FINANCIAL POLICY.

Evening Star, Issue 7627, 1 June 1888, Page 1

FINANCIAL POLICY.

The taxation proposals of the Treasurer are of such a character, fraught with so much mischief that public interest is almost necessarily centred thereupon, to the exclusion of the consideration of other important points in the Financial Statement. Now that the country understands what the services are which render increased taxation necessary, and the means by which it is proposed to raise it, the possibilities are that there will be on expression of public opinion to the effect that those services had better be done without than provided for at such a cost to the community. The enormous sums spent upon school buildings since the Education Act came into operation would at least suggest the conclusion that for the next year or two the present accommodation should suffice. As to the subsidies to local bodies, we have always held the be a vicious one. So long as there was loan money available there was some reason in the argument that a contribution therefrom should be made towards local public works; but the matter stands on an altogether different basis now that the subsidies, if granted at all, must be paid out of the ordinary revenue. The Treasurer puts it very plainly when he says that " the colony "should clearly understand that con- " tinued payment means additional "taxation." The subsidy system has, in our view, done much to demoralise local bodies, weakening self-reliance and inducing extravagance; and it might, we are convinced, be abolished with advantage. Temporary inconvenience would no doubt be experienced throughout the country districts, but a better state of things than at present would in due course be established, and the expenditure would be much more closely looked after when the money had to be found entirely by the ratepayers. Were it decided not to make appropriations this year for subsidies and for school and public buildings, the amount of additional taxation required would be so reduced that a few wholesome economies in directions suggested by the Treasurer himself might probably obviate altogether the necessity of raising fur.her revenue than is estimated to accrue under existing fiscal arrangements. Let us hope that this may be the outcome after all of proposals which may well startle from their ordinary political apathy the people of New Zealand. Apart from the Tariff, there is much in the Financial Statement, as an exposition of the policy of the Government, which is altogether to be commended. The intention, for instance, is announced of sweeping away the two great circumlocution departments—the Native Office and the Public Works—both responsible for enormous waste of public money, and quite unnecessary for administrative purposes. The mischief the Native Office has done—what with Ministers who were " too clever by half," rapacious hordes'of Pakeha-Maoris, grasping Native chiefs, unprincipled adventurers of every type—is beyond calculation. It has been distinctly the interest of the officials to keep the Native difficulty unsettled; and most unscrupulous means have notoriously been used to this effect. In respect to public works, there is really little legitimate work left for the department What there is can quite efficiently be done by the staff of the constructed railways. The marvel has been of late years what the crowd of highly-paid officials at headquarters and the various branch offices could possibly find to occupy their time. The road construction will certainly be better done by the survey staff, who, as the Treasurer mentioned, have practically been charged with the greatest part of it already. Very material retrenchment will be effected by the abolition of the Native and Public Works Departments, and it is to be hoped that the necessary measures to effect this will neither be obstructed nor opposed.

The Public Works Fund in all three accounts shows that the moneys at the disposal of the Minister have been administered with the closest regard to economy during the past financial year. The balance in hand on March 31, and the loans authorised but not yet raised, amount altogether to £1,968,635, subject to liabilities to the amount of .£471,695. The moneys available are disposed of under the allocations in the schedules to the Loan Act of this session and the provisions of the North Island Main Trunk Railway Railway Act. There is nothing left to fight over but the respective sums of £70,000 and £9,000 which are " unallotted." The Financial Statement is strangely silent on the question of immigration, but the Treasurer last year stated distinctly that it was designed to introduce a scheme, and it may be that he has intentions respecting the £70,000. The £9,000 originally intended for a railway which was struck out, will, there is no doubt, come in very conveniently to fill a gap somewhere. Ministers have made up their minds to "go slow" as regards loan expenditure during the current year. No further contracts are, to be let on the North Island Trunk Rail* way, and there is indeed a very growing impression that the carrying on of the costly work might well be postponed until an era of more prosperous times. The moneys authorised for the purpose are a long way short of being sufficient for the completion, so that nothing is really to be gained by pushing it forward through a country which, by all accounts, does not afford a desirable,

even if apracticable, field for settlement. The Treasurer also intimates that very little, if any, work is proposed to be done this "year on the lines named in the schedule to the Loan Act, so that the expenditure of borrowed money will be limited to the construction of roads, telegraph extension, harbor defences, and purchase of Native lands. The Treasurer reminds the House that the colony will not be able to go upon the London market for any further loans until the expiration of three years, and that consequently the resources available must be diligently husbanded. He proposes, for reasons of economy, to raise the whole of the new loan at once, and to invest such portion of the proceeds as are not immediately required in a manner which will save the interest, while at the same time the money will be practically at call.