The Lyttelton Times. WEDNESDAY, SEPTEMBER 4, 1867. GENERAL SUMMARY.

Lyttelton Times, Volume XXVIII, Issue 2092, 4 September 1867, Page 4

The Lyttelton Times. WEDNESDAY, SEPTEMBER 4, 1867. GENERAL SUMMARY.

The General Assembly has been in session for eight weeks, and the battle of tho Budget has not yet been fought out. At the date of our last summary the Ministry had already met and defeated two asaaulta of the Opposition, chiefly through the impartial conduct of the Canterbury members, who, throwing asido mere political arms, voted on the merits of the questions. Since then they have gained another victory, and sustained a signal defeat, the former on a comparatively unimportant point, the latter on what was looked forward to as likely to prove the battle-ground of the session. "When tho debate on the Otago goldfields question took place the Government secured several votes by promising that a bill should be brought in to enable the Government to delegate the powers undor the Goldfields Acts to the Superintendents and Executive Councils of the provinces. By-and-bytho bill made its appearance, when it was found that instead of tho unreserved delegation promised by the Premier, the power of Superintendents and Executives was seriously interfered with, inasmuch as the General Government claimed the right not only to fix the salaries of all goldfields officers, but to make these salaries independent of the local authorities. This they did by declaring thein to be a first charge on the provincial revenues. After a stormy debate, in which the whole of the Ofcago question was again dragged before the House, Ministers announced their intention to make the obnoxious clause a Ministerial question. On a division they had a large majority. This was the victory to which we have alluded. The defeat was on the Local Government Bill, the measure, par excellence, by which the Government policy was to be distinguished during the present session. The bill was a very pouderous affair, containing upwards of lour hundred clauses, and its fate was not doubtful from the moment of its introduction. Briefly, it may be described as a permissive bill, by which the outlying districts of any province were encouraged and even bribed to place themselves under the control of the General Government. "From this description, it will be obvious that the bill aimed directly at the most vital part of Provincial institutions. Its rejection by a majority of nine proves that the Provincial •or Constitutional party ig in the ascendant in the House, and that no attack on Provincial institutions, be it bold and open or insidious and masked, can be expected to succeed. From the flourish of trumpets with which the incubation of the Local Government Bill was announced at the close of last session, and from the great expectations which the public were led from time to time throughout the recess to form regarding it, members not in the confidence of the Government very naturally expected that it would be made a Ministerial question. Nothing of the sort. Ministers were rather ashamed of their « big baby, and praised it in a half-apologetic tone. They begged that it might be allowed to pass the second reading, for the purpose as they declared, of affirming the principle that the outlying districts of the various provinces had been and were badly dealt with by their local governments, and that it was necessary to do something for their protection. They were quite willing to submit to any modifications in committee, and to . expunge objectionable clauses. But a majority of the House was decidedly opposed either to the way in which the , principle of the bill was affirmed, to j the principle itself, to the remedy pro- , posed, or to the machinery for, carrying the remedy into effect, or to all four, | and the bill was thrown out. Seven : , Canterbury members voted for, and four against the second reading of the ' Local Government Bill, and wo can ' account for the conduct of the formei i only on the supposition that 'thej hoped to render the bill innocuous to Provincial institutions by extensive modifications in committee. TheFinancialStatement was brought before the House by Mr Fitzherbert on August 22, in a five hours' speech. The long experience, distinguished ability, dexterity, and exquisite tact of the Colonial Treasurer are abundantly displayed in almost every paragraph, and we rise from the perusal of his Budget speech with mingled feelings of admiration, dissatisfaction, and distrust. If to smooth over difficulties, disarm anticipated assaults, and sow dissension among the Opposition be the chief aim of a New Zealand Treasurer, it must be admitted that Mr Fitzherbert has succeeded admirably. But there is a want of candour about the statement as a whole, and a disinclination to recognise the true position of the colony, which at once create uneasiness, and eventually distrust. Mr Fitzherbert prophecies too many smooth things, and hardly admits, even by implication, the real state of affairs. The Statement is ingenious, but not frank; clear, but not strong; comprehensive, but not free from petty contrivances unworthy of the colony. It exhibits an extraordinary generosity towards the North, and. a corresponding demand on the liberality and forbearance of the South. It is calculated to defeat opposition, and to extort the sanction of the House without giving satisfaction to any one. Against an estimated revenue of £1,084,000 for the financial year 1867-8, Mr Fitzherbert places a proposed expenditure of £744,178, exclusive of Provincial appropriations. The taxation of the colony is not increased, but neither is there on the other hand' the slightest attempt at reduction. ,The two sides of the account are bo nicely balanced, and the revenue is so obviously calculated to the uttermost possible farthing, that a very slight derangement will place the Government in difficulties at the end of tho

financial year, and compel them to raise a new loan. Mr Fitzherbert'i scheme of finance embraces several new features. The Colonial revenue" from whatever source derived— ei' elusive of course of the land f u J of the Beverai provinces-will h ence . forth be called the Consolidated Revenue of the colony, and the General and Provincial Governments will 8| iar9 it in equal proportions. The loans of the provinces will be guaranteed by the General Government, but the charges on account of them will be deducted from the sh ar9 of the Consolidated Keveaue to which the provinces becomo entitled To illustrate the new scheme of finance wo will suppose that the Consolidated Eevenueraised in Canterbury.exclusive of the land fund, is £250,000. The Provincial share would bo £125,000 • but, before any part of this is handed over, the General Government will deduct the departmental expenditure charged' against the province, and amounting in Mr Fitzherbert's detailed estimates to upwards of £48,000 as well as the interest and sinking funds on the consolidated Provincial loans probably £30,000 more. Should the share of Consolidated Eevenue to which a province is entitled under the new arrangement not bo sufficient to meet the departmental eipenaes charged against it and the interest anj sinking fund on its loans, the deficiency will be made a first charge on the land fund. In the financial year 1865-0 and under the arrangemont by which the provinces considered themselves entitled to three-eighths of the Customs revenue raised within their territories, Canterbury received upwards of £83,000, which was less than her share j under the new arrangement it does not appear that Canterbury will receive so much. At the same time the Provincial Treasurer will not have to provide for the interest and sinking fund of the loans. The only advantage of the new scheme, so far as we are yet in a position to judge, lies in the fact that the provinces wiil henceforth receive a fixed instead of a fluctuating and uncertain share of the revenue; that is, those provinces which, after the charges we have enumerated are deducted, become entitled to any share whatever.

The consolidation of tlie Provincial loans is another prominent feature of Mr Pitzherbert's financial statement. He proposes to raise, from time to time and as necessity arises, a new Colonial loan for the conversion of Provincial debentures at a fixed rate, and within a given time. The security offered to the public creditor is, the whole Consolidated Eevenue of the colony. In the case of a province whose share of this revenue is not sufficient to meet the interest and sinking fund on its loanß, the General Government will, as already remarked, make up the deficiency from the land fund. In any case, the position of the Provincial creditor is decidedly improved, while those provinces which are really solvent musk derive a very considerable benefit. The provinces will not be permitted any longer to hawk their loans, or to undersell each other, and so ruin the credit of the colony. Mr Pitzherbert's liberality towards the North is only equalled by the pertinacity with which he reminds the South that the compact of 1856, by means of which it has enjoyed the unreserved control of its "land fund, was a remarkably fortunate and paying bargain for the Middle Island. While admitting that "a bargain is a bargain all the world over," and declaring that the North has no intention of denying the obligations of the compact, Mr Fitzherberfc continues to cast it ungraciously in the teeth of the South—forgetting, apparently, that it was entered into at a time when the North wa3 in a position to dictate terms —and to intimate his belief that under certain conditions, an assault on the territorial revenue of the South ig is probable as it would be defensible. By a mere stroke of the pen, Mr Pitzherberthas forgiven the Northern provinces a debt under the Loan Allocation Act amounting in the aggregate to upwards of £244,000; in the case of Auckland alone he consents to forego close on £287,000. On the principle that it is as well to wipe out a debt which there is no hope of recovering, the conduct of the Treasurer is quite comprehensible; but it ought to be very clearly understood that in allowing this large sum to be cancelled, the South is again acting in a spirit of chivalrous generosity towards the North. To talk of it as a matter of justice is simply to misuse the English language, and to insult the donor while exacting his bounty to the last farthing. But Mr Pitzherbert, while extending this large sum with one hand, thrusts in the faces of the Middle Island members the compact of 1856 with the other, blandly telling them meanwhile, that " a bargain is a bargain all the world over," and that although the North raight.itwill not attempttosetaside this particular bargain. It is apparently more profitable for the North to observe the terras of the bargain; and, ' on the plea that it was a remarkably good one for the South, to levy occasional black mail under a threat of putting an end to it. Mr Fitzherbert proposes, by means of what he terms" an unusually pretty transaction," to adjust the outstanding claims between the General Government aud the provinces under the Surplus Eevenues Act. It appears that the provinces stand indebted to the General Government in the sum of £183,000. To merely wipe out the debt, says the Treasurer, would not be fair; it would be acting generously towards some provinces at the expense of others—as if he had not already proposed to do the same thing_ on a much larger scale. The case of Marlborough he is prepared to regard as exceptional, and to cancel the whole of its debt to the General Government, amounting to £12,000. Divided equally between "Wellington aud Nelson, this sum will reduce by so much the debt of these provinces. Canterbury, whose debt to the General