APPLYING' A SURPLUS.

Evening Post, Volume LVIII, Issue 153, 28 December 1899, Page 4

APPLYING' A SURPLUS.

It is the fashion in New Zealand to parade huge surpluses. It was not always so. Hitherto Colonial Treasurers have acted upon the sound principle that no more should be extracted from the pockets of the taxpayers than is absolutely necessary for the services of the Government, having due regard to economy and prudent management. Under a "Liberal" Government a new system has grown up, by which large sums in excess of what is required for administration purposes are apparently raised, and although great efforts have been made to conceal the sources from which this excess revenue has been obtained, there is now no doubt that the mass of the people have founu the money through the Customs. By un-. der-estimating revenue and over-estimat* ing expenditure in the most flagrant manner, large surpluses have been shown, and as there appears to be some credit attached to the production of these surpluses, the practice above alluded to will continue. It is always pleasant to see the balance on the right side at the close of the financial year, but a huge and unwieldy surplus, assuming it to exist, merely discloses that an unnecessary amount has been drawn from the people. Tho uses to which the surpluses are applied are also matters for condemnation. Of course, it is alleged that the larger proportion of the money is applied to public works, but, as every one knows, the Colonial Treasurer by this moans has the power of-,debauching the constituencies. Works are undertaken that are not of pressing importance, and the expenditure is on a lavish scale ; in fact, money is of no importance. It must, however, be admitted that with the fluctuations in our trade* the surplus may occasionally be considerably greater than the estimate, but in recent years this has become a chronic feature of our finance. How to satisfactorily deal with the surplus is a matter that will soon need to be discussed. The present method of disposal is far from satisfactory, for the west results are not obtained, nor can it be said that it is fairly disbursed. In some of the Australian colonies the surplus is disposed of by legislation, and the results ara all that could Oe desired. For instance, in Queensland, unSer the Audit Act Amendment" Act 1895, the surplus is handed over to the Trustees of the JPublic Debt Reduction Fund, by whom it is applied for the purchase of debentures or Government stock, thereby reducing the national debt to the extent of such purchases, and this is practically the British Jiractice. Suggestions have been frequenty made that it would be better to place these surpluses aside to meet deficiencies which may hereafter occur ; to establish, in fact, a sort of equalisation fund to be used as occasion may require, but this

scheme in open to the objection that the money can always be diverted to other purposes, and from what is known of colonial politics this is really what would happen, in our cuse if this method were adopted. The other system of arbitrarily placing the money at the disposal of Debt Commissioners is much to be preferred, as it compels the Treasurer of the day to so regulate the finances of the colony as to ensure that, as far as lies in his power, expenditure shall not exceed revenue. Under such conditions an effectual check would be placed upon fancy financing, for there would be no gain to the Party in power to have a great surplus. Regard for economy would be forced upon the Treasurer, and public works would be undertaken with great caution, and only such ventures sanctioned as are really essential to the progress of the colony.