D.—l.

these formation works, in the event of its being necessary to provide work for the unemployed, and I have therefore shown the amounts authorised, as proposed to be expended over the present and next three years accordingly, in the event of such expenditure being requisite. Depaetmental Expendituee. In connection with our future proposals to gradually reduce loan expenditure on all classes of works, it will be necessary to .correspondingly reduce the departmental expenditure, which was £30,156 for 1884-85, £29,632 for 1885-86, and £25,835 for 1886-87. The expenditure for this year will be about £25,000, which is somewhat short of 4 per cent, on the portion of the loan expenditure under the control of the Public Works Department proper ; and, on same basis, I think it is probable that the expenditure for the next three years could be reduced to £20,000, £15,000, and £13,000 respectively, making in all for the four years £73,000. It is also intended that this expenditure should be charged proportionately in accordance with the amount of works under the control of the department in each of the several subdivisions of the Loan Fund, which would give, for the four years, £13,000 chargeable to Part 1., £15,000 to Part 11., and £45,000 to Part 111., making in all £73,000 as before. Public Woeks Estimates. As regards the general shape in which the Public Works Estimates will be brought down, I have not found it desirable to alter the form recently in vogue, with one exception, namely, in respect of the Estimates for the North Island Trunk Eailway, the amount required for which has hitherto been voted in one lump sum, to cover construction works and surveys of all classes at both ends of the line. In that case I have made an alteration, as it seemed to be desirable that .full information should be given as to the expenditure at each end of the railway ; firstly, on railway works proper, and secondly, on roads; and also that separate information should be given as to cost of surveys as distinct from construction works. I have therefore now divided the estimates for this line into the several items of "Departmental expenditure," " Eailway construction" (north end and south end), " Permanent-way and rolling-stock," " Surveys," "Eoads" (north end and south end), and "Purchase of Native lands;" but as regards the roads, as I have already mentioned, no further road-works are intended to be undertaken under the loan for this railway. The votes proposed for road-works are therefore merely sufficient to cover the liabilities already incurred with a slight margin for contingencies. Conclusion. Finally, Sir, I would wish to state that, in approaching this task of dealing with the Public Works expenditure of the colony, the Government was convinced that, however much the construction of public works may have tended to develop the country generally, and also to meet the demands of growing settlement, it was nevertheless evident that our rate of expenditure in the past has been more than the colony could well afford, and that the time has come when we must materially curtail it. With that object in view we prepared the proposals which I have now had the honour of laying before this House, and I may say that throughout the whole of this allocation our object has been to do justice to all concerned, and to endeavour, where practicable, within the limits of the funds at our disposal, to avoid stopping ruthlessly any works on which the expenditure already incurred would be altogether thrown away, or which would yield a reasonable percentage on their cost if completed as hitherto intended. _ To the best of our belief these objects have been attained by the allocation which I have described, and we now therefore lay it before Parliament, in the full confidence that honourable members will aid us in carrying these proposals out, in the interests of the colony as a whole, at whatever sacrifice it may be to their individual districts. Taken as a whole, the chief feature in our proposals is to steadily reduce expenditure under loan from, in round numbers, £1,100,000 per annum for this year, to £300,000 per annum for the third year from March

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