The Press. MONDAY, JULY 1, 1889.

Press, Volume XLVI, Issue 7350, 1 July 1889, Page 4

The Press. MONDAY, JULY 1, 1889.

One of the clearest tests of the success of Sir H. Atkinson's finance is the evident sense of a new-born freedom with which it has inspired the Opposition. Sorely against their -will they have been compelled, while his measures were still in progress, to play an acquiescent part in the general scheme of severe economy which he laid before the country and in the taxation to which he had recourse to supply the deficit and make both ends meet for the future. So long, we say, as it was still uncertain how far this would really be successful, the Opposition were under a moral constraint to let things alone. It is now clear that the deficit is filled up, a surplus has been attained, and we have nothing to do but to go on in the course we have begun. A great weight is taken off the minds of the Opposition. They like neither the economy nor "the taxes, and the first thing they naturally set themselves to work upon s to attack the taxation. They are, we think, a little too much in a hurry. All is not done yet that needs to be done in order to justify anything like playing tricks with the existing system. We have, it is true, restored to a wonderful degree the confidence of investors at Home, but that confidence is still largely made up of trust for the future, as well as of experience in the recent past. To change now in any material degree the system of taxation on which our finaucial arrangements are based, would be simply " swapping horses in the midst of the stream." And yet this undoubtedly is what is now being seriously proposed. In what precise shape the change will eventually be brought forward it is too soon to say. But it is as certain as anything can be, in the way of prospective party tactics, that a determined attempt will be made, before the present session is closed, to get rid of, or at all events, to take all the virtue out of the existing: property tax. There are some parties in the House whose abhorrence of this tax is so absolute that, provided they can only gee rid of it, they are not solicitous about providing another. To this section we have nothing to say. The property tax, be it good, bad, or indifferent, about which we will say a word immediately, is the instrument' by means of which the finances of the colony have been rectified. Takeaway the revenue derived from it, without putting some other in its place, and the deficit which* we have done so much to remove, rises again at once before us, in all its original proportions. If therefore this tax is to be got rid of, or indeed materially altered, some other means of income not lees reliable must be found to supply its place. At least we are not aware of any scheme likely to be brought before the country for effecting a still further reduction in our expenditure, such a3 to dispense with the necessity of a new tax. If there be such a scheme no one would be more ready than ourselves to consider it on its merits, or to give every support to a practicable scheme. Others, again, there are—Mr. Ballance, the newly-nominated leader of the Opposition, is an instance—who wish to get rid of the property tax and to substitute other sources of revenue in its place, with the view not so much of supplying the wants of the colony as of giving effect to certain political views which they have already been knowntoadvocate. Mr.Ballance, agreeing in this with Sir Robert Stout, looks upon it as a point of great policy so to arrange taxation as to make it fall mainly, if not exclusively, upon laud. He, therefore, would substitute for the property tax a tax as heavy as may be necessary upon landed property. .Now, land is no doubt a species of property, and as fairly subject to taxation as any other; and if all persons who had property held land, and held it m equal proportions, it might be principally a question of convenience whether the tax should be levied upon property in the mass or upon that portion of it which consisted of landed investments. But as the contrary is notoriously the case, it w oh ™™£% some other tax must be resorted to m order to redress the balance, anS the tax that we usuallyhearspoken of in this connection is unquestionably an income tax. Upon this scheme we have to note shortly that the immediate effect would be to tax the land twice over; firstly upon the laad itself and secondly upon the income derived from the land— a procedure which, however, it may commend itself to those whose political

object it ia to punish every body who ia guilty of devoting himself to the cultivation of land, does not aquare precisely with the generally recognised principles of justice and equity. We cannot, of course, in tho present article, do more than indicate the obvious and preliminary objection to the scheme proposed. As the matter advances we shall have other opportunities of dealing with it fully. Independently of all this there is another consideration which leads us to condemn utterly the line now contemplated by the Opposition. This will be no isolated case of an ill-considered policy. New Zealand has already acquired an undesirable reputation for a willingness to try experiments. It is said of her that the best recognised principles of finance will be disregarded and the most outrageous political theories supported in the mere wantonness of party conflict. Illustrations of these charges are, as our readers know, ready enough to hand were it necessary to dilate upon them hero. These attempts have not been largely successful, but they have dove their mischief. Just now especially they ought of all things to be forborne. "We are, as we have sa : d, just at the critical juncture at which we may go forward to reap the fruits of a severe, but necessary, retrenchment, or by one retrogressive step undo ail that we have done. We cannot think the country will consent to this last course. It would be as if, in full view of the promised land, we ■were to turn back our steps to the wilderness we had left behind.

Undoubtedly the part of the Financial Statement which will be read with the greatest interest outside, and produce the most beneficial effect upon the minds of our critics, is that portion dealing with the state and prospects of the colony. With one exception, the Treasurer was able to show that in every article of importance there has been an increase during the last year, and in many of them a large increase. In the export of grain, frozen meat, grass seed, butter, cheese, timber, gold, coal, flax, and a large number of other products, there has been a gratifying increase, as far as quantity is concerned, and in addition there has been in the main items a marked increase in value. The one exception to the general rule is wool, and here the increase in the local consumption has to some extent made up for the deficiency, the quantity of wool locally consumed having increased from 2,001,1551b in 1887-8 to 4,079,5631b in 1868-9. It will thus be seen that the large producing industries have suffered a marked and gratifying revival. This revival, however, is not confined to agricultural pursuits. Mining gives evidence of renewed vitality, not only as regards the raising of the, precious metals, but also in connection with our coal production. Last year the output was 613,895 tons, as compared with 558,620 for the previous year, and going a little back in the history of the industry our progress is certainly remarkable. In 1878 the output of coal was only 162,218 ; in 1880 it was 299,923, iv 1883 it was 421,764, while last year it rose, as we have seen to 613,895 tons. It is impossible to over-estimate the importance to the future progress of the colony of the rapid development of our coal mines. Abundance of cheap coal is essential to any real and permanent progress in manufacturing enterprise, to say nothing of the source of wealth which the mineral will prove when it takes a prominent place in our list of exports. Theevidenceof substantial prosperity on the part of the colony is not confined to the great expansion of our export trade. We have of late years been learning the necessity of thrift as well as industry, and although it hasjpleased some of our publio men to sneer at this homely virtue we are convinced that without it there can be no assured stability in our public finances. Long before the Legislature of the country had been taught the necessity of economy the people had been practising it themselves in connection With their private affairs, and it was not till the electors at the polling booths insisted upon a change that an alteration was effected in the colonial finances. The figures quoted by the Colonial Treasurer show that the accumulated funds of the friendly societies are increasing, aud the same remarks apply to the funds at the credit of depositors in the Savings Banks of the colony. Between 1886 and 1888 the amount of those, deposits increased by over half a million sterling, while the number of depositors increased by 11,750. These facts, together with the progress of life insurance, indicate a state of things which cannot fail to enormously strengthen the financial position of the colony. They point to the fact, as the Treasurer modestly puts it, " that in the means of saving and iv the will to save the people of New Zealand are at least not behind their kin in other parts of the world."