THE FINANCIAL STATEMENT.

Auckland Star, Volume XXIX, Issue 206, 1 September 1898, Page 6

THE FINANCIAL STATEMENT.

A: ' .WELLINGTON, August 9

' In the House to-day in Committee 2>f Supply the Colonial Treasurer (the Sight Hon. R, J. Seddon) delivered the annual financial statement, which Was as follows:—

Mr Guinness, —In accordance with ! the announcement made last week, it! gives me very great pleasure to place j before you the much-inquired-after and longed-for Financial Statement. For some years past the reference in the Budget to matters not directly relating to finance has given rise to prolonged debates. To obviate this I have made a departure by eliminating from the Financial Statement this year all reference to extraneous matters not bearing directly on finance, and seeing that the statements and reports from the several Departments give more complete aud elaborate information on the several subjects than was contained in the necessarily condensed reports in previous Financial Statements, it will be an advantage not to have the Budget loaded with reference to departmental and abstract policy questions. It is pleasing to me on this, as on former occasions, to relate to honorable members that there was another substantial surplus at the close of the financial year. In accordance with the provisions of the PubRe Revenues Acts, the audited accounts of the colony have been duly gnzetted, and consequently their contents have been published far and wide. I have been extremely amused at the 'war of the surplus' which has been waged by leading journals. In one camp it was complacently asserted that'the alleged surplus of £521,000 was in reality a deficit of over £800,000, and the fignires compiled by an erstwhile champion of members opposite were triumphantly quoted in support of this contention. I have little desire to enter the lists, for it appears to me to be of no importance whether the real and substantial sum of £521,000 with which the year closed is called a 'surplus' or a 'balance.' The amount is available for expenditure during the current year, and as Colonial Treasurer I feel quite satisfied that whatever it may be called, the money is there. Perhaps if the word 'balance' was made use of there would not be so much argument. The exact figures of the balance with which the year concluded were £521,144 after payment of £10,000 for the patent rights of the cyanide process, and the transfer of £300.000 in aid of public works. This last-named sum completes a total of £1,330,000, which has been, during the last few years, contributed to the Public Works Fund out of the balances of the ordinary revenue account of the colony. This very substantial aid has been obtained without entailing hardship or inconvenience to the public at large. The annual interest on the £1,330,000 at 3i per cent, is £46,----550. That would otherwise have been sent out of the colony, which would have been poorer by that amount. I notice in the controversy which has been going on over the surplus that much stress has been laid upon the inclusion in the revenue account of the money raised under the Consolidated Stock Act, 1894, and being included in the revenue account it has necessarily formed a part of the surplus at the end of each year during our administration, when 'surpluses' have been the rule, and not, as in former years, the exception. I can scarcely be blamed for so including these sums, for the law distinctly lays down that the proceeds derived from the sale of the debentures issued unthe Act just mentioned 'shall form part of the Consolidated Fund.' The law was made by my predecessors, butnevertheless it is my duty to carry out its provisions. In previous years (as will be shown by a subsequent table) and when deficits were the order of the day, the revenue was aided by the issue of debentures against Sinking Funds to double and- treble ■the amounts issued during the last few years, and when the Ministry in office in 1890-91 showed a surplus of '£143,965, the revenue had been aided by the issue of debentures to the value of £ 288,000. I subjoin a table of balances of the ordinary revenue account, year by year, since 1871, showing the amount of surplus or deficiency at the close of each year; also the i amount of debentures issued in aid of revenue from whatever cause arising. This table, at any rate, / shows at a glance that the finance of the Liberal administration for- the last seven years has been successful; nay, it may be truly observed that the balances during that period form a marked contrast in our favour to those under the successive Con. rvative Governments. We have often been taunted that we know nothing of finance, not even the rudiments, but although only an unsophisticated plodder in the intricate labyrinth of fipances, I claim to know, at any rate, how to keep on the right side,of the ledger. Perhaps it, was our predecessors' highclass ability in financial matters which so constantly produced an tmder-estimatedexpenditure and over- . estimated revenue, with the result of landing them in financial deficits. Table showing the position of the Ordinary Revenue Account at the close of each financial year, commencing 1871 :— Colonial Treasurer Year Deficit )•• Office, June 30,1871 .. .3521,183 .. .1: us Vogel June 30,1872 .. £505,617 .. ,T:..ius Vogel June 30,1873 .. £256,963 .. Julius Vogel June 30, 1874 .. / £123,160 .. Julius Vogel June 30,1875 .. £320,388 .. Julius Vogel June 30,1876 .. £151,227 .. Julius Vogel June 30,1877 .. £612,930 .. H.Atkinson June 30,1878 .. £355,201 .. John Ballance June 30,1879 .. £500.058 .. John Ballance March 31,1880 .. £1,522,772 .. H. Atkinson March 31,1881 .. £1,837,666 .. H.Atkinson March 31,1882 .. £1,628,316 .. H. Atkinson Surplus. March 31,1883 .. £35,519 .. IT. Atkinson A deficit of £1,796.450 was wipe-:, out by the conversion of £1,832,0000f Treasury bills into permanent debt. The surplus of £35,549 is simply loan money. Deficit. March 31,1884 .. £152,111 ~ H.Atkinson Aid to Revenue from Sinking Fund Colonial Treasurer Year. Debentures. Deficit. in Office. March 31,1885.. £247,700.. £130,105.. Julius Vogel March3l 1886..£252,200..£112,141..Ju1ius Vogel March 31, 1887.. £251,000.. £92,294.. Julius Vogel The deficit had really become £212.294, reduced to £92,294 by the issue of £150,000 as permanent debt of the colony. Surplus. March 31,1888. .£257,184.. £4,745. .11. Atkinson A deficit of £395,255 was also wiped out by the conversion of £400,000 of Treasury bills into permanent debt. The surplus of £4,7-15 is simply loan money. Deficit. March 81,1889.. £263,200.. £50,836.. H. Atkinson Surplus. March 31,1890..£275,200.. £36,568.. H. Atkinson March 31,1891..£277,000..£143,965.. J. Ballance March 31,1892..£272,300..£165,573.. J. Ballance _ March 31, 1893..£270,200..£273,779.. J. Ballance March 31, 1894..£274,500..£290,238.. J. G. Ward Mar ih 31.1895..£117,800..£180,024.. J. G. Ward March 31,1896..£145,100..£215,558.. J. G. Ward March 31,1897.. £70,300..£354,286.. R. J. Seddon March 31,1898.. £69,600.,£521,144.. R. J. Seddon REVENUE AND EXPENDITURE. word or two now about the rees aafl e_q>endLtu_.e £. iasi -gear.

1597-9 S. The estimate for the year was £4,793,000; the actual figures reached £ 5,079,230, producing an excess of £286,330 over the estimate. A glance at table two, which accompanies my Statement, shows how the ; excess is made up, but I may briefly mention the largest amounts, namely, £61,400 from Customs and beer duties, £ 59,200 from stamps, £ 95,400 from railways, £43,300 from territorial revenue, £34,800 from land and income and other heads of revenue. In last year's Budget I anticipated an increase of £61,000 for Customs revenue over j the actual receipts of 1806-07, and I ex- : pressed a hope that I was not too san- | guine in adopting such increased figures. I hacl two things in view, first, that importers were very fully stocked at the time, and secondly, that the Northern gold mining activity having suffered a relapse it was only reasonable to suppose that geneI ral trade would be proportionately j affected. I may probably be blamed that my pessimistic views were not I fulfilled. Personally, I am pleased to find a different result, for the increase of revenue from this source and from our railways goes far to prove that the spending power of the people has been improved. A much larger amount of succession duty was received than could be estimated for, and this, with other substantial amounts, have swollen the stamp revenue. The land and income tax has come, in wonderfully well. The last-named tax has reached a record amount, and very fairly indicates the general prosperity of the colony. From our railways we have received, as I have said, some £95,500 in excess of the estimate supplied by the Department. There is no special feature in this to comment upon, for it is the evident result of increased commercial business, which has more than compensated for tbe loss of revenue from the. floods and from the drought in Southern Canterbury. Other heads of revenue have shown a gratifying increase. The Advances to Settlers Office was able to repay to the Consolidated Fund £22,----000 of the arrears of advances made from time to time from that fund. 1 am happy to mention that during the current year I think the oflice will be able to "repay the balance, of these advances as well as to provide for the due payment within the year of the ' half-yearly amounts of interest upon the £1,500,000 loan borrowed for the purpose of lending upon mortgages. The actual expenditure reached £4,912,372, ancl the estimate was set- down as £4,979,074, resulting in a saving of £66,702. Tbe table I have already referred to shows at a glance the various items over or under spent. The working railways' vote was exceeded by £25,796, but T do not imagine much exception will be offered to this when it is taken into consideration that nearly £ 100,000 of excess revenue was at the same, time obtained, for it is evident in railway business that increased revenue means also increased expenditure. Among the underspent amounts (which totalled to £108,173), the item of £27,709 represents principally a saving of interest payable on Treasury bills and inscribed stock. The other items are of the ordinary departmental character, and call for no special remark. The result of the transactions of the Revenue Account for the financial year ended March 31 Uist may be set down thus:—Actual receipts, £ 5,079,230,1e5s actual expenditure, £4,912,372; balance, £166,858; add balance at the beginning of the year, £354,286; surplus at the end of the year, £521,144. It has been the custom to refer to the other accounts which form part of the Public Account of the colony, ancl 1 shall do the same on this occasion very briefly. THE PUBLIC WORKS FUND, 1897----1898. In accordance with the authority obtained last session the separate accounts of the lands improvement ancl the native lands purchase have been discontinued as from April 1, 1897. The transactions now simply form part of the Public Works Fund. Dur.ing the year it became necessary to assist the ways and means of the Public Works Fund by making use of the unissued portion of the aid to public works and land settlement loan, ancl for this purpose £125,000 »was raised by the sale of debentures,and £100,000 was received as a temporary advance against short dated debentures of the loan. In the early, part of the year the £30,000 appropriated from the Consolidated Fund was made use of, and a further sum of £ 50,000 was temporarily transferred, pending arrangements being made in London for the issue of the 3 per cent, stock,by means of which £500,000 of the authorised loan was to be issued. In respect of this £50,000, it is right to mention that the Audit Office declined to allow the advance to be restored to the Consolidated Fund, except as a charge against the unauthorised account. I have, therefore, had to do the best I could with a limit of only £50,000 for unauthorised charges, instead of the margin of £100,000, which Parliament placed at my disposal for unforeseen contingencies in all funds and accounts. This smaller limit caused great inconvenience in connection with the railway and other overdrawn votes, etc. The above receipts (exclusive of the £50,000 retransferred), together with some Sinking Funds, ancl other small amounts (in all £2876), made up atotnl of £527,876, which was passed into the fund, and with the balances, brought forward, to commence the year with, namely, £359,159 (including £231,796 transferred from the separate accounts) made a total of resources amounting to £917,035, with which to meet the expenditure during the year of £865,543, leaving abalance in hand of £51,492. In addition to this balance the unissued portion (£275,000) of the authorised £500,000 loan has yet to be brought to account. THE CHEVIOT ESTATE ACCOUNT, 1897-98. The separate account for the Cheviot Estate shows receipts froiii rents, etc., amounting.to £16,277, and this money was expended in payment of interest on the special loan, in reading, surveys, ancl other charges. THE LAND FOR SETTLEMENTS ACCOUNT, 1897-9 S. For the purpose of acquiring lands for close settlement, debentures amounting to £135,000 were created ancl sold. In addition to this amount £27,667 was received from rents, leases, and fees, making, with the balance brought forward (£4714), a total of £167,381. Purchases were made to the amount of £147,990, and £10,595 was expended in roacli__g, surveys, and other expenses, leaving a balance of £8796 at the close of the year. THE CONVERSION ACCOUNT,. 1597----1898. ' 'M £h& Segißnin^ ot fibs jgeftG j_i&iac-,

count had a balance of £1573, and dur- | in- the year £554,390 three per cent, stock was inscribed for conversion purposes, and £848 of the premium, J was received on a portion of the same. iOn the other hand £360,916 of debentures was converted at different rates into £364,392 inscribed stock, and! £185,216 of various debentures was j redeemed. .The expenses amounted to £4663, ancl the balance at the close of the year was £2542. THE LOANS TO LOCAL BODIES ACCOUNT. The balance in hand to credit of this account at the commencement of last year was £4, ancl during the year £111,400 debentures were created and issued under the Government Loans to Local Bodies Act, ISBG, and refunds of £4601 were made to the credit of the j account under the provisions of sec- j tion S of the Government Loans to ( Local Bodies Act Amendment Act, j 3 896. These sums, amounting in all to \ £110,005, have enabled loans to be j made during the year to the amount j of £75,257 to local authorities, and! £18,770 towards opening up for set-1 tlement blocks of land, leaving a balance of £21,979 to the credit of the , account at the end of the year. The total amount raised and carried into this account by the creation ancl issue of debentures up to March 31 last was £1,165,500: (1) For granting loans to local authorities, £879,069; (2) for loans to open up blocks of land for settlement under section 2 of the Government Loans to Local Bodies Act Amendment Act, 1891, £196,631; and (3) for payment of £89,800 to the Public Works Fund on account of the debt of £89,878 8/9 due to the said fund for debentures issued under the Roads and Bridges Construction Act, 1882, and converted and inscribed as debts under Part 11. of the Government Loans to Local Bodies Act, 1886. The total disbursements up to March--31 last have been: (1) To local authorities, £857,091; (2) to Lands and Survey Department, towards opening up new blocks of land for settlement by construction of roads and bridges to give access to such blocks, £196,631; ancl by transfer to credit of Public Works Fund, £89,800, leaving a cash balance of £21,97S as above stated at the end of the financial year. 1 am glad to be able to state that the local authorities whose districts were overtaken by the severe flood disasters of last year have apparently been able to make good the damages without being compelled to increase their loan obligations by borrowing .under the. Government Emergency Loans to Local Bodies Act of last session. Members will, I am sure, join with me in expressing the hope that their selfreliance will be rewarded by the increased prosperity of their districts. THE NEW ZEALAND CONSOLS ACCOUNT, 1897-1898. During the year £58,780 of deposits has been inscribed. A small amount of £S5 remained uninvested at the close of business on March 31 last. THE PUBLIC DEBT, 1897-1,898. The gross debt was £44,366,618 on March' 31, 1897, ancl £44,963,424 on March 31 last, producing an increase i of £596,806 during the year Addi-' tionol debt must take place so long as Parliament sanctions the policy of acquiring land for close settlement, the purchase of native lands, the construction of railways, roads, and works, and authorises assistance to local bodies to enable them to make roads and build bridges, etc., for the purpose of opening up the splendid land of the colony in various districts. To enable this policy to be given effect 10, £246,400 of debentures, under the Land for Settlement Act, 1594, and the Government Loans to Local Bodies Act, 1886, was created, £58,780 was inscribed as New Zealand Consols deposits. The interest on these sums is more than recouped to the Consolidated Fund . In addition £69,600 was issued against the accretions of Sinking Funjjs for the year, and £225,000 was raised on account of the half million authorised under the Aid to Public Works and Land Settlement Act of 1896 and 1597. A further inscription of 3 per cent, stock took place to the amount of £551,302, for the purpose of redeeming and converting previous loans to the amount of £545,932, producing a net increase to the debt of £8460. Two small parcels of loans were paid oil', namely, £6934, the Consolidated Stock Act, 18S4, and , £4500, Lyttelton and Christchurch railway loan, 1860. The net debt on March 31, 1897, was £43,552,324; on March 31, 1898, it was £44,081,521. THE CUSTOMS REVENUE. The Customs revenue has shown great elasticity during the last three years, as will be seen by the following figures:—lß9s-96, £1,649,344;. 1896-97, £1,818,893; increase a,s compared with previous year, £169,549; equal to 10.3 per cent,; 1897-98. £1,935,352; increase as compared with previous year, £116,359; equal to 7.05 per cent, in some quarters this increase is persistently attributed to the operation of the tariff in 1895. In opposition to this view I beg to draw attention to the fact that the revenue derived from colonial beer, the rate of which was not altered, shows a somewhat similar increase, as follows: 1805-96, £62,680; 1806-97, £68,787; increase as compared with previous year, £6107; equal to 9.7 per cent, ' 1897-98, £72,179; increase as compared with previous year £392; equal to 4.9 per cent. It is also noticeable that the total value of imports has been increased in a greater proportion than the duty—lß9s-90, £6,356,985; 1896-97, £7,673,511; increase as compared with previous year £1,316,526; equal to twenty per cent. 1897-98, £5,015,990; increase as compared with previous year, £445,479; equal to 4.5 per cent. Taking the average for the two years 1896-97 and 1897-98, tlie comparison is as follows: Customs revenue, 8.6 per cent, increase; beer duty (excise), 7.3 per cent, increase; total value, imports, 12.2 per cent. In my opinion the above is a fairly complete answer to the allegation that the increased revenue is caused by the tariff of 1895. I feel sure that the increased revenue is owing to the prosperity of the country, arising from the impetus to mining, the prevalence of fairly good prices for agricultural produce, the increased spending power of the people, the settling of the people on the land, and opening up of the country. SAYINGS BANK RETURNS. Referring- to the general prosperity of the community, I may be pardoned for introducing here a few figures from the Savings Bank returns, which I think very strikingly show how substantial our prosperity has become. I will contrast the Savings Bank figures of December 31, 1597, with those of 1890. In IS9O the number of deposits received was 162.935, and the amount £1,658,543, while at tlie close of last year deposits numbered 267,615, and in .value reached the large sum of

---£ 3 187,219. The nupiber of accounts remaining open in 1890 was 97,208, as against 159,331 last 'year. Since 1890 the total amount standing to the credit of all open accounts, inclusive \ of interest, has very nearly been i doubled, the respective figures being, j in 1890, £2,441,876, and in 1897) £4,744,924. The average amount , ! standing to the credit of each open account has increased from £25 2s 4d to £29 15s 7d. Such figures as these are in the very highest degree satis-; factory, ancl prove without doubt that j the prosperity of our people is real, ! and that their earning power must! have largely increased. I hope mem- j bers will pardon me for this digression. PROSPECTS OF TRADE. Inquiries which have been made in | j different branches of trade give good j ! reason for anticipating a fairly pros- j j perous year. At all events at present j | there are no signs of any check. I i.have also consulted the Agricultural i Department, and am assured that the; ! prospects for this year are good. The ! mining industry is, perhaps, not so | promising. On the whole I feel justij fied in estimating the Customs re- ] venue at a similar sum to the amount actually received last year, viz., £1,935,000. The beer duty revenue I have estimated at £71,000, the revenue last year having been, £72,179. THE TARIFF. The elasticity of the revenue derived from indirect taxation may lead members to unthinkingly urge for a revision of the tariff, and under a misapprehension to press for a reduction on the necessaries of life. In the remission on the last tariff, under the item of tea, which is a necessary of life, we have lost a revenue of £75,000. Who have received the benefit? Is it the consumer? If 1 were to answer in the affirmative by far the largest number of persons would say I was .wrong-, and that it was the middleman who has profited. Again, it must not be forgotten that the £100,000 payable as old age pensions is practically a remission. True, it is only payable to a section of the people, but they are deserving, and being a humane and proper charge few will challenge the call marie upon them for this- purpose. Now, on broad lines of genera] policy, I submit that it would be unwise, impolitic and injurious to the colony to attempt to materially interiore with ihe tariff under the existing conditions, and would be indefensible. Great injuries would accrue, which would not by any means be counterbalanced by any remission that might be made. . A.s yet, there has not been sufficient time to gauge accurately Ihe position. We have bad two years of prosperity; can we. absolutely and accurately say how long this ""ill continue? Should there be a change in the tariff let it be made on the broad lines, that there was too much indirect taxation, and correspondingly too little from direct taxation. Tinkering with the tariff should be avoided. LAND TAX AND INCOME TAX. The revenue derived from the land aud,income taxes during the past year was £382,497, or £17,497 over the estimate, and about £5000 over the receipts of the preceding year. The steady increase in the income tax receipts has been maintained, and affords the best possible evidence of the advancing prosperity of the colony. The Consolidation Bill considered by the. Public Acounts Committee last session will be re-intro-duced. This measure, though not absolutely essential for taxation pur- | poses, deals with anomalies, which it jis considered advisable to remove, and presents the law relating to direct taxation in a clear and more concise form. Certain concessions, which it is thought equitable to make will tend to a reduction of the income tax receipts. The purchase by the Government of estates under the Land for SettlementsActsalso tends to decrease the land tax receipts, but it is expected these reductions will be more than compensated for by an increase in the land tax receipts resulting from the new valuation. Ido not, however, place the estimate for the year above £390,000, which means an increase on last year's receipts of about £7500. Turning now to matters which concern the present hour, and affect the remaining months of the financial year, I propose to give honourable members some idea of the estimated ways and means of our Revenue Account. ESTIMATED EXPENDITURE, -1898-99. The estimated expenditure for the year out of our consolidated revenue account amounts to £4,743,876, excluding £350,000 in aid of the Public Works Fund, which latter amount is provided out of the surplus of last year. The actual expenditure last year amounted to £4,612,373, therefore the current year's estimate totals £131,504 in excess of that of last year .'Fifty-three thousand five hundred and ninety-nine pounds of this arises from the extra provision for interest required on the new loans raised or authorised during the past ancl current years. The departmental estimates show a net increase of £53,952. Classification and increased facilities are answerable for £44,031 of additional expenditure for postal, telegraphic and railway services, to keep pace with the increasing population. The Education Department asks for additional expenditure amounting to £8549. There has been a consensus of opinion that our Permanent Force and our volunteers should be strengthened and made more efficient. These improvements cannot be effected without additional cost, consequently the .Estimates of the Defence Department will be found to be increased by £25,896. In the Colonial Treasurer's Department there is an increase of £13,254, but of this sum £13,000 arises from a contribution from the Land and Income Tax Department as valuation fees, which axe credited as revenue, and included under the head of 'Registration and Other Fees.' The Police Department shows an increase of £7554. It has been apparent for some time past that the police force of the colony "was numerically weak. On the present Estimates we are therefore providing for the engagement of some fifty extra men. The services I have just named really provide for ex- j penditure of an exceptional nature, i arising from causes which do not j influence the expenditure of other Departments. The amount, I acknowledge, is large, nearly £100,000, but I do not think hou. members will gainsay the necessity of providing for the services, and this will be plainly demonstrated when the estimates are under discussion. The increase of salaries by some£l4,ooo of the two classified Departments, Railway and Postal, naturally caused dissatisfaction from those in the unclassified branches of the public service, and it seems clear to me that to be just and equitable to all something should be done under a comprehensive and wellconsidered scheme, and, without un-

duly increasing the Departmental Estimates, to place each and j every branch of tbe public service on a proper footing. If an analysis were made of the increases allowed in Departments which do net enjoy the benefits of classification, I am confident that the amount in relation to the whole of the Departments so situated would n,ot exceed £3000 or £4000. In the Lands and Valuation Departments there are reductions. The Native Department anticipates recovering a large amount l for survey expenses from the proceeds !of the disposal of lands along the ' route of the North Island Main Trunk I raihvay, and in the case of the latter Department the initial expenses of valuation were nearly all in last year's expenditure, and consequently a much smaller vote is now submitted. The ! estimated ordinary expenditure for 1897-98 was £4,669,074, as against | £4,743,876 for the' current year. ESTIMATED REVENUE, 1898-99. Very careful consideration has been given' to the figures finally adopted j as estimates of the accruing revenue : of the current year. The figures I have set down for this year amount to £5,023,300, which is ,£230,300 more than I estimated for last year, ancl £33,930 less than our actual receipts. Contrasting the present estimates with the actual receipts of last year) the increases amount to £30,871, and the decreases to £64,801. I have adopted as an estimate for this year the figures representing last year's actual receipts from Customs duties. In accordance Avith the remarks I have previously made, the general prosperity of the community enables mc to estimate a small additional sum will be derived from the combined collections of land and income tax. From 'registration and other fees' an additional sum of £22,711 is estimated to be derived, principally from tbe fees chargeable for the figures supplied by the Valuation Department. Amongst the decreases I have hacl to include the receipts from the sale of stamps. Heavy succession duties were unexpectedly received last year, and of course cannot be again estimated. My colleague, the Minister for Lands, anticipates a distinct falling off in the revenue derived from the disposition of our lands. The receipts from cash sales ancl deferred payment selections are rapidly growing less, and in some cases pastoral runs are falling into our hands, and will require to be re-let at less rentals. These causes will probably result in decreased revenue to the amount of £36,296. The amount representing the proceeds of debentures issued in respect of the accretions of sinking funds during the year is £15,300 less than the sum issued last year. SUMMARY. Fringing the estimates of expenditure and revenue together, the position at the close of the current financial year, on March 31, 1899, may be set down as follows: Balance brought forward to begin the year with. £421,144; less to be transferred to the Public Works Fund, £350,000; balance,* £171,144; estimated expenditure, IS9B-99, £4,743,876; estimated revenue, 1898-99, £5,023,300; excess of revenue over expenditure, £279,424; total, £450,5G5. From the above amount I propose to set aside £100,000 for old age pensions, and to transfer to the Public Works Fund £25,000 in aid of harbour defence works ancl defence services, £25,000 in aid of additional requirements of lunatic asylums, new methods, etc., and inclusive of the amount already expended and liabilities incurred, £25,000 to defray the cost of the erection of our Parliamentary Library and central -part of the Legislative Buildings. Reference has already been made in His Excellencies Speech to the important question of preferential duties on goods manufactured in the Mother Country. I think the time has now come when we might with advantage make a substantial concession in the shape of granting a remission of five per cent, of the duties now imposed on this class of goods. This remission, if made, will probably amount to £ 50,000. The appropriation of the sums I have above indicated will reduce the above total to £225,565, from which amount further deductions will also require to be made to provide for the usual Suplementary Estimates and for the proposed additional grants to local bodies, and to ensure the amount required next year for the payment of old age pensions. AID TO THE PUBLIC WORKS FUND. The total ways and means of the Public Works Fund unexpended on March 31 last amounted to £326,492. I hope to be able to transfer from revenue this year in aid of the Public "Works Fund an amount of £350,000, thus bringing the total ways and means under this fund up to £676,492, against which there were liabilities amounting to £ 394,427. As the expenditure, including £156,731 spent on additions to op_n lines, amounted j last year to £865,543, and will probably amount to about the same sum again this year, it will be evident to honourable members that the available ways and means are not sufficient to meet our requirements, even up to March 31 next, and it is very desirable that we should be able to see our way a little beyond that date. It is contended, and with some force, that we should not burden those now in the colony with the cost of the construction of railways, material roads to open up land for settlement, together with works of a national and permanent character, lasting for all time, and being for the benefit of future generations. It is urged, furthermore, that we should not go too far abead't-viind be constructing works before the proper time, and which for that reason are for some years unproductive. We are by this means placing upon the shoulders of the present generation a burden, which, if greater care had been exercised, would not have been required to be borne. Wise discrimination is necessary. To unnecessarily borrow, to plunge and squander, must inevitably land the colony in disaster. There is a class of work needful to meet present requirements, beneficial ancl necessary for the convenience of the people of to-day, ancl which during the present generation is only of sufficient capacity to- meet its requirements. Future generations will have to provide for themselves similar .conveniences. I allude to the construction of public buildings, such as post and telegraph offices, lunatic' asylums, benevolent institutions, and court,houses, harbour defences, maintenance of main roads, and roads in localities where tliere are no railways, the construction of tracks for tha development of our mineral resources. All this class of work is a reasonable! charge upon the revenue. As will be seen from my summary of expenditure we propose to take from, revenue £425,000 and we further propose to obtain this year, in aid of the Public Works Fund, and more particularly for the class of work previously men.-

tioned as national and permanent,'the sum of £500,000. It does not, however, follow that we intend to raise or appropriate the whole of it this year, but I do consider it necessary, so as to avoid complications, to place the Public Works Fund in a more favourable position than it was on March 31 last, when there only remained a balance of £51,492.'1 n order to carry on the necessary works hon. members are aware I had on the first and second Imprest Supply Bills to transfer £225,000 from the Consolidated Fund to the Public Works Fund. Such assistance as this would ; have been impossible had it not been for the elasticity of our finance, and I, therefore, deem it to be a more prudent course for the future to have sufficient in hand at the end;of the financial year to meet the public works requirements, independent of revenue, for some little time thereafter. CONCLUSION. I have now almost concluded; and although this is perhaps the shortest ! Financial Statement that- has been dej livered for many years past, still it is | concise, treats solely of finance, gives | sufficiently the state of. the finances of the colony, is instructive, and I hope not uninteresting. The continued prosperity of the colony leads me to the conclusion that Aye are on safe lines, and that there is nothing ephemeral. Land values are maintained. There is no sign of decrease in our revenue. Our population b. increasing, and the same can be said of our imports and exports. The settlement of people on the land is progressing satisfactorily. The output of gold and coal mines is steadily improving. The labourer scouring the country for work, commonly known as the' 'swagger,' is now becoming a 1 thing of the past. The employment of nearly the whole of the workers, ' privately and publicly, has proved beneficial to the colony as a whole. Labour-saving machines have, it is true, thrown out of employment many : men, ancl this will continue, but although this entails individual hardship for the time being with the i changed conditions other avenues i must be open, and the private employer and State can, and should, assist in utilising the surplus labour. The safest and permanent solution is to place such of them as are willing upon the land. As to the future outlook, being neither pessimistic nor optimistic, but desiring calmly and dispassionately to gauge correctly the position, I feel confident that with strict economy, reasonable expenditure on reproductive works, thus providing for those who are willing and able to labour, the settlement of the people on the land, with proper regard paid to the development of our vast mineral resources, with due provision made to ensure the export of our principal products in good condition ancl increased markets, together with the continued energy ancl enterprise of our colonists, we have a bright and prosperous future before us, and I shall look forward with hope to be able in my next Financial Statement to again congratulate the people of our colony on their improved position, to announce that my expectations have been fully realised and that the wisdom of maintaining a strong finance has been fully -justfied.