The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. THURSDAY, AUGUST 7, 1913. THE FINANCIAL STATEMENT.

Auckland Star, Volume XLIV, Issue 187, 7 August 1913, Page 4

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

THURSDAY, AUGUST 7, 1913. THE FINANCIAL STATEMENT.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance, And the good that we can do.

There is nothing particularly sensational about the lion. Jas. Allen's second Budget, but there are some very satisfying indications of the country's industrial and financial prosperity. The revenue for 1012-13 exceeded the revenue for lflll-12 by no less than £700,000—a truly remarkable proof of the rapid development of our natural resources and the growth of our export trade. Further, .Mr. Allen may fairly congratulate himself on the fact that the actual revenue exceeded his estimate by nearly £786,000, which allows that the Minister of Finance had by no means an exaggerated conception of the Dominion's wealth-producing power. In every important department the revenue received was considerably greater than the estimate. Railways show an excuse of £2'2;5.000. Customs £208,000. Stamps £154,000, Land Tax £78,000, Territorial Revenue £81.000, Post and Telegraph £27,000, and so on.' In only two departments have the receipts fallen below the estimate, and even here the total deficit is only £0,300. All this is eminently satisfactory; and it is no less gratifying to find that the expenditure for the past financial year has fallen short of the estimate by £1-17,000. On the other hand, the actual expenditure exceeded that for the previous year 1 •. £742,000. Of course it is impossible to prevent the growth of expenditure with an administrative system organi-ol en the elaborate plan we have adopted hnre.

and involving so wide an extension nf the ordinary functions of government.

But the large increase in our revenue is more than counterbalanced by the growth of -our expenditure, which is £40,000 in excess of the advance in our public receipt*. However, it would lie unfair to condemn the '"Reform"' (kivern-me-nt for extravagance without a longer trial; and Mr. Allen may point with some pride bo the fact that there was a decrease of £123,000 in ithe expenditure of the Department of Internal Affairs.

The section of the Financial Statement which refers to our liabilities and to our prospects of reducing them, is not altogether reassuring. Our gross pirhlie debt has now reached £90.000,000. reduced by various sinking funds to about £57,----500,000. It is true that, as we have often pointed out, over £55,000,000 —more than 00 per ceut. of the total —has been expended in directly reproductive investments. But the actual amount of our public -debt is more than enough to emphasise the need for strict economy and great care in ail our future financial operations. One disquieting feature of the position is that loam to the extent of neaxly £10,000,000 fall due in 1915; and the liquidation or conversion of this debt, along -with the flotation of the annual Public Works loan for two or three millions, is likely to be somewhat cmbarrassin-g. However, -Mr All-en assures us that while in London this year he prepared tho way, financially speaking, some distance ahead, and he anticipates that satisfactory arrangements can be made when the debentures fall due. Of course the country is irrevocably committed to the policy of borrowing to finance our Public Works system, and we are far from suggesting that this policy should be abandoned. But with all this load of debt to carry we will do well to develop our resources and to exploit our natural wealth with all possible energy and speed. The proposal to work the valuable iron deposits at Parapara through a syndicate is certainly worthy of consideration; and the development of our watcr-povjer, both for irrigation purposes and the generation of electricity iis a source of industrial energy, should be carried out as vigorously as possible, with due regard to the heavy financial strain that the country has already to support. But infinitely the most direct and effective way of enriching the Dominion is to open up the land; and the extension of roads and railways in those parts of both islands where the best return is to be expected from such expenditure of public money is needed to-day-more urgently than ever. We must wait for the Public Works Statement before we can be sure that the interests of (Auckland and the Dominion as a whole are not again to he sacrificed to the political influence and the parochial claims of the ; South. Meantime wo may point out that Mr. Alien's proposal to permit the con- j struction of light branch lines by privnto companies will need to be most carefully considered. so as to secure the ultimate [ reversion of such works to the State on ; terms that will benefit the country at

least as much as the original promoters of the enterprise. In regari to the Ir.nn , problem. ?.!r. Allen indicate* thai a Till 's f" l>o brought down enliirgir.-r tV, f-xi -ting f.icilitip« !>t the <srl tlrmrvit of t!;r surplus Nμ'! , .: , lii: , .--: iiiiil .il.-:> i!:n! th., survey und *iii>(!ivi-.ii:i of Crown !,..n-!-----is being accelerated, and a!! available land is to be placed on the market ac

quickly as possible. This is all very well as far as it goes, but Ministers must have learned by this time, even if they did tnot know it before they took office, that there are not much more than two million acres of Crown land and Maori land left that can ever be settled. The one extensive source of supply still available for settlement is to be found, in the huge areas, leasehold and freehold, now held by Europeans. But it is a most significant fact that the Budget contains no suggestion about the necessity for breaking up these great 'holdings or compelling the owners to put the land to prohtable use. On the other hand, the "Reformers" propose to extend facilities for securing the freehold— apparently to the Lands for Settlement lands; though the keen competition for leaseholds at every land ballot proves that the freehold is not absolutely needed to promote settlement, while the concession of the freehold on the conditions already laid down means an immense and undeserved profit to the Crown tenant, with a corresponding loss to the State, which has spent millions in acquiring and cutting up the big estates that will now be restored to private ownership. How much the country is losing by this persistent alienation of its most valuable assets is indicated clearly enough by the returns from the National Endowment lands. Five or six years ago the -Reformers" declared that these reserves were absolutely worthless; but i last ycrr they contributed over £900,000 to the revenue. We fear that the coun-

try will not awaken to a sense of its loss through the gift of the freehold to frown- tenants till it is too late to

repair the injury. However, we hope tliat the Liberal party will make itself heard on the land question this session in clear and unmistakable terms.

Aβ to other proposed legislation, an Electoral Kcforni Hill on proportional representation lines would bo well worth discussion. The graduation of the income tnx is a fiscal expedient that does not commend itself to us anything like so forcibly as un increase in the graduated land tax. The terms of the-reciprocal trade agreement proposed between New Zealand Mill .Australia must be left over till the political situation in the Commonwealth is more dearly defined. .No alteration in the Customs duties would be approved by the country or should be accepted by Parliament which would conflict with the

fundamental principle of Protection for Horn,. Industries. The increase in tin!

KducaUon vole ai jipe.i r> necessary, and

(he proposed increase in salaries may liavs the desirable effect of attracting

male teachers to our primary schools, or keeping tliem longer in the service. Assistance to fruitgrowers and expenditure on immigration, judiciously directed, should prove h boon to the whole Dominion. The news that Government propose* to bring down a Bill this session to modify the position of the Bank Of New Zealand, wil! certainly interest the large number of shareholders who had some cause to complain of the scheme recently proposed by the director*. On the whole, the Budget speech suggests that Parliament is to have a

busy time this session, and we trust that every representative of Liberalism in both Hoiu.es will use hi.s best efforts to

ensure that the democratic principles maintained in this country so long and with such conspicuous success shall neither be infringed nor ignored.