Financial Statement. [BY TELEGRAPH] Welington, Yesterday.

Waikato Times, Volume XXIV, Issue 2021, 20 June 1885, Page 2

Financial Statement. [BY TELEGRAPH] Welington , Yesterday .

Iv Cowmittop of \Y.\y* nnd Mc.iim, tlio Troastner the Hon. Sir.J. Vogol delivered tlio fr)l]ii\\ingst,itonipnt : — Mr H vmlin, —I h.i\e ti)D often addronicd ;i Cnminittm 1 of ,Su])j)ly up.m occasions hko thii not to fee I coit.iin tli.it I '•hall icccivo fiom lion tnombfis a. kindly mid con^idoicd hearing.

Revenue and Expenditure 1884-85. The geneinl rosnlts of the yew have already been published and it is only neenssary I should buefly recapitulate. Tlio yoar 1884-85 was commenced with a dehcit of £1.">2,112. For £r>O,OOU of tlm amount deficiency bills weie authorised to be issued maturing on the 31st Much, l^Sij. Tlio lul.mco of iiJl l'J wa-i di-ichaigi'd out of tho veil's re\eiuie. I proposed last \imi tli.it the £I*l,ooo should not be turned into ,1 per 'ii.uient debt. I --till hold the same view. Tlio tiiiniMcti<m of consolidated revenue for the year 18S4 B.">, after dischaigmp the de fit-it £2112, and basing outstanding the A.'n,ooo shows a, cndit balance of €l!l,0 ( .ll, nr, exclusive, of tho small deficit paid off, n Mirplns of £22,003. The total consolidated rovenup of the year amounted to £3,'y(i9,4'.H. There was n deficiency in tlir item of st-imps principally occaiioacd by tho expected increase of postal revenue having by accident boon twice credited in the hstimattM. The railway*, also, Khowed some deficiency, to a Rina.ll extent on thf EntiinAto^. l*hn total deficiency in tho Estimates was £'22,01i>. The AYppnditnrA, on the other hand, \va.s lees than the amount toted by £23,8. r »2, inclnsi\c of £5082 expended on nervices unpro\jdod for, ho that renult wai the nurplus in the year's transactions which I have already otated. Hon. member* will bear in mind that tho nurplus of £(JO,OOO anticipated in the liudget last year was reduced subsequently by the Supplementary Ksti mutu Hand votoH. In the revonuo wan in eluded an amount of £24,700, the proceeds of dH><>nturen inxued undei the Consolidated Stock Act, 1881. Hon. members are aware th it the amount wa« issued to repicsent the equivalent of the incieisp of the Sinking Fund for the year. I shall, later on, ask tho attention »f the Committee to these subject*.

Expenditure for the Year 1834-85 This includes uridneh.argt'd li tbilities of the |)!C\idiH )i\ir. Vccnidiii^ to tho ]>l.m introduced in 1-SSO, of bunging only into yi'fiily tiCLouut^ tin 1 actn il rxpundruie .md lecvipt-i « ithm th it peiiod.

Land Fund 1884-85. Tho land fund ate unit .i, f tho closo f>f the ytMi 1.5.53.51 -,h>>*\od a lul.moo "f JWO, H7. J'ht 1 ri'vonui* 11 ci'ivi'd (luuiifj tlu 1 |>»^t yen amountod ti» CH>O,%'I, of which f'tJ, W2 w for ct\*h mlcs <if l.md .itul i'(i\."».{7 f«>i "alt-i on d<>ft'rivd f> vyim 7)t^. The e\j)i*iulituit % .iiiiounti'd to t'-'O'), }S-), mi th.it at tlic Im'x'ui iiiii<,' of tlu» prr'sunt fin mci.tl yi'.xr tlicio «,i> a cu-dit lul.ukv <.f £;»,iWI.

Public Works Fund, 1884-85. The bil.meo .itm-ilitof the ]»ul)lu Wi.ikfnnb .it tin* i-ni l of .Vl.irth, LSM, wa> ±I»S\X,')l2, from th" nutilm -nU of tho I'un <>f one niillinii ne^oti.ited in J,11111.11J ,11111.11 v, IWI, i."W,000 came to ciedit .iftei M.ueh of th it year, .iMil frmn iii-»t \tm«"iit-* of the million loin ut><ri>ti ttwl 111 tliinuiry l.nt, il>St,')O | ) C.»I»«O t'» t'K«l(t ))(f>»' t))l> 0)1(1 l>f .M.lllll, ISS."). There was.ilsn.ui nniuiuit of £10,000 from dnficii'iicv l>ilN .vutlrii wed to In Umuml l.istycn in tud of tho I'uMie Work. Kuihl ri'docmalilcnt the cud of th" pii'sfnt month, jviul uo fiatlier ol>t lined toO.OOO of tern pur.iry advance 1 !. The total .mioiuit pl.ici'd at the ciedit of tho Public W'oik-* Kund during th.« year ISSI-X."i was £2,32«,0i r ». Tho i>\]>cndituro ainouutfd to t'l,.'Wi,7'27, W\iii{f t"):iO,2l)Siittlioc»d of M:vich l.i^t, w ith winch to ltojfin tho yoar. In addition thoict > we lud tho b.d.inc" of the third instnlimMit of tho tin co million loan to receive, i,'lVi,yoo; alii tho new loan nf i,'l,")00,000 ii'cuntly r.»Hod, tunouutin^ 111 all to £2,<i4V2!)8, Kiiojt-'ct, howovor, to luclump tion of deficiency bilN, £100,000, the iedcniption of tumpoiMry advances, £.->O,OOO, and iidvanccH to bo nccountud for m the h 1 nds of oHicurs, K2">0,000,

Tho Public Debt. The amount of the pu jlic debt on the 31 «t March, 1881, less the Sinking Fund account, was £29,574,(K)3. Tho amount of tint debt on tho 31*t M.irch, 1885, was £30,0 W,IM- It was increased by flesh issues and conveisions, tho conversions from ii higher to a lower rate of interest, of oursp, has ing a tendency to a 1 irger prin ci >le amount, butalcss annual eh irge. The un iu.il chaigc List yen was t'1,.">70,77!1, w liiUt tln-> \uar it is LM,7»3,G1>2, exclusive of lilt 'KJst on (Iclici'Micy liilN, md "ii tho million and a-h ilf lo.in. Th" increased annual eh uge is to lie accounted foi by the iut^iesl on th'J adilitional mil i >n, and bv Al<>4,ooo wlnc'i, owinc to tli • c inversion operations o^c wed coming into tho clinrgo din ing LSHJ8"). listening to tlii-* item List ye.ir, I ostini ltd it at t'."»o3 only. 0 i the other hind aie reduction* consequent on conversions, debentures totik<« upvidc mvoited driwing djbiiituros. Wfi estimate tlie inteio<t foi those under the old head as also tho Sinking Fiiud. Under the authority of tho Cons ilidated Stock Act, 18S4, we issued debentures t> tho amount of £103,Jv50 t') ropJice two Amounts of of £20), "00 and tH7,!»00, respectively, issued under tho (l.Mieral Purpose Loan Act, which hid fallen in for payment, and £2000 under the Nelson Loan Act, 71. o.ulyin January. Tho third and last million of the throe million*) loan of ISX2 w.is negotiated with excellent results. Tho average rate obtained w.w £"!>!) 10s Id for each £'100. Considering the quotation for consols, and tho Bink of England rate of interest ruling at the time the price wan o\c3edingly satisfactory. Tlio million and a half lo.m authorised la*t ye.ir hah recently been negotiated at a still bettei figuio, namoly, un avorajjo price of £100 uh 3d. A-i_conHols are lower in pi ice than in January List, this result must b'j ontiHirkrcd Htill moro gratifying, and a comp irion with rates* obtained for othei loans enhances the gratification. lion, members are aware that within a U'\v days of each othor throe loans, besides our own were placed in the market, namely, thoso of Victoria, Queensland, and K'outh Australia. It is impossible to tell the exact rate yielded by a loan from the selling price, or the allowances in .shape of adwuitages of acciued interest and dn count. I asked tho loan agents to cable mo tho results of the four loans, and lion, nieinboid will be pleased, whilst the pessimists amongst them will be surprised to learn that the Now Zealand loan fetched tho highest pricn of all. Thi»t is tho telegram read from the Agent - General, "net pi ice reducing interest and discount, Viet'nia, t'!H) Is 4d ; iJiii'imulftiMj, t'!)7 3s 101 ; New Zealand, £!)!> <>s 2d ; Adelaide, tfi'J r,t t)4, Ho that we were nearly a fifth per cent, bottur than Victoria, and eight por cr»t, botttu- than .South AiiHtralia, and moro than two por rent, better than <Jueonsland, It is right, however, to say that the Victorian Joan was Krppr. mid tlmt during a fow days interim the in.li kot had somewhat imprnvod. Tho loan conversion transaction during the year comprises amongst othois the_ paylug off of tho uncoil vei tea bnlaticc »i/.» per cent., t7|ft,<)QQ, We- havo also converted £2,(i12,0000f conv)littat«»d drawing dobentnres, but before. I refer to this operation I should like to say a few words concerning tho Consolidated Stock Act of last session, under which it was offectod. It will bo remcinbcrec] that this act, which had for its object t)jo facilitating of tho conversion •( tho loans and saving tjjo oonntry of tho bin don of the Kinking Fund, whiM ponteiiiporancnus frosh loans wore being immed, met With consjderablo. on[iosition. Thorn wn» at firit groat aiHiculty m making it« imoi'.iiloiis iiuderstood. A very goncral statement has buou ii)ade th.it wo were using tho accruing sinking fund, and I need not roniind you of unkind ;uit|<j|paUoiis which we indulged that the ciedit of kha C°l° n y would be injured by its claim*. Th» trlui)>phant answer to the opposition, the bill ruot witlf ju the luilli.nit Kiiocosg of tl'o operation*, ai^d |n \t* having entirely faijod to do .-jnyinjuiy to j tlio cieditof the colony, do not lot it bp supposed that it oscvped criticism, sumo ,;c tivo community smvivedthis session, a oalil»i;MUII was even sent out fioin Kngland which uppeiU'od fn all tho novvupapers m tho colony, that Hto.uk l^gliangu objected to act on what this cablegram wax founded, f h.«»«i not been ablo to discover. I h.ive heard of no objection taken by tho Stock ICxeliango or by iiiiy prominent ujembei thereof, but the act was yell oo))sidoied at home, and full explanation of it mado ti; tho 15 ink of England. Tho AtjontUonoral also in a itntatical papor with which it is Unusual to accompany a loan, elaborately explain* tho effect of tho act on tho Sinking Fund, That tho acfc and operations proponed undpr it aid,not in jut'ccroriit U shown by tho negotiation of loans which I have ahoady referred to. It has been useful act. It in npprov ed by tho fact th.it through its agoney WO liatO oiHVOJted ,V3,0|2,100 of the

t!1,772,">00 of consolidated (drawing) debenttues left undrawn. Tins was the immediate action of tho nioasuro foi winch I had to undertake an amount of personal losponsibility last session which at timps almost fnghtenod mc, thoroughly convinced tliough I was of it* \.ilue. Tho majority of hon. members whom I addrcs aip aware of the effect of tho aft of last session. Tho act simply provulod that we might create debentures to in Amount commensurate with thn growth of thp Sinking Funds from and alter the cud of M.uch, IHKI, those debenture* to bo extinguished by the procoed« of the Sinking Fund when they c.inio to bft realised. Thus, if the Sinking Fund increased by a <in.ii tor of a million during tho yeiii 1884 85, up wcio to create debtsnturo* to that amount. It could not bo and that tho crp.ition of tbcsp debentures mcroa-od our indebtedness. It left it precisely whero »t was, and thin was to be continued in anticipation of conversion if wo issued under provisions iclatmg to Sinking Funds, a million of new bond*, .a million in addition to accumulation 1 ! to end Mdich, 1884, would h i\e to st.md over creditor in tho Sinking Fund. Jhiting th« year past we issued dcbentuics for £247|700, tn.it being the amount whicli was computed by tho Treasury and Audit Department would represent the accretions of the Sinking Fund during 1884 85. If tho matter were loft there I should claim that we had successfully effected a legitimate oporation of compensating the revenues »nd tho amount of the year's increase* of the Sinking Fund by iiHiung frefth obligation!* to bo afterwards discharged out of thme increase* ; but, indeed, I havo been able to go much further. No lew than £71,400 of converted bonds came in for paymont undor the Mivich drawing. Of the money thus paid in by the Crown agents, and of debentures issued tho first year, we extinguished at onco £71,400, in that within a fevr monthi of tho Act passing wo were enabled, by the conversion operation*, to extinguish nearly a thud of the hnt j'dr'.s debentures Of tho debentures rein, lining of last year and tho-,o wo shall issue this year, if tho con\or»ion proceed no further than it hao done already, we Khali probihly be able to extinguish ovor £100,000 from tho result of tho next drawing m March. Many members u ho opp i.sed the bill la-it year did so conscientiously, and I appeal to thoir goneroiity not to allow the opinions thry then entertained to prevent their now admitting that the measuro was a f iir one and calculated to legitimately assist the finances of tho colony. As regards the terms of the conversion, wo give for the consolidated bonds other bonds bearing ~>%, interest for »uven years, without Sinking Fund. At the end of sex en yeans wo give 4/ o inscribed sti>ck for 5% debenture* at the rato of 107 for each hundred. Practically, the result moans this : the same annual charge for seven years, less Sinking Fund, and thereafter a sa\ ing of n little ovor J per cent, on the annual chirgo after tikmg into consirler.ition tho expense and fcutficient annual pro\iswii to extinguish the additional i ipital stock. I may say that the Wcstland and (Jreymouth Harlv>ur \cts justified my expectations. It will be zocolloctrd that I contended it would bo better to guarantee dcb-nttirc, ,md not to borrow for boaids. It [iroi # es, a*< I expected when the Hank of England and the market asked im to nndeitake not to bonow fuither until the end of March, 18S(i, they had no difficulty in excepting fioin such an cngigenient th * giur.intcod dolvntures of tho harbour b iml\ The guaranteed dob 'iituro-* ln\u realised.!, f.tit price. It was to be expected that, not b.:ing dhectly issued by th" Oovernnvnt, to t.iy nothing of their notb'in 1^ inscnbed stock, they would yield less til m our oidinaiy li>.iiw. Hiirboiii boards obtain their money on splendid term , whilst (!overnment runs no risk, since it is sec urod by funds of the lio.uiU aceiuiug in its hands, lhaxe n<iw the gi.iteful ti^k t> perform, to express to th >% loan .vgeii's th % pi ofound thanks and ackii n\ leds,vm uts of the (lo>einniMit for th" exyll -nc 1 of their judgment and /. iloiis -ei-iic «. lion meniberH will read with ritei ■ t th • c trrespondenco whicli wll 1>- i>'icil b-fm them.

Future Policy. Itaforo prnceoduig to due i>s propoiiN ol tins present yeir t'lor" ate crt i n lironl features t> bo conaideiod to \vl i !i I mu-t ask the attention of the co>nuiilt« i e. We ha\o armed at a pcri-idof our hut'ii v when it is necossary to cuvfully oihHt the nature and effects <'f tin* ti\ tti'Ut of colony. The customs rev enu", which i-> tin m >-tnn portant branch of the nnenue io pines t<i bo revised by reason of *»oveial tiroum stances wliich in oidn.uy com-o 1 ugely effect its natural gr iwtli. I need only mention two of these tircim'tanc^. Tin 1 lncreaso of i»roducti>»n m tin* c<\ iiiy, in wliich I include manufactuiiiiK, li.i* .1 tendency t. wjn.iljy ill mni.li thi import duties of m.mv article* winch li uc yielded increasingly I.uge amounts in thpist, and alcoholic be\ crages, fioin winch the heaviest custom* returns h.nehtlieitn Imcn received, am showing a diminished c >iiHUtiiptio!i. Both thosn facts arc cmi ncntly gratifying, tlio latter from a moral and social p int, the exceeding vahn of which it would be impolitic to exaggerate, the former for both utilitarian nnd social iua-<on"i of only lens importance. To put the ca-<e briefly, lo<« consumption of intoxicating drink* meivn an increiKcd happ'iir.t>B and social well toing, and l.ir^or local production moan* incioa^cd piopcrity. It ii clear that both ciiu«d-» .ir^iu* an increased power (o piy tho Cust'iui^ dt.tien on whatevor articles it in coiirtidei&l desirable they Hhould h« levied. The returns of the CiiHtoms duties on spirits during the l«it throe Knnnoial yetm aro Nug,?ostive:-1882-S3, £310,517; 18S3H4, i'lOo.-KX); 1884-»V. £377,«MW. For the h^t two months of the preient year, the receipts h.ne been at the r.it 3 of £3l}(t,(>2t a yo.u. Those person* who refuse to «cc in th'j condition of a new country special cr2umnt_ance* which lender in ippropri.ttu their ranging themselves undci the old woild bimi'rs of Protecti(;tiou or I'Yeo Tiado liny at lonst meet on thu ci'limon K'round, tli.it fiscal refjuireinents aro tl)n prjiniry object of Cuitoms duties, Thero is n<i taxation more fair, ju-^t and lo^icjil. I auk pro-toctioiii-^tH t<> agroe with me, .tithough they may goo in customs duties nn ulterior obj >ct, the Gncoursipeniont they give to local production, and I ask l''roe Trader*, to rendur like acquicHoonse, although they may arguo thut the remission of dntiei tend-, to lighten the cost of living. In shoit, Cimt'irrn taxation is a natural and }bvioiiH »|Mx;ioH of revenue, and Free Traders who would ffpoeially dominish it, or PiotectioniHtH who would specially increiso it, Keek to modify natural conditions by nrtifici.il onorf. I am far fioni saying that such a modification i* necessary or wise. It coiwtantly falln within tho range of the duty of Parliament to specially intensify or ab ite tho application of lecognmed principles, but I lu\e yet to aliow why I claim for Ciintonix duties the character I have assigned to thorn. Thoy qrtj fajr, just and logical, becaiiK-: it is re«isona()lu pi>oqtice)M of other countries nl)onld i)ot goin^ hero to enjoy all the benefits that complicated imohiiiery of Government affords them without Contributing to itxgost, Tb»i proj«>-!iti<>n in in no way affuotud by thu question of whethev tho ultimata charge falls on tho consunior rather than on the producer. If it be admitted that it fulls on the consuinor alone, which is open to question, as at least to somo extent it affects tho Jester or greater profits of tho producer, it is still cl u ar tljat the consumer who finds it de-iirablo to consuuio exotic pn>t}uctioiis should on their behalf, contiibuteHotuething to the cost of Government, tho oprratioui of which will onablo thoio productions to find q. markot. Gnxtoms dutios have in addition two (fioat advantages of being cheaply collected, ai)d of facing on those who in greater or Icusor proportion ulogt to conxqnje dutiable goods. Tn» avorago cost of collecting Customs duties amount* to o;|ly £2 Us 3d per cmt. lint it is nndoKii'ablit th^t tho w)|olo of tho taxation of the colony should Iw (joncyulcd *<) ns not to come homo in a foiciblo manner to tixpayei"», hence together with indirect taxation there should bo taxation of an unnfist ik.'bly dirojt chaiacter, as also some of an iiij/einuii.s medium bptwoen the two. Tl^it stanjp 44'c^ BiinjiJy |Jjj,s jeads mo to state that, together wftii tbo luvisioij < ( f tlj* tit iff, it iq ijes|iab,lo to jmss under ro\ i'qw tlio direct aud seint direct taxation of tl^o o ilony. These classes of taxation roqnne to b) coiiiideied if for no other reasons than that they should bo put upon an elastic fin,! jnj.;, in which tin* featuie of tioimal incjr Jii^e sl)oul(J l,a\e full play. It is necessity now to cmit-idcr tbu i.ltni.a>ter of the l/opul ition. Besides the \eiy -.njall iHinjln'r of peiwims wlio live upon their means, nnd i'm lujijfer nuinher om|ilnyud by tlio (Jownimi'iit, tint (>(,mjpat|oiis of tljo people may be diviijed iw follows :— /VgWcuHural, pastoral, mining, maritime (in which 1 include fishing), manufacturing, commercial and professional and domestic Hsrvice. Tn ?\ch of these classes, excepting the last, hei-tt ai<e Ixjth employers and emp'oved but for <},ir jirrfant jnnI>o,c we iwccl jniko »o ÜbUuctwiJ

between tlifin, because it h cleiu that til' 1 junspouty of any class moans, m should mean, piospority equally <>f cmplovois and employed, lndeod, in .1 c >nntt > with such a range <>f |»n>j^r<"<H b»»f<>ic i\ it hhotild bo our ambition to weo that facihtits arc open to tlio employed of to day becoming thu employers of to morrow. It it be conceded that tho colony is not unduly peopled, or in other words, that there is room for a much larger p >pulation than at present, we may eliminate from our consideration the expediency of promoting the survival of the fitted in densely populated countries. Concoaled though it may bo, the consideration that tho suiviv.il of the fittest will in tho cue] ho tho host lies at tlu* loot of tho indiffcicnce with which tho interest of the separate classes forming tho community are regarded here. We cannot, in c uirimn prudence, tolerate such indifferonc. It h essentully of the utmost iinportnuc to e.vch class that tho other cl »w- -'i >u!il p> osp -r. Tim seems so suiijilo a trui -in ti it you in i\ cm lid-r I am tiospisM ig o-i \ > u pitienuj by leading up to and utteiing it, yet it. appears to mo of such linin-M .m i'ile i.i >in vit t > our whole moral, soci.it, c mi tier Mil aud c >rpor.'vte system, that I ci.mot pioclum itt «i loudly. In the absence of ,v di*p i-itio-i to give and take, tho ivlf.tr? of fie country cannot bo properly c insulted. Th >se interested in any of the el »««■«»« of occup.iti m must rccolloctthnt th«» pios»io,<R of tho other clauses i'h the surest ro»d to thoir own. The towns must not ask an .vkwtagti from the country district-* if they are mt prepared t<> give on o in re .urn The colony cannot become we^thr without manufactures on a large «ca!e. Tho multifoini conditions of town lifo afford a market to country producers, but the denizens of the town can not prosper unless they afford t.> tho country producers facilities for reaching the markot and opening nj> land. What I wish to ut.ibliih is that it is our duty to consider how all the elates of ocecupation can best aid each other, so that they may alt equally progress and unite together together a self-roliant, self-supporting community. The most important point which arises from this contention is that if there are to be Customs dutios which will effect the cost of production by country producers, there must have been assistance to open up that land. Tho means the pro\ inces afforded for opening up the lands by roads and bridges was tho foundation of the colony's progress. Wo have since gone in for more ambitious arterial Rystcms, but tho time has come round when we must consider as a complement of those systems the opening up of country, and especially tho-.o parts in which the present means are small. To base tho aid wo render on tho present means <>f the recipients would be to give to those who have rather than than to those who want. Hence lam fro" to confer that I recall a groat deal I said last session about each district depending upon its own taxation. Of curse, this should lie ho> in a lwa-surr. We c vnnot refuse to enable districts which have prospered to prosper still further, but we must go beyond this and rein'imlxT the spirit of the old iirovinci.il aid rendered to the young districts, that the feeble requiio special sustenance. Tho a-^Utanc" eann->t b> b\s"d on tho in»ans of each, and the largest aid must be gi\ on in pr >p >rtion to the poorer distiicts. Our prop i-~.il th *n h settled subsidies cxtMidmg over nianv ye.ii->, but divided after a plan which will give goiter c m-Meriti m to the p iomv districts. The scile will adjust it-elf til it ns a distnct becniii'js nclier, its ieceipt-, though prihups 1 lrjjor, will 1)0 bisod mi a les- *i scale. Tins is not tin? plnce t> fully di«cus^ the prop isihon ; I must re"-v to it to an extent little more than to elucidate our Hnanci \] proposals. It is, however, necessary to oxploin that thi' long term for which we propo«e that the colou\ should bind itself as it* object to the finance of the local bodies, and en il.lc th> in to borrow on tho secniity of the snU-idios. We are, moreover, distinctly of opinion that tha 10311 bolic< should bo released from tutelage. Th • conditions under which the s lb-ulifs si mid \x> expended should Ixj pivsonb'il, and tlie boards be h'»ld responsible f>>r the pntpei cvpendituro of the money, hut wv d<i not approve of making the expenditure subject to tho supervision of tlie I i>\ eminent. Thn experience of the Uuds and B-idges Construction Act and the enormous lalvmr it has devolved on the Public Works Departments show the fallacy if a system in which the responsibility is divided. We can never have a s itisfactory system of local q ivernment unless the ratepayer* aro made to foel that they have no ono but themselves on whom to depend for a w'l-io expenditure of tho orporito funds. L>t the most interested alxent theinsehrs fioin the, district, or bo indifferent to the liioceodincfs of the locil bulie-i, but let t!>.M» mi lei stand that thoy di» this at their own ns'v, an'l that thoro is id tutelary genius watching over the interests they neglect. O;ie hoa^s at tim^s toproachos levelled at locil bvlios because of their gieit nnmb'r, and by fio in my pjoplo «*ngaijed on then: ; if tlu-e. bidiu-t ovcrlip and repeat o ich other's vv irk, there is of course, an objection to them, but if the\ do distiut work I not milv see im obj ction to local government I'e'n,; dnid:l amongst ,\ groat nu nh'r of |i,t">'u. but much advanta<;o i:i it \th 'ototicallv i»er feet li>cil system w >uld In th it m whij'i nearlr all the indivihnls With th« con«fit of their fellows rrndjrod oncii his shire of lab mr to the gjnorat good. Although we may stop short of si nido .a diM-i>'i there surely can b; n >tlnng t> tile exception to in the division of lib mi that for e\am;ilo w >uld s'iv'i to som> cipahlc jiTsnn purely ni'iiucipil duti.M, to others attonti'iii ti tbu h.vrb >ur, t > ot'iors care of the jtnlilic librari >s, iind so on. It is however chiefly my duty t> n ivy to d-'il with financial oonsidemti >V, and I have to siy that the (i lyriuu 'lit considered th it from a fiscal n >mt of view tho prop isml endowment of local districts is ani,)ly warianted. Apvrt from the Contention I have submitted, that it is for the welfare of of tin- whol" c immunity that the several interests should help each other, the ovpenditure proposed is a- wise investment, opening up of country by roads and bridges ouoriii msly iiiqroaio. iti value. I mean its intrinsic, not spoonlntive value. Wo shall thus by means of the subsidies be constantly adding to the amount of property available for direct taxation. The unequal expenditure during the last three years <>n j-o:mJs, bri<lg>M, and analagous county works is a striking pitta in favour of tho m u'o regular system wo now submit. A statement of past expenditure is furnished with the usual tables. Wo propose to repeal the Hoads and Bridges Construction \ct, but to fulfil tho ohligitions incurred under it wo propose that jwrt of the charge, of subsidies shall for five years come out of loans, but the sum proposed from this somcc will bo very much loss than wo have grown into the practice of t iking for tho piupose from borrowed money. The amount of subsidies to local bodies we shall submit is a sum not exceeding £300,000 per annum for twenty-five years, of which one-half for five years shall contain Rome &pi»o,ial f"»h.3Jdios to goldfields counties, and we intend still lo continue the rating of Crown lands, but the Crowr liability t* not to evtond to rates bey.md v'd in the £'. We shall submit a jniwor to tn« (iovepnop t«» arrange with local bodies foi making roadn hpacially required to open uy. lands nevyly sold or about to bo sold. I can not refrain from adverting to one apecia povyor, which wo desire to place at tin optional disposal of local bodies, a power w Inch is as beneficent as it is likely to lx profitable. I allude to piovidmg dwellingl.oiuuj, with snj ill .areas of land attached, foi labourers all over tliu colony at njoduiMte routs, or on terms of puichase by instalments. Kup|M»st», to take an u\.unple, that si local body nuts up a house nt a cost of £80 on a pn-ee of l.uid value £30 oi £10, the tofetf would give n good return at Is a week, with a lijjht to tl»« f«" *itr\\ilo \n about foui teen yeais, or 5s a week and tt right to feo .snnplo in about ten years. We pioposu to exempt the dwelling-, whilst nndor Itvuo from soizuro for debt. Thoy may l)c crpctfd by hundreds all over tho colony, and they vyill give lo the labourer tho means of comfort, tho want of w Inch has been apparent in this colony, and is painfully apparent m older countries. The loctil bodies will mn no risks, for these properties will constantly acquire additional valise am} l# ro<)c| seounty foi the liability upon thorn. As to "tl*« " hm>PS( ties thornieJveH. I anj lupposiug laijcjs to ba u«d in the vicinity of towns and country townships. They will become within tho period mentioned of great value. It is intended the subsidies shall only be ono-half for tho present year. Tho pea* in i; thi«, it is nocessary to fulfil a» tho engagpnianbi fqi? toatjn and bridge either proimsod or entered into," including those undor the Roads and Bridges Construction Act Tho amount required for this rjupnqso ia very large, and a half yeai'ij HubHidy for tho presenj year seems sufficient. The amount of £300,000, which. I have mentioned, w tho maximum amount which will be allowed. Based on rates it is estimated that according to tho present rates it will to ab ut WjO,OOO, fm thio )ui aud

lulfi.f tint will be €125,000. We submit tli.it for dm \« -u th" c'ins.ijKhtcd i<»eniie shall contnbute £7~>,000 of that amount, and tint 4T>0,000 n!n,U be contributed from tli< Public Works FuiiJ. Th-- "uhsidie, Mill lncliulfj small ciMtributioii- to the tow us and larger ones to road district* « n d c mnties This i-, irrespcctn eof the treatment which we propose, to a<l'»]>t with charitable institutions and hosj>it,l< I will ask h>m. m-mbjrs to suspend their judgment on the subject until .ill tho measures are bofore them. We will, if acceptable t<> the Houae, at once brine down tho local government and clmitable aid me V sures. They are three m nuinlxT. Wo will nio\e the second re ulmcf and explain the nature of eich, and then adjourn the debito until all of them are before the House. Hon. numbers will then be able to .imply consider them as a whole, and tike siich citr-e c.i u-ernmp them a* C">mp.'nd>» itself t > thai judgment. I ai >» aware that by this m 1 1' of proceeding we sh,U] notI)- purlin,' w'ltt are con>iileied fydg pirt\ tietic-, bit, a c moderation of- thu kind ii in>ti!fi l ie it, complied with the ffre.it nh.\nt.v<e ni-mb'is will enjoj in liming before them the measures in their entirety, with the n ituie fully explained. We consi, ler fiat lu-ides the assistance which, through l |( cil bodies we rendered to the c iltiv.iti hi of tiir> soil by opening up the countiy with road* and bridge*, specnl nid h necessary to the goldhnkl* districts. Wo also .ire of opinion that pirticulnr encouragement should be given to the c*t iblishm^nt of fisheries all mund fie cant. The advantages of a hirdy maritin » p >;mlati >n aro too patent to nerd Comment. It only needs to be «>aid that New Zealand seems eminently destined for sucii a population, and that fisheries in it* vicinity .we believed to offer abundant inducements for the encouragement proposed. I crime now to consideration of the great body of j>erxons engaged in manufacture* of all descnptions. Wo cannot have this colony as wealthy and prosperous an it should bo if manufactures do not hold an important position amongst industries. With a good climate, abundant water nnd coal, an immense range of natural productions, nnd .separated by a wide belt of ocean from other countries, it possesses the natural conditions which should make manufacturing a success ; but the earlier stages of all industries are beset with more or le.ss difficulty, and there h no proof whatever that any particular manufacture may not be suited to the colony because in its initial stages it cannot coin]>ete with goods of tho same kind imported. Thin we are brought face to face \v ith theories which are ranged under the heads of Free Trade, and Protection, although as I hue pre\ iou-ly said old world docti ines w Inch are cmi^nsed under these banners aro quite different in their nature to those which we have to c muder. It seems impossible to prevent people dealing with the question a,s if we really had to fight out the question on the ancient field of bittle. In any case you have the right to ask the Government to frankly disclose, their views. We aro, then, dealing with neither Free Trader* nor Protectionists in tho nemo in which those t"iuH are commonly used. We do not b'>lu>\e the circumstances of the colony are such a* to mike it politic to adopt simple Freo Trade principles, which km the th-m elves i-ito giving no advantage wli ite\ or to loc il produce, and to applj ing exci^s t> cmnteivail import duties. On th ; c mtr.iry, wj think it i-. so important j th it all sections of th-j p >ptilation f>hould be pioht ibly employed, that it is iinj»u-.-.jble t> apply any th-nry tint de;»ends for its h ims on the suppositi >n that thj jMtpulati in, if it cmiiot nnd one occupation but must look to an >thjr, and Ik> c intent to contend with tho population of other c nintri >s on equal tenin, no mittei what miy bo the. condition of lab mr in those cmntri'js. On the other hand, we distinctly abjure a policy of Protection which would gne to the follower* of protected pursuits a SUto aided guarantee of success, no matter how unsuitable tho*e pursuits might he, and a policy of a kind which would carry with it a guarantee of •State directi >n implied through thousand lamihcitions of manufacturing operations would be a system unhealthy, forcing, and fraught with i>os-iible ultimite disaster. We are far from saying there aie n-it some industries which th; .State rihonlri footer but those should be c »imn mdmg, con* .spicunis industries like that of the fisherwa. The fostering should bo di-ect i>i character by a bomiii, but with regard to industries generally tho question with those who pursuo them should be, Are they calculated when the difficulties are overcome to *tnnd on their own merit and defy competition? As I ha \e said, in the natuial and logical course or tilings e\ery import should be subject to a reasonable duty to represent a contribution to the evpense of the <Jo\eminent, of the machmeiy of which the importers take advantage, but be) .nil that the Customs aie a constant mode <>t taxation cheaply collected, calcuhted to affect pcojile otherwise free from taxation, and the mcrea.se much depending on ttu \oluntary c»ntiib itmns o' the c msuiiiei<, who elect to use imported good*. It is not in the prnbib'e ntture of e\ent« that for a long period t'lo colony should c«cipe fr«>m thj iK'Cji->ty of rais ug large L'ustoii.n rmtiiiuo .uid in tixing particular it?ms, liaxing fir<t regard for revenue requireinenfH. It is quite desirable to h.ue considuiatum for tho occupitions of tho-e who .iro st ruing to mnno.int the difficulties atteudi.ig the onlioi -tag«j« of industries, but I distinctly state reg.uding the nrimary object* of Customs revenue that tariff ■•'lonld hi entirely within the control of Parliinieat, unleas in case of beet sugar, where distinct c uitract is registered, and ih it I'uili tu)''nt id do ilmg with tho tinff from ti-uo to time should not bj fettered with ninH'M tngageinents of an indirect eh tract"!, and s.iy to ln.tnufACt.ires thiough nit t!i' cnuitiy that they will be an u ist>, it they invest large mnns ii industries under tlu idea these will be c mtimiallv bolstered by tariff nrrnngeuifnts. They may reason ibly exercise judgment a.s to the probable duration of the duties which will as«mt them, but their calculations should be made on the presumption that their industues within a reasonable imrjod pan defy oompetittoQ el&ewhere, anqeven beyond ttiis, that there is a fair prospect of their being able to supply outside markets, the islands, and other countries accessible to New Zealand, open good prospect* of an extra market; and I am convinced industries of substantial character that can be carried on in New Zealand with a reasonable prospect of defying outxide comi>etition, j and of supplying in the face of competition other countiies. We shall ask for a revision of the tariff, because the present one is too complicated, and has lo»t, besides, its elastic character. One word more. We believe the Government whenI ever it can prudently do so, should encourage local in pieferenco to outside production. It should do so in the interest <>f economy, that is to say, the piospect that the local producers \\ill be able to supply much more cheaply and satisfactorily. In order to remote the niisconcfp. tion as to competing value^ imports shall nut be free from customs duties, nor from reasonable wharf ago charge, Without going at length into the nature of tariffs, 1 may wy it depends on principle of revenues. «nd in the interests of simplicity we made »m few distinction* as possible. The freo entries ate enumerated, and the ai tides not enumerated are subject to ten per cent, duty. We slightly increase the duty on spirits. We put a duty on foreign coal, and an extra duty on tea, but we do not nici ea>e the duty on sugar. It is so Useful for purposes of fruit preserving, and making jains and preierve-s that I should have been gUd t<i rqduoo (the d.uty qn it. Anothei change I need not now refer to, On the whole {he fcautf is calculated to do no mrue than restore the diminished power of alcohnho duties, and of theso with which local nidus, tries havo interfered. We have thus a .sure guarantee that if it comes upon a population ready to meet it, its effect on tho people- will be lass harsh than the tariff of 188 U. The direct and semi-direct taxation next calls for consideration. With regard to the latter, the stamp duties, wo think, require revising for increase in one important respect, but principally with a mow of surmounting the cleverness of those who, under the present circumstances, manage to evade them. The huccchh of the duties is altogether inadequate. They aie much less tha,n (jrea^ Jfy-jtain, and it cannot be alleged that in jihat oounfciy there ia an undue want of consideration for the possessors of property. We have to defeat the ingenuity of those who, with tho M ruling passion strong in death, pass the 1 last days of the lives they ha\e devoted to i the acquisition of wealth in marvellous de vices to deprive the State of revenues whi h should be p+yabjo on their decease, With regard to direct taxation, it is no uocrei that Aliniiters prefer a land and income tax to a property tax. The House and country are divided in opinion on the subject, We have come to the conclusion that a coinpromixe is necessaiy <tnd expedient. As i« thejease with all systems of taxation there is a great advantage in pu^ilu ha\ui o ' bovHijc u»ed te them. Thu,s»

wa see in somo countries the people educated to a mode of taxation which would be utterly distasteful to the denizens of other «?untri8 1 The people of New Zealand hTC«™ accused to the pioperty ta* , knd if for no other reason a gic.it deal is tjj E«S favour of retaining it. We think Kid tew modified a< to dopnve it of lonTe of the feature, that are obnoxious to the views of those who prefer a different system of taxation. It is intended to make SSJAS thin duection. The primary EaSis we wish to make a.c to provide for exemption of agricultural implements up to certain sum and also to provide for exemption of machinery up to ceitain amount. I know by this compromise I may give pleasure to a few lion membeis who are accustomed to look upon obstiancy as the highest v irtue, and are delighted when they can point to a modification of opinion on the p.irt of their opponent-,. l«or my part T ha\e a high admii.ition for a public man who has tho courage to boldly a\ow -i change m his ojnnion. rherefore if I were able to admit that I have entirely changed my views I should not dread doing so, but I mu-t not be understood to have changed my opinion on the subject of tho property tax. I look on it as unwise in principle and undesirable in its effects. I should prefei a simple land tax, in the assessment of winch the valuation of improvements was excluded, and an income ta\ if the land tax required to lie supplemented. But as I have said, a great deal of heed has to be given to the fact that people become accustomed to any sjstem of taxation after a time, be it good or bad. Again, nothing could be more oh|ecti<>nahle than a constant change from ono system to anothei, and it seems probable, if some compromise be not effected, that we shall oscillate for yoaia between the two systems of property and land tax. Again, though on income tax is in my opinion a fair way of getting at the earnings of the ]>eople, it hrn a feature of an objectionablo n.itiue, to which it would take years to become accustomed ; and I may s.iy further, as far as I am personally concerned, that whiNt 1 prefer a land tax to the complication of tho property tax, I am not insensible to the risk one runs in espousing a land tax. It is supposed that such a tax is not for income purposes but for destroying excise. I am no friend to parcelling out the land in large estates, and I hold that, as regards our disposition »f lands, we are fiee to deal with them in tho manner that is best calculated to put a numerous population on the Mill, but when wo look back at times past and remember how fiom tune to time special inducements wero offcied to rich men to buy large estates because of the m>ney"x>eing wanted, of how, ill fact, for the, s.iko of money tho public estate was frequently sacrificed, I can see no justihca tion for distiibiTtmg. bargains which, novvcvnr impolitic, were entered into with deliberation. I was an advocate of cheapening the system of land acquirement. I desired when the railway policy was commenced t.) double the price of laud exposed to free -.election. I do not think I took part in occasional hu gains which were made for obtaining largo Minis of money from wealthy purchasers, but good faith is of pi ieeless value. In the couise of time some of these estates may lie wanted for settlement, and when they aie the btate has a perfect right to take them on payment of competition, but at piesent we have millions of acres and do not require an> tinner of the kind. lam thcrefoie well disposed to a compromise which does in f ict give a I'iid tax, but it accompanies a tax on the capital value of peisc.nal instead of on the incomes of its posse-wus, I was a!»o, it may be remembered, opposed to any property tax or hnd tax, unless it was localised. Here again 1 have somewhat modified my views. If such a tax were localised, the towns would chiefly enjoy it, and thecountiy districts which inoio rcquno it would get the least. For the sake of that mutuality of interest to which I alluded, it is better the State should collect the whole and average its disti lbution. I carried last year the repeal ofhilf thepioputy tax, and Mild that I would like to do away with it all if the chantable aid could be localised. I propo«c now to return it to £ in the £ to cover the amount of charitable aid contribution, wt'i which it is still intended tha btatts should supplement local expenditme to me"ttho subsidies to local bodies, and to contribute to the increased degreeot cxpendituie. Pioperty should surely bear its. shaie of this burden. It will not, I think, bo possible to bung into force at once the changes proposed in respect to the deduction for impiovement. A fre-h valuation is brsing taken, but it can t be completed in time to aff< ct his year's expenditure. The committee are no doubt prepaied to lea in that provision will have to be, made for increased expenditme this yeai. Last yeai of sum of £fil,ooo foi mteiest on a con verted loan was -aicd to the colony l>y th- pi .c-<sof emersion. It am-B m this way. The conveision duimg INS 3 piovided foi'an cxclnnge of secuntie. in Januaiy, bat iiiten st was thiown su f n foiwaul in '81 t'nt a full year's piynient of mte-iest did ii >t como within tie >ear. The amount of mt'te-t piyab'e veaily was lvducnl by the am unit of fcli 1,000. Toe cucu-ustance >vis expluned last year, and 1 have pievioiisly this evenuu alluded to it. lhcn theio is the mcieased interest on the thud million loan and half->eai's interest on the million and a-half just issued. On the ot'ier hand, there is a reduction of mteiest in respect of the c -iiver-uon of 530 debenture h and the floating debt, and theie will bo a c iimderable saving this yeai on the £.10,000 for exchanngc for paying interest in London. Still, on the whole, the iieim:} nent chaigos show an increase, wl.ich is puiely nominal. As tho honorarium to members is t) become payable by permanent act, it has been tiansferrcd to that heidi ig for the class " Legislature, nnde< which it formerly appeared. There are other items of increased expenditure, such as that for tho Colonial Exhibition in London, for making the triennial valuation under tho Pioperty Tax Act, the usual large increaso foi education, and increased expenditure for defensive purposes, There is the expenditure nppaient for the diicct mail service, but of course there h tho revenue derived from it The English mail sorvice costs us less than formerly, but we havo not yet doubled thn posttl receipts because of two mails s month. Theiednctmnintheusc of the Biindisi mul is most satisfactoiy and we save a considerable amonrt on the cost of last yeai of the present San Francisco mail mervice.

This Year's Estimates of Expeaditure.

Tlio following «tit*ruent in tabular form nhow-i tho ottim.ttt's of r\|x>mlttmo during tho ctin cut, ycir. Thoy <iro coinpired with tiio o«im.it«M and with tlic<ictu.il expendi ture of tin-, year.

I have alre.wly explained the inoroases in the interest expenditure. I have also referred to an increase under the accounts authorising the permanent payments, owing to the honorarium being transferred fioin an actual to a constant iate. The othoi items of increase under permanent acts aio those for the payments which have to be made to the harbour boards of Westport and Oiovmouth under the acts of last year. It will bo remembered that although thono boaids weio gifted with certain endowments, the management it provided w.w Btill to remain in the hands of the I üblic Works Department, honco the full receipts are canied to the public revenue, and payments are ni.ide under the authority of the acts themselves. The reduction in the Colonial Secietary's Department is p.irtly duo to loss rate for cluntable aid. I hope if tho bill we ore introducing be ya&aod,

that the amount in future yoais will bo much less. Thoitpmsplcctoi.il and audit nUo, show a- sft\ni£. Tho Tieasmy shows a decrease on tho wliole, notwithstanding thehea\y item of £l">,000 for lovahieinor undoi the Piopoity Tay Act, and the sums sot down foi tho exhibition-. The s.-u ings „,e on H.ilaups, and on a large item of list year, exchange and commission. Tho Postal Depattment shows a considerable mcieaso, occasioned by placing the amount on the Estimates for payment for tlie direct mail sen ice with England. Although the bonuses come out of postage*, the receipts are, how on or, taken into account in tho estimate of revenue. The additions foi ordinary purposes in the Postal Depaitment becomes larger each year by increases of s.iliry only for cadets and clerks, of £10 nn salaiw- less then £120 a-year. The Cuatoms Department has increased the expenditure for a new ste.im launch at Auckland, ,md for a few othoi items, including expenditure on iepairs to tho Hmoinoa and Stella. In Stamps tlieie was .1 sm.ill saving on lnsit year. Tho Education Department shows the usual increase for capitation allowances. The Native Department increase is more seeming than real, borne portion of the cxpc-n.litiue last year was chaiged to the civil list. [The remainder of the Statement had not armed when we went to pies<. .it (> a.m.]

"::;:!:-•'• : •{ > uhosx -i ~. -< 4- w ia »-» ~ ' ?• 1 ►]>•>•>> ion^ o1o 1 g-SSSSIggg-g-sif. |S.x t ' '• 1 ..I ... * 5 w r h- w 03 - M >-m

Summary of Services Chargable to the Consolidated Fund 1885 86, 1884 85