THURSDAY, JULY 1.

Hawke's Bay Herald, Volume 13, Issue 1065, 13 July 1869, Page 3

THURSDAY, JULY 1.

COMMITTEE OP SUPPLY. (From the " Independent.") The House went into Committee of Supply, Mr. O'Rorke in the chair. The Colonial Tbeasueek, after claiming the indulgence of the House, proceeded to explain the circumstances under which the Government asked for permission to raise £150,000 by Treasury bills. If in the course of his remarks ho appeared to be reflecting upon the late Government, he wished it to be understood that he had no intention of doing so. He would deal j : with the House with perfect frankness ; and would consider that he was not acting properly if he did not take it into his confidence and give it all such information as ifc was desirable for it to know, not only in reference to the present resolution, but also, in anticipation of the fuller statement which he would afterwards make, with regard to other measures which might come before it during the session. It would be more convenient if he were to deal with the subject of Ways iand : Means while dealing with the subject of Supply, He proposed to state— the imprest required by the Government; the * revenue required; the ways and means which the Government desired to have provided ; and lastly, he would endeavor, V as far as he was able, to satisfy the House •' on a subject iabout which.it was exceod- " ' ingly anxious— the expenditure upon tho. ' ''defence force. (Hear, hear.) . First, in ; '"'regard to the imprest required. He had . .'certain figures before him which he be r ' lieyed to be correct, and which he should /'briefly state. It was calculated there ■ ivould be required for the civil service for 5 the month ot July, exclusive of permanent appropriations, a sum of £32,000 ; liabilities for May and June for Defence purposes, £71,000, which sum included some liabilities for previous months; and in view of jthe reductions which the Ministry hoped to be enabled to effect in the enormous expenditure now going on for Defence purposes, a sum of £15,000 ought to "be provided for July. These three sums jnade up a total of £118,000, while other payments, due under permanent appropriations, would also have to be made— to the provinces on the Civil List, and interest and sinking fund on debentures. He must further explain that the £40,000, under special order to which reference had been made by the late Colonial Secretary, was exhausted, and the £71,000 of liabilities was over and above that sum. The amount of imprest required for the month he had stated to be £118,000, but it might be that the accounts of a portion of the expenditure in May and June would not come in for a considerable time. He was told that accounts often did not come in until a considerable lime after the expenditure had taken place, which seemed to him an unfortunate thing, because the Government were, by this means, kept in ignorance of the actual expenditure going on. However, it might be that £150,000 for the current services would not be required, but it was better for the House to place the Government in a position to meet such an expenditure. The £150,000 ; was calculated to cover expenditure for a month and a halt. The Government saw no reason to doubt that tho business " of the session might be concluded in six ■ "weeks time (hear, hear); and before the ■•• £150,000 was expended a permanent Ap- ■ propriatioh Act would have been passed. ■'" He now came to the question of ways * Ui and means.- The imprest would not at all ** represent the actual expenditure of the '* ' irionth; because, as he had already stated, , there were certain permanent appropria- ; 'tions to be met, and could be paid with- ' out further authority from the House. He would state briefly the outgoings ~ and incomings which might be expected during the next month, so as enable the • House to arrive at a conclusion upon what provision it was desirable, or rather, absolutely necessary, to place at the command of the Government in order to preserve the reputation of tho country. For the Civil Service the expenditure, inclusive of the permanent appropriations, during the mouth would be £35,000 ; in interest and sinking funds for loans, £70,000. The payment of this latter sum could tie deferred until the Ist August ; or it " might be paid immediately before the departure of the outgoing English mail, and it would be for the Government to decide, taking the rate of interest and course of exchange into consideration, which it would be the best to do. £15,000 would become due to the provinces. For defence, as he stated before, the May and June liabilities amounted to £71,000, if they all came in ; possibly the amount required for July would be £15,000 ; and an amount for £17,000 for Wellington de- . bentures became due that day. These • debentures had to be consolidated, and to effect that object an amount was drawn against some - consolidated stock, and an O.rder sent home to sell it. These various pums, amounting in all to £223,000, the Government ought to be put in a position to meet. With regard to the resources at the command of the Government for meeting these charges, there was, according to the officers of the Treasury, probably about £56,0G0' of the Consolidated Fund avail- * able for drawing upon ; but, according to v the books of the Comptroller-General, the --_ amount was £82,000. The explanation of this discrepancy was to be found in a longstanding difference of opinion between the (Creasuiy and the Comptroller-General asproper division of several monies %#p.hg the- different portions of the public . ' .accounts. As hon. members were aware, j) * the' public account was divided into four branches, tho Consolidated Revenue being one, and upQn that revenue only could the ( Government act for the purposes set down . against Consolidated Revenue. The discrepancy between thebooks of the Treasury >and the Comptroller-General appeared to have arisen., through some difference of opinion as to the way of making up cash balances, and the time when posting should take place, and how the balances should-be divided among the several branches of the public accounts. .He hoped some arrangement would be corno to between them, and thai.it would, not be necessary to refer the matter to the House. According to the Comptroller's notion, there was an overdraft on some accounts, while in the Treasury no such overdraft was considered to exist. Under these circumstances, he preferred to take the figures sent in to him by the Treasury. Some difficulty existed in fixing tho exact amount, owing to a certain payment which had to be made the previous night under the Public 'Revenues' Act; but, in round numbers, . £56,000 of the. consolidated Fund was available. It appeared that about the Ist „ of May the General Government found it necessary to exercise the power given them by the Public Eevenues Act of borrowing £60,000 when'the General Assembly was not in session ; and the sum so raised was carried "to the credit of the Consolidated '"' ' Fjind account.: . It could not exactly bo called an overdraft, because any balances that might exist mother branches of the public account could be placed against ifc.i^£)lAtJjis:,gum . of . £60,000 then, some £J^,ool),jW;pg ; still available. Then there , y^ewi'^lasjfry, bills in hand-, which,-, could %& immediately negotiated; to the amount •• k oi $ii,35& ■■"■' f Ttib balance of jejeUuplfpr

the month of June remaining to come in amounted to about £20,000 ; and he was advised that it was safe to draw lipon London to the extent of £15,000. He did not wish to give any complicated statement of how that £15,000 would be obtained, but wbuld rilerely state that it would bo on account of the Wellington debentures which fell due on Thursday. The officers of the Treasury were of opinion that ifc was probable a much larger balance than that was in the hands of the London agent. These sums altogether amounted to £102,350, and, deducting this from £223,000, a deficiency, of £120,350 remained to be provided for. In this sum, however, was included £7000 for interest and sinking fund which fell due in London on the Ist October next, but which must of course be transmitted beforehand. Against this deficiency might be placed [ some £41,000, the estimated revenue of July. He was not going to enter into an ethical discussion as to whether it was [ right to use July revenue to pay May or Jun,e expenses, but it seemed to him that in -'emergencies Treasurers were apt to forget distinctions of this kind and to regard money as available for all purposes. But if they used July receipts for discharging liabilities incurred in other months, >t would be necessary to make other provision for July expenditure. Without, then, allowing for July revenue, a sum of £120,000 was required. The Government, in order to carry them over six weeks, proposed to ask for £150,000 in Treasury Bills, in disposing of which the qntieipated no difficulty. He thought it right to state that the full power given by the House, of issuing Treasury Bills had been exercised. The Colonial Treasurer last year expressed his intention of paying off £25,000 of Treasury Bills,- but had been unable to carry it out. That amount fell due yesterday. Treasury Bills to the amount of £228,000 were now in circulation. The £150,000 asked by the Government would be sufficient for the six weeks ; but it would be premature for him to express an opinion as to what future scale of expenditure would have to be provided for. He was, however, able to state that it was the policy of the Government to very much reduce that abnormal expenditure which was not only eating up the resources of the colony, but was absolutely beyond the means of the colony to bear. (Cheers) . He hoped that when he made a further financial statement, he should be able to show the House that such an abnormal expenditure was unnecessary. Whether or not this £150,000 would be sufficient he was unable to say, but trusted that the large curtailment of expenditure which the Government hoped to be able to make would enable the elastic resources of the colony to recover themselves to f=ome extent from the very heavy blow which they had already received. (Cheers.) He now came to the question of the Defence expenditure, and it was necessary in order to enable the House to arrive at a notion of the circumstances which ruled that expenditure, for him to endeavor to explain the very complicated system of advance accounts which now prevailed. Hon. members would then nave no difficulty in understanding the almost insuperable obstacles which stood in the way of the Government keeping a tight hand on the current expenditure. Advances were made to any officer or paymaster for defence purposes. This money could only be obtained from the Comptroller as against a particular vote. When, however, it came into the paymaster's hands, the money was simply advanced 1 to him as a present debt, and so stood in the books of the Treasury ; and, until the paymaster sent in a statement of how it had been expended, it could not be carried to the account of the particular vote against which it was to bo placed. Hon members would understand how advances outstanding at the end of any year, although the money had been expended in liquidation of liabilities incurred during that year, were really not brought into account until the following year. Thus, the Government brought down a statement showing their Defence expenditure from July 1, 1868, to May 31, 1869, to have been £226,000 ; but this really included liabilities incurred in the previous year ending in Jnne, 1808, while, on the other hand, liabilities incurred during the year 1868-9 would only appear in the accounts of 1869-70. Hon. members would understand the process better if he explained what took place during the past year. The liabilities of that period unprovided for amounted to £71,000, but a very large amount of advances, the amount of which it was impossible for him to say, but. it might be something like £80,000, would be outstanding when the Treasury books for 1868-9 were made up. In estimating the liabilities of the .present year this £80,000' .niust be included, which would give £150,000 to be provided for before the House could provide asinglesixpence for the services of financial 3 r ear, beginning that day. This system prevented the House knowing how to provide for the current year, as it was not made aware of the- exact amount of outstanding liabilities. As well as he could recollect, the Treasurer was under the impression last year that the outstanding liabilities of the previous year did not amount to anything considerable, in fact he gave the House to understand that somo provision made by it to meet certain expenditure for Defence purposes would not be absorbed — something like £40,000 which the Government might have raised under the Consolidated Loan Act. Now, however, ; he was not able to say- what the Defence liabilities amounted to. The system, in its very nature, falsified the accounts, and he hoped that somo way might be found by which so complicated a system, and one so calculated to deceive, could be abolished, and one by which the actual expenditure for any year would bo shown in the accounts of the year substituted in its place. B statement made up in the Defence Office, and which he would lay on the table, showed the Defence liabilities to be £78,230 14s. lid, dut £4200 of this was to meet any charge which might be made by the Imperial Government on account of ammunition, but which it was not probable would be made, and £3000 had been intended for clothing, but no order was sent, and the £3000 could not be considered a liability. In this statement appeared an item of £4000 for contingencies. This might appear a large sum, but in his opinion it was a small one for the purpose. The House was, ho believed, * extremely anxious fox' information on another point— the rate of expenditure going on at the present time. According to a statement which ho had obtained from the Defence Office, and believed to be sufficiently accurate to enable hon. members to judge of the scale of expenditure, the expenditure last month was £41,435, or at the rato of about half-a-million a year. The House would recognise the accuracy of the estimate made by the hon. member for.Tiinaru (Mr. Jollie), both in respect to the liabilities incurred last year, and the rote of expenditure now going on. This sum of £41,435 included £4000 for contingencies,' and £3000 for ammunition. If £3000 was considered too high a sum to put down for one month's ammunition (Mr. Stafford : Hear, hear). It. must be. remembered that the estimate CQntainedno item. for arms, or clothing. Last year the Imprest Supply Bill was

passed through all its stages in one day. He did not" say there was any* absolute necessity for tbis being done on the present occasion, but would remind the House that no payment could be made during the present month until the Imprest Bill had been passed, and it was desirable, in view of the large liabilities accruing, to give the Governmerit the largest possible time in which to dispose of the Treasury bills. If the House did not, however, wish to pass the bill through all its stages at that sitting; the Government would interpose no objection, but he felt bound to say the interest of the colony required the passing of these two bills with as little delay as possible. He would move " That a sum not exceeding £150,000 be granted to her Majesty for the public service of New Zealand by way of an advance to be accounted and charged for in manner hereinafter to be .expressed ,in an act or acts to be passed during the present session of ihe General Assembly, for charge on the Consolidated Revenue of the Colony for the year ending June 30, 1870. " Mr. Staffokd said the hon. gentleman had explained clearly and faithfully the condition of that portion of the financial affairs of the colony with which he had dealt. The r.cquest; of the. Government was not an unreasonable one, and he should not oppose any obstacle to if. He acquitted the Government of any desire to surprise the Hous'o,'. although .he was at first astonished to find the 1 Committee of Ways and Means on the order paper, he not having heard leave asked and given the previous day'.. /The hon. gentlemen had,' however}! 'on' 'one subject somewhat mystified 'tlie'^cbmmittee, who might understand hini to mean that not : only had £71,000 to be provided for past liabilities, but a further sum of £80,000 on account of advances. Ho fully agreed, with, the hon. gentleman in his condemnation of a system of accounts which prevented' the actual expenditure for a period being laid before the House; and had for many years endeavored to get it altered, but was always met by the objection that mechanical difficulties prevented the alteration. But, so long as the present system of payment continued, it was evident the House would not have to provide for a whole year's as well as past liabilities. He thought the hon. gentleman should not ask for his Imprest Act to be passed through all its stages that day, but should be satisfied with the committee passing the resolutions that day, and the bill on Friday. . He (Mr. Stafford)- would support the Colonial Treasurer in. a request of that kind. Tho hon. gentleman while stating that the whole of the Treasury bills hud been used, did not state how they had been used.. They had not cost the colony one shilling of interest, as they Were taken by the Comptroller-General, who had in exchauge for them allowed money to be transferredirpin other branches of the public accounts to the consolidated fund. Had they beenissued to other parties, they would cost the colony six per cent. In a similar manner the Order in Council authorising the issue of £60,000 deficiency bills had been given to the Comptroller- General and it became unnecessary to raise the money from banks or other sources. With regard to the Defence expenditure, it could not bo assumed that because the expenditure for a certain month happened to be so much, the expenditure for the whole year amounted to about half a million. What, tho hon. gentlemen had to dp was to ascertain the sum absolutely expended during .the whole twelve months. Nothing could be more irregular than the mode in jjyhich the colonial forces had been .taken? on pay and discharged during the last year.. The cost of the operations during the 1 last month might be taken as the maximum of tho rate of expenditure for next year, unless the circumstances were extremely different. If the King were to raise the standard of rebellion it j was of course impossible to say in what expense the country would be involved. The Chairman left the chair while Mr. Stafford was speaking, and upon his resuming his seat at 7 o'clock Mr. Stafford was not in his place. ' Mr. Cakleton, by permission, explained the reason why he had allowed the order for the Committee of way's and Means to be placed, on the notice paper. Mr. Dillon Bell said if it were not inconvenient for the Government,, he hoped the committee would postpone its j final decision on the resolution until Mr. | Stafford had an opportunity of finishing his speech. The statement made by. the Colonial Treasurer seemed to be in the main correct ; but however full the statement might be with regard to the past, there was aquestion relating to the futurewhich had not been fully dealt with by tho Colonial Treasurer or the Cok»nial Secretary, — what is the conditioner the current expenditure of the country P He agreed with the hon. member for Timaru that a month's expenditure . could not be taken as a basis of an estimate for tho whole year ;. but, before the House took any further step, it should know what en-., gagements had been entered into with the colonial forces. He had heard with incredulity that since the General Assembly was opened several hundreds of Ngatiporous had been engaged for a year, and had also heard that some of the forces had been engaged for three years. If it were true that the late Government had entered into long engagements with men, it was evident the Committee of Supply had no control over the expenditure. He wished, then, that the Cpmmittee should not proceed until the. i late Government gave it the key to the finance of the colony. Should, the colony be committed even for a few moriths to such an expenditure as was- now goiiigon, it seemed impossible to meet it without an infraction of the arrangements of 1856... As regards tho main, sources of revenue;, .--the 1 utmost state of tension had beetn reached, and any further taxation must be direct. Unless the Treasurer was able to show some hitherto unproductive source "of revenue which could be offered as security for a further loan, cither direct taxation or the Middle Island land fund must be had recourse to. Ho did not. wish to be an alarmist, but it was time the House enquired into its sources of revenue, and the legacy of liabilities which the late Government had left them. It might be, though he did not say it was so, that some 1000 men were under engagement for twelve months, and they could not be paid, fed, and clothed under £12 a month, and the House ought to know its actual engagements. It was impossible to say what political combinations or successes might occur, but he wished to say that he would not be a party to any large financial engagements unless the Treasurer pointed out the sotirces whence tho interest and sinking fund would come from. The Colonial Teeasueek felt indebted fothehonmemberlbrTiinaruforthesupport he afforded him, and the hon. member no doubt recognised that the Government was simply performing a disagreeable -duty imposed upon them by the necessities of the caso. Ho did not see tho object of postponing the resolutions. Since he made his statement, a paper had been placed in his hands, which showed the actual expenditurb oii Defence purposes during the past year to be £259,279, to which had to be added the £71,000 of liabilities to which he had before referred, making a total of £830,000, and as he had before warned the House, other accounts

might come in. As to the expenditure for the last month not being a criterion of the whole year's expenditure, the expenditure during the year had been increasing month by month, and he wished the House to consider whether the expenditure should continue to increase. The House, might pass the bills through their first stages that high t, and if it thought lit, through their remaining stages on JFriday. Mr. Stevens commented on some re- " marks of the last speaker relative to the employment of the trusts fund in the discounting of deficiency bills. He thought that what had deen done was justifiable, but if very large portions of the funds were dealt with, in some cases inconvenience might arise, if the officer in charge was suddenly called upon by the owners to pay a large portion of the trust monies. He agreed with the Colonial Treasurer that one officer should not be burdened with these fuuds, which should be placed in charge of a trust., With regard to the general question before the committee, he agreed to a great extent with the remarks which had fallen from other hon. members. The amount to which. the. Treasury and Exchequer bills were swelling the debt of the colony was very 'serious. It was undesirable to anticipate the discussion which must shortly ttfkc place on the general policy to be adopted ; but he wished to express his opinion that they must either bowow more tfipney and capitalize the interest, or .come upon the land fund or gold fields,., or. have, recourse to further taxation," which . the colony would not bear. ' ' ' lte^Miew' " that, the ex-, penditiire must £6m>W\tW6 war, but if the war was beyorid' tire mteanS of the colony, some measures niu'St betaken to bring it within those means. '• Tho resolution wasi after some discussion, put and carried, -and reported to the House. The report was received, agoraed to, and referred to tho committee of Ways and Means. .... Leave was given to the committee to sit on Friday.