THE FINANCIAL STATEMENT.

Hawera & Normanby Star, Volume x, Issue 1942, 30 May 1888, Page 2

THE FINANCIAL STATEMENT.

The following are the most important portions of the Statement delivered last night : —

The Treasurer, tbe Hon. Sir H. Atkinson, said : —

Mr. Hamlin, — The recess which has just ended has been so short, only about one half tbe ordinary length of our Parliamentary recess, and tbe work imposed upon tbe Government so much greater than usual, that with every effort on my part I have been unable to-dj.y to submit to the consideration of the committee the Budget proposals of the Government.

PEFICIT,

The receipts of tbe year still keeping the ordinary revenue and land fund account conjoined for the purpose of comparison with my estimate last session fell short of the actual expenditure of the year by £382.047, as against £312,653, anticipated, being a 69,394 in excess of the estimated deficit for 1887-88 or deducting £22,104 paid for compensation for loss of office, the excess was £47,290. Before explaining how the estimated deficit came to be exceeded, it may be as well to state what it actually was at 31st March last. As I have just said, the expenditure exceeded the receipts of the year by £382,047, but if we add the deficit left over from the preceding year, £146,556, we get a total of £528,603 for the two years. The liabilities outstanding at the close of the year were in respect of the ordinary revenue account, £126,184, and of the land fund account, £18,772, making together £144,956, being about £60,540 less than they were at 31st March, 1887. The revenue, as a whole, did not realise the amount estimated, Dy £103,336 ; the railway receipts did not reach the estimate by £68,174 ; nor the land sales by £29,503. The revenue derived from depasturing licenses, rents, and other sources also fell short by £7239. But the Customs duties and stamps were both slightly in excess of tbe estimate. The expenditure, as a whole, was less than the estimate by £33,942, or, excluding compensation paid for loss of office (£22,104), it was £56.047 less than estimated; which sum, deducted from the revenue short received, £103,336, gives tbe excess deficit of £47,280 for the year. The amount expended last year was within the votes of Parliament by £53,000 ; included in this is £19,882, the unexpended balance of the amount voted for the General Post Office, Wellington. The total expenditure out of the consolidated fund under the Appropriation Act, including services not provided for, was £2,168,713, for the year 1887 88, including the whole charge for defence services, as against £2,241,513 for 188687, with £12.500 added for defence services charged to loan, being a reduction of £85.300 in favor of last year. The accounts stood thus : Ordinary revenue account, £302,970 ; land fund account, £79,087. To these sums we have to add the deficit with which the year began, made up of £92.293 ordinary revenue account and £54,263 land fund account. There was, therefore, for the two years a deficiency of L 395,253 in the one account and L 133,350 in the other making a total of L 528.603, but parliament having last session in anticipation of a large deficit at the close of the year 1887-88 made provision for L 400,000. I have to-day to suggest only a means of meeting the much smaller sum of L 128.603. I shall not propose to add the amount to the permanent debt of the colony.

THE PUBLIC DEBT.

The gross public debt at the 31st March, 1887, was £35,741,653. The debt paid off having amounted to £342,400, and the new debt increased by £1,359,184, the total gross debt at the 31st March, 1888, was £36,758,437. Deducting the sinking fund's account, £1,222,056, the net public debt at that date was therefore £35,536,381 as against £34,314,454 at the 31st March, 1887.

There had been expended in anticipation of raising the North Island Main Trunk Railway Loan of £1,000,000, £325,685. During the pa9t year, a further sum of £152,515 has been expended, making in all £478,000, and leaving a balance of £522,000 unexpended. As hon. members are aware, this loan has not yet been placed upon the market, but in order to provide iunds to cover the expenditure both made and in in progress, it became necessary to obtain temporary advances to the extent of half a million upon short dated debentures, pending tbe raising of tbe loan. The liabilities outstanding at 31st March, 1888, chargeable upon the balance of £522,000 amounted to £75,904.

SUMMARY.

The actual balance at the credit of the public works fund as a whole on March 31st, 1887, was £786,294, subject to a deduction of £242,800 for district railwa}' debentures sold with the loan of 1886. The balance at the beginning of tbe year for public works expenditure was, therefore, only £543,494. During the year we received the balance of the loan of 1886, £391,300, and an advance of £500,000 borrowed by late Government upon the North Island Main Trunk Railway Loan. These sums made together £1,434,794, of which there was expended during the year £966,159, leaving an unexpended balance at 31st March, 1888, of £468,635. consisting of cash in the public account, £408,715 ; Imperial guaranteed debentures, £5000 ; advances in the hands of officers of the Government, £54,919 ; total, £468,635. The loans authorised, but unraised, amount to £1,500,000 (being £500,000 of the North Island Main Trunk Railway Loan, the £1,000,000 re-autho-rised this session). The balance on hand on 31st March last and the loans authorised but unraised, make together £1,968,635, subject to liabilities at 31st March last of £471,695.

GOVERNMENT LOANS TO LOCAL BODIES

Up to 31st March, 1887, there had been borrowed under the provisions of the Government Loans to Local Bodies Act, 1886, for the purpose of making loans to local authorities the sum of £50,000, and there had been lent £15.270, leaving £34,720 in hand last year. There was borrowed a further sum of £75,000 and lent £93,571, so that the total amount borrowed to 31st March, 1888. was £125,000 of which there has been handed over to local authorities £108,841, leaving a balance of £16,159 unissued. At the same date the liabilities outstanding amounted to £29,224. The applications received in response to the notice published in the Gazette on 19th January last under section 16 of the Act amount to L 78.330, of which LG9BO are for 6econd years' loans, nearly all of these applications have been provisionally granted, and should the local authorities complete the ateps necessary to give the security required, a further sum of about £90,000 will have to be borrowed to enable the Treasury to make the loans, which will bring tbo total amount borrowed on this account up to £215,000.

The sums available are largely in excess of the total amount of the loans applied for to date, and, granted it is not intended to ask Parliament Co appropriate money for this purpose in the present session. The scheme of these loans to local bodies contemplated an annual payment of 5 per cent per annum for 26 years, the colony to be responsible for payment or the principal sum, and to meet it by setting aside yearly a sinking fund of two per cent to redeem tbe debentures at maturity. It is probable that, with respect to

future loans, the amount payable by local bodies may have to be increased, and I Bball, during the present session, make a proposal to tbe House on tbe subject.

REDUCTIONS EFFECTED IN PDBLIC EXPENDITURE.

The actual saving so far made is L 283.097 or L 28.903 less than we hoped to accomplish. The total salaries and pay amounts to L 638.519. The salaries of all other persons in the service of the colony except police, military forces, and country postmasters, amounts to L 365.754. By a glance at the tables attached Hon. members will see that in every department under the annual appropriations, except defence, more than the promised reductions have been made, and that of the £74,050, undistributed, £53.730 has also been saved. This saving of £233,097, although not so much as the Government had hoped to make, will, I trust, be considered by tbe committee as a not unreasonable appropriation to our undertaking of last session, as modified by tbe House. Tbe saving upon the defence expenditure is £42,434; we had estimated to save £46,000. We propose to classify the whole of the civil service, and strictly to limit the numbers of each class by Act, from which no deviation will be allowed without the approval of Parliament. We propose to amalgamate tbe Native De* partment with that of the Colonial Secretary, making it a branch of that department. Our intention is before the end of the year to abolish the Public Works Department. We shall propose to continue the construction of such of the railways as are to be proceeded with under the staff of the constructed railways and to hand over the whole of the road works of the Survey Department, which is already charged with a large part of that work, employing local bodies where possible in carrying them out. FUTURE PENSIONS AND RETIRING ALLOWANCES.

We propose to bring in a separate Bill, supplementary to the Civil Service Bill, providing for the payment of all future pensions and retiring allowances to civil servants not now entitled to a retiring allowance, out of a fund which will be kept up by monthly contributions from all the members of the service who are not now entitled to the privileges of the Civil Service Acts at present in force, with perhaps a small contribution from the State. ESTIMATED EXPENDITURE FOR TIIE YEAR

1888-89.

The estimated ordinary expenditure is £3,953,593.

LAND FUND

The estimated expenditure chargeable against tbe fund is £107,245, made vp — £188,100 for payments to local bodies under permanent Act ; £2400 rates on Crown lands ; and £86,045 for Crown lands and surveys. Last year the total expenditure was £158,474.

TOTAL EXPENDITURE.

The total estimated expenditure is £4,060,838, being £3,953,593 against ordinary revenue and £107,245 against the land fund. N© provision is made in these estimates for school or other public buildings and for subsidies to local bodies. ESTIMATED REVENUE. FOR THE YEAR

1888-89.

The estimated ordinary revenue for the year 1888-89, on the basis of the present taxation, including the sum of £263,200 to be received as proceeds of the sale of what are known as the sinking fund debentures, is £3,899.400. The estimated revenue from land is L 119,000, our total estimated revenue from all sources is L 4,016,400 and the estimated expenditure being L 4,060,838 leaves a deficit of L 44.438. The land fund is estimated to give a small surplus of LI 1,755, we have therefore to provide a sum of L5G,193 to make our ordinary expenditure and revenue balance. The amount which the Government estimate will be required for expenditure on public buildings from revenue for the year is £60,000, being £39,000 for school buildings: 17,000 for l.he general post office; and £13,000 for other buildings. This added to the estimated deficit of the ordinary revenue, and including £30,000 subsidies to local bodies, makes the total amount to be provided, £146193, if no further reductions are thought prudent.

SUBSIDIES TO LOCAL BODIES.

The Government propose that the tax on tea should be increased by 2d per lb, and that one half of the whole duty received from tea should be set aside, and devoted to the payment of these subsidies. The estimated production of tbe tax for this year, with tbe additional duty added, will only be £114,000. One half of this will be £57,000. This amount will not be enough to pay a subsidy of 5s in the £ for the current year. I shall therefore ask authority to provide the amount if deficient from the general revenue for the year 1888-89. I propose that one-half the tea duty should in future be set apart for the subsidies, and that that amount, whether more or less than the proportional payment now made of 5s in the pound, should be all the aid given from general revenue to the local bodies.

PROPERTY TAX.

It is not proposed to make any alteration on the rate of tbe Property Tax this year. I shall ask the House to agree to remissions to a certain amount in some classes of machinery. Tbe loss to the revenue if the remissions are agreed to will probably be .£4OOO.

TARIFF,

I now come to the question as to how the deficit of can be best raised. After much careful deliberation, tbe Government have determined to ask authority to raise the amount required by an increase in the Customs duties.

The Government do not propose to put any additional duty on sugar. Tbe Government recognise the fact that a free trade tariff and a prohibitive tariff are equally incompatible with tbe amount which we must raise. We nave endeavored, while making revenue our first object, so to adjust the proposed duties as to assist our local manufactures. If we are to raise by Customs duties, a yearly sum of not less than L1,45b,000, for the purposes of ordinary revenue, it seems to me we cannot prudently reckon to do with less than that sum from the Customs for some years to come. I trust that if any errors appear they will, with the assistance of the | committee, be amended or removed. PROVISION' FOR. THK DEFICIT OF 1887-88. I have now to state how it is proposed to meet the .£128,003 standing to our debit; on the 31st March last. The Government propose that a pritnajje duty of one per cent be levied upon all goods imported into the colony, whether free or dutiable, for two years, and that the proceeds be applied to the payment of £128,000. This duty, it is estimated, will yield about £'58,000 a year, and tbe small ■ balance over may be safely left to be met from the ordinary revenue. THE CROWN AND NATIVE LANDS RATING ACT. I much regret the necessity for repealing this Act for there is no doubt that tbe repeal will severely effect some ff the local bodies.