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THE COLONIAL TREASURER’S FINANCIAL STATEMENT., Ashburton Guardian, Volume I, Issue 24, 20 November 1879
THE COLONIAL TREASURER’S FINANCIAL STATEMENT.
[jONGLUDED.] I'UBLIC DEBT. Our public ii ,-bt on the 30th June last amounted to i/23,222,311. Treating the guaranteed debentures as practically issued, and including treasury bills, of i which £442,000 mature on the Ist of March next in London, and will have to be re-issued, the annual charge for interest and sinking fund in respect of this debt was L 1,232,119. Since then we have issued a Deficiency Bill amounting to L 600,000 ; and when the loan of of L 5,000,000 is raised, our total gross debt will amount to L 28,822,311 ; or, deducting the accumulative sinking funds, our net public debt will be L 27,112,304, subject to an annual charge of L 1,400,000 for interest, and L 116,176 for sinking fund, making together L 1,516,176, an annual burden requiring our most watchful attention, and one which can only he borne if our taxation is properly adjusted, and our financial affairs managed with discretion. It .may be gratifying to the Committee to learn that, though the amount is small, last year we redeemed out of accrued Sinking Fund debentures, amounting to £71,009. Of these, £58,000 represented the whole of the outstanding debentures issued under the “Wellington Debts Act Amendment, 1876,” and £13,000 represented a portion of those issued under “ The North Otago District Public Works Loan Act, 1872.’’ PUBLIC WORKS FUND. I showed in my speech of Oct. 14 last, that we began the year ending June 30 1879, with a credit balance of £2,056,940 including advances outstanding amounting to £1,156,260, and this year with a nominal credit balance of £506,205, but that of this sum £289,543 consisted of advances outstanding, which, as hou. members are aware, are in fact moneys spent but not yet brought to account ; so that wo really began the year with only £207,062. This includes, as cash on the credit side, the whole of the loans (including the guaranteed debentures) authorised to date except the £5,000,000 loan. I further showed that we hadspentin the first quarter of this year, that is, up to Sept. 30 last, some £504,733 of the £5,000,000 loan, and that we had entered into contracts and engagements which would necessitate our finding £733,553 more by Dec. 31 next, and £921,818 between that date and June 30, 3880. In other words, that the late Government had in various ways anticipated the new loan to the extent of £2,220,104, including £140,000 for contingent defence, and £200,000 for put native lards, hut exclusive of cost of raising the loan ; and that in addition to tills large sum, which is payable by June 30 next, there will be outstanding at that date a further sum of £957,177 for land x>urchase, and £128,815 for contracts entered into before the present Government took office. These figures were disputed at the time I spoke by the late Minister of Public Works, but I regret to say that, after most careful reexamination of the whole subject, I find the figures I then gave were strictly accurate. My lion, colleague, the Minister of Public Works, in consultation with the Engineers-in-Chief, has been endeavoring to arrange an extension of the period during which these payments will have to be made, and will shortly inform this House of his success in that direction, but he warns me that much practical relief is not likely to follow his exertions. The Committee will, therefore, see that unless we can abandon some of our land purchase bargains, for I fear that none of the other engagements can be got rid of, the new loan is anticipated to the extent of £3,300,000, without including the sum of £154,791 payable to Canterbury and Otago on account of impounded land revenue or making any provision for the redemption of the guaranteed debentures, and also without taking into account the cost of raising the loan. When we remember that the Public Works scheme of 1878 was to take five years to complete, that the expenditure from loan was only to be at the rate of some £goo,ooo a year, and that by a special provision of the “ Loan Act, 1879,” no money raised under it was to bo spent without the appropriation of Parliament, we shall, I fear, have to come to the conclusion that 1 arliamcnt has not been treated with frankness in this matter, and that its authority has been disregarded. The Government, Sir, have reason to believe that not more than £3.000,000 of the £5,000,000 loan can be floated this year ; that it will be 12 months before we can place the other £2,000,000, and that we cannot go upon the London market for two years afterwards. These facts will render the exercise of the utmost prudence necessary in the expenditure of the balance of the loan yet available for appropriation by Pailiament. I hope that hon. members on each side of the House will insist upon all expenditure being confined to necessary and profitable works, and that the expenditure of the balance of the loan shall be extended over a period of not loss than three years. PROPOSALS FOR EQUALISING EXPENDITURE AND INCOME IN FUTURE. And this, Sir, brings me to that part of my statement for which hon. members
iiv; no doubt looking with some impatience. Are the receipts‘from land sales to bo retained'in the Consolidated Fund, and spent as ordinary revenue 1 Sir. ire have been relying upon the receipts from land sales as one of the chief items of onr Consolidated Revenue. This is tho-.-onelil v unsound in principle, and should be abandoned at the eivliest possible date, that date being not later than the end of March. The receipts from land sales should, in the op'nion of the Government, be chargeable with the expenses of administration and survey of the land,, and the balance scrupulously applied to Public Works—local and general—and to immigration. By this means it is clear, that a real and not an imaginary fund would bo created to aid in carrying on onr Public Works—local and general, and we should got rid of treating as revenue that which is really capital, and spending it upon the ordinary services of the State, ft is onr duty not only to place onr Consolidated Fund upon a sound footing, but .also to show the London capitalists unmistakably that we are not availing ourselves of the expenditure of borrowed money to sell our public lands, and at the same time applying’ the proceeds to the maintenance of services properly chargeable on annual income. I submit, Sir, that we have no more effective means of showing the soundness of onr financial position, and of the resources of the oniony, than by resolutely setting aside the receipts from our land sales forpublie works and immigration Sir, the Government entirely disapprove of sacrificing the public estate to make up either a temporary or permanent deficit in the revenue, or of selling lard for any other purpose than for settlement and occupation. The hon. gentleman then went on to state the proposals of Government for equalisation of income and expenditure. The land sales would be eliminated from ordinary revenue, but the pastoral rents would be retained. The subsidies now paid to local bodies by Government would be discontinued at the end of this year—the whole question of local finance being again considered next year. By the cessation of these subsidy payments £275,620 would bo saved from the colonial funds, but a permanent deficiency of £544,040 would still remain to be met. This Government proposed to meet by the imposition of a property tax, the increase of customs and stamp duties, and the release of sinking fund and interest by bringing the Consolidated Stock Act into operation. PROPERTY - TAX. It will, I think, generally bo admitted, that we have now reached a stage at which a Property Tax, in some shape, is unavoidable. The principle of a Land Tax has already been affirmed by this House, and there is much to be said for the policy of specially taxing unused hind, hold for speculative purposes. If it were practicable, I should certainly advocate the special taxation of unused land ; but, in my opinion, it is not practicable, and taking the ordinary holdings of improved land, I am unable to see upon what principle of justice or expediency it is hold, that is the only - form of property which should be taxed. Why, I wish to know, should the farm of the hard-work-ing pioneer settler, or the frontage of the struggling city tradesman he taxed, while bank shares, mortgages, or other such property, are allowed to go free ? I shall, therefore; ask the House to impose a Property Tax upon the American model, excluding incomes, and thereby to affirm the principle that realised wealth, in whatever form, shall bear its fair share of the burdens of the State. The Government, after careful consideration, have come to the conclusion that an Income Tax is not applicable to the existing circumstances of the Colony. Sir, the Government will ask Parliament to merge the land tax in the property tax, which we intend to introduce, thus including land in the same category as other property making it equally but not specially liable to general taxation. THE TARIFF. I have said, Sir, that the Government propose to raise additional Custom duties. With respect to the encouragement of local industries, I have had many communications with gentlemen interested in the promotion of local manufactures, and a Committee of this House has still the subject under its consideration, but the time at the disposal of the Government has been quite inadequate to deal in a comprehensive manner with so important a subject. The Government therefore propose to .appoint a Royal Commission during the recess, to examine and report upon the whole subject of the best means of fostering and promoting local industries. In the meantime the Governmtnt propose to admit many articles duty free, so as to assist local manufactories as much as possible. Upon tea and sugar we do not propose to re-imposo the duties remitted last year, but it may be necessary to reimpose them next year upon a general revision of taxation. The articles upon which we propose to increase or impose duties are almonds and nuts, chaff, corks, dried fruits, fresh fruit—other than oranges and lemons, window glass, grain and flour, malt, split peas, hops, iron, fencing, tacks, matches, and vestas, preserved milk, nails, perfumery, patent medicines, timber, salt, stearine, spirits, tobacco and cigars, wine, and all goods 'at present charged with ad valorem duty. The total amount they are estimated to produce is about £300,000. We propose to re-impose the duties on timber and grain. We think experience has shown that their repeal has very injuriously affected local trade in shipping, and also the timber industry, which was a growing and important one, and which we are certainly not justified in seriously crippling without some compensating advantage to the State, but which we altogether fail to see has followed the repeal of these duties.
We propose to increase the duties on spirits, end on tobacco. With regard to spirits, we shall ask for an increased duty of two shillings per gallon granting at the same time an allowance for such as are under proof, the same as is now chai'ged upon spirits over proof. This mode of levying the duty is, I believe, the custom in almost every other country. To make up the loss to the revenue which will result from this allowance for spirits under proof, will require an addition of at least 6d per gallon, so that the proposed increase is really only Is fid per gallon, or in the whole £47,000, giving a total on spii’its, wine, Ac., of £56,000. We propose to increase the tobacco duty by Is per pound, and to authorise its manufacture in bond, granting as an encouragement to its local manufacturers a bonus,
for the next two years "nly, of Gd in the pound upon the quantity of tobacco manufactured and duty paid in the colony. The increase on Hus item is estimated at. £50,000. From spirits, wines, &o.„ and tobacco includin ' cigars and snail, i hope, then, to obtain £106,000.
Liu, Sir, before proceeding t> state what tardier burdens it. isnoces-ary to hu pus-*, it will be convenient hero to stab
vlhat relief e it; be afforded in the w;.y of remission of duties on carriage makers' and saddlers’ ironmongery, carriage nuikers’ leather, buggy shafts, bout carriage timber, hickory, hatters materials, fine wire for brush making, sheet zinc, plain galvanised sheet iron, sulphate of soda, almonds sneb as arc used in confectionery, phosphorus, and oil of rhodium. These remissions amount to £15,000, and it is hoped that with these alterations, and by the aid of further reductions which are in contemplation, local industries will be placed in a more advantageous position than at present. The Government propose to abolish all light dues for vessels employed in tire coasting trade. This, it is also Imped, will give material assistance to that important, branch of onr industries—the local shipping trade. The loss to the revenue by this remission will bo £SOOO. Stain]) Duties.—These might be increased in several cases, but looking at the fact that these duties were all levied mainly on transfers of property, and that it is proposed to put a special tax on property, the Government have determined not to ask for any increase ot the stamp duties, except those'upon successions. It is estimated tuat these audition al duties will produce £1(1,000 at present, and will become constantly increased. HOW DF.FICIEXOV FOR OFRREXT VKAR IS TO BE MET. Five months therefore of the financial year have practically gone, and we have already issued and absorbed Deficiency Bills to the amount of £600,000. It is not, in the opinion of the Government, either possible or wise to atten.pt, under our present circumstances, wholly to meet this deficiency by taxation. Wo are, I hope, about to take a new departure in finance ; the proposals of the Government if given effect to insuring in the future a state of equilibrium between expenditure and income. But to secure this result taxation of a very onerous character will have to be imposed, and the Committee will, I think, agree with me in the opinion that to impose a special taxation for the purpose of the current period would be impossible. The Government will therefore ask authority to provide by loan for such deficiency as may be found to exist on March 31 next. It will include, of course, the Deficiency Bills already issued. To redeem these and to cover the balance, I shall ask the House for authc rity to issue Treasury Bills. These latter the Government propose to have inscribed as soon as possible under the authority of the Consolidated Stock Act, 1877. The hon. gentleman concluded by moving the following resolution : “ That in lieu of the duties of Customs now charged on the undermentioned articles, the following duties of Customs shall, on and after the 18th day of November, 1879, bo charged thereon, on importation into New Zealand, or on being cleared from any warehouse for home consumption, namely, almonds in the shell, and nuts of all kinds, except cocoanuts, 2d per lb ; chaff, 10s. per ton ; corks (bottling), 15 per cent, ad valorem ; fruits, (dried), 2d per lb ; fruits (fresh), other than oranges, lemons, bananas, and pine apples, 15 per cent, ad valorem ; glass, Crown, sheet, and common windows, 2s. per 100 ft. superficial; grain and pulse of every kind, not otherwise enumerated, 9d per 10011) ; grain, when ground, or in any way manufactured, Is. per 1001 b ; malt, 2s. per bushel ; peas, split, Is. per cwt; hops, Gdper lb : iron fencing wire, staples, anil standards, 20s. per ton; iron, galvanized, corrugated, sheets, guttering, ridging, and spouting, washers, screws, nails, and wire netting, 40s. per ton ; iron tanks, Gs. each ; matches, of all kinds, 25 per cent, ad valorem ; milk, preserved, 15 per cent, ad valorem ; nails, 3s. per cwt. ; perfumery and tiolet preparations, not otherwise enumerated, 25 per cent, ad valorem, proprietary medicines, commonly called patent medicines or preparations of medicines, or any medicine or preparation of which the receipe is kept secret, recommended by advertisement, bill, or label for the relief of any disorder or ailment 25 per cent, ad valorem; timber, sawn rough, 2s. per 100 ft. super ; dressed, 4a. per 100 feet, super ; shingles .and laths, 2s. per 1000 ; pailings, 2s. per 100 ; posts, 8s ; rails, 4s ; salt, 20s. per ton ; spirits or strong waters, not being sweetened or mixed with any article so that the degree of strength thereof cannot bo ascertained by Syke’s hydrometer, for every gallon of the strength of proof of such hydrometer, and so in proportion for any greater or loss strong! h than the strength of proof, and for any greater or less quantity than a gallon, 14s per proof gallon spirits ; other spirits being sweetened or mixed so that the degree of strength cannot bo ascertained as aforesaid, 14s per gallon ; liqueurs, and cordials, 14s per gallon ; perfumed spirits and Cologne water, 21s per gallon ; stearine, Id per lb ; tobacco, 3a 7d per lb ; cigars and cigarettes, Cs per lb ; wine, other than sparkling and Australian, 5s per gallon ; all articles not otherwise enumerated, which are now chargeable with duty at. 10 per centum ad valorem, 15 per centum ad valorem. That the duties of ’Customs chargeable upon the goods, wares, and merchandise, hereinafter mentioned, imported into New Zealand, shall cease and determine, viz : —Almonds, barbary bitter and other for confectionery, bolts and nuts, carriage bolts and nuts, tire
bolts, shackles, holders and other iron fittings for carriages, morocco, roan, jappanned and enamelled leather and tanned and dressed sealskins, and goatskins, buggy shafts, bent wheels, anas, and other bent carriage timber, hickory umvrought, hattors’ gabions and hatters’ calicoes, fine iron, biass, and copper wire for use in brush making, phosphorus, and oil of Rhodium, sulphate of soda, saddlers’ ironmongery, grindery, sheet zinc, plain sheet galvanised iron. ” After a discussion, in which Sir ft. Grey, Mr. Reader Wood, Mr. Moss, and others took part, the resolutions were adopted, and the House adjourned at 11.00 p.m.
Colonial Industuy.— The Melbourne Woollen Company sold during the past half-year no leas than 50,11112 yards of tweed, at prices which enabled it to pay a dividend of ten per cent to the shareholders.
THE COLONIAL TREASURER’S FINANCIAL STATEMENT., Ashburton Guardian, Volume I, Issue 24, 20 November 1879
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