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THE FINANCIAL STATEMENT., Ashburton Guardian, Volume III, Issue 665, 17 June 1882
THE FINANCIAL STATEMENT.
The following is an epitome of the Financial Statement delivered last evening by the Colonial Treasurer : 1 am presenting the Budget thus early because the Government are anxious that the House should have ample opportunity of carefully considering and discussing the financial position and requirements of the colony. In furtherance of this object, which I feel sure will meet with the approval of the committee, I hope to place the estimates in the hands of lion, members not later than to-morrow, and I venture to express the hope that the House
will Consent to tlio appointment of an early day for going into supply, and not permit the postponement of so vital a question as Ways and Means until the end of the session, when hon. members arc often unable, from mere physical exhaustion, to give the subject that attention which its importance demands. The committee will be glad to learn that the reports which have been in circulation for some time past to the effect that there is considerable surplus standing to our credit upon the transactions of the year are substantially correct. I shall not therefore trespass to-night to so large an extent upon the patience of hon. members as I have been compelled to do so on some former occasions. My statement will be short, but I must still ask for the indulgence of the committee while submitting for its information the somewhat dry details of the financial results of the last annual period and the proposals of the Government for the present year. The expenditure for the year under permanent Acts of the General Assembly was estimated at L 1,570,919, including L 1,499,318 for interest and sinking fund, while the amount voted for departmental services was L 1,757,060. The total estimated expenditure sanctioned by Parliament was, theref0re,L3,328,579. The actual expenditure was L 3,278,820, being L 49,759 leas than the estimated amount. There are no items of this expenditure which appear to call for special remark. The estimated revenue of the year, exclusive of revenue derived from the sales of land, was L 3,297,650, and the actual amount paid into the public account was L 3,488,170, being L 190,520 in excess of estimate. Following the course approved by Parliament in the session of 1880-81, a separate account of the land sales has been kept. Adding to the receipts of the year the balance at credit of land fund account on 31st March, 1881, amounting to L 32,373, and deducting the expenditure, we have a balance of this account of L 11,360 at credit on 31st March, 1882. The appropriations on the Public Works Fund account for the year ended 31st March last amounted to L 1,892,554. The actual expenditure, however, was only L 977.886, including 1454,224 for railways. Included in the liabilities of the Public Works Fund at the end of the year is the sum of L 338,876 for the purchase of native lands, particulars of which will shortly be placed before the House by my colleague the Native Minister, who will also state the proposals of the Government with reference to our future policy in the purchase of native lands. In the meantime I may inform the committee the amount which will be required this year to complete the purchase of those blocks which the Government have decided to acquire will probably not exceed L 109,000. The gross public debt of the colony on the 31st March, 1881, amounted to L29,1C5,511, subject to a deduction of L 2,057,242 for accrued sinking funds. On the 31st March, 1882, the debt was L 29,946,711, and the sinking funds had increased to LL2,266,418, the net debt being thus L 27,680,203, or L 572,024 more than it was the previous year. This increase of debt is thus explained. Of the Treasury Bills, which on 31st March, 1881, formed a portion of the public works tund, sales to the amount of L 431.000 have taked place. These bills had been taken up in 1880, with money standing to the credit of that fund, as there was then a large balance not wanted for immediate expenditure requiring temporary investment. They have now been sold, and the proceeds paid into the public works fund, as money was required for the works authorised by Parliament. The debt has also been increased during the year by further advances, amounting to L3C4.700, obtained in London on the security of the debentures of the loan of 1870, guaranteed by the Imperial Government. With reference to the LBOO,OOO Imperial guaranted debentures, I may, perhaps, remind the committee that although in speaking of the amount of public works fund they are always treated as cash, as a matter of fact they never have been sold, but are used to provide a working balance to save interest, by borrowing upon them from time to time only such sums as are required, according to the stale of the public works fund. I may mention on the other hand that the debt has practically been reduced during the year by an addition of L 209,176 to the accumulated sinking fund, to which has to be added L 14,800 for debentures of the North Otago District Public Works Loan of 1872 redeemed. The net increase in the total amount of debt being thus, as I have said, L 572,024. Before [ proceed to sum up the financial results of the year 1881-2, it may be not be out of place for me to state a few facts in connection with the Government Savings Bank and the Life Insurance Department by way of illustrating the steady progress of the colony, and the rapid advance of these institutions, and the growth of habits of prudence amongst the people during the last ten years. In 1871, with a population of 266,986, the amount standing at the credit of the open accounts in the Government Savings Bank was L 357,654. These accounts were 10,549 in number, and the average amount at the credit of each was L 33 18s Id. In the Savings Banks established under the Savings Bank Act, 1858, the total amount at the credit of depositors on the 31st December, 1871, was L 97,312, distributed over 3,726 accounts, the average amount at their credit being L 26 2s 4d. There was thus a total sum of L 454,967 in the Savings Banks in 1871 at the credit of 14,275 persons, the average amount for each being L3l 17s SJ. On the 31st December, 1831, the population of the colony was 500,910 ; there were 51,008 open accounts in the Government Savings Banks, aggregating the amount of L 1,232,788, or an average of L 24 3s 4d at the credit of each. In other Savings Banks there were on the same date, 10,046 open accounts, the totalamountat credit being L 316,727, or an average of L3l 17s Id for each account. The total amount of deposits in the Savings Banka in the colony at the end of the year 1881 was, therefore, L 1,549,513, belonging to 61,055 depositors, with an average of L 25 7s 7d at the credit of each, as ! against L 454,966 in 1871, and 14,275 depositors, with an average of L3l 17s sd, the population during the ten years intervening having increased from 266,936 to 500,910. These figures are well worth the careful consideration of hon. members. Tiiey show the remarkable extent to which tho advantage of the Savings Banks is being taken by the people for whose benefit they were 'established. The population having barely doubled itself since 1871, while the number of depositors has increased nearly fivefold. Going on to speak of the growth of the Government Assurance Department, the Hon. Treasurer said the business of the department in the first ten years of its existence produced a profit of L 77.000, as shown by the valuation report of the London actuaries, which was laid before Parlameut last session. The business done has increased from 460 policies issued up to June, 1871. insuring L206,0J0, to a total of 16,900 policies, issued during the eleven years ending June, 1831, insuring upwards of L 5,800,000, being equal to an annual average of 1,500 policies, insuring fully half a million each year during the period. Tho business of the year now approaching its close will, I am informed, considerably exceed that average, and probably reach L 600,000. The growth of the assurance fund is not less satisfactory than has been the progress of the annual business, From a sum of L 5,000 in hand in Juno, 1871, the accumulated fund by June 1881, had expanded to over L 557,000, and now it has reached neaily L 650,000. Agreeably to the wishes of Parliament, as expressed last session, an industrial branch enabling persona to insure their
lives for sums ranging from L 3 and upwards by means of weekly payments, was opened in the early part of March last. During the thirteen weeks which have since elapsed, 2,100 industrial policies have been issued. The avarage amount insured for all ages is about L 25 per policy ; for adult lives about L 55. As in the ordinary branch of the department* so ol’o in the industrial branch, any profits which may arise will be divided amongst the assured, a provision which is quite a novel feature in what is termed industrial insurance. To facilitate the payment of small quarterly premiums, there will be provided cards on which postage stamps can bo affixed until the amount of the quarterly premium is reached, and the cards can then be deposited in the post office, where credit will be given for the premium they represen*. Arrangements are also being completed by which Post Office Savings Bank depositors may make payment of premiums out of their deposits by means of an instruction to post masters for that purpose, thus saving trouble and securing the maintenance of the policy. These facts and statistics show the remarkable growth and still increasing progress of the department, which is evidently supplying a great public want, and is now so far advanced that the Government, as I have on former occasions mentioned to the House, have decided to ask Parliament to place it under the control of a Board. A Bill to carry this object has been prepared and placed before members. Before leaving the subject of life insurance, I may offer a few additional figures, showing further the remarkable stimulus given to that form of family provision since the establishment of the Government' scheme .jn 1870. The number of life policies in force in New Zealand in that year has been estimated at 2,000 insuring LI ,000,000. Last year there were in force in round numbers 24,000 policies, insuring L 8,300,000, of which more than one half is insured in the Goverement department. This gives an increase foi the period of 22,000 policies, and L 7,300,000 in tho amount insured, or eleven* times the number of persons, and more than seven times the sum insured in the colony eleven years ago. The total moneys received and paid into the public account during the year, including land sales, was L3,£05,233; and the total expenditure, including charges on the Land Sales Act, L 3,616,895. The receipts were thus L 188,338 in excess of the expenditure, and, adding to this sum the surplus at the close of the year 188081, L 26.706, we find that we have a credit balance on the 31st March, 1882, of L 215,044, This result is one upon which I hope I may be allowed to congratulate the committee. It fully bears out the opinion expressed by the Government in 1879 that the grave depression and deficit then existing were temporary and remediable, and shows us that the course then determined upon by Parliament of a rigid economy and sufficient taxation has restored the finances of the colony in a remarkably short time to a thoroughly sound condition. We may well be proud of belonging to a people and a country which can in such circumstances produce such results as these in a period of two years. The question of local finance has been again carefully considered during the recess, and the Government have thought it advisable to issue a circular to local bodies asking for their opinion upon the subject, and also upon some important questions relating to the constitution of the county councils and road boards. I shall shortly ask leave to introduce Bills to give effect to such alterations as the Government think necessary in the constitution of these highly useful local bodies, and also to make sufficient provision for their financial requirements. Ido not propose to trouble the committee with any particulars of the proposed Bills, as it will be more convenient to do so when the Bills themselves are under consideration. I might, however, say that the principles which tho Government have taken for their guidance in preparing these measures are:—(l) That tho local bodies should be left as free as possible from central control; (2) that they should have conferred upon them all powers which can be advantageously exercised by such bodies; (3) that their finances should be as distinct as possible from the colonial finances, and that their revenues should be sufficient. The necessity of dealing with this subject during the present session is admitted upon all sides. The question is not one which should be treated as a party question, and I venture to hope that the Government will receive the hearty support of both sides of the House in providing the country districts with means of performing the . important, duties which have been imposed upon them of making and maintaining a large proportion of the roads of the colony. The estimated annual appropriation for this year amounts to L 1,851,127,. This shows an apparent increase upon last year’s votes of L 93,468. I say apparent, because the services for which a largepbrtion of the extra L 93,468 is required were paid for last year out of loan. I anticipate, 1 - if taxation is to remain unaltered, with the property tax at one halfpenny in the pound, that we shall receive a total ordi-,. nary revenue of L 3,393,500, exclusive of. land sales. To this must be added the balance of L 203.683, which stood to our credit on 31st March, and we then get the sum of L 3,597,183 as the total amount available for the services of the year.Now, if from this we take L 3,478,639, the estimated expenditure to which I have already referred, there will remain a balance of L 118,544 at the end of the current financial year. The Treasurer then • went into the subject of charitable aid, which, ha said, must be considered before ! the questions of what should be done with the surplus, aud what relief, if any, I could be given to the taxpayers of the colony, could be dealt with. It may be taken for granted (the Treasurer proceeded) that the indigent and the sick poor must be fed and clothed and properly looked after by the community. Should private charity fail to make proper provision—and that private charity will fail to make a sufficient provision, I fear, is only too evident—the State then, as the State, will have to undertake this business in some form. It may be impossible to deal with this large question during the present session ; but as there is a great, and I believe a very general, repugnance to a poor rate, in which I strongly sympathise, and as grants from the consolidated revenue are, to say the least, very undesirable, I propose to submit a scheme of national assurance for the consideration of the House, which I believe to be thoroughly practicable, within the means of our people, and which would make necessary provision for the sick, the widow and the orphan, and the aged. It is possible that my enthusiasim has carried me too far upon this subject; his made me too hopeful. But i havo given the question much thought, and I am convinced that the scheme which I shall, at an early day, submit to the House is within the bounds of practical politics for us in this colony. Major Atkinson went on to point out that sufficient provision must in any case be made for charitable aid for the year. He would have to ask for a grant of L 50,000 for Hospital maintenance The continued assistance of local Boards or local committes would have to be asked in managing the Hospitals. W ith regard to charitable aid now coating L 40,000 a year, he would have to ask for L 20,000. The relief to be given as far as practicable through local institutions, the Government granting £ for £. If this proposal (the speaker continued) should meet with the approval of the committee, I shall have to increase the L40,000:for ; hospitals and charitable aid, which I; men-., i icned as included in my estimated ezseh*
diture to L 70,000, thus disposing of L 30,000 of the surplus. The balance then of L 118,544, which I said would probably be to our credit on the 31st March, 1883, will bo reduced by this means to L 88,544 I will now turn to the consideration of the question what relief if any can be given to the taxpayers of the colony. We have now only a surplus of L 88.544 as a margin—after making the temporary provision j I have jnst proposed for the services of thb J'eitr, which are not of a permanent fchirkcter, amouhtihg to about liloo,ooo. With such a stirplus we might, if we did not intend, as we do, to go upon the London money market early next year for a further loan to continue our Public Works scheme, safely reduce taxation by at least L 50,000. But taking all the circumstances of the case into consideration, I do not think it would be prudent to reduce taxation at present. If it be deterto borrow more money to enable us to complete our main lines of railway, it will obviously be necessary to continue taxation at such a rate as will insure an ample margin of revenue to pay interest on the money borrowed. Taxation must, as a matter of course, remain at a high rate, until the works now being constructed out of loan are completed and have had time to become productive. The estimated expenditure chargeable against the land sales fund is as follows : —For charges fixed by Acts of the General Assembly, L 41,600; for the Crown Land, Survey, and Mines Departments, L 153,810. The receipts from land ■ales are estimated to reach L 354,000 for the current year. Adding to this sum the balance at the beginning cf the year L 11,360, and deducting the estimated expenditure L 195.310, we have a balance remaining of L 170.050. The question of the disposal of this balance must he postponed for the present, until the Legisla ture has determined what form of aid shall be given to local government bodies. The proposals of the Government in reference thereto will be submitted, when I introduce the Bills which have been prepared for dealing with this subject. It will be in the recollection of some members that last year I intimated to the Bouse the intention of the Government to submit for consideration a Bill authorising the issue at par of a loan of L 25,000, the principle and interest of which would be payable in New Zealand only. Circumstances prevented the Government from giving effect to that intention during the last session of Parliament, but steps are now being taken to prepare a Bill, which will be submitted for the consideration of the House in the current session. I have drawn the attention of the committee in a previous part of this statement to the very large accumulations of money in the savings banks in the colony, and the Government think, as I remarked in the statement 1 had the honor to make last year, that many of the depositors of this money, as well as the public generally, might be glad of a more permanent form of investment, if one can be provided, which is at the same time secure and easily convertible into cash. I propose, as before, that the loan shall bear interest at a rate not exceeding 5 per eent., and that the proceeds shall be paid into the public works fund, to he appropriated by Parliament. I also propose that the loan shall be issued in the form of inscribed stock, with the right to the
subscriber to obtain at any time when desired bonds payable to bearer of LlO and upwards. The Government believe that securities such as I have described will find favor with the public so soon as their nature is generally understood. The loan will be disposed of equally as it comes into favor, the object of the Government not being to obtain funds for expenditure, but to provide a class of security for the investment of savings which seems generally to be desired, and is likely to have a very beneficial operation. We find that the industrial class, consist-
ing of 312,436 souls, exclusive of 11,903 domestic female servants, pays L 269.751, being at the rate of 17s 3d per head, or, including the drapery duties paid by these domestic servants, L 280,062. The intermediate class, consisting of 96,260 souls psys L 256,272, or L2 13s 3d per head ; and the property class, consisting of 68,445 souls, L 439,819, being at the rate of Lfi 8i 6s per head ; that is, with the Property Tax at Id. But if we take that tax at sd, they pay L 310,719, or at the rate of L 4 10s 10£d per head. These amounts are exclusive of the duties upon spirits, wine, tobacco, colonial beer, and do not include, for obvious reasons, that part of our so-called taxation which is paid for by each class in proportion to use for service rendered by the State, such as post office, telegraph, court fees, etc. With taxation it is, of course impossible to meet individual cases. In apportioning the taxation of the community we must take a wider view, and t . deal with classes considering their circumstances and numbers. It is difficult to exaggerate the importance of this subject, for badly-adjusted taxation means undue exaction from some class or classes, which cannot fail to be detrimental to the community as a whole ; while, on the other hand, fairly-adjusted taxation means that i the public burdens are borne with as much - ease as their extent will admit. I will express the hope that this question will receive the careful attention of hon. members of all interested in the public welfare throughout the colony, so that when our financial position : permits we may deal with the subject on broad and intelligent principles. Government, taking into consideration all •; the circumstances of the colony, have determined to propose to Parliament a loan , of L 3,000,000, to be raised and expended at a rate not exceeding L 1,000,000 per ■ annum. The speaker concluded by saying that he had full confidence that folclowingthe rule of prudence and economy, , and a cautious and well considered advance in public works as funds became available, they would not only maintain, but as the resources of the country became develop ed, steadily increase the present satisfactory condition of their finance.
THE FINANCIAL STATEMENT., Ashburton Guardian, Volume III, Issue 665, 17 June 1882
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