FINANCIAL STATEMENT.

Hawke's Bay Times, Issue 1596, 24 July 1874, Page 297

FINANCIAL STATEMENT.

The following abstract of Mr Vogel's Financial Statement, delivered in the House of Representatives on Tuesday, has been telegraphed free to the whole press of the Colony. The amounts throughout are stated in round numbers.

Mr Vogel said that the statement would hot only be, shorter than usual, but it would be unprecedented, on account of the prosperity which it evidenced. The statement was made at an earlier period than had been customary, a result for which he was indebted to the untiring exertions of the Treasury officers in preparing the accounts. Last year it was anticipated that the actual results of 1872-3 would leave a surplus of £3BOO, with which to begin the year, but it proved that there was a difference of £6OOO as compared with what was anticipated. This arose partly through underestimating outstanding liabilities, and partly from some assets not being realized, the result being that instead of a surplus of £3BOO, there was a deficiency of between £2IOO and £2200. As to loans, it would be remembered that during the last session, an announcement was made that 5 per cent, debentures to the amount of half-a-million had been sold at £2 10s premium. In January last the [loan agents invited tonders for one million pounds at 4£ per cent. He had been favorable to the change to 4 per cent., but he approved of the action of the agents Bince they had inserted a condition that the debentures might be retired at any time after five years. The half-million borrowed at 4£ per cent, interest realized £9B. Making allowance for redeeming the discount, this was tantamount to borrowing at the rate of £4 12s 6d per cent. It was originally calculated that money for the Immigration and Public Works Policy would have to be borrowed at 5£ per cent. It was gratifying, therefore" to know that the average rate of iuterest on the loans for those purposes yet negociated, including allowance for recovering discount, amounted only to £4 14s, lid per cent. It was right that he should, say that the market for colonial loans was not so favorable last year *s seemed to be then promised. There was now no demand for such debentures in the colonies. , This arose through the demand for capital for local enterprise, but it had to lie borne in mind, in considering the question of the borrowing powers of the colony. The aggregate amount.of the public debt, after deducting sinking, fund accrued, was £12,500,000, and the annual charge was £777,000, of M hicli £554,000 had to be paid by the colony, and £223,000 by the provinces. After explaining the position of the various loan accounts, Mr Vogel referred to* the land fund. This, he said, showed a remarkably progressive increase. During the year 1869-70, the receipts,, exclusive d£ gold revenue, trere £209,000 ; 1870-1, £208,000; 1871-2, £336,000; 1872-3, E 889.642; 1873-4. £1.038,000: The Post Office Savings Bank account showed an increase of deposits of £137,000, the total deposits in those banks being n0w"£682,000. The revenue of the past year exceeded that of 1872-3 by £300,000, and it exceeded the estimated amount by £239,000, This result was very large when the proportion it bore to the whole amount of the revenue was considered. He could not state accurately the increase that had.resulted from the substitution of ad valorem for measurement duties, as there had not yet been sufficient time to classify t|je returns; "but there could be no doubt that the new duties produced more largely than the measurement duties. He was glad of this, both on account of the result,, and on account of the testimony" it bore to the honor and truthfulness of the commercial classes of the country. He emphatically expressed the opinion that taxation had not pressed harshly on the bulk of the people, and that under the new Bystefii th,e duties had been more evenly distributed over articles of luxury than waß the case formerly. After deducting expenditure t,and. liabilities, as well as allowing £20,000 for liabilities yet xo corn" in. and paying off £45,000 of Treasury, bills; there was a balance at th» end of "|B?3'4 available'for the krvi-es of t,ie current year amounting to £207,000..''"" After explaining at some length the position of the railways, Mr VoitUl i'anid that ..the revenue of the. country was in-, creasing so uiuch, simultaneously with the introduction of immigrants, and the! prosecution pf public works, that there could no longer be any doubt as to the success of the policy, and the colony; would be quite safe in taking over the main trunk lines of railway whenever it might be found convenient to do so,, and in relieving the prpvinees frum'. all liability on account of those lines. Apart from the rerenue, which, it was now certain, would be derived from the railways in excess of working expenses, the consolidated revenue of the colony had, during the last two years, increased

by £412,000 or within a few thousand I' pounds of the total annual charge which the railways, when completed from one | end of the colony to the other, would entail. It must be pointed out, however, that further authority for borrowing to complete the railways would have to be given. Howeyer successful the immigration and public works policy might be, it must be remembered.that it was necessary to meet the colonial requirements before straining the credit of the colony for other purposes. Consideration of the fact of the railways being pushed on more quickly than* was originally intended, and of the fact that it was not desirable to encourage too largely the construction of other works, impelled the Government to decide not to renew their proposals of last year, as to Provincial borrowing. The Government were prepared to allow a limited amount of assistance to the provinces, but such assistance to be rendered through the Colonial Government, and to be charged either against the amount for the settlement of immigrants, or upon the Consolidated fund, but with power to the Government to issue Treasury Bills, if found necessary to meet it. As to the assistance to be given to separate provinces, Mr Vogel said: "First, in regard to Auckland, the Government during the recess undertook to ask Parliament to allow the province to raise £50,000 to be advanced from time to time, extending over a period of about tLree years, for works upon the Thames goldfields. The security in this case, besides that of the province, is of a specific and large nature, and the importance of the objects to lie gained is not to

be denied. The Government besides agreed, subject to the approval of Parlia ment, to advance to Auckland, on the security of one-hair" of its land revenue, tc bo impounded for the purpose, £40,000, ft sums of £6,000 every three months. The Government propose to ask Parliament tc carry out these arrangements. We dc not propose to ask for Auckland any further loan beyond the power to devoti some part of the immigration funds tc objects directly promotive of the settlement of immigrants. Tarauaki, with its splendd lands, offers a field for the location of immigrants second to none in the colony, and we shall ask power to advance, money to aid so essential a work, Similarly we propose to devote some funds to Westland and Nelson. In respect to these four provinces, it is to be remembered that they have not ae yet enjoyed so much of the direct benufil from the expenditure of immigration at they may be supposed to have the right to claim. Still, for money expended on works, we propose conditions for repayment. I may add, also, that whilst we shall require the approval or the Provincial Governments to any works undertaken, we propose that the works shall be carried out under the control or with the approval of the Public Works Department. What I have said of those other provinces in respect to immigration, applies equally to Marlborough. We shall propose, for works in connection with the location of immigrants, advances extending over two years, besides a loan of £4OOO to bridge the Clarence Itiver. In regard to Wellington, members will no doubt have observed from the correspondence that the Government, during the recess, endeavored to induce the Provincial Government to reduce the amount of borrowed money they desired. We agreed to submit, for the approval of the Assembly, a proposition to allow Wellington to obtain an advance of £66,000 on 80,000 acres of land, to be opened to tiie free selection of small settlers. We shall ask that this plan be carried out. I may also mention incidentally that we propose to ask authority to construct proper Government buildings in Wellington. Nelson's case is the most difficult to deal with. That Province has long lagged behind in tiie race that other provinces have iuu. it requires useful works, of which it is siugularly destitute, and we propose to lend to it, on specific security, £50,000 for works which the Public Works D.partnient approve. From Otago also t.ie cry for borrowed money has come. We cannot see our way to at present sanction the large sum that Province asks for, unless by way of purchase of the Winton and Bluff line. If the Provincial Government are willing, we will be prepared to propose to the Assembly to purchase that railway at a valuation, the payment to be made in four equal instalments on the Ist February next, and the Ist February of the three following years, the money to be devoted to the construction of branch railways, Otherwise, in respect to Otago, and in respect to Canterbury and Hawkc's Bay, I have only to say we propose to continue their trunk railways, and to aid* them in locating the immigrants they so wonderfully absorb. The Government proposed not to undertake any further goldjields. works until some of those already begun had been completed. They proposed to appropriate an additional £60,000 for roads in the North Island, and to continue the same plan as formerly, by allocating to the Midtile Island provinces a like amount out of the sums that would thus be familiarly explained by the slaughter of the. bird which lays the golden eggs. As a mere matter of policy, it is wise, in the midst, of th,e ( 'immense increase of the Colonial revenue, to specially remember some of the provinces which contribute to it, and which at present are at a great disadvantage as compared with other provincea. It is not wise to let parts of the Colony languish under a, uf wrong —-to ajlp.w them to feel they are still becalmed, whilst the favoring breeze re-' niovesfrom theirsightthe vcsselsoriginally becalmed with them. The condition of the three j Provinces of 'Auckland', Westland, and Nelson, as compared with the other provinces, -is lamentable, • and r>q'iiivs, from the surplus of \\\e Consolidated reY«;nue, the attention of the Legislature. Auckland's case is by far the worst. It. will take that Province some years to v.-.irk itself round, and to enjoy the ! ' : ;' ,re which I. firmly believe is still' k, ji% -it. Westlaud has proved a mine of wealth to, the Colony; it jg fully to desert it. The West Coast of Nelson is somewhat similarly placed. Nelson 7 "Will; however, now have the means, as it appears its rulers have the inclination to use those moans, to become a prosperous Province. These considerati"iis impel us to recommend that out of the year's surplus a sp.sial

I allowance, in addition to that already I provided liy the scale of capitation allovvi ances, be made to Auckland, Westland I and Nelson, at (he rate of £25,000 to the first, £IO,OOO to the second, and £SOOO to i the third. When lion, members study the 1 whole of the circumstances, they will not, I I think, grudge the proposed aid." Passing on to tlie expenditure for the current year 1874-5, he said that the essftntial principle of. this Budget was different from that of any previous one, : its great object being to prevent the Government recruiting revenue by resort to I borrowed monies; in fact the present j Budget had for its object to relieve loans | at the expense of the consolidated revenue. j He proposed this year to take over and to charge upon the consolidated revenue . all the cost of interest, inclusive of in- ! terest upon the works in course of construction for which other provision had been made. He proposed also to bear on the consolidated revenue half of the defence expenditure, and half of the amount to be paid a« subsidies to road boards. Further, he proposed to pay off au additional £IOO,OOO of treasury bills Taking into consideration the number of officers of the Civil Service who were inclined to leave the sen ice on account of opportunities to benefit themselves, and the hardships to which they were subjected through the increased cost of living, the Government had decided to recommend, as a matter of expediency, no less than of justice, that a special allowance should this year be made of 10 per cent, to all officers whose salaries did not exceed £l5O a-year; of 7£ per cent. to. nil Officers whose salaries exceeded £l5O, but did not exceed £3OO ; and of 5 per cent, to all those officers whose salaries exceeded £3OO, but did not exce d £SOO. To do this would absorb £15,000 of the surplus. Adding those various items to the amount of the capitation grant, the special allowances to the provinces, as well as the ordinary expenditure and permanent charges, the total expenditure for the current year would be £1,630,000. This would include £271,000 to be devoted to the reduction of Treasury bills current, and to the payment of amounts which might, under existing authorities, have been charged to loans, thus justifying the statement he had made that the main feature of the Budget was to relieve loans at the expense of the consolidated revenue. He would explain, when he made his immigration statement, the further votes that would be required for immigration and for railway purposes. His colleague, the Minister for Public Works, would, in a. day or two, explain the various circumstances reFpeeting the construction of the main trunk lines. He must, however, state that what he meant to include when he spoke of main trunk lines, which the colony would lie justified in accepting as Colonial lines, were those lines which bad been already authorized, together with such other lines as wouh! complete existing gaps between Kaipara and Auckland, New Plymouth, Napier, and Wellington, as well as those necessary to complete through communication between Picton, Nelson, Hokitika, North Canterbury, and the West Coast. t The total revenue for the year, estimated with moderation, was £1,496,000 ; adding to this the surplus with which the year was commenced, there would be a total of £1,704,000; and deducting the total expenditure, there would be a surplus of £66,000. It must be remembered, however, that that surplus was liable to be largely trenched upon by Supplementary Estimates. In conclusion, Mr Vogel urged that while the country was confidently pursuing its policy of progress they should wisely husband its strength, and not have larger recourse to borrowing than was absolutely necessary for carrrying out the policy which the House and the people had adopted. Progress was reported, and leavo obtained to sit again. The House was adjourned at half-past nine. p.m.