should, however, the proposal- only lead to a dispassionate discussion '■ of this important matter, we shall have advanced one step towards a solution of what I venture to think is one of the great; problems of the ,age— a problem which,"' though happily not so urgently pressing j upon ..us as ,upon .older communities, where.the distribution", of •■wealth is at present much jnore : ,unequal, is still one it behoves us asf the'founders of a nation ?to grapple' with^ and' to the.best ,of our solve without delay .< I 'have^ said ithaffit'tiatverjr, probable tbat^we 'cannotf; fdwil'^witluU-tfiiß^'question?. during l - % this, < ( s"esBi*onf Ibut&whetheft we.;d6 >;spl .omjiot, f(B,v!6rlmeVtrphpo!^;^P.#^g^t^ ul ?t 1 i er^ tM

be - granted, . I shall ask the continued assistance of the local- . -boards or the local committees, as the case may be, in their management, for without careful local supervision abuses of a serious nature are sure to creep in. "With regard to charitable aid, now costing about L 40,000 a year, I shall ask for a vote of L 20.000, and propose that this relief should be given as far as practicable through local institutions, the Government granting £ for £. If the proposal ahoulcl meet with the approval of the Committee, I shall have to increase the L 40.000 for hospitals and charitable aid which I mentioned as included in my estimated expenditure to L 70.000, thus disposing of L 30,000 of the surplus. -The balance, then, of LI 18,5 44, which I said would probably be to our credit on the 31st March, 1883, will be reduced by this means to L 55,544. I will -now turn, Mr Hamlin, to the consideration of the question, What relief, if any, can be given to the taxpayers of the colony ? We have now only a surplus of L 188 ,544 as a margin for making the temporary provision I ha v e just proposed for the services of the year, which are not of" a permanent character, amounting to about LlOO,OOO. With such a surplus we might, if we did not intend, as we do, to go upon the London money market early next year for a further loan, continue our public works scheme and safely reduce taxation at least L 50,000 ; but, taking all the circumstances of the case into consideration, I do not think it would be prudent to reduce taxation at present. If it be determined to borrow more money to enable us to complete our main lines of railway, it will obviously be necessary to continue taxation at such a rate as will insure an ample margin of revenue to pay interest on money borrowed. Taxation must as a matter of course remain at a high rate until the works now being constructed out the loan are completed, and ha\ c had time to become reproductive. Sir, we feel assured that what the House desires, and the country demands issteady progress with our dubiic works, and not again to full into debt for current expenditure, and although we are apparently raising less revenue this year than will cover our expenditure, it must be borne in mind that the tempoiary and extiaordinary services which are this year being clnuged agaiust revenue amount to more than the difference between expenditure and revenue,aad the use of a surplus for such a purpose is quite legitimate finance when there is not reasonable doubt that next years' revenue will be ample to provide for the services of the year.

Estimated expenditure and Revenue from land sales for 1882-82. The estimated expenditiuc chargeable against the land sales fund as it follows : For charges fiked by aots of the General Assembly, L 41.50 0; for the Crown Lands Survey and the mines department L 53,800. The receipts from land sales are estimated to reach L300 ( 000 ior the current year adding to this sum the balance at the beginning of the year, LI 1,260 and deducting the estimated expenditure, L 196.310 we have a balance remaining of L 170,950. The question of the disposal of this balance must be postponed tor the present until the Legislature has determined what form ot aid shall'be given to local governments when I introduce the bills winch have been piepared for dealing with ibis subject.

Local Inscribed Stock. It will be within the recollection of hon, members that last year I intimated to the House the intention of the Government to submit for consideration a bill authorising the issue of pait of a loan of L 250,000, the principal and interest of which would be payable in New Zealand 'only. CircumtsanceB prevented the Government from giving effect to that intention during the last sesivon of Parliament, but bteps aie now being taken to prepare a bill which will be submitted for the consideration of the House in the current session. I have drawn the attention of the committee in a previous part of this statement to the very large accumulations of money in the Savings Bank« in the colony, and the Government think, as I remarked in the .statement I had the honour to make last year, that mauy of the depositors of the money, as well an the general public, might be glad of a moro permanent form of investment, if one can be provided, which is at the same time easily con ver table into cash. I propose, as before, that the loan shall bear interest at a rate not exceeding five per cent, and that the piocecds shall be paid into the Public Works fund, to be appropriatdd by Pailiament. I also piopo-e thai the loan falmll be issued in the form of inscribed stock, with tno right to the subscribers to obtain at any time, when de«dred, bonds payable to bearer of £10 a.nd upwards. The Government believe that securities such as those I have described, will find favour with the public as soon as their nature is generally understood. The loan would be disposed of it gradually, as ifc comes into favour, the object of the Government not being to obtain funds for expenditure, but to provide a class of security for the investment of savingl, which seems generally to bo desired, and is likely to have a very beneficial resnlt.

Incidence of Taxation. I should now like Mr Hamlin, with the permission of the committee, to say a fow words about a question which I think well worthy of our attention at the present time, viz., the incidence of overtaxation. Does our present taxation prers unfairly upon any particular class, and especially upon that class whicb is the least able to bear it ? Because if so, although we might not be able to reduce the total amount, we might be called upon to shift the burden from the weak to other and stronger shoulders. I have, Mr Hamlin, beenlooking into this question of the incidence of taxation in order to ascertain the amount borne by the different classes, so that relief might be given if necessary to those upon whom the taxes appeared to press the mast heavily. I will state broadly, for the information of the committee, the results of my enquiries, referring hon. member* fer particulars to table 9, published with this statement. The results of my enquiries' seem to me to show that our taxation is, upon the whole, fairly distributed over the community, although what is fair in such a case is a proper subject for discussion, and a question, upon which, there may be a great diversity of opinion. For the purpose of comparison, I have divided the population into three classes, which, for the object I -have in view, may be, considered natural divisions. Eirst, the wage-earning, class, which ' I shall hereafter for convenience call the ' industrial class, 'consisting, of 312,426 souls, exclusive of ll^O^dome's- ' tic 'female servants ; second, the interme,diate claßsynumbeiing 96,260 50u15. ', This class is composed [of all those ,who ,are known by the.,census as not belonging to the industrial s class, and who do' not pay property' tax ;''and, third, the ! class; which pays" property tax, ing' 0f"" 69,445' souls. The total taxation^ upon , which. ,'my calculations are.baBed',-ffo^ what, ,we term taxatidn, proper as distinguished for /what r is Tpaid , for services .rendered^ is* ,?1i1,276,'100$ This was made up as'ff ollows ; — Customs, LI", 276,100 ;'BtampB*(iiot including 'postr ,, >, aare 51/126^48";

estimated to be paid by the Maoris on general customs, and also the duty paidon cotton piece goods, which are now free. These amount in all to L 683,794. I make these reductions beoause with the present information at my disposol it is impossible to apportion to each class the expenditure under the head of wines, spirits, and tobacco with any accuracy, and because the other articles rated do not come within the scope of the enquiry. But I have no doubt that if we could make now a true distribution of the amount paid under the heads' of wines, spirits, and tobacco, we should find that the intermediate' and property tax classes pay a large share, aud that the relative proportion between the-three classes whichrl am about to give be but little, if at all changed. I assume of course, a moderate use of these articles. ,If used in r excels it is impossible'to say which class may pay most, but I think it wil be generally admitted that those who use spirits a,nd tabacco, or any other articles in excess to whatever' class they belong fair subjects for heavy taxation. Now, I have received from sixteen chief towns in the colony trustworthy information as to the actual expenditure of a a large number 1 of mechanics and labourers. I,have compared the. expenditure so obtained with the expenditure of the same classes, in , England, and find, only such differences as the change of circumstances ' would lead ton 'to expect. I think, therefore, we may take these returns as approximately accurate for practical purposes. I believe that further information which I am collecting -»vill generally bear out the results now given, and that any error which may be found in my estimates will be in the directi6n of a slight over-estimate of the amount paid by the indiistrial class. The returns to which I have alluded, show that the average amount paid the State by families of the industrial class averages 16s 6d per member, or a total of L 214,522 for the various families. This estimate is made from the actual expenditure of 56 typical families, resident in all parts of the colony. But to this amount we must add the duty, L 51,246, paid by 49,355 single men, equal to LI Os 9d per head, and the duty, L 3,983, paid by single women over 18 having occupations, equal to 19s Id per head. The aggregate of these amounts is L 309,741, thus giving an average over the whole class of 17s 3d per head. But to this amount we must add Ll,Oil, being the duty paid by the 11,903 domestic female servants for drapery, at 17s 3d per head, thus giving a sum of L 250,062 as the total taxation paid by the industrial class exclusive, of uour.se, of the duties on spirits, wines, tobneco, and colonial beer. I have included ail domestic male servants and married couples at scarce, as paying in the industrial classes, although probably the chief part of their consumption ought to be credited to the intermediato property classes. I'have said that the total amount paid by the industrial elapses is L 250,000 and that though the amount is ascertained by means of the actual expenditure by 56 families in various parts of the colony, and that these returns have been carefuliy checked. If we now deduct L' 280,062, the amount paid hy the industrial class from the total duties which were now considering we got L 312,344 as the customs duties paid by the inte i mediate and property classes. I think there can be no doubt that the stamp duties are paid by these clashes, it is possible that a small amount may be paid by the industrial class, but it is so small that it could not appreciably affect the results as between the various classes. To summarise, then, we find that the industrial class, consisting of 312,436 souls, exclusive of 11,903 domestic female servants pay L 269,701, being at the rate of 17s 3d per head, or, mchidiug the drapery duties paid by these domestic servants, L 280.062; the inteimediate class, consisting of 96,260 souls, pays L 256.272, or L 2 13s 3d per head, and the property class, consisting of 68,445 souls, pays L 439.819, being at the rate of L 6 Ss 6d per head, that is with the property tax at one penny, but if we take the tax at one halfpenny they pay L 310,719, or at the rate of L 4 10s o£d per head. It is difficult to exaggerate the importance of this subject, for badly-adjusted taxation means undue exaction from some class or classes, which cannot fail to be detrimental to the community as a whole.

Proposed Loan. I have now, Mr Hamlin, only one more subject to deal with, the question of a new loan. We ha\ c first to consider whether a new loan is advisable this year, and second how much will it be desirable to borrow ? Now with regard to the first question, we must consider the state of tlie public woiksfund, and the amount wcjcun piudently expend per annum. Afti'i rovutiug to tlicpie&ent stateof the finance, the Treasurer pmceerled :—: — Sir, theG- ivMnment are fully aware of the lesyon.sibility they incur. They recognise clearly the principle that before the public debt is increased the gain to the colony shall be seen to bo more than commensurate with increased liability. They believe that a case within this rule has now arisen ; they thmk that our ordinary finance being restored to a satisfactory condition, and our main trunk line of railways being still incomplete, it is now prudent to raise a fresh loan for the purpose of completing these railways, or carrying them a stige nearer to completion, and for certain after definite and important public works. After saying the railways were paying, he said: —The Government, therefore, sir, recommend that a loan should be rained, but only if the money can be borrowed at a reasonable rate of interest. The Treasurer having dealt at some length on the necessity for a loan continued :—The Government have determined, sir, to propose to Parliament a loan of L 3,000,000 to be raised and expended at a rate not • exceeding L 1,000,000 per annumn. My hon. colleague the Minister for Public Works' statement will inform the committee in detail of the items of the proposed expenditure, and of the mode by which we hope to confine the expenditure to specific works determined "by Parliament before the money is borrowed. Major Atkinson '.concluded by defending the views he had embraced on the subject of the finances "of the colony, and by expressing his faith in> the vitality of the colony, and the energy of the colonists.