Financial Statement.

Daily Telegraph (Napier), Issue 6176, 17 June 1891, Page 2

Financial Statement.

In the House of Representatives last night, the Premier delivered the Financial Statement. After a few preliminary remarks Mr Ballance said the late Treasurer estimated the revenue for the year at £4,159,000, which was reduced by the repeal of the primage duty to £4,131,500. The actual revenue received was £4,282,500, or £151.004 in excess of the revised estimate. With the exoeptiou of revenue derived from depasturing licensee, all the heads of revenue had been exceeded. The net result was a surplus of £143,965 loa 6d. On the land fund account the estimated expenditure was £115,080, and the actual figures were £116,108, or £428 in excess of the estimate. The estimated revenue was £96,600, while the actual receipts came to £164,270, or £67,670 in excess of the estimate. Largo quantities of land in the Canterbury district were sold for cash, but the lauds available for disposal in this way were nearly exhausted, and even were the policy of wholesale disposal for cash justifiable, it would be impossible to obtain the earns amount of revenue from that district again. The value of land sold for cash in Canterbury last year was £65,029, while the estimate for this year was only £4000. The large excess of cash receipts during the year provided a balance sufficient to pay off the deficit of £45,716 at the commencement of the year, and to have a surplus of £2445 at the close of the year.

PUBLIC DEBT. The net public debt, after deducting accrued sinking fund, was £37,281,764 at the beginning of the year, and £37,359,157 at the end of the year. PUBLIC WORKS FUNDfI. The available balance of loan funds in the various accounts at the beginning of the year was £1,047,466 16s 2d, which was increased to £1,053,248 0a 10d by some small receipts. There will be £200,000 available for public works. ESTIMATES FOE THB YKAE. The Treasurer then at great length gave details of the estimated revenue and expenditure of the year 1891-92, stiting the items on which he expeoted increases or decreasee. lie estimated the revenue, including £143,965 surplus from last year, at £4,412,765, and the expenditure at £4,155,105, leaving a surplus of £251,660 at the end of the year. PBOPOBALB. A penny postal service throughout the colony; the application of £30,000 out of revenue for opening up land for settlement; remwsion of native lands duty on leases, amounting to about £6000 a year; a tax of 2J per cent on all money passing through, the totalieator estimated to produce £10,000 a year. LAND TAX.

We propose to introduce a bill to abolish the property tax and to provide for a laud and income tax, and in respect of the land tax to grant an exemption on improvements up to the value of £3000 for each owner, and also to impose a graduated tax upon all persons and companies the value of whose land, less the £30C0 of improvements, shall amount to £5000. In the assessment of the tax an owner will be allowed to deduct from his land the amount of any mortgages, and the mortgagee will pay the tax on the total of his mortgage at the same rate as the owner on his land—that is, Id in the £1 but the graduated tax will fall entirely on the owner, snd he will pay this on the full value, less the allowance for improvements For the purposes of this tax it is considered that the mortgagee is a part owner of the land, and that therefore he should share with the owner the responsibility in the matter of the tax—to which principle, however, we make the graduated system an exception, I may here state that an owner will not be asked to pay land tax on the value of the interest of any tenant who holds a lease in which he has a marketable goodwill. The tenant will be assessed with the value of his interest. Wβ propose to graduate the tax on the following scale ;— On a total taxable value of £5000 to £10,000, 1-J-d; on a total taxable value of £10,000 to £20,000, ljd: on £20,000 to £50,000, l|-d ;on £50,0u0 to £100,000, l£d; on £100,000 and over l§d. It will interest the Committee to know what a land tax is expected to yield on this system, supposing the ordinary rate is to be Id in the £1. The result of an all round tux of Id on the land of persons, as distinguished from companies, Has been estimated by the Property Tax Department at £117,596, and the graduated division of the tax on persons at £46,567. The all-round tax on the land of companies at Id amounts to £27,361, and the graduated tax to £15,323. If we add these amounts together we obtain a grand total of £266,847.

INCOME TAX. I now come to the consideration of a tax on incomes derived from trade and oommerce. Wβ believe the property tax to be grossly unjust in its operation, imposing without discrimination burdens on capital, whether productive or unproductive, and discouraging industry. For this obnoxious form of taxation we intend to substitute an income tax of a shilling in the £I. There will be an exemption of £150, and a, deduction by way of abatement of like amount from incomes which do not exceed £600. 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 it will not be levied on profit derived from land, which is reached by the land tax. Further, under the heading , of " Companies " &re included all joint stook corporations, banks, shipping, fire and marine insurance, and goldmining companies, but there will not be any exemption in the oase of companies. Life insurance associations are at present charged Id in the £1 on the amount of their fund" invested in the colony. We propose to charge an income tax of Id in the £1 on the income derived from personal property in the colony, but land tax will be oharged on their land. It is estimated that they will not be so severely taxed as in the past, and the alteration will, I think, serve as an encouragement to invest in the coloay, and will, I am glad to say, afford some relief to institutions that are serving a, most beneficial purpose: In order to prevent misconception, it will be well for me to state distinctly that 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 we propose to exempt all incomes of £300 and under, and to deduct £300 from all incomes above that amount. An income of £500 will therefore pay on £200, and an income of £1000 on £7O'o, with a rate of 3d in the £1 on the first £200 over the exemption, and Gd in the £1 above that amount. A person in possession of £500 iucome will pay under this proposal £2 10s per annum; one in possession of £600, £5 per annum; of £700, £7 10s per annum, and so on.

BE VENUE. I have now to bring together the estimates of land and income tax. Of the amounts receivable under the different schedules of the bill, the land tax, including land and mortgages under the schedule A i £266,847 income tax under schedule B, in* eluding banks, life insurances, gold-mining, fire and marine insurance, and other com* panics (omitting profits from lund and morfc* gages), and companies'debenture other than mortgage debentures, £47,300 ; income tax under schedule C, from trade and commerce, £40,000 ; and income tax under schedule D, professions and salaries, £15,000. These amounts, added together, give a grand total of £369,147. Pending the results, however, of the triennial valuation of property shortly to be made, and the receipt of income tax returns, it will be safe to deduct from the total estimates 5 per cent as a margin, thus arriving at a total net revenue of £350,690 at the end of the present year. THE CENSUS BETUBNS.

After expressing , regret that the land tax of 1877 was repealed, instead of being improved, the Treasurer referred to the censusreturns, aud to the " exodus" of population which he attributed largely to th» cessation of public works, and he expressed regretthat the public works policy in tho past hadnot been made subordinate to settlement: considerations. He hopfsd the establishment of labor bureaus in the chief centres wouM aid in preventing the outgo of pcpufotion, by informing men out of work where they could get employment, and suggested that it would be well to consider whether another mile of road or railway should be undertaken without at the same time some provision being made fur the location on the land of those engaged on the work, if possible. With a view of stopping the "exodus" immediately, Ministers would propose to put in hand such public works as promised to be of a remunerative character, and for which money was available. He concluded by quoting statistics relating to poverty in England, and expressed a hope that legislation in New Zealand would be so directed as to cause a wide diffusion of wealth and the abolition of pauperism. On the conclusion of the Statemont Mr Ballance said, in reply to Mr Bryce, that he proposed, if possible, to commence the financial debate on Friday next

Progress wae then reported, and the House rose at 9 p.m.