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Tib -day, Ju: E 8.

The Council sat only a short time, and the business done was of very slight importance. HOUSE OF REPRESENTATIVES. Tuesday, June 8. AFTERNOON SITTING. The House met at 2.30 p. m. NOTICES OF MOTION. Mr. Shrimaki to ask why the privilege of transmitting press telegrams by special coxTespondents to 10 o’clock p. m. was not extended to this session. Sir George Grey to ask leave to introduce a Bill to introduce a Bill to perpetuate the public services rendered by Mr. Moorhouse to Canterbury. Mr. Murray to move—That the honorarium payable to members of the House of Representatives be reduced to LIOO, and that no honorarium be paid to members of the Legislative Council, also that the salaries pa}'able to future Governors, as well as to Ministers of the Crown, be reduced. QUESTIONS. In reply to Mr. Stewart, The Hun. W. Rolleston said inquiries would be made regarding the order of some Licensing Courts, that unless certain wooden hotels were pulled down and rebuilt of stone, licenses would be withdrawn. In reply to Sir Wm. Fox, The Hon. W. Rolleston said the position of Judge Bathgate as a Director of the Mortgage and Investment Company, recently formed in London, was incompatible with his position as a District Judge in New Zealand, and he would be made aware of the fact. Judge Bathgate went Home on private business, but was allowed half-pay from the judicial vote and the other half for acting as an immir gration agent. NEW BILLS. The following Bills wore introduced and read a first time—To extend the franchise to women (Dr. Wallis). To prohibit party processions (Mr. Pyke). THE LICENSING BILL. The Hqn. T. Dick ipoved the second reading of the Licensing Act. In detailing its provisions he said that it xyaa proposed to introduce what was knmyn as lociil option, also to do away with the bottle licenses at present in force in some parts of the colony. He explained the provisions of the Bill at considerable length, and he asked the House to join with the Government in making it a BUI that would be at once fair to the publican and acceptable to the country, Mr. Barron said that climate influences had a groat deal to do with the necessities that existed for drink, and he thought that in New Zealand that fact would operate against a uniform measure being passed for the whole colony. Mi*. Stewart spoke against the impropriety of the total abolition of the bottle license. He looked upon the Bill as a whole favorably. Mr. Seddon complained that ample provision had not been made against the ileicit sale of spirits. He also maintained that some concession should be made for the accommodation houses. He also objected to single women being allowed to hold licenses. The debate was interrupted by the 5.30 adjournment.

EVENING SITTING. The House resumed at 7.30. . Mr. Speight moved an adjournment of the debate on the Licensing Bill. The House then went into Committee of Ways and means, when the Treasurer delivered his THE FINANCIAL STATEMENT. In the course of his introductory remarks ho said that his anticipations, said even by friends of the Government to be too gloomy, had; been more than realised, and that the financial results of the past nine months had been less satisfactory than he had predicted. He felt, however, that the check to the colony’s prosperity was only temporary ; but, bearing in mind this check, the duty of economy and retrenchment was all the more pressing. He was glad to know that the public mind was awakened to the colony’s position, and that a desire' was everywhere manifested that the annual expenditure should be brought within the revenue, by the reduction of the one, and the increase of the other. Last session the fiscal system had been considerably modified, but the system of local taxation and subsidies had remained untouched ; but he had then promised to introduce a scheme dealing with that system. It was his intention in this statement to redeem that promise. He then went on to give the FINANCIAL RESULT OF THE TEAR, which, owing to the change in the financial year, ended this term on the 30th June, 1879. It will be remembered that I estimated that after the payment of all liabilities outstanding at the close of the year, and taking credit for the assets of the year, there would be a deficit of L 131,842. The actual deficit on the transactions entered upon up to 31st March last, in respect to the period now referred to, has proved to be L 69,418. There remained unpaid, however, on that date liabilities to the amount of L 70,193, including L 50,000 owing to the Bank of New Zealand, as the balance of the overdraft of the late Provincial Government of Otago, while on the other hand further assets, amounting to L 5821, have been realised since the 31st of March, so that the total deficit, including assets and liabilities, on June 3 r| th last was L 133,790, instead of L 131.824 as estimated. EXPENDITURE OF THE PERIOD ENDED 31SX MARCH, 1880. In the statement I had the honor to make to the committee last session I estimated that the expenditure would amount to L 3,110,262, but this sum was increased to L 3,139,539 by the passing of supplementary estimates. The actual expenditure to the 31st March last, including advances in the hands of officers of the Government amounted to L 2,772,276. In accordance with the provisions of the Public Revenues Act, ‘IB7B, Amendment Act, 1879, returns of liabilities outstanding on 31st March, certified to by several Under-Secretaries, have been laid before Parliament. The liabilities amount to L342,96G, from which, however, I deduct the L 70,193 already referred to as belonging to the period ending 30th June, 1879, leaving L 272,773 in respect of the period now under review. Adding this sum to actual expenditure on 3ist March, amounting, as I said, to L 2,772,276 we get a total expenditure of L 3,045,049 as against L 3,139,539, the estimated amount, there being thus an apparent saving of L 93.490 a-ycar. .... I now come to the estimates REVENUE OF THE COLONY FOR THE NINE MONTHS ENDED MARCH SIST, 1880. The total revenue received during this period amounted to L 2,133,759 to which add L 50,000 receivable on the Ist April from the Land Tax, which the Committee will remember was includodin the estimate, making together, L 2,183,759, the estimated amount being L 2,545,200. The revenue,. therefore, fell short of that anticipated by L 261,441. The revenue from the Customs did not reach the estimated amount by L 47,335. This, although chiefly caused by the general depression throughout the colony, has been partly caused, I believe, by the awaking of our population to the necessity of cultivating more thrifty habits and practising greater self denial. The stamp duties produced L 32,921 less than the estimate. The gross revenue from the stamp duties during the nine months ended ,31st March, amounted to L 111,057, and the refunds to L 18,979, an altogether unusual amount, but an estate which paid L. 18,405 duty in the year 1878-79, was declared by the Supreme Court to be not chargeable and that sum, therefore, had to be refunded in, February last, and is included in the refunds above mentioned. The stamp revenue, but for this unexpected occurrence, would have realised L 14,516 less than the estimate, instead of L 32,921. The receipts from railways fell short of the estimate by L 113,072, but the loss is counterbalanced to some extent by the not inconsiderable saving of L 43,242 effected in the'expenditure by my lion, friend the Minister for Public Works. The land revenue, too, I regret to say, produced only L 155,108 instead of 11246,700. The postal revenue, however, exceeded the estimate by L 12,961, but of this sum LG ; 9S2 was the profit'of the Post Office Savinas Bank account which has heretofore been treated as incidental revenue, FINANCIAL. RESULTS OF THE BEEJQD ENDED 31.ST MARCH, 1880. After stating that Government proposed to deal with L 200,000 deficiency bills issued by Parliament under authority of the Public Revenue Act, 1878, in the way the LBOO,OOO of similar bills issued last session had been dealt with —namely, adding them to the permanent debt, the Treasurer said—ln adding this amount to rhe permanent debt, Parliament will only be carrying out the policy adopted last session for the purpose of enabling the colony to take a new departure financially with the beginning of the current year, by providing for the whole of the floating debt up to that date. I have summarised the res- It at which I have arrived; —The deficit during 1878-79 has been shown to be L 133.790, the expenditure for the nine months ended 31st March last L 2,772,276 and the liabilities on the same date L 271,774, making a total of L 3,170,840. The receipts for the period ended 31st March were L 2,133,758, land tax due Ist April L 50,000, assets L 5,000, making a total of L 2,188,758. Taking therefore the total revenue from the total expenditure ive arrive at a deficit of L 990,081 for the period ended 31st March, ISBO, to meet which, as I have already stated, Treasury and deficiency bills have been issued to the amount of LI,OQO,QOO, leaving a credit balance of LojOi§ to bp cappied forward to the next financial period. Qn the 30th June, 1879, the gross public debt of the colony amounted to L 23,222,311, on the 31st March, 1880, it wa5L27,422,611; or deducting the accrued sinking fund, L 1,805,498, the nett public debt was L 25,617,113. This amount is exclusive of the treasury and deficiency bills for L902,00G, held by the public works fptid, and the LdQO,QOQ unsold debentures of the loan of 1§76 guaranteed by the Imperial Government. Since the 30th June, 1879, the loan of five millions authorised last year has been raised. On the Ist of March last Treasury bills amounting to L 442,000, ajid forming part of the public debt on the §()th ,Junej 1879, matured, and were temporarily redeemed out of the public works fund, provision having been made under the Treasury Bills Act, 1870, for renewing them to the 31st of December, 1882, and exchanging them at that date for debentures, with a currency of three years. During the nine months ended 31st March last, additional Treasury and deficiency bills to the amount of L 1,000,000 have been issued. Bills for L 550,000 have

also been taken up temporarily by the public works fund, so that the actual additional to the public debt by the new loan and these bills amounts at present to L 5,000,000. On the other hand guaranteed debentures amounting to LBOO,OOO have been redeemed, and the debentures of the North Otago District Public Works Loan for L 7700 have been paid off, making together L 807,700, which sum being deducted from L 5,000,000 leaves a net increase to the public debt of L 4,200,300. When the Imperial guaranteed debentures for LBOO,OOO are sold and the whole of the Treasury and deficiency bills now held by the public works fund, and representing advances to the Consolidated Fund to the extent of L 092,000 are issued to the public, the gross debt will amount to L 29,214,011, or deducting the accumulated sinking fund of L 1,805,408, the debt will be L 27,400,113, subject to an actual charge of about L 1,535,000. In this statement of the public debt, the last loan of L 5,000,000 is treated as uninscribed. Should the whole of the debentures be converted on the terras offered, the public debt will be increased by L 1,000,000, but the interest will be reduced by L 10,009 per annum. Parliament will be asked during the present session to make provisions for extending to the 31st of December, 1882, the currency of certain Treasury bills amounting to L 390,000, partly falling due within the current year, and to grant authority for exchanging them at date for debentures, with a currency of three years, as in the case of bills for L 442,000 provided for by the Treasury Bills Act, 1879. Similar provision, as I have already said, will also be required with respect to the deficiency bills for L 200,000, issued under the Public Revenue Act, 1878, forming part of the bills, amounting to L 1,000,000, issued during the past financial period. After explaining the difficulty the Loan Agents had encountered in raising a loan last year, and giving the reason why it had been offered at so low a figure, the Treasurer said that the Loan Agents’ accounts were not yet to hand, and he was unable to give the precise net price realised for the loan, but after all allowances, the price would be about 95£ for 5 per cent, debentures, and 79i for those converted into 4 per cents. At the close of the year 1878-79 the balance to the credit of the Public Works fund amounted to L 506.205, of which L 298,543 represented advances in the hands of the Government,.the cash balance in the public account being L207,C62. During the nine months from 30th June, 1579, to 31st March last we received on account of the proceeds of the five million loan, L 4,249,000, and certain special receipts and recoveries amounting to L 22,849, making, with the balance at the beginning of the period, a total of L 4,778,054. On the 31st of March the cash balance in the public account, after providing for outstanding orders on the bank, was, in the colony and in London together, L8C2,410, and the advances in the hands of officers of the Government amounted to L 315,763, making together L 1,178,173. We had thus issued during the nine months ended 31st March last, L 3,599,881. In the course of further remarks the Treasurer said that there was a balance of L 1,920,410 available for public works and other requirements until the Treasury deficiency bills already referred, to could bo sold. Having stated the amount of ways and means available, I shall now inform the committee what are the liabilities, to meet which funds must be set aside before the question of entering upon new works can be entertained. According to the returns certified to by the Undersecretaries of the several departments, the liabilities of the Public Works Fund on 31st March last amounted to L 2,455,313, made up as follows :—lmmigration, LIO,OOO ; Public Works department, L 644 ; railways, L 910,506 ; surveys of new lines, L 1,500 ; roads, L108,69S ; land purchases, L 1,061,486 ; water works on gold fields, L 11,704 ; telegraph extension, L 1,034; public buildings, L 205,314 ; lighthouses, Ll2O ; miscellaneous public works, L 73,309. To this this sum I add further liabilities incurred by the Public Works department since 31st March, LIIO,OOO, and a contribution for the current year towards the cost of the Defence Force on the same scale as for the past nine months, L 140,000. These sums amount to L 2,705,313, from which 1 deduct advances in the hands of officers of the Government on 31st March, L 315,763, leaving L 2,389,550 as the sum required to be set aside out of ways and means at the credit of the fund on the 31st March, amounting as I have informed the Committee to L 3,262,410. Hon. members will however bear in mind that of this sum of L 3,202,410, L 1,343,000 is represented by Treasury and deficiency bills issued in aid of the Consolidated Fund. It will be seen that the large amount of liabilities to which I have referred will absorb the whole of the cash' at the credit of the public works fund, and will necessitate the sale of L 469,000 of Treasury and deficiency bills hypothecated to that fund. The means available for new works and services will therefore be represented by L 873.000 in Treasury and deficiency bills,' being the balance of L 1,342,000 now held by the Public Works account. >3o much then, sir, for the history of the past'. J will’ now submit for the consideration, and Ihqpe tfyg approval, of tlfe Committee, our SCHEME EOK LOCAL FINAKOE and proposals for the ordinary services of the current year. I said last session that the Government would this year rer commend the discontinuance of subsidies, To propose the abolition of grants in aid of local bodies without substituting a workable scheme in their place, would be trifling with the subject in a manner which” I venture to think, would not meet with the approval of Parliament. Our aim is twofold—our duty being first to place our general finance upon a sound footing, and second, to put our local bodies in such a position as will enable them to do the work which rightly devolves upon them, and which must be done by them if the country is to be prosperously settled. I do not think it convenient to trouble the Committee tonight with many reasons for discontinuing the subsidies. That question can be better discussed when considering the Bills which will be introduced to give effect to our proposals. I may, however, point out to lion, members that the system of subsidies has operated unequally. It has largely helped the rich and populous districts, while giving little assistance to those which are poor and thinly peopled. It must also be remembered that they were proposed as part of a scheme to which full effect' has never been given, for tlie hind fund has-been so generalised instead of localised in provincial districts, and tlie expenditure upon public works instead of being limited in account and confined to arteral undertakings, has been lavish and extended tq >vorks of all descriptions. The magnitude of this expenditure will be 'evident when I say that ive have increased qur debf for’ public wqrkg within'The last three years‘and‘a half (the time during which subsidies have 'been paid) ]}y L 9,000,000, which means an annual iportgage of L450,Q00. Thg circumstances' qf the colony* haying greatly changed since the system of subsidies was introduced, and it qeiijg evident that the Treasury cannot continue tp pay them without the imposition of fresh taxation, the case for the reconsideration of the whole question is complete, for it is certain that Parliament will never consent to levy additional taxation for such a purpose without full enquiry and careful deliberation. In the scheme which I am about to submit to the Committee, I must ask lion, members to bear in mind that I take it for granted, first, that sections 5

and 6 of the Financial Arrangements Act, 1876, Amendment Act, 1877, which authorises the subsidies and grants of 20 per cent, of the land fund to counties, are to be repealed, and, second, that the proceeds from land sales are not to be used for the ordinary purposes of Government. The ground being thus cleared I will now endeavor to describe in sufficient detail the scheme we propose to give effect to our proposal. I shall have to ask authority to introduce two Bills. The first will be an amending Bill. It will remove the present restriction upon rating ; that is to say, that it will permit of local, bodies having the right to levy rates to any amount they consider necessary for local requirements, not exceeding 2s. in the pound. If passed as a special rate, it will authorise boroughs and other local bodies to borrow at any rate of interest the ratepayers may choose to give, and to any amount, subject only to these restrictions—(l) That the principal and interest of all new loans shall be made payable in New Zealand. (2) That any local body desiring to raise a loan shall before doing so levy a special rate sufficient to cover the interest and sinking fund upon the money proposed to' bo borrowed, such rate to be continuous until the debt has been repaid. The Bill will also require that any local body which has already borrowed upon its general revenue shall, before again entering the money market, levy a special rate to cover the interest and sinking fund upon the existing loan or loans as well as providing by special rate for the new loan. This and other powers given by the Bill are apparently very large, and will, I fear, be considered dangerous by some, but, sir, I would point out that if local bodies are to be really useful, they must be made independent and responsible. The one precaution to be taken is to see that the ratepayers spend their own money, and not the money of other people, and this will be carefully provided for in the Bill. I now, sir, come to a further and still more radical provision in the Bill. It is clear that all who benefit by the expenditure of rates should contribute towards them, and carrying out this principle to its legitimate conclusion, we propose that all Government property (including the waste lands of the Crown) and, subject to an important qualification, native lands, shall be liable to rating, with the exception of the Government Houses in Wellington and Auckland, the Parliament House and grounds, the General Government buildings in Wellington (by which I mean the large building upon the reclaimed land), and the railways and wharves. Whatever may be thought of this proposition at first sight, it will, I am sure, on mature reflection, and when it comes to be discussed in all its bearings, commend itself to lion, members as fair and reasonable. I will, sir, first state how we propose to deal with the Maori lands within counties in which the Counties Act is in force. It is a fact which I think should be recorded that some eleven million acres of land in the North Island are still held by less than 41,300 Maoris (men, women, and children), and that not one half-penny in the way of rates has ever been imposed upon the natives by this House for the construction of roads and bridges which are being made throughout the country, and by which their lands are being enormously increased in value, although it is true and ought to be noted to their credit, that many of them have voluntarily paid rates' arid contributed from time to time towards,the cost-of public works. The whole Maori property too is exempt from taxation under the Property Assessment Act. Sir, the Government think that the time has arrived, and we hope and believe that our Maori friends will agree with us in our opinion, that henceforth all Maori property in boroughs shall be subject to taxatiorf to the same extent as the property of their fellow citizens. But, sir, further than chis, we do not propose to go. We think, after careful consideration of all the circumstances of the case, that onthe grounds of public policy we may reasonably exempt owners of native country lands from the payment of rates. It is clear, however, if this is done, that some equivalent must be found to enable those counties containing a large area of Maori land to carry out the duties we are imposing upon them. Therefore, we are compelled, by considerations of public policy, to depart in this way from the principle of the Bill. It is clear that the cost of exemption should fall upon the /, colony at large, and not upon the localities on which the burdens are imposed, upon the assumption that all the, land will contribute its fair share of the local taxation. Is is proposed to limit the amount of ordinary rates leviable upon Maori country lands to one-half the rate levied on the ordinary land in the district in which they lie, but not exceeding ninepence in the £, and upon waste lands of the Crown one shilling in the £ upon the annual value, these lands being practically unrepresented in the local governing bodies. This limitation is not, I think, unreasonable. Tlie total estimated value of Maori land is L 6,370,000, but of this, L 5,200,000 is situated in counties in which the Counties Act is in operation. In any satisfactory scheme of local finance, means must be found to construct our main ' road?’ throughout the colony. Some provision must be made to repair darqage ‘done by floods and tempest ’to qur roaejs ~qqd liridgeg.'arid gome help must be' extended, if possible, to qur ’district roads. This, then, brings me to the second Bill tp which I referred as necessary to give effect to our proppsals. The title of the Rill ■will be the Local Public Works Bill, it provides for the constitution of an unpaid Board, consisting of the Minister of Public Works, the Epgineer-in-Uhief, the Surveyor-General, and the Publiq Trnatqe. The duties of the Board will b§ to pay the rates on all waste lands of the Crown, to pay the rates on the Maori country lands, to make grants in aid of the construction of main roads, to advance money to construct district roads. This will be done from funds the constitution of which I will now describe. As I have before said, we shall ask Parliament to set apart the proceeds of land sales for. special purposes, not permitting it to bo used for the,ordinary expenses of Government, charging against it only the costs of its administration, including survey. Looking at the fact that our unsold lands are estimated at a low average as worth L 12,500,000, I think we may, therefore, reasonably expect to realise not less than L 300,000 a-year for some time to come. The charges on the land revenue should not exceed L 140,000 a-year, so that should we only get from land sales L 300,000 a-year there will be a balance to credit- of at least LIGO,OOO. The Bill witlf Which am now dealirig' provides * that out of the balance' of the land sales, after paying the expenses' of administration, there shall be paid to the Board each year the sum of ' L 150,000. If,'however, the land sales in any year'should‘not produce a surplus of L 150,000,' such a less'amount 1 only as the’sales ' may’produce will'be paid Vq-toq Board. "’I Have estirnated ‘the land “ sales this year at‘onTy L2C6,0<36. It is'possible that they may produce more, but 1 have ' • not, after careful consultation with the department, thought it prudent to estimate it’ at more than that amount. The cost of administratiqn and charges is set dqwn atabqutLlso,onQ.'' therefqre ? available this year, 'should riqji esßmateg not be exceeded, wtjuld be pjily L50,Q00. Sir ? it seems to thg Government that in starting such a scheme as we have under consideration, it would be unwise to attempt to launch it without sufficient funds to enable the Board to make a good beginning. The prospects of The surplus land fund for this year reaching L 150,000 being but small, it ii proposed to ask the House to make a grant to the

Board of L 150,000 out of the loan, so as to place it in funds for the work of next spring and summer. The funds thus created are to be applied to the following purposes: —First, the payment of the rates on the waste lands of the Crown and Maoi-i country land ; second, grants in aid for constructing main roads and repairing damage done by floods or tempest. The races, estimated at a ■ shilling in the £, supposing every Road Board- and every county levy a shilling rate, would amount to about L 74,000, if rates on Maori lands are included ; but I much doubt if the amount of rates payable by the Board will often reach L 50,000 a year. The balance remaining, whether it be LBO,OOO or 100,000, will be applicable to main roads only. ££The main roads I should have said will be defined by proclamation. I have had sketch maps prepared for the information of lion, members, showing the roads it is proposed to declare at once ; power being given in the Bill to proclaim others from time to time as circumstances may require. The grants in aid will be limited by the funds at the disposal of the Board, and will be made in this way : I will suppose for the sake of illustration that the county wishes to construct—and construction means forming and metalling roads or building bridges—a section of main road over which it has control, or to repair damage done to a main road by flood or tempest. The Council must obtain an estimate of the cost of the work proposed to be executed, which I will suppose amounts to LG,OOO, the Council will then make application to the Board for a grant in aid. But before the Board can make the grant the Council must show that it has one quarter of the LG,OOO, that is L 1,500, at its disposal, whicli it, undertakes to spend upon the work, or the ratepayers of the county must impose upon themselves a special rate which will repay one-fourth of the LG,OOO, namely, L 1,500, in twenty half- ! yearly instalments, without interest. In other words, three-fourths of the cost of i the construction of the main roads will be 1 paid by the Board, and one-fourth by the 1 County either in cash or by way of a i special rate extending over ten years. * Hon. members must bear in mind that ( the waste lands of the Crown and Native 1 lands are subject to a special rate, as well 1 as private lands. The reason for making 8 no grants unless the county is prepared to I contribute a fair proportion of the I outlay will be obvious to the committee. 0 I now turn to the proposed assistance to c be given to the district roads, that is to ° all roads other than main roads. The Bill o provides that the Board of Local Public 8 Works may borrow from time to time at 5 c per cent, interest, of the Postmaster- J 1 General or Government Insurance Com- n missioners, any sum not exceeding the v whole LIOOjOOO, the colony being liable ° for its repayment, and lend it to the local bodies for the purpose of constructing h district roads. The terms upon which 8 grants to be made are, that a special rate e is to be levied by the local body desiring P to borrow, whicli shall produce 9 per cent. tl per annum upon the proposed loan. The. P interest charged is to be 4 per cent., so tl that 9 per cent, paid half yearly will cover tl both interest and sinking fund, and will w extinguish the loan in fifteen years. It h will be observed that the rate of interest if is very low, and the terms of repayment u: easy. I think, however, hon. members tc will approve of substantial assistance sc being given to local bodies for the purpose bi of constructing roads throughout the G colony, if only we keep within our legiti- tl mate means. But the Committee will si say, how can the Board borrow money at ei five per cent, interest, and lend it at four? w. Sir, this difficulty can only be got over by hi the same means as is proposed in the case of the funds for the construction of main roads, by making a grant from loan to start the fund. I shall, therefore, ask for y L 150,000 to be granted for the purpose. The Board will then be in a position, should the grant be made, to lend £ n L 150,000, or any less sum, at four per cent, interest, and at the same time to pay 5 per cent, upon such sums as it may rc borrow up to a limit of LIOO,OOO, with a jv safe margin for contingencies. J BOROUGHS. So far, sir, I have not yet directly men- ar tioned an important branch of my subject; I refer to boroughs. I do not desire to make light of the present loss to these bodies on the subsidies.. My proposals will no doubt necessitate for a time a reduced expenditure, but there will accrue j to the boroughs the permanent light to £ a tax Government and Native property of not much less than one million in value. I say permanent, for 1 think no one can doubt that if once the principle of taxing Government property is admitted by this House it will never be possible to retrace that step. The rates on all Government , property it is proposed to charge upon the consolidated fund, as being properly in- j eluded in the ordinary expenses of Government. I trust, sir, that the proposals ou which I have thus briefly sketched will commend themselves to hon. members, as at any rate the basis upon which this ' important question of local finance may be j ultimately settled. We are all of opinion, I think, that the subsidies should cease if || c means to a reasonable extent for carrying oil the necessary jvorks can be provided in ■ a/better way, and ! ‘submit that' pur 'pro'- £•» ppsalp' are 'better ‘ ip "eyery regpect.' The g £clipme is spunci, b'ecausp'jt bagejl iippp tyrp pjflncipipf which are how unanimously accepted ih thig House— that the proceeds of land sales shoqld be applied to the ppening up and settling the epuptry ; second, that the landowners must for the r\ futpre practically find t)ie paeans tp m(aintain t]ie roads of thp colopy. Apd it has moreover this great addjtiopal advantage, that it will §npble us to copipjetp thp separation of general and local finance, “I* The ope will ip futpre be in no way dependept upon the other—an advantage B* which I venture to think will be of inoalculable benefit to both the Government Tl and local bodies. Should our proposals “ e meet with the approval of Parliament I hi shall also ask for authority, where necessary, to permit local bodies to receive c ‘ directly every tax or rate which belongs P c to or has been made over to them. ESTIMATED EXPENDITURE OF THE CONSOLI- W DATED FUND, 1880-81. Se Honorable members will kindly bear in a = mind that the land fund will be a treated separately, and that it is therefore ot excluded from the estimates of expendi- a I ture and revenue which I am now about to submit. Although treated separately, the land fund remains to all intents and 3 T< purposes a part of the consolidated re- m venue, for the purpose of security to the ac New Zealand bondholders. Tfie Estimates B sfiow avei-yia'rge de'diVctlon 6r the "charges hi Upon the consolidated fund, as compared with last year, amounting in the gross to L 541,000 ; and but for the increase in expenditure over last year of L 109,000 for w interest, L 28,000 for education, over ta which, of course, the Government had pt pd Control, the reduction Would have been A L'673,000." Aind if we deduct frorp this T: the' ‘ Sum di ' Llfio,ppp *trap l sfei-'rdd as rii charges against the land sales, there would a ; still have remained the very substantial he reduction of L 523,000. But even after tr making provision for this increased ex- fe penditure of L 132,000 on interest and oj education, and allowing for the loss to the te revenue of the proceeds of land sales Tl 1)290,000, there will be a nef saving of wl expepditpre from the fpfjd of $e 11341,000, ‘and this without impairing the fp upefulnesg of the locql bodies, the effi- It ciepcy of the public service, or shifting pr burdens which should be borne upon re- th venue to loan or other funds. The total to proposed votes for the year, exclusive of w< liabilities, are L 3,473,709. But of this we pr cannot spend and bring into the accounts be within the year more than L 3,248,709. fn This advantage will iiot recur, but fortu- LI pately comes to our aid now, thus an

as giving the revenue time to recov< ■xt its normal condition, as we have evei us reason to hope it will by next yea: nf r It will perhaps astonish lion, members i he hear that we are now paying ov£ •id Xi 1,000,000 a-yoar salaries, pay, an in wages, and L 18.070 for pensions. Th },] includes our railway employes and oi c |s ordinary complement of constabulary an a police. Of this sum L 643.000 is fc lf l salaries, pay, and wages of L2OO a-yes ig and under. The Government have ha jf no time to grapple with this enormous e? j pendituro during the short recess jus y~ terminated, but they have made reduc ;h tions wherever it was possible to do a without detrimentally affecting the mack )e nery of go\eminent. We have given th [ n subject as careful consideration as th !( j time at our disposal would permit, but, a «h I have often before pointed out, cffectiv and permanent reductions, as distin sd guished from spasmodic efforts at economy n must be the work of time. Bub, althougj ;o time was necessary to deal with this sub ie ject comprehensively, and we had so littl Le time at our disposal, we felt this could b ,j no excuse for not at once making a begin • e ning. Besides several minor reductions i 6 my hon. friend the Minister for Publi Works has reduced the expenditure of hi; [ s department by L 36,000 without impairing n in any way its efficiency. The Nativ< 0 Minister has succeeded in reducing tin y expenses of his department from L 46,944 which was last year’s estimate, to L 24,201 |j this year, or after allowing transfers tc 11 other departments, to nearly 50 per cent. 1 In the land purchase department, which I had grown into a serious excrescence on | the Native office, he has reduced the t salaries from LIO,OOO to L 6,000 a year, or 3 about 40 per cent., and in botli cases I venture to assert the service is 3 being better performed than formerly, f The Government have had under consider--1 ation the questions of the salaries of ; Ministers. Looking to the financial . position of the colony and the necessity t for reduction, which must be made in some : form, wo propose that 20 per cent, shall be . deducted from their salaries for the current , year, beginning on the Ist July next. So fur, sir, a reduction is simple enough. Gross and cruel injustice may be easily done to many deserving officers if largo reductions arc indiscriminately insisted upon, and the efficiency of the public service may be seriously impaired. Wo have among our civil servants not only a large number of willing and efficient officers, but we have men who would be a credit to any service. And while some of our departments urgently require reform or remodelling, or even abolishing by consolidation with others, some I am sure could hardly be touched without being injured ; and again while some officers are no doubt overpaid, others, considering the value of their services and the difficulty of filling their places, deserve more than they get. We can therefore lay down no inflexible rule for retrenchment. But, sir, an effort must be made in the interest of economy at once. We shall therefore propose to the House, notwithstanding the fact that the Estimates have been apparently kept within the narrowest limits, that 5 per cent, or L 50,000, be struck off the votes for salaries, pay, and wages, and we shall then proceed in the manner I have indicated to make this saving. And if with the aid of the departments we are unable to make the necessary reductions to cover this amount, we shall issue a scale of per ccntages showing the sum to be deducted for every employee of the Government, which together will make up the L 50,000. If, then, the Committee should agree to this reduction, the total expenditure within the year I estimate will be * L 3,198,709, for which provision has to be made. ESTIMATED REVENUE OF THE CONSOLIDATED FUND, 1880-81. The Treasurer then gave his estimate of the probable revenue for the ensuing financial year, and put it down at L 3,190,000. He could not take as hopeful a view of the Customs receipts as he had wished, and the financial depression had rendered no more than a not very reliable approximate estimate possible. From this source perhaps L 1,250,000 might be obtained. There had been an ominous decrease in the revenue in 1879, and a more than proportionate decrease in the first quarter of 1880, and this notwithstanding the increase of duties. Imports, too, had fallen off during that quarter, and not from any diminution of imports of material for Government, such as railway plant, etc. There had been an actual falling off from tobacco, from spirits, and from drapery. A surplus of L 41,082 was expected of railway revenue over expenditure, and a slight Increase of freight charges was meditated. The estimated expenditure for the year was L 3,198,709, and the estimated revenue L 3,190,000, leaving a balance unprovided for of L 8,709. In regard to this the Treasurer said : I would again call the attention of the Committee to the fact that if we made up our accounts as we have done heretofore there would be a still further amount to make good of L 225,000. But as I have said before, this will not become payable within the year, and therefore I do not propose to make provision for it. I hope hon. members will understand that, although this is jh'no sense,' putting qff a payment which could be made duriqg the year,’ jet that in futurq years' the postponpd liabilities qt the end will be counterbalanced by the outstanding liabilities at the beginning. In other, woyds, through beginning this year free we have to pay less during the year than in any succeeding j T ear by the qmount of liabilities which will necessarily be outstanding at tl|e end of this year, THE |.AND fund, I must, sir, hgre say a few words about the land fund, the receipts of which, from all sources, are estimated at L 335,000. Of this L20Q,000 is for land sales, and L 135,000 for pastoral rents. The pastoral rents, being revenue, have been included in the consolidated fund, but the L 200,000 estimated to be received from the land sales has not been so included, but in accordance with our proposal of last session, repeated this evening, it has been set apart to be separately dealt with. The charges, as hon. members will see upon reference to the Estimates, against this, amount to L 150,223, leaving a balance 0fL49,777, which, if our scheme of local finance should meet with the approval of the House, will he handed over to the Local Public Works Board. We shall further propose that in every year when the proceeds of land sales is more than enough to pay charges and administration and the LlqOiOOO,’to the jjoard ot Lobal Public Works, and the balance shall bo paid into the Public Works fund. PROPOSALS FOR THE FUTURE. The Government, in accordance with what they believe to be the desire of the tax-payers, will ask the House to exempt personals effects, furniture, and books, Ac., from assessment under the Property Tax Ac> ' By" tMs ‘concession, ft is’ estiriiafed that the revenue will lose L 40,000 a year. This necessitates the question of how it can be made good in the most effective and least objectionable manner. I fear there are only two practicable courses open to us ; that we may re-impose the tea and sugar duties or we may tax beer. The Government have carefully considered whicli of fheae courses fq follow,‘|ii"d havfi fjetermihecl to ask ‘ Parliament tp impose a tax upon colonial teer of 6d. per gallon. It is with grpat regret that I make this proposal, but the financial position of the colony is such as to compel us to resort to taxes which in more favorable times we should not have supported. We also propose to increase the duty upon imported beer by Gd. a gallon. I hope to obtain from the beer tax during the current year LBO,OOO, or at the rate of LIOO,OOO per annum. It will be within the recollection

er of hon. members that I proposed last year r y to introduce a Bill to increase the succesr - sion duties, but that through want of time 1° the Bill was never circulated. I propose er to proceed with that Bill, and should it W become law it will increase the stamp Is revenue this year by about LIO,OOO. Jr Summarising then, sir, my proposals, for “I the convenience of the Committo, they ar amount to this. The deficit between the ar estimated expenditure and revenue is l( I L 8,709, to which I add the property tax, making a total of L 43,709. The estimated st produce of the beer tax is LBO,OOO, to which I add the LIO,OOO for increase of 30 stamp duties, and obtain L 90,000, thus >- showing, if our expectations prove correct, 16 a credit balance of L 41,291 with le which to end the year, a margin, as ls the Committee will agree, none too wide. " e The Treasurer concluded by expressing a hope that the connection would be realised ] i in future between additional borrowing h and additional taxation; that every million >- added to the permanent debt meant a le permanent annual charge of L 50,000 to the •e colony ; which on’y taxation would meet; i- and that the difficulties now experienced b would teach a lesson of thrift and economy, c Ho them moved as follows :—“That s towards raising the supply to bo granted g to her Majesty, there shall be levied and o charged on and after the ninth day of e June, 1880, by an excise duty of sixpence ■, per gallon on all ale, beer, porter or other 2 malt liquors brewed or made in New 0 Zealand before removal from anj r brewery, ;• cellar, warehouse, etc., or other place in 1 whicli the same may be stored ; such duty i to be levied, collected and paid in such 3 manner as the Commissioner of Customs r may direct. That in lieu of the duties of 3 Customs now charged on the undermen--3 tioned articles, the fallowing duties of Customs shall, on and after the ninth day • of June, 1880, be charged thereon, on f importation into New Zealand, or on being cleared from any warehouse for ’ home consumption, viz : —Ale, porter, ! beer, of all sorts, cider, and perry, in 1 bottle, the gallon, Is. 9d.; ale, porter, 1 beer, of all sorts, cider and perry, in bulk, the gallon, Is. 6d. ” After a long discussion, the motion was carried. Wednesday, June 9. AFTERNOON SITTING. The House met at 2.30 p.m. A NEW FEATURE. Sir Wm. Fox gave notice that he would move, on consideration of the Licensing Bill, the insertion of a clause giving relatives the right of action against anyone ■ supplying liquor to persons to their ; injury. NEW ZEALAND 'WINES. i The report of the Local Industries Commisson on the sale of New Zealand wines i was laid on the table. THE SUBSIDIES. Mr. Sutton gave notice of motion for ] payment of subsidies to local bodies as 1 heretofore during the "ensuing six months. questions. 1 In reply to questions it was stated that ] Building Societies would be charged under Section 13 of the Propertj Tax the same as other companies. Govern- c ment recognised the importance of the Bill t to prevent threatened representations of 1 an indecent or immoral kind, but were prevented by other engagements from in- t troducing such a measure. Such a Bill a introduced by the lion, member would r have their support. On cause being shown, t the sale of the Hannah Mokau would be t delayed for a month. Government had c under consideration the propriety of ex- b tending the time for furnishing the statements required by the Property Assessment Act, but no modification wsuld h be made in view of its repeal. Corres- S pondence between the Government, the o Agent-General, and the Loan Agents re- m lative to L 5,000,000 loan and the conversion of loans would be produced. No h provision would be made towards continu- w the grant of land scrip to Volunteers.. and they did not consider Volunteers entitled to any remuneration. I NEW bills. fi The following were introduced and read tl a first time :—To perpetuate the recognition of the public services of W. S. Moorehouso, Esq., in the late province of s? Canterbury (Sir G. Grey) ; to amend the r< Crown Grants Amendment Act, 1870, Li (Mr. Rolleston). p knighthood. H The Hon. John Hall produced the J Governor’s message containing a despatch h from the Secretary of State for the al Colonies intimating the honor of Knighthood had been conferred on the Speaker of the Lower House. lie moved that the b despatch be made a record of the House. p Mr. Macandrcw seconded the motion, b which was carried, and the compliment tl was acknowledged by the Speaker. tl sir julius vogel’s candidature for fal- y ( MOUTH. oi Mr. Gisborne moved for copies of cor- «■ respondence, etc., with the Agent-General on the subject of his candidature for the House of Commons, and also on his being a Director of the New Zealand Agricultural Company. ' JJ Sir Win. Fox seconded. T The Hon. John Hall promised th,at the tc correspondence would be produced. U ; The following motion was agreed to ! - A fftip-n qf aiqqqnte paid for advertising 1 and printing to newspapers, from Ist October to 31st March last (Mr, Wallis). a Mr. BfcLaqghlan moved for the corres- S pondence relating to the treatment, h death, and the inquest held on the body C of Jqlm Wilson, found dead in his cell in ■ the gaol at Invercargill. The Hon. Mr. Rolleston produced the _ correspondence, and stated that a Royal Commission would be appointed to enquire if deceased had been neglected. -p The motion was carried, and the House J adjourned at 5.30. y

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PARLIAMENTARY. Ashburton Guardian, Volume 1, Issue 111, 10 June 1880

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