FINANCIAL STATEMENT.

Auckland Star, Volume XXXI, Issue 196, 18 August 1900, Page 3

FINANCIAL STATEMENT.

PROPOSED MILLION LOAN

REMISSION OP CUSTOMS DUTIES.

PENNY POSTAGE

THE NORTH TRUNK RAILWAY.

PEOPOSED BRANCH TO STRAT-

FORD,

THE 'FRISCO SERVICE.

WELLINGTON, Friday: In Committee of Supply in the House tonight, the Colonial Treasurer, the Right Hon. R. J. Seddon, delivered the Financial Statement as follows:— Mr Guinness,—lt is with confidence and pardonable pride that I submit my fifth Financial Statement since holding the position of Colonial Treasurer, and in it, as in those preceding it, a very satisfactory condition of affairs is demonstrated. The results of last year's operations show that the elasticity of our finances was underestimated, and the record surplus of £605,351 exceeded the expectations of the most optimistic of our colonists, and which was both to them and to me a most agreeable surprise. The phenomenal returns from railways and Customs clearly establish the increased spending power of the people, whilst the increases from land and incomes prove the increased value of real estate. They also "show that salaries have increased, and that those whose incomes are derived from trade, commerce and the professions have prospered during the year. The savings through the under-expenditure of moneys appropriated in the various accounts go to prove there has been a careful administration supervision, and It is quite consistent with good government that wherever, owing to altered conditions, expenditure of public moneys from the Consolidated Fund can be avoided without injury to the public service, a .real and tangible saving is effected. In this, as in the preceding Statement, It Is deemed desirable to adhere to finance, or matters closely allied therewith, and to place the financial position and proposals before members in a plain manner-of-fact and business-like form. I may as well state at thid point that an increased amount will be required from the Consolidated Fund, which will perhaps strike.members as being unusually large; but this should not take them by surprise. It must be remembered that increased and new charges, such as old age pensions £200,----000; the payment of our contingents, harbour defences, and defence forces £258 000; contributions to Ottawa and India £10 000; public health, £5000; lands and surveys, £140,000, have to be met and that such increased expenditure is desirable in the best interests of the colony. For orphanages and Inebriate-homes I am providing a new item of £10,000. The expenditure is necessary, and would provWe for a long-felt want. I am pleased to announce that, notwithstanding the Ssturbed condition in China and the war fn South Africa, our avenues are more than equal to meet the strain of our increased expenditure, and members will be |lad to hear that after making due ■ liiiilil of the improvements and conveniences which have cost them nothing, to pay their JhnrP of the interest, and to bear a responsibility as to the principal of further loans Which may be required to complete the works Inaugurated with surplus revenue. The necessity for more expeditlously• prosecutes the construction of ! the North Isand Main Trunk and other main lines of railways with the view of developing the tourist traffic, promoting land settlement, and Industries, and connecting the large centres Sf population, admittedly demands our immediate consideration. The completion of our main roads and the construelo£ of roads In the back blocks during the next summer is an essential work of paramount Importance, in order to encourage the close settlement of our lands; therefore, he borrowing proposals herein submitted, compared with those of previous years, are not unreasonable, and after careful consideration are found to be absolutely necessary to meet urgent requirements. There will be some disappointment that the amount proposed to be borrowed is not lareer but we must not overlook the condition of the money market, and that moneys could ouly be raised now at a considerable discount; in fact, it would be uuwise to nlace a large loan on the market under the existing conditions, aud prudence demands that we should ouly ask for suliicleut authority to meet pressing demands. The fact of taking power this session to borrow largely would have a depressing effect ou our existing stocks, and would, at the same time prejudicially affect the raising of the money absolutely required this year to give effect to what I have herein foreshadowed, detailed particulars of which will he given iy my colleague, the Minister for Public Works, when he brings down the Public Works Statement. I regret to have to mention that there has been no favourable opnortunlty up to the present to tloat the loan authorised last session. Temporury arrangements have been made under which moneys have been obtained with which to carry on our public works, to meet the requirements of the Advances to Settlers' Office, and to complete the purchase of lands under the Lands for Settlements Act. The anticipated speedy termination of the war in South Africa brightened the outlook In the money market but the unexpected trouble In China has given things a set-back, and It seems Impossible to gauge the time when we can, with advantage, place our new loans with a reasonable'prospect of success. Under these circumstances, I trust members will concur with me in agreeing this year to the moderate proposal submitted. FINANCE OF lojO-1900. Aa a fitting close to the finances of the 19th century, so far as they relate to this colony, I am, as I previously stated, able to congratulate the country upon a record credit balance. At the end of our last financial year this balance amounted to no less than £605,351, and emphatically demonstrates the magnificent progress this colony made in developing its internal resources. The revenue for the year amounted to £5,590,----396, to which £111>,232 of other receipts were added, making the total on the revenue side of £5,G99 618. The expenditure amounted to £5,140,128, leaving a surplus on the year's transactions of £559,490, to which add the balance brought forward from;this preceding year of £45,861 (£495,861 less £450,000 transferred to the Public Works Fund), and we arrive at the record balance of £605,351, which I have just mentioned. REVENUE. In framing last year's estimates of revenue, I most certainly had no idea that the colony's resources would expand to such a wonderful extent. Tlie taxation as imposed Is clearly not all of an Irksome or oppressive character, but as the amount received from indirect taxation is large, it is clear that it will stand reduction and still leave a sound finance. The revenue last year was estimated at £5.249,600, while the receipts amounted to £5,580;386, or £330.786 in excess of the estimate, and also £393,957 In excess of the preceding year's revenue. All tne heads of revenue except the " miscellaneous exceeded the estimate —Customs by £127,500, railways by U46.600, stamps hv £61200, territorial by £24,200, and others by smaller amounts. " Miscellaneous" would also have shown an excess had the amount of £61,832 been credited to this account upon recovery from the lands for settlements accounts, as I Indicated in my last Budget would be done. 'xhe Audit Office however, decided that the recovery could'not be considered revenue, and therefore the amount had to be dealt with as an nntßlde recemt. hence miscellaneous Is shown as £52,700 less than the estimate. The expenditure upon all services for last year was set down as £5,203,701, whereas the actual sums spent totalled £5,140,127, or £63,573 less than .the amounts which hare exceeded the estimate, and call for

little comment, the principal item being jailways, wltu £1^,500. But as we have received from that source some £140,600 in excess of the estimated revenue, we cannot complain if the expenditure was exceeded by £12,500. Most of the Departmental expenditure has ocen kept within the amounts voted. Interest and sinking fund is underexpended by nearly £10,600, pricipally arising from the interest provided for our three per cent, inscribed stock not being required up to the close of the year. The Department under the control of my colleague, the Minister for Education, shows a saving ot £23,000. In explanation of this I am informed that the capitation was not so largely availed of as estimated owing to a sparseness of attendance, Aiefly causeu by sickness amongst the pupils of many of the larger schools. Some of the larger items provider on the vote for " charitable " purposes were also not paid over during the year. The other items of under-expenditure do not require separate comment. THE PUBLIC WORKS FUND. The year 1808-90 closed with a credit balance of £70,856, and during the financial year 1899-1000 the fund was augmented by receipts consisting or £310,000 of old loan moneys, and £300,000 of advances made against the million loan authorised last session. £450,000 was also transferred from the Consolidated Fund, and some miscellaneous receipts, amounting in all to £2,116, wore added, making a total of £1,002,116, by which the moneys in the fund were supplemented. In order to make my figures clearer I have omitted amount of charge on both sides of the account. The expenditure during the year amounted to £993,223, and the balance of cash and advances at the close of last year was £139,749. I have previously stated that owing to the unsatisfactory state of the English money market, caused by the varying phases'of the war in South Africa, no attempt has been made to float the last million loan, but very satisfactory arrangements have been made with our bankers, whereby advances are being obtained, so as to provide funds for the monthly requirements of the Public Works Fund. ', ■ LAND FOR SETTLEMENTS ACCOUNT. Large areas of land were required last year for settlement purposes, and the outlay, Including expenses, totalled £374,148. Besides this the account was charged with £95.182 for interst paid by the Consolidated Fund, upon debentures issued to provide funds for the purchase of estates. To meet the whole of this expenditure, debentures amounting to £448,000 were created and sold, and with £46,355 derived from rents, £225 from small recoveries, and £28,111 of balance brought over from the preceding year, the receipts amounted to £522,719, and the expenditure, as above, being £4(!9,830, there remains an available balance of £53,389 to begin the current year with. REMISSION OF CUSTOMS DUTIES. The oft-repeated demand for a reduction in indirect taxation cannot longer pass unheeded. I propose, and that with pleasure, to take off the whole of the duties on kerosene, rice, salt, coffee and cocoa, tinning machinery, agricultural machinery, dairy machinery, dredging machinery, engines and boilers for mining and dairying, and portable and traction enSines. Further, I propose to remit half the duty on tea (other than that in small packages), half the duty on currants and raisins, half the duty on candles, half the duty on wax matches, leaving the duty thereafter equivalent to an average of, say, 30 per cent, on the value, and that the present duty on patent medicines of 40 per cent, shall be reduced to 15 per cent, that the present duty on drugs and drugvisits,1 • sundries and chemicals shall be reduced from 20 per cent, to 15 per cent. The remissions on these heads amount to about £15i',000. I had hoped to have granted remissions to other articles, but the sibnormal expenditure this year under several headings does not permit me doing bo. The remission on Customs duties, as stated previously, together with concessions on railways and penny postage, are estimated to reach over £3U0,000 per annum. To this after March 31 next, must be added the reduction in the mortgage tax, which will amount to over £20,0U0 per annum. REDUCTION .ON MORTGAGE TAX.

For some considerable time Interest on mortgages has steadily decreased. During the past 10 years interest on mortgages has fallen about one-fourth. This makes thu penny in the pound on the capital value n very heavy charge. The colony Jias conceded conditionally one-half per cent, on mortgages under the Advances to Settlers Act, and ,one-haif per cent, to local bodies on loans under Government Loans to Local Bodies Act. It is also proposed to grant conditionally a rebate of one-tenth the half yearly payments of rents from Crown tenants, equal to onehalf per cent, and it follows therefore as a matter of abstract .justice that there should be some relief given by a reduction on mortgage tax. Many widows, orphans, and others, whose living depends on this class of investment, are heavily taxed, and I regret not being able to announce this remission as being immediately conceded. However, I intend to Submit proposals later on in the session that from and after March 31 next mortgage tax should be reduced by Id In the £. PENNY POSTAGE. Parliament' during the session of 1891 passed an Act under which penny postage within the colony could be established. From that time until the present, owing to the demand upon our funds, we have not been able to give to the public the. boon such a cheap rate of postage would confer. It is pleasing to be able to announce that on and after January 1, ISO., n penny postage system will be established within and without the colony. Ihis colony will thereforebe the first in AusVIGoSuS n.OSEC"ION OP PUBLIC

SIS Brsvwsjf« i r^r^stT^ 3 && * CrowS tenants, proceed expeditiously with roads and bridges, and roads on goldflelds. tTiS "development of our mines, telegwph oxtensfon and public buildings must be OTov"ded io * Besides these works, we must aso take into consideration the fact that ft cannot reasonably be expected we shall h* ftbie to transfer, as hitherto, any sum was available out of the loan of last year; also £500*000 coming from the Consolidated Fund, derived from the surplus at the close of the year. These amounts make up vi ?&o 749 Taking into consideration, therefore, that the expenditure, for the cmrent 12 months will be very considerably in creased, as I have already, indicated, and that we must have sufficient loan money left to last us for at least six months of next Tear I'am of opinion that it will be necesslrv'to ask for authority to raise a loan of £1000 000, so as to carry on our public works policy successfully. , TEACHERS' c |fLARIES-INCREASED We propose to increase the total annual grant by about £28,000, which is eaulvalQnt to ss. per head for the numer in average attendance in all the schools o! the colony, and to deal with it in such, a way as to remove inequalities and anomalies. TECHNICAL EDUCATION. Substantial financial assistance • will be elven to the existing technical schools and for the extension of technical education Into all parts of the colony, including hand and eye training for the pupils In our schools, and special training required for manufacturing, agricultural, mining, and commercial pursuits. HARBOUR DEFENCES, THE FORCES, 1 AND VOLUNTEERS. Honourable members will observe that the defence expenditure thia year amounts to £258 141. This is a large sum in proportion to our population of 800,000. It must however, be borne in mind that a great portion of the proposed expenditure is nonrecurrent. We have now a scheme approved by the Imperial Defence Committee, and 'It Is our duty, compatible with the funds available, to give effect to the recommendations embodied in the committee's'report. The circumstances.which arose In connection with the equipment of bur contingents for South Africfc compelled me to ask for large supplies and stores, and to take care that munitions of war and. necessities for the field should be. obtained and stored, so as to be ready for.use in the colony at any moment. It, is esseptlal that we should have 30,000 rifles, and that they should be of the same pattern and calibre. One of the four field batteries has/arrived in the colony, and this must be properly equipped. The provisions made on the Estimates are required Irrespective of what may hereafter

be determined on with regard to forming an Imperial reserve. Last year our appropriations were for the capitation and equipment of 8,000 volunters; since then 3,000 have been enrolled, and applications are now in for 90 additional corps. A large number will not be able to earn capitation money this year, so the amount asked will be sufficient to meet requirements. Appropriations are also rendered necessary in connection with the formation of rifle clubs and caaet corps. SAN FRANCISCO MAIL SERVICE. At the present time the net cost In carrying- our mails by weight is about £11.000 a year. I understand that the Australian Governments have not yet agreed to accept the terms offered by the Oceanic Steamship Company. What proportion of the £30,000 per annum asked by the company was to be paid by this colony was not defined. As no definite action has been taken by the Australian Governments in reference to the proposals of the Oceanic Steamship Company, the matter, so far as we are concerned, is surrounded with difficulty? and owing1 to the conditions stipulated by the American Government, the resolution of the House passed last session cannot be complied with. Later on, when the Govern-1 ment are in a position to better define the situation, proposals will be submitted by my colleague, the Postmaster-General, to meet such circumstances as may arise. MAIN TRUNK LIjJES OB" RAILWAYS.

The North Island Main Trunk line of railway takes the pride or place so far as public attention is concerned. Deputations have waited upon Ministers, meetings have been held and petitions presented. To this I take no objection, but when all sorts of threats are held out' unless the Government pledges itself to perform the impossible, then I draw the line, preferring to do what is just to all parts of the colony, and not to -rush into reckless and lavish expenditure. The colony is prosperous, and is prospering. Why, then, should there be a reversal, necessitating the floating of large loans, and that at a time when we have, rather than float a loan at a sacrifice, to make temporary arrangements with our bankers. There are two points of interest, the one being the speedy completion of the work, and the other the route. The Government have come to the conclusion that the route offering the most expeditious construction of the railway is the Central one. Parliament has authorised this, and the surveys of it are the most advanced. It is the shortest, and presents the fewest difficulties in the way of speedy construction. After full inquiry the Government see no reason for differing from the decision previously arrived at. Irrespective of other main trunk lines, the Government have been asked to pledge the colony to complete this line within three years. To do so, unless at enormously Increased cost, would, owing to the nature of the country that it has to pass through, be a physical impossibility. No one would think seriously of attempting to lay the permanent way until the Mokohine viaduct has been completed, so that the rails and sleepers may be laid from the south end. Already the formation has been completed some 10 or 15 miles beyond the viaduct. The viaduct itself Is being as expeditiously proceeded with as is possible with due regard to the lives of the workers. There are several other bridges beyond the viaduct, which we hope to complete simultaneously with It. This done, the permanent way will be laid with all expedition. At the northern end the line will be energetically pushed on. There are some very heavy cuttings to be made. These are in hand, and where men can be put to work to advantage, that will bo done. Rails will be laid through to Kawakawa within a year from there towards Taumaranul there are no great engineering difficulties to contend with, and by the time the House meets again the most exacting will have no reason to complain of the i^rogress that has been made. Further details will be given by my colleague when he brings clown the Public Works Statement. Suffice it for me to say that from a iinancial standpoint no one will have reasonable grounds for complaint in respect to the allocation for this line. We must not forget that the speedy completion of the Otago Central, the Midland, the Waipare-Awa-tere, and other important lines within a reasonable time is necessary. Tostarve the construction of these lines so that an abnormal amount of money might be spent on the North Island Trunk Railway would be resented in a way that would cause those members who forced the situation to come to the conclusion that it is wise to be reasonable in all things. Last year for railways £300,000 was allocated out of the million loan. This year we propose to allocate £500,000, and, talcing into consideration the expenditure up to March 31 last, this allocation practically means more than doubling the expenditure for the current year. STRATFORD-KAWAKAWA JUNCTION. In finally deciding that the Central route shall be the route In so far as the North Island Trunk Rrailway is concerned, the necessity for connecting Taranakl with the Auckland railway service has not been overlooked. The' settlement along this route, the coal deposits, and the timber available, render it imperative that the necessary surveys should be authorised and provision made for the requisite funds. Along the East Road there are 40 miles almost without metal. This is one of the best dairying districts in the colony, but the condition of the roads renders it almost hopeless for settlers, most of whom are Crown tenants, to carry on successful operations; A narrow gauge railway should be constructed to remove these disabilities. It could be constructed expeditiously and cheaply, and as a means of carrying gravel for the roads, returning with produce, coal, and timber, It wo.uldpay and fully justify the experiment. The surveys should be at once undertaken, and an engineer, with experience in this class of railways, should -be given charge thereof. There are other parts of the colony where narrow gauge roads would prove a success. The Minister, for Public Works will give the details. LAND FOR SETTLEMENT. The sum expended in the purchase of private lands last year (including expenses) was £374,148, a sum far too small, as compared with the demands there Is for land for close settlement. The five districts in which land Is most required for close settlement are Hawke's Bay, Wairarapa, Marlborough, North Canterbury and Otago, and given the necessary means, our Intention this year is, if possible, to double the purchases of the preceding year. There are other districts that in a lesser degree have eligible estates for sub-division. The Auckland provincial district suffers In this respect, but there has been a large sum expended In the purchase of native lands, roading, and surveying same, as well as in the purchase of several large estates." There is no frootl ground for complaint, the demanpa for land In this part of the colony being fairly met. It was thought by many that a graduated land tax and a tax on absentees would have the effect of causing subdivision, nnd thus promote close settlement Such, however, has not been the result Land for workmen's homes, near the large centres of population, must be acquired more expeditiously in the future than It has In the past. In order to enthe rent falls due.