THURSDAY. AUGUST 1, 1895. THE FINANCIAL STATEMENT.

Press, Volume LII, Issue 9172, 1 August 1895, Page 4

THURSDAY. AUGUST 1, 1895. THE FINANCIAL STATEMENT.

If we were asked to state what was the most remarkable feature of the Budget we should place first and foremost its length. It is too much to expect the ordinary reader to wade through such a prodigious mass of facts and figures, and we quite agree with the view that it would have been far better, both for the sake of Mr. Wakd and the long-suffering members, if this formidable document had been simply laid on the table, thus sparing the Minister the task of reading and the House the infliction of listening to it. Better still, however, would it be, for Colonial Treasurers to learn the art of

condensation. A great deal of the departmental detail with which Mr. Ward's Statement on Tuesday night was overloaded would havo come much batter in the form of reports from the heads of the offices concerned.

While making thi3 protest, however, vre frankly admit that Mr. Ward is to be commended for the grasp he evidently possesses of the multifarious subjects with "which he has to deal, and the pains he has taken to make them intelligible to the public. A larga part of the Statement naturally deals with subjects which have already beeu threshed out in discussion. We have no intention on the present occasion of going again into the question of the Trust Funds. While giving every weight to the fact that Mr. Wabd probably had to combat the efforts of " bear " money brokers whose object it was to depreciate the loan for which they intended to tender, his best friends must admit that he allowed his zeal to outrun his discretion. Apart from this circumstance, as we have said on previous occasions, he is justly entitled to the credit which he now claims for himself in the Statement for the splendid success of the 8 per cent. loan. We also heartily approve his proposals to provide for the gradual extinction of our debt. That, of course, was the object in view when the original Sinking Funds were provided, and it is a little strange to find the heirs and successors of the Ministry which first seized those Sinking Funds now proposing, in effect, to revert to the system which Sir Julius Vogel's Government so eagerly abolished. Moreover, we cannot shut our eyes to the fact that Mr. Wakd and the present Ministry have, up to the present, not only adopted the policy bequeathed to them by Sir Julius Vogel, but by means of expensive conversions and the like, have seized everything in the nature of an accrued sinking fund it was possible for them to get hold of. Why, even in this very Budget, Mr. Wakd proposes to annex the sinking fund accretions "under the Government Loans to Local Bodies Act. We should heartily rejoice to see the Ministry devoting themselves in future to the policy of gradually extinguishing our debt instead of steadily adding to it as thr y have done in the past, but we canr it help feeling that Mr. Ward in thus dealing with the Local Bodies' Loans accretions has chosen a strange method of showing his sincerity in this matter. As to the leading financial aspects of the Budget, it is impossible to got away from the fact that Mr. Waud is obliged to admit an increase in the debt, and, as a natural corollary, is compelled to propose an increasa in taxation. Those are the broad unpleasant facts which remain when all the ingenious dissertations upon figures, and the sanguine speculations as to the future are boiled down. Mr. Ward appears to think that because he has made both ends meet by heavy taxation he has done well. He apparently does not recognise thai a successful Treasurer is one who can reduce taxation. There is no merit in increasing it. There is, ws grant, a certain amount of skill required in " stripping" the colonial milch cow to the last drop, and that Mr. Ward and his party are adepts in the art of taxation all must admit. The lesson they have yet to learn is that it is possible by means of excessive imposts to squeeze the very life out of a country, and that is what we are afraid will bs the result here unless the recklessness which is the characteristic of Mr. Ward's general finance is tempered with more prudence. There is a most significant fact in the Financial Statement, the true meaning of which Mr. Ward has utterly failed to realise. It is that the increases of revenue for which the hon. gentleman takes so much credit, are largely the outcome of what may be" termed penal taxation, such as the stamp duties, while there is a marked falling-off in the revenue obtained from trade and commerce, which trade and commerce are the true test of a country's prosperity. When we find that there is a reduction of £80,215 in Customs and £18,251 in railway revenue, it certainly looks more like a case in which the country requires to be relieved of some of its burdens of taxation rather than of its bsing in a condition to bear .more. Again, it must be observed that part of Mr Ward's revenue is derived from the cash sales of land. Wβ admit that in this he is only following the custom of some of his predecessors, but it is evident that in selling the land he is selling the colony's assets, and, a matter of business prudence, the proceeds ought to be trusted as capital.

■There are. a number of subjects touched upon in the Statement which require separate treatment, and which . can only be glanced at here. The changes in the tariff are .characterised by a spirit qf moderation, and so far have Our approval, but we doubt if they will give any general satisfaction. The reductions of Id per lb on tea and Id per gallon on kerosene, although in the right direction, are too small to afford any appreciable relief to the consumer. On the other hand it is evident that some of the new duties, e.g., those on flannelettes, will increase the cost of living to the working classes. We approve of the policy of obtaining revenue when necessary, by means of the succession duties, although Mr. Wabd has been a little unfortunate in especially singling out widows to bear the brunt of the taxation in this caso. The general exemption up to £300 will soften the blow, no doubt, but that amount is little enough for a poor woman left to face the world alone after the loss of her husband without having toll levied upon it by the Government. As to the Consols Act, it has proved such a ghastly failure that we have no doubt Mr. Wabd felt far from happy when he was making his melancholy confessions under ibis heading to the House. The real, practical, net result of that Act has been that the Government has borrowed £150,000 from the Bank of New Zealand at per cent, and lent it to the Colonial Bank at 4 per cent. Against the difference in the interest has to be set the fact that the Bank of New Zealand has the security of the Government for its money and the Government has that of the Colonial Bank. The object of such a transaction is too obvious to call for discussion. Mr. Wabd is good enough to promise us that he does not

contemplate any more " hasty treatment " in the matter of Bank legislation this session, but he doe3<fell us that the Bank of New Zealand Estates Company is not in a satisfactory condition, and he wants it referred to a Select Committee of both Houses. We fail to see why the colony should worry itself about the Estates Company,unless it is really necessary in the interests of its guaranteed two millions to the Bank. Wo long ago expressed the opinion that the Estates Company was a white elephant, and we have no doubt that unless a great rise takes place in the value of properties, or unless the Government do intervene in its behalf, the Company is bound to result in heavy loss. We do not absolve the managers altogether from blame, as we know of instances in which they have been offered a fair price for land in their possession and have refused to sell. If the country decides that in order to save its two million guarantee it must do something for the Estates Company well and good, but we shall carefully scrutinise any proposal made with that object in view when it is brought down. The questions of the reciprocity treaties with South Australia and Canada, and the proposals to subsidise the Vancouver steamers and assist the Pacific cable, are of sufficient importance to demand more detailed attention than we can give them on this occasion. We confess that at present it appears to us Mr. Ward takes a rather visionary view of the advantages likely to be derived from his proposals, while the cost will be a solid and undoubted fact. The groat disappointment in connection with the Budget is the utter absence of any attempt at retrenchment, such as the circumstances of the country urgently require. The colony is getting very tired of being regarded simply as the patient milch cow on which successive Treasurers are to exercise their ingenuity, each trying to outdo the other in attempts to extract as much as possible from the long-suffering creature. It was generally thought that the limits of this process had at length been reached, but Mr. Watu> is evidently determined to justify his reputation as a " Wizard of Finauce," if only in being able to extract the taxpayers' coin from the most unsuspected places.