FINANCES OF THE AUCKLAND PROVINCE.

Lyttelton Times, Volume XXV, Issue 1631, 8 March 1866, Page 2

FINANCES OF THE AUCKLAND PROVINCE.

Message No. 20. The Superintendent, in submitting to the Provincial Council the Appropriation Bill for 1866, purposes at the same time to lay before them a statement fully explanatory of the financial position of the province. He regrets that it will be found most unsatisfactory. The Superintendent has found it convenient to arrange the accounts under three heads. The first relates to the loan of £500,000, authorised to be raised by the Auckland Loan Act, 1863 ; the second to the confiscated land, including the expenditure on account of the Waikato immigrants ; and the third embraces the ordinary revenue and expenditure of the province. I.—LOAN. A return already laid before the Council, a copy of which is transmitted herewith, gives in a tabular form the state of the loan account up to the Ist of January, 1866. From this account it appears that out of the £500,000 authorised to be borrowed, the sum of £479,000 has been appropriated to various purposes. These appropriations may be classed under five heads :— 1. Payment of debentures issued in 1855-6 £45,000 3. Loans topublictrusts and bodies, repayable witli interest ... 123,000 3. Public works and buildings, including railway ... ... 191,500 4. Immigration, native land purchases, and surveys... ... 68,500 5. Purchase of land and buildings, viz.: Government House and Supreme Court ... ... 50,000 £479,000 Thus £21,000 out of £500,000 is left unappropriated. But on the other hand, there is required the sum of £21,000 to pay for excess of expenditure upon works already contracted for, in some cases almost, if not quite, completed, or to make those works useful or efficient for the purposes for which they were intended. The particulars are as follow :— Harbour works ... ...£13.000 Tamaki bridge ... ... 2,000 Stockade ... ... 2,000 Lunatic Asylum ... ... 4,000 The Superintendent sees no alternative but to apply the £21,000 still remaining unappropriated out of the loan to meet this expenditure. The Council have already concurred with the Superintendent as to £13,000 required for completing the harbour works, and the £8000 still free will cover the other three items.

There still remains an excess of expenditure which will be required to complete the railway, beyond the £luO,OUO already appropriated, and for this excess some provision must be made. The Commissioners estimate the amount required at £17,000.

The Superintendent is unable to suggest any means by which this sum can be provided, except it be taken from money which has been already set apart for other purposes, but which has not been absorbed or pledged by expenditure incurred or contracts entered into. The only sum available appears to be that appropriated to the waterworks. The amount for this object was £44,500, and the expenditure and liabilities incurred underthis head for the surveys in connection with the Waitakerei scheme and for the supply brought into the city from the Domain will leave a large sum available. The Superintendent feels very great regret that any of the money set apart to procure an adequate supply of water, so essential to health and comfort, should be directed to any other purposes, and the necessary works thus indefinitely postponed; but he sees, under the circumstances, no alternative. It appears to the Superintendent as simply a question whether his suggestions shall be carried out, or the large sums expended on the railway be treated as lost by the non-completion of works essential to render it available for any use.

Practically the loan of £500,000 may now be considered as expended, or so pledged by debts and liabilities already stated, or hereafter referred to in this message, as to leave no portion of it available for any other purpose. lI.—CONFISCATED LANDS. Prom the papers already laid before the Council relative to the Waikato immigrants, the Council will have become informed that, after some negotiations between the General and Provincial Governments, the then Superintendent, Mr. Graham, in the month of May last, agreed to undertake the cost and management of the Waikato immigrants, and to provide them with employment, on condition that the General Government should advance the sum of £15.000 in debentures, and shmid convey, within a given time, the Taukau block of land, valued at £18,000, to the Sup rintendent on behalf of the province. The expenditure on these immigrants was for many months very large, amounting at one time to upwards of £5000 a month. Every effort has been made from time to time, both by the late and present Superintendents, to reduce it. The monthly expenditure now is under £2000; but it is quite clear that even this expenditure cannot be long continued—must, indeed, be rapidly reduced, and shortly cease altogether — simply, if for no other reason, because there are no funds to meet it.

The account on the Ist of January last stood thus :—Amount advanced in General Government debentures, £15,000; expended on account of immigrants, £38,000. Against which there is to be set the value of the Tuakau block of land, which was estimated to be of the value £18,000, and to contain 10,900 acres, but on survey is found to contain less than 7,000. The difference (£23 000) between the amount received from the General Government, and the amount expanded, has been paid out of provincial funds, or rather by money borrowed ou the credit of the province. Tins money must now be returned in order that the debts and liabilities in which the province has become involved may be met. As the Council are already aware, the General Government are under an engagement, as part of the terms upon which the transfer of the confiscated land was accepted to hand over debentures to the amount of £100,000 as a loan, either to be returned before the 31st of December next, or paid for out of a loan to be raised on behalf of the province. The Superintendent proposes to borrow the sum of £80,000 on the security of these debentures, in preference to selling them at a discount. The estimates of receipts and expenditure on account of the confiscated lands, including the past expenditure on account of the W aikato immigrants, will stand thus: —

RECEIPTS. Advanced by General Government... £15,000 Loan on debentures for £100,000 ... 80,oou Part of provincial loan, £250,000, to be raised by authority of the General Assembly JJJOJ Land sales £145,000

EXPENDITURE. disbursements (Waikato imrnigrants) to Ist of January, 1866. £38,000 Tntprest under Loan Allocation Act, 1865 14,800 Instalment of compensation for losses in the war 25,000 rv>st of establishment for administration of lands 3,500 Interest on loan and General Government Debentures 5,0001 Compensation to friendly natives for Jand taken in confiscated blocks 10,000 Waikato immigrants 5,000 Surveys Public works 20,000 Contingencies 3 > /00 £145,000

HI ORDINARY REVENUE AND EXPENDITURE. The provincial accounts have been made up and balanced to the Ist of January, 1866. The Superintendent very much regrets to have to inform the Council that they unexpectedly involve a very large sum to be proTided for. The receipt from all sources for 1865 amounted to £123,146 14s sd, and the expenditure to £131,230 19s 3d, showing an excess of expenditure of £8,084 4s ; this excess is for the most part made up of two items, viz., surveys, £3,151 18s 9d ; Great South road, £4,124 Is lid ; and there are, in addition to these, large liabilities actually contracted on account of surveys and public works, and necessarily to be paid for. The former will require £2,994 lis, and the latter j £8,909 7s 1 Id. The total, therefore, required to meet the debts and liabilities of 1865 amounts to £19,988 3s 9d. The Superintendent cannot see that it will be possible to pay this sum, or indeed any part of it, out of the revenue for 1866. The estimate of ways and means for 1866, transmitted herewith, shows a revenue of £98,960 13s. Out of this there are fixed charges to be paid amounting to £38.460, leaving for appropriation £59,700. The estimate of expenditure transmitted herewith, shows a sum of £59,397 14s 6d for 1866.

The Superintendent has used his best endeavours to cut down the estimate of expenditure to the lowest figures, and he is afraid that in some cases the amounts proposed are inadequate for their objects. He invites the Council to sift the estimates thoroughly, and he will be glad if they can see their way to further retrenchment. The Council will observe that the cost of the ordinary establishments in some cases exceeds that of last year, in consequence of the additions that liave been made to the staff. This increase, however, is rendered essential in consequence of the increased work, and is by no means commensurate with what has to be done. The transfer of the confiscated lands to provincial administration will more than double the labour of some of the departments, and will require the frequent visits of responsible officers to distant stations. Indeed, the affairs of the province have now become so large that it is impossible to manage them economically and efficiently in the way in which they have hitherto been conducted. It is necessary that the work should be divided amongst departments with responsible heads, who will carry on the business under the direct supervision and control of the Superintendent. The Council may rest assured that the Superintendent will neither spare himself nor the officers under him, and will take care, as far as it is possible, that no expenditure shall be incurred which the public service does not require ; but the Superintendent feels thoroughly assured that neither efficiency nor economy is promoted by the Superintendent occupying his time in office details. It is his belief that the expenditure for last year was suffered so largely to exceed the income, because the time of the Superintendent was taken up in minor matters, which could have been well done by some one else; and, consequently, that a general comprehensive supervision essential to good and economical government was necessarily neglected. The Council, however, will observe that the increased expenditure in the ordinary departments of the Government is not thrown upon the ordinary revenue. The cost entailed by the administration of the confiscated lands is properly chargeable against the revenue arising from them. A very large estate has to be administered, and it is but reasonable that the cost should be defrayed out of the revenue to be derived from it. There were two ways of charging this expenditure; the one by the creation of a separate establishment, the other by an increase of the provincial establishments ; the Superintendent prefers the latter course as the most efficient and economical.

The increase made has taken place in the executive offices and the Survey and Provincial Engineer's Departments. If the survey, colonization, and improvement of the confiscated lands are to he vigorously carried on, the Superintendent is of opinion that even a further increase of the two last-named departments may be required. The ordinary revenue is credited and the confiscated land account debited with the sum of £3,500, whish it is estimated will cover the difference in the cosi of the increased establishments between what will now be required, and what would have been required if the transfer of the confiscated lands had not been accepted.

Ithas already been explained that debts and liabilities exist, amounting to £19,988 3s 9d, which must be provided for. The Superintendent is unable to propose any other mode of meeting these than by a further diversion of the money appropriated out of the loan to city water-works. Much as this is to be regretted, it is fortunate that the loss will be less felt in consequence of the Bupply now provided from the Domain being much better than was anticipated. By this means a large portion of the city of Auckland, that which most required it, is supplied with an abundance of good water for drinking, and a moderate supply for other purposes. With this and the public wells we must now for some time be content. The Superintendent proposes to appropriate to the payment of thia debt a sum of £20,000, making with the £17,000 for the railway £37,000 out of the £44,500 intended for the waterworks. A small bahnce of the original sum will be left to increase the Domain supply should it be found practicable to do so. The Council will see, on examining the estimates, that by no practical means can any money be provided out of the revenue for 1866 for local works. It has long been evident to the Superintendent that this state of affairs would sooner or later come about; it has come sooner than he expected. There are, however, two main provincial works which must be kept in repair, if possible, by the province—the Great North Road and the Great South Road, including the Onehunga branch connecting the East and West Coasts. This latter road has a very considerable revenue, as sliown by an account transmitted herewith, sufficient to pay the interest and sinking fund of the loan of £15,000 advanced to put it in good order, and to leave a considerable surplus to keep it in repair. • It is a matter for consideration whether the Great North Road may not also be made to yield a considerable revenue to assist in extending and repairing it. The Superintendent will state his views as to these roads in a separate message.

Other public works, whether in town or country, can only be provided for by local taxation. Moreover, it will not be well that we Bhould treat this state of things as temporary. In the opinion of the Superintendent it is not only inevitable, but permanent. It must be met by exertions on the part of owners of property. Local rates are the legitimate sources from which money for roads, bridges, and local improvements are to be derived. The Customs revenue cannot be looked on as properly applicable to such purposes, and the land revenue, an appropriate fund, is not now sufficient in this province to pay the interest and sinking fund on the debt which has been incurred to provide the means of purchasing the land from the natives. The amount of the debt on this account is £90,000, involving an annual first charge on the land for interest and sinking fund of £5400. Last year the sale of land did not produce sufficient to pay this sum : this year enough may be obtained to do so; but a surplus cannot reasonably be expected.

The result practically is, that we must pay our debts out of money raised under the

Loan Act, by transferring for this purpose a sufficient sum to supplement the revenue of 1865 ; and this will leave the revenue of 1866 applicable to the necessary expenditure of this year, but barely sufficient to cover it. The estimates have been framed on this basis,, and the Superintendent requests the Council to give the subject their most careful consi- [ deration. Estimated Ways and Means op the Province of Auckland for the Year 1866. Customs three-eighths, £61,800; land revenue, £5400 ; provincial revenue, £9400 • pilotage and harbour dues, £2500; interest and sinking fund on harbour trust debt, £85,000 at 8 per cent., £6800; interest and sinking fund on city trust debt, £21,000 at 8 per cent, £1680; tolls, Tamaki bridge probable receipts), £500 ; tolls, Great South Road (probable receipts), £2580 ; ditto, Otahuhu, £500; ditto, Drury, £300; tolls, Onehunga wharf, £200 ; contribution from Waikato settlement funds to cover increased expense of ordinary establishments, £3500 ; repayment of assisted passages, £2500 ; miscellaneous, £500.—-Total, £98,160.

PERMANENT CHARGES. Sinking fund on £350,000, Loan Act, 1863, at 2 per cent, for one year, £7000; sinking fund on £100,000, Loan Act, 1863, at 2 per cent, for six months, £1000; interest on £350,000, Loan Act, 1863, at 6 per cent, for one year, £21,000; interest on £100,000, Loan Act, 1863, at 6 per cent, for six months, £3000; interest and sinking fund land purchase, loan, £90,000, £5,400; Superintendent's Salary Act, £800; Auditor's salary and contingencies, £260.—Total, £38,460. Ways and means, £98,160; permanent charges, £38.460; balance for appropriation, £59,700.