THE FINANCIAL STATEMENT.

Waikato Times, Volume XXXII, Issue 2646, 27 June 1889, Page 2

THE FINANCIAL STATEMENT.

Ok tho House going into Committee of Supply this evening the Colonial Treasurer, Sir H. A. Atkinson, delivered the Financial Statement its follows: —

Mr Hamlin : The accounts of the last financial year have boeu already published, anil honourable members are in a position to know that the task before mo this evening, though, not of comse without difficulties wf its own, is a far more pleasant one than either of those that fell to my lot on the last two orcasions, when it was my duty to present the annual Budget t.. this committee. GENERAL REVIVAL. Our trade is reviving, our foreign markets have much improved, and our industries, larse and small, with hardly an exception, show increased activity and steady progress. The policy of retrenchment and strict economy, sanctioned by Parliament in 1887, and since carried out by the Government, to the best of their ability, has produced tho result which, sooner or later, was bound to follow, and I have to-night the pleasure, unusual for somo years past, of announcing a surplus. A SURPLUS, That surplus is not indeed a very large one, but it is a surplus, and those only who have really entered into our financial difficulties for the last few years, and felt the responsibility of helping to meet them, can appreciate to the full extent the satisfaction of again finding the balance on the right side of the account. Tho committee, I am sure, will feel as I do, this satisfaction, and will at the same time join with me in the caution that we must new be doubly careful lest, with the return of increased prosperity, there should be any return of any unwise or unnecessary expenditure. ORDINARY REVENUE, 1888-9. The estimated expenditure for the year 1888-89, including the votes taken upon the suppliniontary estimates and charges under special Acts, amounted to £4,084,054 ; tho actual expenditure was £3,977,205 ; there was, therefore, unexpended of the amount authorised £100,789. The non payment of any balance of subsidy due to local bodies arises entirely from their neglect to make application according to law. Honorable members will observe under clauso 8 (Education) that one vote—Public Schools—has been exceeded by £0,000, and that an underissue of nearly £7,000 has occurred on other votes, chiefly'for school buildings. For the first time m our finance, the vote for last year for school buildings was charged entirely against the Consolidated Fund. The total revenue estimated to be received during the year 1888-S9 was £4,102,400, the actual amount received was £4,055,034. The customs duties yielded less than the estimate by about £55,392. This will not probably surprise members ; it is not an unreasonable margin of error taking into account tho complete revision of the tariff. RAILWAYS, The railways also yielded less than the estimate by £38,803 ;'but this was counterbalanced by a reduction in the expenditure of a still greater amount. The net revenue was £300,000 instead of £358,102 as estimate. STAMPS. Stamps appears to have yielded more than estimated by £14,329. Registration and other fees fell short of tho estimate by £8,273, but the estimates included £11,538 for rates under the District Railways Purchasing Act, which, however, through the failure of the Bill introduced last year, did not come in. The only item of exceptional revenue is tho sum of £18.000, profit earned by the Public Trust Office year by year. Of this amount £2,507 was earned last year. LAND FUND. The estimated expenditure of the Land Fund was £127,423, the actual expenditure was £119,490, being less by £7,927. £23,330 was paid to local bodies in respect of receipts from deferred payments and perpetual lease of land, and £15,490 for rates on Crown lands. The estimated revenue of tho Land Fund £119,000 ; the actual receipts wore £108,000, being £10,993 less than estimated. The amount received for land sold for cash was £11,00S more than estimated, for deferred payment, £22,000 under tho estimate. The deficiency is owing to perpetual lease tenure being preferred, and chiefly because payment of instalments dun was not enforced in fulfilment of a promise to Parliament, consequent upon tho rejection by the Legislative Council of the Fair Kent Bill. The Government have had all these holdings re-valued, and steps have been taken to recover amounts due upon the new valuation. This question is surrounded with difficulties, owing to the land having been taken up, in many cases, at far more than its value for cultivation, and the very low rates ruling for agricultural produce during the last few years. SETTLEMENT. The Committee will bo glad to learn that more settlement has taken place upon the Crown lands, and bv bona, fide settlers during the past year than during any years since 1881. 55,188 acres of land were taken on the deferred payment system by 355 selectors; 201,042 acres on perpetual lease by 705 selectors, and 70,987 acres by 053 cash purchasers. This is a highly satisfactory record, and shows that, despite tho temporary emigration of some of our population, out people have not loosened their real hold upon this fine ceilony; but, on tho contrary, have taken a firmer grip, by 1,773 of them becoming proprietors of 330,817 acres more land than was held the year before. FINANCIAL RESULTS OF THE YEAR. I have said that the total ordinary revenue received was £1,055,034, and that the total ordinary expenditure amounted to £3,977,205 ; there was, therefore, a surplus for the year of £77,709. This includes the primage duty, amounting to £10,132; and I have, in accordance with the declared intention of the Government, and the implied sanction of the House, paid.off £50,000 of Deficiency Bills issued last year to meet the balance of tho deficiency on the 31st March, 1888. The committee will, I am sure, think it a not unsatisfactory result of tho efforts to live within our means that the colony has not only raised within this year enough revenue to meet the whole of tho necessary | ordinary expenditure, but has also been able to pay off £50,000 of debt, and still have a small surplus. LIABILITIES. The liabilities on 31st March last exceeded those of the previous year by £10.154. The liabilities of 1887-88 were, however, exceptionally low, far bolow the average of previous years. The average was £100,000 being about £24,000 more than tho amount of the liabilities on olst March last. There is u small deficiency of £11,459 in the Land Fund Account, and this will be certainly made good during tho current year. Such, then, arc the results of the year, and I venturo to think they are results with which the colony may well be satisfied. All this has been accomplished with a largo decrease in the Public Woiks expenditure. THE PUBLIC DEBT. The gross public debt on the 31st March, 18S8, was £30,758,437, on the 31st March, 1889, it was ,£38,375,050, but deducting the Sinking Fund accrued (£1,395,389) the net debt was £30,979,001. as against £35,545,010 on 31st March, ISSS. The addition to the permanent debt was £1,010,013. Though borrowed, the greater part of this sum was not spent, but remained in hand to the amount of £1,357,090 on tho 31st March last. The Treasurer then enumerated the Loans paid off, and Debentures redeemed during the year and renewal of loans under the " Consolidated Stock Act, 1884," by short dated debentures for £299,500. THE PUBLIC WORKS FUND. Honourable members are aware that for reasons mentioned in my last financial statement, and which is unnecessary further to refer to tho Public Works Fund now consists of three separate and independent accounts. No. 1 account The balance at credit of this account on ttie 31st March, 1888 was £200,301, including £150,000 temporarily raised under the Loan Act of ISB7, in anticipation of the £500,000 authorised by that Act. That Act was repealed last session by a now Act, similar in all respects to the one repealed, except that the section containing the error was omitted. The loan was floated last year, and the account credited with £500,000. The expenditure during the year amounted to £210.258 fur public works and £25,75S for charges and expenses of raisins the loan, leaving an unexpended balance of £303,891 at credit of this accounton the 31st March last. The principal items of expenditure were: — KoatU. £101,031 ; public l.uildnv.'s, £34.592 lighthouses, harbour woiks and defence, £52.593; telegraph, £12 017; i't.!ier sen ices. £30,391. 11l addition to the balance of £303,891 theie is an available asset under "The. '1 >wrnliient Loans to Loc.il Bodies An!, 1881)." which authorise- tho into a liability under that .Ait of i!e! en!nres given by loml bodies to Mr Tivasuiy for advances out of the Public Woiks Fond, under "The Ro:nis and Bridges Construction Act, 1882," of £87,974, which, with the balance of £303,891 at credit made £391,775 iivuikibltJ for expenditure subject '

to liabilities amounting to £105,273. No. 2 account: The North Island Main Trunk Railway Loan of £1,000,000, authorised in IKS-', was raised last year in conjunction with the million loan. In anticipation of the loan there had boon expended up to the 31st March. 18S8, £■!?«,000, le.-ivmsc a t».,1-alien alien ot £522,000. Lisl. year there was expended £Bli, 184, including £51,788 for charges and expenses .if raising the Joan, leaving an unexpended balance of £435,508, subject to outstanding liabilities aoiountiut' to £28,972. No. 3 account: At the 31-t March. 1888, the balance at the credit of this account was £510,241. The amount available for expenditure, including tho balance at the beginning of the year, was £890.244. The unexpended balance is £1)18,078, subject to liabilities amounting to £174,31)1. SUMMARY. The balmcs of the Public Works Fund as a whole on the 31st .March, ISSB, including the loans authorised but unraised, amounted to £1,008,035. During the year this amount was augmented, making a total of £1,091,001. The expenditure on p.-blie works, including all charges, amounted to £033,305. The balance left at credit on 31st March, 188!), was, therefore, £1,357,000, to which I add the assets of £871,974 referred to in my remarks on No, 1 account, making together £1,415,070, subject to £308,039 of liabilities. LOANS TO LOCAL BODIES. During the past year a sum of £75,000 was borrowed by the Treasury to make these loans, bringing up thet )tal amount so borrowed, to £200,000 on tho 31st March, 1889, and a further sum to the amount of £8,347 was handed over to local bodies making a total of £192.310 paid during the year. Refunds to the Tiewury amounting to £940 were made under Section 17 of the Act, which provides for repayment of moneys borrowed in excess of tho sum required to complete any public works. The balance at credit of the account at the close of the year was therefore, £8,024; the engagements of the Treasury at the same di tfl in respect of these loans amounted to £25,920. In April local bodies were informed that a Bill would probably be introduced in the coming session with a view to increase the rate of interest payable on loans made during the current financial year, and loans provisionally granted would, if accepted, be subject to such additional rate of interest as six per cent. ESTIMATED EXPENDITURE FOR 1889-90. Ordinary revenue account : I now come to the consideration of the expenditure and revenue of the current year, and according to custom, I iirat deal with the expenditure. The estimated ordinary total expenditure is £4,117,331; of this £1,013,205 is for interest. Honorable members will bear in mind that of the £1,888,405 which appears as interest and Sinking Fund although charged against revenue, is recovered to tho Consolidated Fund by the issue of debentures under the Consolidated Stock Act of 1884. It is very necessary to remember this fact, as the larger sum is often spoken of as tho amount of annual interest we have to pay, and our financial position is assumed to be worse than it really is. Full details of the expenditure will be found in the estimates, which will be in the hands of honourable members immediately. I may call attention to the increase in tho Education Vote, which is necessitated by tho usual annual increase of children of school age; the estimates also include £25,000 for school buildings. Wn have increased tho salaries of officers receiving less than £200 a year by a total of £4,522, and of officers of higher grades to rectify inequalities by £1,005 ; and have also increased the expenses of the Native Land Court by P. 200 to enable tho court to compote with the large increase of work coming before it. Notwithstanding thoso increases the proposed expenditure under the thirteen classes annually voted is £3,933 less than tho amount granted last year. Provision is also made for the continuation of the subsidies to the local bodies at the same rate as last year. The total estimated expenditure is £1,239,331, being £4,117,331, chargeable against tho ordinary revenue, and £122,000 against the Land Fund. EST! MATRI) REVENU E. Assuming the present taxation to remain unaltered, I estimate that we shall obtain for t lie year 1889 90 a revenue of £4,187,800. This includes tho estimated sum of £275,200 for Sinking Fund, and then recouped to the Consolidated Fund by the sale of an equivalent amount of debentures. Customs, £1,550,000, I have reason to expect they will reach that amount, but trade has not yet become entirely settled. It is impossible to make a very accurate estimate, and I wish to guard myself by pointing out the difficulties under which my esiimato is made. An increase to the railway revenue is anticipated to the extent, of ,£28,500, but as the expenditure is estimated at £18,S00 more than last year, the net revenue receivable is only increased from £300,000 to £370.000. It is natural and right that the commissioners should not take too sanguine a view of affairs, but I certainly hope the result of tho year's working will prove to be larger than they anticipated. There is a satisfactory increase of £30,083 under 1 the heading of depasturing leases and rents. I will presently make a few remarks about the Property-tax which it is estimated will yield, under the new valuation £10,000 less a year upon the present penny rate. The land fund is estimated to produce £131), 100. Kstimated results of the year 1889-90 :—I estimate to receive a total revenue of £4,323,900 against a total expenditure of £4,239,331, but excluding the land fund from both sides of the account we get a revenue of £4,187.800 against an expenditure of £4,117,331, thus showing a balance of £70,409 at the end of the year ISB9-90, if my anticipations are realised. But to this amoui:t I add what is left of last year's surplus, £27,709, and get a surplus of £98,235, of which £55,000 will be applied to tho further redemption of the floating debt, leaving a sum of £43,238 at the end of the current year. PROPERTY-TAX. I have said that the tax will yield about £10,000 a year loss. This arises from the falling off in the reputed value of real property. There has been a fair increase in the value of personal property but, as honorable members know, there has been a considerabable fall in tho reputed value of real property. Speaking generally this fall, although in one sense to bo regretted, is, I venture to think, on the whole nothing but advantageous to the colony at large, for we know the price of land ruling throughout most parts of tho colony was for a time and to a considerable extent its speculative value rather than its value for use. We may well put up with a temporary loss of revenue, caused by a return to a more wholesome state of things. I promised last session to consider carefully this question of the Property-tax during the recess, and to give the House ail early opportunity to discuss tho matter. The Government propose certain modifications, which will require legislation to give them effect. I propose to introduce the necessary measure to give effect to the proposed alterations in the course of a few days, and to ask for its early consideration. I may hero state that wo propose to exempt fioin the tax all machinery which, however, will be strictly defined, and to allow any owner or the Property-tax Commission to have properties re-valued under reasonable restrictions without awaiting tho triennial period. The fall in uew valuation will cause an estimated loss to the revenue of about £20,000, but the Government do not propose to ask for any new tax to meet this failing off, hoping there will provo to be sufficient elasticity in the general revenue to make it good. I do not now propose to enter into any arguments in favour of tho Propertytax or the remission proposed. THE TARIFF. I have had a series of tables prepared for the information of honourable members, showing the results of tho ten months of the year in which the tariff has been in force in imports and duties as compared with tho imports and duties of the corresponding months of the year ending on the 31st March, 1888. I can see it is unfortunately impossible at present to deduce any law or even find any satisfactory argument as to the effects upon trade and industry produced by tho tariff. I may point out that the tariff has been successful ill producing the revenue required of it. OTA GO CKNTRAL RAILWAY. In visiting it I was very much pleased with the country, and came to tho conclusion without any doubt, that the railway uutrht to be continued if it. could be done without iutraetion of the policy we are all agreed on, tb.'it is withrut recourse to anew loan. Wi' think it can be done, and a Bill to give effect to our proposal of at one 3, coiitiiiuins: the line will be submitted fir the consideration of Parliament. MIDLAND RAILWAY. The Midland Railway Company have r.ow rai-ed throe-quarters wf a million ns a further instalment of tlieii cu i'al : this, it is estimated will enable them to make the stipulated expenditure at the Springfield and Nelson ends of the iine,- and to continue the line to Reafhm and towards Lake Bruuuei on the West Co:«t, It is matter

for congratulations that this important work, colonial in its character, is now to bo pushed forward with vigour. VILLAGE SKTTI-EJIESTS. A m ist instructive return has been prepared, and will be laid upon the table of the House, giving much interesting details of tho settlers and settlements, and the general conclusions to bo drawn from our past experience is that village settlements supply a wank if formed of a small number of settlers in a neighbourhood where some work can be conveniently obtained, where '* Vno land is of good quality, and most important of all where the settlers are of tho right sort. WORKS IN TUB NOHTII. The "Minister for Public Works, in his statement, will say what we propose with regard to the Main Trunk Line, north of Auckland. He will also make a proposal with regard to tho Puhipuhi kauri forest. •STATU AND ntOSFEm 01' THE COLONY. I will now, Mr Hamlin, with tho permission of the Committee, call tho attention of honourable members to some prominent and important facts relating to the condition and prospects of tho colony. Tho colony has lott by emigration, during tho last two years, 'J,580 people; that is to say, 9.550 more people left than arrived in New Zealand. The Government recognised it as a duty to find a remedy if one was to bo found, but I came to the conclusion that, in the circumstances of this colony and the neighbouring colonies, no remedy was possible that we could consent to apply for. The only effective remedy, in my opinion, was the'continuance of a large public works expenditure. It is evident, I think, that during the many years that we have been continuously spending very large sums of money on public works, not tho general Government only, but the local bodies also, a numerous class has sprung up who have been relying on the public expenditure as a means of livelihood, and many of whom do not care to live the life ot an ordinary settler, As our expenditure on public works decreased so the tide of intercolonial migration turned against us. Our expenditure out of loan for work done in the colony durintr the year lS8(>-87 was in round numbers £1,110,000, and Ifor the year 1888-89 .t 123,900, so that we have been spending during this last year at the rato of £717,000 per annum less than we were spending two years ago, There is no doubt that the recent exceptional discoveries of gold ar.d silver in neighbouring colonies, and tho extraordinary prosperity which the colony of Victoria has enjoyed during the last two years, the same period during which wo have been making the large reduction in our public works expenditure, have also tended in a marked degree to induce many persons who do not or perhaps cannot afford to look very far ahead to try their fortunes on the other side. I have, therefore, come to the conclusion that the loss of a small percentage of our population was inevitable when we began seriously to contract our large publicworksexperidituro, and that looking at the circumstances of the case, we have passed through the ordeal remarkably well. To the reduction of public works expenditure is also largely traceable, a reduction which has recently taken place in our railway traffic, and it is satisfactory to find that this is so, rather than that it should be due to a falling otf of the legitimate international trade of the country. Honourable members will find attached to this statement a table showing in detail the exports for tho last two years. From this it will be seen thatin everyarticle of importance, with one exception, there has been an increase during the last year and in many of them largo increases. The export of grain has increased from 3,(130,843 bushels to 5,581,4,:18 bushels ; grass seed from 104,550 bushels to 271,772 bushels ; frozen meat from 4!>,3U3,S7iSlbs to (J3,003,4721b5, and it needs no prophet to say that this important industry will only leach its limit in quantity and in price, when some efficient organisation for its sale and distribution shall have been established in the United Kingdom. Butter has increased from 2,272,02011)3 to 3.(531,37(i1bs ; cheese from 3,3K1,(511i1bs to 3,731,8:101b?, and sawn timber from 33,791,'192 feet to 41,219,810 feet. The flax industry m.iy be said, practically, to have sprung into existence during the last year, tlio export having increased during that period from 1,812 tons to ">,003 tons, and it is still rapidly increasing every month. The valuo of tho excess of exports, exclusive of wool, last year over those ol the year before may be taken at not less than £992,000. It is also satisfactory to know that the quantity of wool locally consumed in our mills has increased from 2,001,155ib5. in 1887-88 t04,079,5(i31b5. in 18SS 89, and this increase must bo set off against any decrease ot exports. The staple exports for the year 18S7 S8 were of the value of i' 0,415,815, while those for the year 1888-89 were £7,315,185. 11 will be seen to what a magnitude some of our industries have already grown, while as to the quality of their products we have ample proof that they are steadily and deservedly gaining in public favour and that a largo number of the articles produced would do credit to any country in tho world. Tho Mining Industry, I ain happy to say, is in a more hopeful condition than it has been for some years, the yield of gold for tho year ending on tho 31st March last was 205,002 ozs., as against 191,001 ozs. for tho previous year. Machinery and appliances are being constructed, some of which are in operation for working the auriferous beaches of the Middle Island, and from trials alroady made are believed to be likely to prove successful. It is hoped the machinery and appliances ir.tioduced for tho reduction and treatment of ores will solve the question of treating successfully the refractory ores of the North Island. Our coal mines are being gradually developed ; the output last year was 013,595 tons as against 5-~>8,(520 tons for the previous year. Further extensive works in connection with this industry are contemplated, some of which are in progress and when completed a largo increase in the output of coal may be expected. The thrift of tho colony, which is represented by the assets of Friendly Societies and Saving Banks, is steadily increasing year by year according to tho last compiled tables. I append a very interesting table I have had prepared, showing a remarkably steady increase since 1880, both in the number of depositors and in the amount deposited in the Post Office Savings Bank, and 1 would particularly draw the attention of tho Committee to this instructive tact that the number of persons having deposits in the Post ()lfice Savings Bank not exceeding ,I'2o increased from 57,3158 in 1880 to 00,043 in 1887, and to 02,831 in li-88, and this is irrespective of similai small deposits with tho savings bank established under the "Savings Bink Ac-, 1858." The progress of tho Government Insurance Department and tho position of its policies and business may be viewed as affording further indication of the condition of that class of colonists (and it is a large one) who exercise prudent care and forethought for themselves and their families, This coupled with the facts I limi. civeu concerning the Savings Bank and F iond y Societies means two important things that in the meani of savings and the will to save the people of New Zealand are, at least, not behind their kin in otliei parts of the world. oun CREDIT. The last fact I will mention is an important one, tho greatly-improved credit of the colony in London. I will give only a single instance : Eighteen months ago our 4 per cent stock was selling rather heavily at 9(5J- ; it is now worth from £105 to £10(5 with an inactive tnarkot, I venture to think we shall seo a further rise when our true present position comes to bo fully known, and a fair and unprejudiced comparison is made between New Zpah.ud and the other Australasian colonies. CONCLUSION. Til concluding, Mr llamlin, I would say that in, giving prominence to those encourag<Wn}f facts, I desire again to impress on honorable members what I said in the beginning of my statement, that our public expenditure will still require the most watchful care. My object has been whilst drawing attention to many satisfactory evidences of increasing production and improved values to lead to the cou-.lusion that it is by such means, aided by public and private economy rather than by large public expenditure, that the permanent prosperity of the colony will be secured. That, sir, is all I have to say. I have, I believe, laid before the committee all the information needed to enable honorable members clearly to understand the financial position 1,1 (he colony and to judge of i'.s substantial and most satisfactory progression, e-iptcii lly in tho occupation of the land and I h ■ si, a 'y, 1 might say rapid, development ot its inoustri il enterprise.