The Clutha Leader. BALOLUTKA : FRIDAY, JUNE 10, 1891.

Clutha Leader, Volume XVII, Issue 883, 19 June 1891, Page 4

The Clutha Leader. BALOLUTKA : FRIDAY, JUNE 10, 1891.

The Hon. J. Ballance delivered his Financial Statement on Tuesday evening. He first detailed tho operations on the consolidated fund for the year 1890-91, shewing as the. result that at the beginning of the year there was a surplus of L 36,568 19s 4d. After paying off the balance of the deficit at the 31st March, 1889 (L 78.605 0s 8d), the receipts amounted to L 4,282,504 0s 7rl, making a total of L 1,3 19,073 0s lid available, for expenditure during the year. Thf> total expenditure amounted to L 4,175,107 13s sd, thus leaving a surplus of L 143,965 15s 6d on the 31st Mnrch last. The gross pnblie debt on 31st March 1890 was L 38,607,950, and the sinking funds accrued amounted to L 1,386,186., 386,186. The net public debt was, therefore, L 37,281,764 on the 31st March last. Tbe gross public debt was 1j38. 832,350, showing an increase of L 164,400 during the past year. The sinking fun/Js accrued are estimated at L 1,473,193,, 473,193, and the net d^bt therefore stands at L 37,359,157. The. treasurer next explained at length the transactions that have taken place in conversion operations, and parsed on to tbe public fund account, shewing that the operations on the three parts of this fund had resulted as follows: — The available balance at th<» beginning of the year was L 1,047,466, 047, 466 16s 2d, which was increased to L 1.053.248 0s lOd by some small receipts. The expenditure during the, year amounted to L 335,151 15s 3d, and the available balance at the close of the year was L 718,096 5s 7d. The outstanding liabilities on 31st March last are stated at L 240,387 2s Id. — With reference to Government loans to local bodies, he explained that up to 31st Massh last the sum of L 300,000 had been borrowed for the purpose, of making such loans, and L 25,000 for the purpose of transfer to the public works fund in part realisation of the asset of L 87,974 Is 3d of the fund payable under section 31 of the act in respect of converted debentures originally issued under " The i Roads and Bridges Construction Act, 1882." Up to' 31st March, 1890, L 248,200 has been paid over to local bodies, and during the past year, L 47,164 had been further advanced, making a total of L 295,364 paid over to 31st March last, leaving a balance of L 4636 available. The engagements of the treasury in respect of these loans amounted on 31st March last to L 41,018, and further apnlieations had been received for L 36,558 which had been granted provisionally. — The treasurer next explained the estimates of revenue and expenditure for the current year, the result being : Surplus brought forward at commencement of the year, L 143.965 15s 6d, to which add the estimated revenue for the year amounting to L 4,268,800, making together L 4,412,765 15s 6d. From this deduct the estimated expenditure for

the year of L 4,155,105, leaving a surplus at 31st March next of L 257,660 15s 6d. Mr Balknce proceeded to explain the way he thought this surplus should be disposed of, referring to the dicision of the Government to estaV.lish a penny post throughout New Zealand, the cost of this reduction in the present year being estimated at L 40,000, although he believed that within three years, through an increase in the number of letters, the loss to the revenue would be more than covered. He also proposed to reduce the postage on newspapers to other colonies to £d, to apply a sum^of L 30,000 out of revenue for the work of opening up land for settlement, and to remit the Native lands duty on leases amounting on an average to about L6OOO a year. He also proposed to pay LI OO,OOO of the surplus of the year towards the extinction of the deficit of the year 1888, amounting to L 400,000, and to place a tax of 2£ per cent, on the money passing through the totalisator, which he estimated would amount to LIO.OOO a year. The result of these various proposals are given as follows : — Cost of penny postage, L 40,000; L 30.000 for opening up land for settlein pnt ; L6OOO duty on Native leases; L 21,820 to meet the estimated deficit in the land fund ; and an appropriation of 1/100,000 to pay off the debt incurred in 1888 to meet the deficit o£ that year. The total of these various amounts is L 197,820. Deducting this from the estimated surplus of L 257,660 leaves a net surplus available to carry forward of L 59,840. To this has to be added the tax on the totalisator amounting to LSOOO, bringing up the surplus for the current year to L 64,840, which the treasurer thought would be an ample margin to provide for the supplementary estimates and possible contingencies. In dealing with the question of the resources of revenue, it was pointed out that it would be impossible to depend in the future on the increased consumption of alcoholic liquor to strengthen the consolidated fund, a fact which was referred to as a grafifying one from a temperance point of view. As wealth is diffused among th« community, stumps will continue to increase, and will be one of the pillars of the financial system. Rail ways can never 1">r» relied on as a source of revenue. Diroct taxation in the way of a )un<\ and income tax must remain with the development of industries a fruitful source of income, and an equivalent of the amount obtained from present property tax may for same time \w, a necessity. Whnn the nature of our obligations will permit it, the Govcrnnnn f am of opinion that relief should be oivfui on the necessaries of life now paying duties through customs. TC the country is to maintain its credit and financial indepondencp., borrow in" in the English market must cease, while any local borrowing is likely to be confinorl to tho absolute necpssity of carrying on those essential works of colonisation, such as the settlement of tho poople on the land, on which depend so directly the prosperity of the community. On the other hand, if tho machinery of Government could be simplified, and judicious retrenchment carried to its proper limit, the expenditure side of the account might sti'l hn considerably reduced. It was next explained that the floating debt incurred to meet past deficits is L 550,000. This will be reduced to L 450,000 by the appropriation of LIOO,OOO out o£ the surplus of the year asabove explained. Then the treifa-er proposes to transfer from tho pihlic works account LIOO,OOO of the sinking fund sat free, thus in the present year reducing the floating debt by the sum of L 200,000, and leaving outBtanrling L.350,000 to be drat with in the future according to the state of the finance. Adding tie L 128.605, paid off mainly by the primage duty, to the L 200.000 now proposed to be extinguished, this shows a reduction of the debt by L 328,605. The Bill to effect a reform of the civil service was next mentioned, and reference made to the position of the GovernniPiit Insurance Department, and the Public Trust Office. In regard to the settlement of the land, the Minister of Lands would introduce a measure to consolidate and amend the law relating to the Grown lands, and also th« laws relating to the Native lands. The treasurer next proceeded to deal with the important question of the incidence of taxation, and intimated that the Government intended to introduce a bill to abolish the property tax and to provide for a land and income tax, and in respect of the land tax to grant an exemption on I improvements up to the value of L3OOO for each owner., and also to impose a graduated tax upon all persons and companies the. value of whose land less than L3OOO of improvements ■ shall amount to L6OOO. It is estimated that the deduction of improvements will cause a loss of revenue of about L 60,000, and the graduated tax will bring in ai increased revenue of L 61.890, which will fall to be paid by less than 3000 owners. In addition to the deduction for improvements there will be the exemption of LSOO from an owner's land, and it is not proposed to grant the exemption when an owner's land, less the deductions he may claim, will exceed LISOO, Thus, a farmer has land worth LBOO, the improvements on which are valued at L3OO. The exemption would make him not taxable. With land worth LI 200 and improvements L4OO, the balance

j wojj.ld. be : L3OO. In the assessm ent of || tax an, owner will be allowed to deduct 1 from his : land the amount of any mort- || gages, and the mortgagee will pay tax p on y.the ; total of his mortgages at the ft same rate as the owner on his land — §, that -is Id in the pound. But the p graduated tax will fall entirely on the | owner, and he will pay this on the full jfc value, less the allowance f:>r improve- | ments. : The following is the proposed | scale of graduation : — | * On a total taxable value of LSOOO f toLIO,OOO ... ... lid £" On LIO.OOO to L 20.000 ... lid |: On L 20.000 to L 50,000 ... }M I 'On L 50.000 to LIOO.OOO l|d | On LIOO,OUO and over ... l|d | The expected yield of the land tax is | as follpws : — Supposing the ordinary I rate to be Id in the pound, the result * of an all round tax of Id on the land I of persons as distinguished from com- | panics has been estimated by the ProI perty Tax department at L 177,596, =-. and the graduated division of the tax % on persons at 146,567. The all-round | tax on land of companies at Id amounts I to .• L 27,361, and the graduated at % 1/15,323. Adding these amounts tol gather a gross total of L 266.847 is ob- | tamed. Above L 25,000 will be paid i as graduated tax in respect of land I owners, each of whom has a greater \ value than LIOO,OOO. These owners I are less than 50 in number. As to the I income tax, it was explained it was in- ; tended to be Is in the pound. There will be an exemption of LI SO, and a deduction by way of abatement of a like amount from mcomos which do not exceed L6OO. Companies will be subject to the same rate of income tax, but it will be understood in all cases where income tax is charged that -■ t will not be levied on the profits derived from land, which is reached by the. land tax. It is proposed to charge an income tax of Id in the pound on the income derived from personal property in the colony, but land tax will be. charged on their land. The, income tax will not be levied on any income derived from land or from money lent on mortgage. Such property will be subject to land tax only. In charging the tax on incomes derived from professions and from occupations in which profit is not made from capital, and on salaries they propose to exempt all incomes of L3OO and under, and to deduct L3OO from all incomes above this amount. An income of LSOO will therefore pay on L2OO, and an income of LIOOO on L7OO, with a rate of 3d in the pound on the first L2OO over the exemption, and 6d in the pound above that amount. A person in possession of LSOO income will pay under this proposal L 2 10s per annum ; in possessson of L6OO, L 5 per year; of L7OO, L 7 10s, and so, on. Considering the comparative independence of those in possession of salaries or incomes above L3OO a year, the srnallness of the rate the treasurer thought would commend itself as fair. The results of the land and income tax he stated as follows : — Land tax, _ L 266,547 ; income tax from banks, life insurance, gold mining, fire and marine, insurance, and other companies (omitting profits from land and mortgages), and companies debentures other than mortgage debentures, L 47,30.0 ; income tax from trade and commerce, L 40,000 ; income tax from professions and salaries, L 15,000, making a grand total of L 369,147. He submitted with confidence that the country was ripe for these proposals, and would accept them. Before concluding, the Treasurer referred to the lesson conveyed by the census returns recently issued. Briefly, the rough results of the census as shown by enumerators give a population of 623,352 persons (not including Maoris) against 570,482 persons in March, 1886, making an increase for five years of 44,870. But the natural increase for this period, being the excess of births over deaths, is 64,168 persons, so that the loss by excess of departures over arrivals is 19,298. The arrivals recorded in the 'ive years were 73,386, and the departures 83,948, giving a loss of 10,562 persons Here, he said, was a loss of wealth and wealth-procuring power, demanding the serious consideration of Parliament. It appeared to the Government that the first thing to be done was to obtain an accurate knowledge of (he facts. How many people were unemployed ? Why employment did not exist for all ? Whether labour should not be organised by the assistance of Government so that it might be more equally distributed and more easily find employment 1 What was wanted in this respect was a system under which statistics might be furnished to a central office at frequent intervals (weekly or monthly) of the state of the labour market in every part of the Colony. The cessation of public works was one cause of the exodus. This showed that the method of carrying on public. works had been radically vicious, when they no sooner cease than those engaged on them were compelled to emigrate. If the. public works had been made subordinate to settlement, they would have created a demand for population. On the other hand, the way they had been conducted had been instrumental in driving it away. He submitted as a subject for the consideration of the committee, that not a mile of road or railway should be constructed by the Colony in the future without, provision being at the same time made for the location of the people engaged in the work on the

land if possible in the neighborhood. This might mean a radical change in the method of entering into contracts, and it certainly would entail a more direct responsibility on the Government, but it would transform into sturdy settlers with a stake in the country a large proportion of those who, seeing no prospect here, were ri^ady to embark for other lands. With a view to immediate relief and stopping the exodus, the Government propose to put in hand tuch public works as are of a productive character, and for which moneys are available.