THE FINANCIAL STATEMENT.

Clutha Leader, Volume XVI, Issue 832, 27 June 1890, Page 5

THE FINANCIAL STATEMENT.

In the House of Representatives on Wednesday evening, the Hon. Sir H. A. Atkinson, in moving that the Speaker leave the chair in order that the House go into Committee of Supply, thanked the House for its indulgence in allowing die Financial Statement to be read by one of his colleagues. Up to that morning he had thought he would be able to deliver the Statement himself, but he was informed by his medical advisers that it would be absolutely dangerous for him to do so in his present state of health. He could assure the House that nothing but ill-health, prevented hi in from delivering the Statement. The House then went into Committee of Supply, and the Hon. E. Mitchelson read the Financial Statement. It was first explained that the Treasurer's anticipation of last session of ending the financial year with a small surplus had been more than realised, and this surplus had arisen no less from tho steady improvement in the condition of the Colony than from the large economies and careful administration which the present Parliament inaugurated and has always insisted upon, and which Government has to the best of its ability carried out. After referring to several signs of real and very satisfactory progress throughout the Colony, the Treasurer proceeded to deal with the Consolidated Fund. The estimated expenditure for the year 1889---00, including charges under special acts and the supplementary estimates, amounted to L 4,150,703. The actual expenditure was L 4,121,842 ; there was therefore unexpended of the amount authorised L28.8G1. ' The estimated revenue (including the primage duty) was L 4,187,800 ; tho actual amount received, L 4,200,247. The total revenue therefore exceeded the estimate by L21 ; 447. The profit for tho year of tho Public Trust office, amounting to L 5182, had not been brought to credit. The estimated expenditure of the land fund, including the supplementary estimates, was L 128,149. The actual expenditure was L 121,919 ; the expenditure was therefore less than tho estimate by LG23O. Of this expenditure there was paid to local bodies for rates on Crown lands L 11.684, and L 18,150 in respect of receipts from deferred payment lands. As to the financial results of tho year — ordinary revenue — the year was begun with a surplus of L27.7G8 after paying off L 50.000 of the deficit, of 31st March, 18S8, and the ordinary revenue received was L 4,209,047. The amount available to meot expenditure was therefore L 4,237,015,, 237, 01 5, and the total expenditure having been L 4,121,541, there was a surplus for tho year of L 110,174- The final result for the year, after paying what was left unpaid of the deficit of L 128,605 — namely, L78.G05, —is a balance of L 36,569 with which to begin the current year. The outstanding liabilities at the end of 1889-90 were less than those of the previous year by L 15,186. They were also less than the average liabilities of the last nine years by L 36,783, and less than in 1881 (when the present system was begun) by L 38,362. These facta are a complete answer to those persons who, professing to be well informed, are either so ignorant or so disingenuous as to talk of the surplus of last year as being manufactured by holding over liabilities at the c.id of the financial year. Oa the 31st March, 1890, tho gross estimated public debt of the colony amounted to L 28,667,950, and the accrued sinking funds to L 1,383.432. The net public debt was therefore L 37 ,284,5 L 8 Of this sum there remained an unexpended amount of L 961.300. The Treasurer made a long statement in explanation of the public debt, and also explained the position of the several public works amounts* As to the Government loans to local bodies, he explained that up to the 3 1st March, 1889, the Treasury had borrowed L 200,000 for the purpose of making loans under " The Government Loans to Local Bodies Act, 1886," and last year further siims were from time to time borrowed, to the amount of L 50,000, making in all L 250.000 at the 31st of March^, 1890. The debentures issued for this amount bear interest at the rate .of 5 per cent, per annum, and mature on the Ist of March, 1892. At the 3tst of March, 1889, the total amount advanced to local bodies was L 192,316, aiid last year the sums so paid amounted to L 59,764, making a total of L 252,078, reducible, however, by L3BBO for refunds, &c. , to L 248,199, leaving a balance in hand at tho end of the year of LIBOO. At the 31st March, 1890, the engagements of the Treasury in respect of these loans amounted to L 14,928, and applications had been received for L 39.539 more, which had been granted on the xisual understanding that all the steps necessary to complete tho security for the loan would be taken before any payments wore made. At the Ist February, 1890, the amount of debt standing inscribed in the Treasury register, including the equivalent of converted debentures issued by local bodies under "The Roads and Bridges Construction Act, 1882," was L 318,980, and between Ist February and 31st March, 1390, further pryments to the amount of L 14,782 had been made, which carries interest at 4 per cent, until Ist February, 1890, when with the interest added the amounts so paid will,, in accordance with the provisions :of the act, be also inscribed in the Treasury register.. As. to the current year, the ordinary ex-: penditure is estimated at L 4,127,417. With the exception of the Postal ; and Telegraph Departments, salaries have been : increased in a very few cases. The aggregate increase which has taken place in the Post and Telegraph Department amounts to LS27JL. The Government have thought ifc desirable to classify the Postal and

Telegraph officials under a system which it is proposed to apply to the whole service, should the Civil Service Bill pass which the Government will introduce. By the proposed classification the total increase will be L 19,569, but this will not be accomplished for five or six years. In education there is an increase of L6OOO. This is less than the amount which the annual increase of scholars for capitation would give. In the Native department, the increase of L 4400 is entirely owing to the appointment of additional judges in the land court and the expenses of the commission under the act of last session. In working railways there is an additional expenditure proposed of LIB,OOO. This j arises from additional mileage open for traffic and the increased cost of iron. In I public buildings there ia an increase of L 27,409 — namely, for school buildings and a building for deaf mutes. Thero is a large reduction in the Postal and Telegraph Department, regarding which the Trea- ' surer said : " This arises from no provision being made for the San Francisco mail service after the expiration of the present contract, and from other items — a full explanation of which will be given by the Postmaster-general when tho Estimates come before the committee. I much regret that the San Francisco service is likely to fall through for a time, as the | New South Wales Government have positively refused to join in the subsidy ; and I fnar that there is small hope of the Imperial Government agreeing to pay for the conveyance of the mails to and from London and San Francisco. I cannot, however, believe that we are likely to be long without a good steam service between Auckland and San Francisco." The amount of the proposed appropriations for the current year is slightly less than the amount voted last year, the totals being L 1,983,330 and L 1,987,237, notwithstanding the fact that the railway commissioners require LIB.OOO more than they did last year, and that we propose an extra expenditure of L 15,000 for school buildings, and LBOOO for an institution for deaf mutes. Tho total estimated expenditure chargoablo against the land fund is L 116.557. This is less than the prevision made last year by over LII,OOO. Tho reduction is caused through rates on Crown and Native Lands being no longer payable except in certain cases, the act having expired on the 31st of May last. In dealing with the ordinary revenue for the year the Treasurer said : — Before I go into the question of ways and means I wish to c ill the attention of the committeu to a subject about which Hiere is much difficulty. I refer first to the question of providing the necessary means for school buildings. This expenditure, as lion, members know, has been charged to the consolidated fund for the last two years ; secondly, to the provision for lunatic asylum buildings, which have hitherto been charged against tho balance of tho loan money originally set apart for the purpose The question of locally charging, if not the whole, at any rate a part of the cost of school buildings has been mooted from time to time, and the matter has been carefully considered by the Government. We have come to the conclusion, however, that it would bo very difficult, with fairness to the several localities, to make such a charge, and that it. might injure our system of education in the country districts to do so. Yet we do not see our way at the present time to charge the consolidated fund with the school buildings vote as a permanent thing. We think the whole matter wants further consideration, and aro of opinion that it would be wise fur the Honse to make extra provision for school buildings, and nearly equal to tho present requirements. This extra provision should bo made for a limited term only, during which period I trust the growth of the ordinary consolidated revenue will render it possible to charge these buildings against it, if Parliament shall determine that it is a charge which ought permanently to be borne by tho ordinary revenue. The Government therefore propose to continue the primage duty for another two years for the purpose of providing funds for school buildings and lunatic asylum buildings. The Government think that the time has arrived when the Minister of Education should have more direct control over the vote for school buildings than has hitherto boon the case, and we shall ask Parliament to amend the law so as to enable the Minister to have an effective voice in determining what buildings are unnecessary.. We "think also, wherever possible, future buildings should be of stone or brick in preference to wood. The Government have had under their careful - consideration duriug the recess the question^)! the incidence of the property tax. Tlie strong antagonism which seems to be felt against the tax in some districts of the Colony would alone have demanded an exhaustive reconsideration of the subject, and such a reconsideration the Government have given the matter, but, the Treasurer regretted to say, without seeing their way to reduce, much less to abolish, the tax in the preseut state of the finances, our present necessities making it impossible for us to forego any appreciable part of tha sum now raised. The question as to a change in the form of direct taxation will be left to another Parliament. With rcforence to (he Otago Central railway the Treasurer said : tn my last year J 3 Financial Statement I submitted certain proposals to raise tho necessary funds to extend the Otago Central railway to Eweburn and to construct the Puhipuhi Forest tramway . Unfortunately tho House rejected the3e proposals when they assumed the form of bills. The Government have had the question of these works again under their consideration, and they still think them of great importance, and that they should be executed. But after the action taken by the House they do not think it their duty thi3 session to again propose their execution. ! He intimated that the _ Government were convinced it was impossible to mike any further appreciable reduction in the public expenditure; unless we are prepared largely to curtail the public cpnveuieuces which are now enjoyed, the absence of which would be felt as hardships. He estimated the total ordinary revenue for the year at L 4, 159,000 upon the present basis of taxation. From customs he expected Ll,480,000 ; from stamps, L 612.000 ; and from railways, L 1,480,000. I The estimated revenue from the land

fund is L 96,000, being slightly over the amount secured last year. As to the estimated results of the year 1891 ho said : X have said that the estimated total ordinary expenditure for the current years amounts to L 4,127,417,, 127,417, and the estimated revenue to L 4,159,000,, 159,000, to which I add the surphis of L 36,509 with which I have shown we began the year after paying off the balance of the deßcit of L 128.605. We. shall therefore, if our estimates are realised, have a surplus of L 68,092, subject, however, to a deduction of L 20,000, to which I shall refer presently, leaving an estimated surplus of L 48,092, which hon. members will agree is not too large a margin to work on, especially when it is remembered that the supplementary estimates have yet to be provided for. The Treasurer next dealt with the matter of the settlement of Grown lands. He said there were two questions to be considered — viz., how to provide funds (1) for the providing the necessary amount for carrying on the Survey and Crown Lands Departments ; (2) for making the necessary roads to render the lauds, fit for the occupation of small settlers. Regarding the first, he said the Government proposed to ask L 20,000 as a grant in aid for this year. On the second question he spoke as follows : — How are we to get the funds to make tho necessary roads to render our Crown lands acceptable for settlement? Now it is clear that the money for this purpose can only be obtained i» one of three ways — from loan, from the consolidated fund, or from tho land itself. The Government are not prepared to recommend a resumption of ordinary borrowing for this or any other purpose. It is clear from what 1 have already said that we cannot spare the necessary amount from the consolidated fund. We must therefore fall back on the land itself, it this can be done without deterrent effect upon settlement in consequence of the apparently enhanced price which our proposals involve. Parliament has already determined that intending settlers shall have the choice of one of throe titles under which to hold their land — namely, by cash purchase, deferred payment, or perpetnal lease with the right of purchasing in fee. The 'perpetual leasehold seems to bo the title which the public prefer. It is growing in public favour, and will, I have no doubt, practically supersede the other two titles. All the costs, therefore of placing a settler on the land — namely, the purchase of the land from the Natives, the survey charges, the cost of making tho necessary roads — have to be provided in cash before any return, even in tho shape of rent, comes back to the Crown. Since, therefore, perpetual lease is tho form of tenure for which we havo mainly to provide, it is clear that provision must be made for tho purchase of land, for surveys, j and for the roading, and tho sooner we determine how this is to bo done tho better for the Colony. The Government have given this matter careful consideration, and aa I have just said, are of opinon that the land must bo mado to bear the cost. We think that tho necessary amount can bo obtained from the land in such a "way as not only not to retard but to promote settlement. Ido not propose now to enter into details — that will be done later on by my colleague- the Minister of Lands' I may, however, say I that the general outline of tho scheme will be something like tho following :=— A block of land, for instance, say 10,000 ■ecres is to be opened for settlement. The roads would be laid out and the sections surveyed. The cost of forming and metalling the main road through the block : would be estimated and added to tho cost of clearing and forming the district roads. The total amount thus ascertained we will Btippose is LSOOO. A rate under the Rating Act would then be struck over the block. to cover that amount, less the present value of the thirds, as though it wore a district raising a loan under the Government Loans to Local Bodies Act, and the county council in which the land was situated would be asked to superintend the execution of the work under the regulations approved by the House. We should propose that in bush districts all road making, excepting the first clearing of the main roads, should be offered to the settlers in the first instance, so as to give employment to them for the first year or two, when work is most required by bush settlers. If this system is carried out, we think it will give great satisfaction and confidence to settlers by ensuring the making of necessary roads as they are requiiel—the money being at call and depending unon no contingency, and enabling a small settler to earn a fair amount of cash at a time when he most needs help. No fresh borrowing powers will be required if this plan meats with the approval of Parliament ; there is ample provision under the Government Loans to Local Bodies Act —a ; slight amendment of that useful Act, extending its provisions to land about to be opened for sale, being all that is required, tho purpose for which the advances are proposed to be made being identical with the purpose for which the Act was passed. Hon. members will perhaps say that this is only another form of borrowing, and that is true. But it is a form fora purpose already approved by Parliament, and within the limit now fixed tho only difference being that the money will be provided at a more suitable time, and consequently will be more useful to settlers. Provision will, of course, have to be made, as I have just said, to give purchasers of the land credit for the present value of ihe thirds, which would in fact, instead of being doled out as they were half yearly, be available as a wh"le at once, to the great advantage- of all concerned. 1 submit that if we are to dispose of our land upon perpetual lease or deferred payment I it is clear we must make provision for roads, and it seems to the Government, that this proposal is by far the simplest and safest way of raising the necessary funds. No fresh strain will b 3 put upon the colonial revenue, the settlement of land will be made self -supporting, and if Parliament thinks it übetteru better to render, direct assistance by charging a lower rate of interest that will have to be paid by the Colony for the money. The public will know definitely what the amount is. I want the committee to clearly under- ' stand that it will be impossible after this year to continue the present arrangement, . which is to find money out of loan in aid of settlement. As a matter of w.e

have during the past five years found no loss than L262,G00 for this purpose, and the loan balance which is yet available will be completely exhausted by the end of this year. The Government havo had under consideration tho question of any possible amendmont of tho land laws, with a view of still further increasing their efficiency in promoting bona fide settlement. They think an amendment desirable, increasing the power of boards and the Minister to prevent dummyism, although, as farjas can be ascertained, thero is iv fact little now practised. But however little it must bo stopped. Wo are also of opinion that in bush districts, and where drainage is noedod, ib will be of material assistance to settlers of small means if tho rent for tho first two years could be postponed and distributed over the rest of the term, both in the case of perpetual leaseholders and deferred-pay-ment selectors, A bill to give effect to these proposals will bo introduced shortly. The Treasurer next explained tho scheme proposed for the purchase of Native lands, and concluded with a long, elaborate, and most hopeful statement of the condition and prospocts of the col' ony.