THE FINANCIAL STATEMENT.

Press, Volume XXI, Issue 2491, 30 July 1873, Page 2

THE FINANCIAL STATEMENT.

We are indebted to the Government for the following summary of the Financial Statement :— The Colonial Treasurer (Hon J. Vogel) made his financial statement last evening. The following is but a brief outline of it: — The Treasurer said he had pleasure in being able to communicate to Parliament, information which would prove that New Zealand bad never been in a more prosperous condition than at present. The result of the financial operations of IS7I-2, proved to be within L3OO of what was estimated, when be made his statement last year. The new system introduced in connection with the Treasury and Audit, was working exceedingly well. The Contioller-General and the AuditorGeneral were associated as Commissioners of Audit, and there was really a pre-audit as to all expenditure. In order that the accounts in the treasury, and those in the audit office might be made identical he had this year taken into account not the actual receipts during the year but only so much as was received at the Treasury in Wellington up to the 30th Juue. Hitherto the Treasury accounts had been kept open after the end cf the financial year, so that aH receipts might included, and by the course now adopted LI3OO oi the revenue received during 1872-3 would no., be included ifi the year's agegptg-

The Treasury were, for the year's purposes, losers to that amount, but such a thing would only happou this once, and the practical gain from the new system would be a great one. The present indebtedness of the colony for colonial loans was L-.551,261. The indebtedness of the provinces for provincial loans was L3,445,47_. The colony was contingently liable for the latter, and it was, no doubt, open to those who desired to exaggerate the colonial indebtedness, to 7.at the contingent liability as cue v,7.h required to be met out of colonial revenue, but the provincial loans were primarily charged on provincial ordinary revenues including the laud revenue, and there was no room to anticipate any difficulty in recovering the amounts. The risk of the colony as for the provincial loans could certainly be underwritten for a comparatively small sum. From tbe colonial liability of LC,881,261 had to be deducted L 415.352 for sinking fund accrued, leaving a nett liability of LC,_Cj.9OB. During the past year L 45,000 of Treasury bills on account of the deficit from 1869-70 had been paid. This was the J second instalment, and as it was proposed to pay off another L 40,000 during the current year, the deficit would be made good without auy addition being made to the permanent debt. He proposed also to pay off L 20,000 of , treasury bills issued ou account of confiscated lands. There would theuj remain a balance of L-00,000 of treasury bills outstanding. These, the Government thought, could be paid off during a short term of years. Therefore it was proposed to renew them temporarily instead of makiDg them them part of the permanent debt of the colony. It was stated that several thousands per year of interest might be saved by this course. One matter which he considered of great importance to the colony was the bold and determined attempt which had been made to reduce the rate of interest. All thc colonies had, in fact, gone in the same direction. New Zealand had issued certain amounts of -1 per cent debentures. The minimum price was fixed at L9O 10s. Of the parcel of L 200,000 offered in New Zealand, nearly the whole had been taken up by the Trust Fund Commissioners. In Australia, about L 150,000 of the new loan had been sold. The operation compared favourably with what had been done by other colonies, and especially by Queensland. That Colony issued 4 per cent debentures at 86, and the result was really a splendid one as compared with previous borrowing at higher rates of interest. After he had called for tenders for these 4 per cent debentures in Australia, he was glad to receive a telegram from thc loan agents announcing their recommendation that in future the rate of interest should be and that sinking or drawing funds should be abolished. The agents expressed their preference for a per cent. Tate ; they had now been instructed to use their discretion in the matter, but he (the Colonial Treasurer) had expressed his preference for -1 per cent, instead of A\. The confiscated lands had yielded well during the year, and had enabled a considerable amount advanced with respect to them to be paid oif. ludeed, the receipts during the present mouth would discharge nearly the whole of the liabilities excepting the L 20,000 of treasury bills which would be paid off during the year. The receipts for the year 1872, exclusive of the L 4500 which, as already explained, had not been brought to account at thc end of the year, showed a total of L 1,119,402, being an excess of L 43.402 over the estimate, and of Llll,_S7 over the receipts during the year IS7I-2. The Customs revenue showed an increase of L 32.144 over the estimate, and of L7G/J6O over the actual receipts of the previous year. After meeting or providing for all the liabilities of the year, there was balance of L'>B3s left with which to commence the current year, 1873-4, One of the most important matters to be submitted to the committee was the question of provincial loans for public works. The Goverment were determined to recommend to Parliament to allow the provinces to borrow money for certain public works in a manner similar to that in which the Metropolitan Board of Works and certain other local bodies in England were permitted to borrow. The proposal would be that the provinces should borrow only on specific security, and that it should be plainly provided that neither the colony nor the provinces concerned should be liable beyond the specific securities given. As far as those specific securities were concerned, however, thc security of lender would be ah.olute,and there would also be a power of law to enforce it. The works for which it was proposed that provincial borrowing should be allowed were, roads, bridges, harbor works, reclamations, buildings for educational and in some cases for charitable purposes, goldfields works, and light branch railways and tramways. The colony could not possibly execute the main arterial works which it had in charge, if it was to be liable to borrow also for local works. That those local works were much wanted was iv no degree questioned, only it was said that the provinces could better appreciate what was needed, and should be allowed to borrow for them. It was proposed that the specific securities to be allowed for the works mentioned should be in the shape of tolls ; and with the approval of the inhabitants of any district interested that special rates also should be levied, ln cases of reclamation the security would be over the proceeds of the work ; and as regarded buildings for educational or charitable purposes the security would be over the revenue from endowmentsIt was further proposed that the Assembly should in some cases allow loans to be raised against special blocks of laud, and that 15 per cent, of the whole of the land revenue should tie paid into the provincial loan account, and should afford security for these works. The bill which it was proposed lo introduce into the Assembly would stringently provide that neither thc ordinary revenues of the province concerned, nor those of the colony were to be liable for any one of these specially authorised loans ; in fact, there would be no more liability on the part of the colony than there was on the part of the Imperial Government for loans raised in England by local boards. Of the land which was to be purchased in the North Island, two-thirds of the whole would be retained as security for the cost of railways, aud one-third would be handed to the province interested, but out of the proceeds of the two-thirds retaiued for railway construction, 15 percent would be paid either to the provincial loan account, or to a separate ac count in aid of public works within the province. The progress of public works in the colony up to the present time had fully answered the expectations held out when the jp.Uej Wftl e*r*gia.a!*7 aaaounced, jj 9a gj

was being borrowed at a less rate than was | anticipated in IS7O. It was expected that j before the end of the current fin_<*..ial ycr.v I 125 miles of railways would be opened iv addition to the thirty-one miles that had been opened iv Canterbury, and exclusive of the Fort Chalmers line. Laud was now being sold, and large quantities at what appeared to be less than its value. Indeed the absolute value of laud had very much increased of late, and it would not be right to construct further railways without retaining bud as security for their cost. The Government had in fact come to thc conclusion that thoy would not construct any other railways than those already authorised, except coal lines, without security in land to the nominal value of twice the estimated cost in each case. As in the North Island laud security could not be provided in the same manner, and as it was desirable thnt j that island should not be shut out from the benefit of railway construction, it would be proposed that two-thirds of all the lauds purchased from Maoris should be set apart as reilway reserves, as already described. It was necessary that a firm stand should be made this year in presence of the immense demand J there was for local works, and of the large sales of land that were takiug place, and that was th. reason why the Government had come down with their present proposals. The Government would indicate the additional railways for which they meant to ask authority, but with one exception, it , was not intended to hurry on those lines, for -the railways already in course of construction afforded quite sufficient occupation for the available labour in the colony. The Government proposed to take authority to fill up the three gaps in the trunk line between Canterbury aud thc Bluff, and to ask for authority to spend a further sum of LIOO.OOO on the line between New Plymouth and Wanganui—the expenditure being carried on slowly, so that the works might progress concurrently with settlement. The House would be asked to sanction a continuation of thc live from Mercer to the frontier, and from the frontier south, in whatever direction might be found bestsuitedforconnecting with the main trunk lino through the North Island. At present thc survey for this line had not been extended further than Ngaruwahia, but this railway it was considered desirable for public reasons to hurry on especially as it would enable to be massed on frontier a number of men whose presence would afford the best possible guarantee against wanton outrage such as that which had lately occurred. It would be proposed that 1,800,000 of debentures included in the loan already authorised, being that amount out of the one million guaranteed by the Imperial Government, should be kept at home as a reserve, to be available in case of need, but that if necessary, those debentures should be borrowed against pending .ah*-- .1' unguaranteed debentures. This wi.uld lie-.s-s!'..ite at present fmthcr authority to lurrow. Tlie committee would remember that in the original scheme it was intended to construct railways, partly by cash payments, partly by way of guarantee, and partly by means of payments in land, but at the will of the House, the whole weight had vow fallen upon cash payments, and the original provision by way of loan would not be sufficient for present purposes. It was however considered that sufficient provision would be made for some time to come, if authority was not given to borrow L 1,500.000 for railway purposes, and half a million for the purpose of native lands in the North Island. A separate loan bill would be proposed authorising the borrowing of L 300.000 to cover the cost of interest on works during construction, including the restoration to tbe public works loan of the amount taken from that loan for this purpose. There would also be included L250,000f0r the purpose of subsidies to Road Boards, including the restoration to the public works loan of the LI 50,000 taken from that loan for subsidies. Further, there would in this Loan Bill be [included L 115.000 for public buildings ; L 35.000 for lighthouses ; and L 50.000 telegraph extension. During the recess there had been much correspondence, and several interviews, respecting the line between Foxhill and the Brunncr; and it had been proposed to give certain land as security for the work, in addition to the security of the province in the way required, in the case of lines in other provinces. The land which it was proposed to set apart had been examiued, and unless for its mineral resources it did not afford adequate security. In order that advantage might be taken of the mineral resources of the district, more must be known of them and of their general position, so that the railway might follow such a course as would be suited to the development of the resources. However, it would be necessary that the question of connecting Nelson and the West Coast with the main trunk system of the Middle Island should be considered. For the present it would bo proposed with a survey of thc line between Foxhill and thc West Coast to combine a thorough investigation of tbe mineral resources of the district. It would also be proposed to examine as to the best route for connecting the East and West Coasts, and' further to ascertain whether it would be practicable to connect the Marlborough line with the Main Trunk system. Respecting coal railways the Government fully recognised as they had done throughout that those lines did not come under the category of either "main" or " branch," but that their construction ought to be looked upon by the Assembly as colouial works. A further sum would be asked for towards the Mount Eochfor.t line and harbor works, and an additional sum would be required to complete thc harbor works connected with the Brunner and Greymouth railway. Any lauds taken fo r railway reserves were to be subject to thc ordinary laud laws of the province in which they were situated, except that with the consent of the Superiutendent they • might be liberally employed for purposes of settlement. The Government would be willing even that lauds should be given under a homestead law to people who would actually occupy them, and they proposed to introduce a measure by which immigrants who paid their own passages to the colony would receive free grants of land subject to occupation conditions. The Government fully recognised bow desirable it was as the demand for labor in connection with public works increased, and as the laboring men of the colony 6aved up money, that they should be induced to become settlers upon the land. This object would be promoted in every posi sible way. There was at present.a very large S necessity ior public buildiugs ja different

parts of the provinces. Auy loan for such a purpose should obviously be made repayable within a not. very long term of years, and it was intcuded so to provide in the 1.0:1:1 Hill j which was to be introduced. (\.r,i;: ; g to the I finances of the current year, the ,-s; i mated ex- ! penditnre for lb7;>-4 amounted hi LI, LSI,CSS. It included the payment of LS.yi'iO out of the consolidated revenue townrds thointercst and sinking fund of the immigration and public works loan, or Lsi;.oi};> more than was paid from that loan for tho like pur:>o>.. 1.-:sr year. It included alu-.i o:vj.iti_t:._-. M allowances | to the provinces on the same basis as hist year : and taking the Kegistrar-General's estimate of population, the total capitation payments to provinces, inehulitnr special allowances as last year, would amount to L 217,904 os, or an increase of more than LOOOO as compared with the payments for 1572-3. The expenditure, as stated, included also L 45,000 for the last instalment of treasury bills, representing the deficit of ISG9-70, which were to be taken up during the year. He was glad to say that there were no deficiency bills outstanding to be taken up. During the past year not only had L 15,000 of treasury bills been taken up but LIOO,OOO of deficieucy bills had beeu paid off. It was proposed that during the current year L 50,000 should be again divided amongst Koad Boards. It was intended to propose to alter the tariff, not because additional revenue was desired, but because measurement duties were very unfair in their operations. Those duties were introduced here as well as in Tasmania by Governor Gore Brown, and the only other colony iv which they existed, so far as the Government were aware, was Ht Helena, whence Gcvcrnor Brown came to this part of the globe. It was desirable to substitute ad-valorem duties, not only because they wero less objectionable, but because something like uniformity was necessary to the use of the powers for intercolonial reciprocity, which had now been conceded, and because those duties would enable a thoroughly liberal system of drawbacks to be. established. The new duties with some inconsiderable exceptions, would be much less than those iv force in Victoria, aud the few exceptions made were for the purpose of securing uniformity. The total estimated customs revenue lor 1873-4, under the new duties would amount to niuc hundred thousand pounds, being only LIB,OOO over the receipts for 1872-3, and if the system of of duties had not been altered, the same amount would Lave been estimated as natural iucrease during the current year. The total of the estimated revenue for 1573-4 waa LI, 180,500, to which must be added the estimated surplus of L 52.000, with which the year was commenced ; but there would assuredly be demands upon that surplus for supplementary estimates and for unauthorised expenditure. In conclusion, he might say that this was tlie fifth occasion 01.1 which he had made the annual financial statement. On previous occasious lie had urged the colonists to the work of colonisation, and sought to stimulate them to a sense of the resources of the couutry. It was now his duty to urge caution. The settlers were showing their faith in the colony by industrial enterprises of all descriptions. They were determined to develope the coal, the iron, the flax, the timber, the minerals, aud the other resources of the colony. They were ready to advance their money for banking and insurance, for steamships, aud for other enterprises, and they had with great courage and determination broken down the shipping monopoly which had so long overshadowed the colony. The leading features of the budget were then that the colony should confine its attention to the great arterial mcaus of communication, leaving to theProvincial Governments the control of necessary local work. Precautions were proposed to keep the colonial credit intact, and the reservation of lands for the settlement of the people had been suggested. In addition, a more convenient, but certainly not a more oppressive tariff was purposed to be substituted for that which had long been in existence. The great aimof the colonists as well as of the Government should be to make New Zealand the home of a large, contented and prosperous population. It was with that aim that these proposals had been made, and he hoped they wonld receive from the Assembly and from the colony earnest yet kindly consideration. j The delivery of the statement ocenpied over two hours and three-quarters.