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THE COLONIAL TREASURER’S FINANCIAL STATEMENT.

♦ Per our Special WireThe following is the financial statement delivered by Hon. the Colonial Treasurer to-night The difficulties and dangers of the position into which we have permitted our finance to drift are admittedly so great, and the time at the disposal of the Government has been so short, and so broken, that I feel confident I shall have the sympthy of lion, members when I ask the Committee for as favorable a consideration of the proposals I am about to submit as may be found compatible with careful criticism and a full discussion of their merits. Sir, I think that all those who have given any real thought to the question of our present financial condition must have come to the conclusion that it will be impossible to surmount our monstrous difficulties and escape the dangers of our position without something like a complete remodelling of our finance, both general and local ; without careful adminstration of Ministers ; and without the exercise of much thrift and self-denial on the part of all classes of the community. The period of the session at which we have now arrived renders it impossible to properly consider the whole question of our finance. This year my unfitness for the responsible position I have the honor to hold would be at once manifest if I were to pretend to be capable, in the short time I have been in office, of maturing and submitting in detail so complete a financial policy as the Government believe to be practicable and necessary. I shall, however, Sir, endeavor to indicate clearly the general scope, and to give what I hope the Committee will consider sufficiently full details of such parts of it as we think possible to deal with this session. But first it will be necessary that I should recall to the mind of the Committee our present financial position—l venture to say one unparalleled in the history of the colony ; for, with abundant national resources, with excellen' credit, and with an increasing ordinary revenue, notwithstanding great commercial depression, we find ourselves reduced to such a position as to cause the greatest anxiety to all true friends of the colony, an 1 to necessitate important measures of financial reform involving large additional taxation. POSITION OF THE CONSOLIDATED FUNDS EESTATED. In the speech which I had the honor to address to the House on the 14th of October Last, I si owed that the total expenditure within, and on account of, the year 1878-79 was £4,006,961 ; and the total receipts amounted to £3,875,137, including therein the surplus of 1877-78, amounting to £116,844 ; and the assets of the year 1878-79 amounting to £6,996 realised since 30th June, .1879, and that the transactions of the year ended by leaving deficit of £131,824. Notwithstanding the fact I have just mentioned, that wo began with a surplus of £116,844, 1 showed that the deficit of £131,824 would have been £50,000 less had the Land Tax for the half year been collected within the year ; but I did not mention, as perhaps I ought, that bills taken on account of , the sale of the old Supreme Court site, and the reclaimed land in Wellington, and amounting to £82,544 were included in the last year’s rerevenue account. Of this amount £33,114 has been paid, and £49,409 remained still outstanding. I found these bills credited to revenue in the treasury accounts, and did not therefore disturb the arrangements, although I am clearly of opinion that they should not have been credited as if the amount had been received in cash. Of course, but for this mode of treating those transactions, last year’s deficit would have been £214,348 instead of £131,824. This, then, was my starting point for the current year—a deficit of £13,824, to which I added the estimated expenditure for year 1879-80, amounting to £3,975,034 taken from estimates left in the treasury by the late Government which obtained £4,106,888 as the year’s estimated revenue. From this amount I deducted the estimated revenue derivable from our present sources of income, amounting to £3,193,900, and arrived at a total estimated deficit of £911,948 to be provided for in some way this year. ESTIMATED EXPENDITURE AND INCOME OF THE YEAR, 1879-80, REVISED. Sir, since I last addressed you upon this subject, the Government have gone carefully through the Estimates of Expenditure as left by our predecessors. These were necessarily imperfect, no provision having been made for several necessary services, and the estimates as now presented show an increase of £39,044 the total amount being £4,013,078, instead of £3,974,034. The total of these Estimates is larger by £6,117 than the actual expenditure of the previous year, but it must be remembered that they include provision for interest on the new loan and deficiency bill to the extent of £IIB,OOO as well as the expense attending the second meetingof Parliament within the year. We hope, mox*eover, by careful administration to bo able by further experience to effect cqnsiderable reductions ; but on this point it is impossible to do more than promise that we will use our best endeavors to confine the expenditure within the narrowest limits consistent with efficiency of the public service. We shall also, during the recess carefully examine into the presentorgamsation of the Civil Service, and see how far, by the combination of necessary offices and the abolition of unnecessary ones, the expenditure canbe furtherreducednextyear. Competent well paid officers are absolutely essential to good government, while a large staff of under-paid civil servants is not only costly but is in its very nature fatal to efficient administration. The estimate of revenue has also been carefully reconsidered, but with the advantage of four months’ actual collections to guide us, I am unable, I regret to say, to increase the amount estimated. It is possible that the Land Fund may be under-estimated, but I don’t see any reason to expect an appreciable increase in land sales until a fall takes place in the price of money, and this can’t be hoped for until a good harvest has been

successfully housed. The problem, therefore, for solution is how is this largo estimated deficit, amounting after correction, to £951,002 to he provided for this year, and what action rm.st wc take to equalise our income and expenditure in future ? For, although it is somewhat unusual, I am compelled our peculiar circumstances to look beyond the present year, and in some measure to take counsel for the next. But before we can answer these questions satisfactory we must examine the nature of the deficit, and ascertain whether it is of a temporary or a permanent character ; because our mode of dealing with it will greatly depeud upon the result of that examination. Now, to enable the Committee to come to a decision upon this important point, it will be necessary to examine and compare the receipts of the Consolidated Fund for some time past. I propose to do so for the last three years, and under three heads—Taxation, Services Rendered, and Land Fund. There was raised by Taxation in the financial year 1876-77, £1,318,643 ; in the year 1877-8 £1,424,029 —being an increase of £104,386 over the preceding year. In the year 1878-9, £1,505,237 —being an increase of £81,208 over the preceding year, of £185,584 over the year 1876-77 ; and this year the estimated amount of receipts is £1,512,300, being about £7OOO only more than lastyear, though largely exceeding the receipts of the years 1876-77 and 1877-78 respectively. For services rendered (omitting for reasons I will presently give, re - ceipts from railways) there was "received for the year 1876-77 L 318,250; fur the year 1877-78, L 366,377 ; for the year .1878-79, L 421.377 ; this year the estimated amount is L 401.600. Here, also, as in the case of taxation, it will be found that the increase has been marked and steady during the three years named, and that while the estimate of the total receipts for this year in respect of services rendered was about L 20,000 less than the actual receipts of last year, an increase of amount in some of the items of receipt is anticipated. I will not trouble the Committee with remarks upon the separate items included under the two heads of taxation and services rendered, but I may say that the examination of tables, which will be appended to this Statement when published, will show that in almost ever}' case there has been a steady increase from year to year. As I have said I have omitted receipts from railways. My reason for so doing is that our railway system was too incomplete in 1876-77 to compare fairly with the receipts of 1878-79, but according to the comparative statement of Receipts and Expenditure on the railways made by the late Minister for Public Works in August last, the figures I have given under the head of services rendered do not show as large an increase as I might fairly claim. It is not, however, desirable in any way to overstate the case. I have not thought necessary to take receipts of more than three years for comparison. Had I done so, however, the only deduction to be drawn from a careful consideration of the figures, would certainly not have weakened n.y conclusion. On the contrary, the further back we go the stronger would my case appear. It may, then, I think, be fairly stated" that our receipts from taxation are steadily increasing, as also our receipts from services rendered, and that the slight check winch the revenue derived from these sources has met witli during the current year is temporary only, and is fairly accounted for by the general depression of trade throughout the world. This fact should, I submit, give us confidence in the future as showing undisputably that our population is hard working and prosperous. In the financial year 1876-77, we received from land sales L 870,819 ; pastoral rents, L 135,036; total, L 1,005,855. In the year 1877-78 land sales, L 1,440,824; pastoral rents, L 145,738; total, L 1,586,562. Last year, land sales, L 737,694 ; pastoral rents, L 132,035; total L 869,729. The estimated revenue, for this year is, land sales, L 248,000; pastoral rents, LI32,000; total, £380,000. It will be seen that the land sales last year only reached £737,694, falling short of the estimate by £384,304, and that this year they are estimated to produce only £348,000. Here, then, we find the cause of our deficit—the falling off in the Crown land sales of the last year. They had reached the estimate, and could he relied upon this year to yield £150,000 (this amount being about the average receipts of the last two two preceding years. We should have this year a small surplus instead of an estimated deficit of £951,002. In other words, under our present system we require from land sales, exclusive of the cost of survey, and administration, something like £900,000 per annum ; and of ordinary revenue it may be, I think, fairly anticipated that with the return of prosperity the annual sales will again be in excess of the Estimates for the current year. With these facts, then, before us, Sir, we are in a position to affirm what we should continue to treat land fund receipts as income, and were we content to sacrifice the future settlement of country for the sake of a temporary ad justment of finance, the deficit to which I have drawn attention would, with our large area of unsold land, be for some years to come of a permanent nature. So long, however, as we do so treat these receipts, we can’t disguise from ourselves that in years of depression wo shall be subject to large deficits, which it will be difficult to provide for without adding from time to time to our permanent indebtedness. In other words, we shall have an uncertain and therefore unsatisfactory finance, and shall ho continuing the objectionable practice of relying upon what is really capital for ordinary expenditure, instead of providing for such expenditure as ought to be done out of our legitimate income. If on the other hand, we should determine that receipts from land sales are not income, and shall not in future be so treated, then it is clear that there is a permanent deficit of 'from LBOO,OOO to L 900,000 a year upon our present expenditure and income. So much then, Sir, for the nature of the deficiency with which we have to deal. Before, however, I answer the question as to how the Government propose to meet the estimated deficit of this year, and obviate a deficiency in future, it will be convenient that I should call the attention of the Committee to the state of our public debt, and the condition of the Public Works Account.

The Statement was still in course of transmission when the wire closed at 2

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THE COLONIAL TREASURER’S FINANCIAL STATEMENT. Ashburton Guardian, Volume I, Issue 23, 18 November 1879

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