The Lyttelton Times. THURSDAY, MAY 28, 1885.

Lyttelton Times, Volume LXIII, Issue 7561, 28 May 1885, Page 4

The Lyttelton Times. THURSDAY, MAY 28, 1885.

If it be legitimate to make things pleasanter in finance, the New Zealand finance of the year, which ended on March 31 last, was very legitimate. Major Atkinson, in his criticism at Hawera, appeared to think it wrong to make things pleasant. We should not like to say that because things are pleasant the Major thinks they are wrong. But when there are two ways of doing a thing, the one pleasant, the other not so, the Major usually prefers the latter. But there is no necessity for condemning pleasant finance simply because it is pleasant. Pleasant finance may be just as legitimate as unpleasant' finance. "When it is not legitimate, pleasant finance is, of course, a crime or a blunder, as the case may be. But the mere fact that the result is pleasant is not necessarily against it. Last year began gloomily enough. We had a deficit on hand, and another looming up unpleasantly near. The financial aspect frightened our politicians of all shades. Everyone, at one time, expected a crushing weight of fresh taxation. Property, land, tea, sugar, spirits, these and many other things were mentioned as about to feel the pressure of some squeezing process. The cry of most of our politicians was for strength to bear the increasing burdens. Their attitude was really heroic, as their expression was certainly lugubrious. The year's result has not been at all like those dreadful anticipations. In the meantime there has been a change. The wand of the enchanter has been waved; the direct taxation has been lessened, and the finance of the year has ended with a surplus. It is not the surplus of .£60,000 which the Treasurer hoped for when he made his Financial Statement ; but it is a substantial surplus of some .£21,000, which, considering the character of the commercial atmosphere in the South, is not to be despised. It is, at all events, considering that .£131,000 of Property tax has been remitted, a vastly better result than anybody expected when the House was dissolved last June. The year's revenue has not realised the estimate as a whole by some .£25,000. A number of heads of revenue show an increase, the chief of which are Customs, with ,£36,100 to the good, miscellaneous with £22,700, while the territorial revenue has surprised the Treasurer with a pleasant little extra .£SOOO. On the other hand, a number of departments show between them a shrinkage of .£91,000, of which the railways alone are responsible for £70,000, and stamps, as might have been perhaps expected, fall short by £17,000. On the other hand, the expenditure shows savings. Here and there an increase is chronicled, such as £13,000 in the Colonial Secretary's Department, and £6OOO in that of the Minister of Education; but, happily, the general tendency of the votes has been the other way, the Treasurer having saved £6500, the Postmaster-General £4OOO, the Minister of Mines' £6OOO, and the Public Works Minister £26,000. The year's revenue, aided by £247,000 of debentures under the Consolidated Stock Act of last year, "for accretions of Sinking Fund for the current year," came to £3,816,494, and the year's expenditure reached £3,795,191, leaving a surplus in the Treasury of £21,303. It is worth while to reflect that but for the railways, which have fallen short of their estimated profit by £37,000, the Treasurer's estimate of a surplus of £60,000 would have been realised.

This; process of aiding the revenue by debentures is what Major Atkinson objects to as too pleasant. From the telegraphed report of his speech at Hawera, it may be inferred that he condemns the proceeding as borrowing

to pay our way. Now, whether Major Atkinson meant this or not, borrowing against the accumulated Sinking Fund, after we have decided not to accumulate any more Sinking Fund, is not borrowing to pay our way in the ordinary sense of the term. Borrowing to pay our way, means permanent addition to our public debt. Borrowing against the accrued Sinking Fund of the year is borrowing against a fund which will one day be set free to meet the liability., That is a very different thing. It may or may not be wrong to cease paying Sinking Fund. That question was decided in the negative last year by Parliament. Having decided that it is not wrong to discontinue payment of Sinking Fund (from ,£240,000 to .£250,000 a year), the logical thing was to set about stopping the payments. By law this cannot be done until the loans are converted on terms expressly arranged for the purpose. But as the loans are sure to be consolidated on favourable terms, the Legislature agreed to allow the accrued Sinking Fund to be set free at consolidation, and to permit the Treasurer in the meantime to draw against it as much as he pays into it every year. The arrangement is, that when the accumulations of Sinking Funds are set free by' consolidation all the accumulations made previous to the passing of the Consolidated Stock Act of 1884 are devoted to Public Works, and all accumulations made after go to meeting the debentures on which the money for the accumulations was raised. The criticism that we should have had a deficit if we had not borrowed in this way is pointless. It forgets that this is the way in which the majority in Parliament agreed that the finance of the country should be conducted. It is more pleasant than taxation. And, as we have accepted the sound principle that Sinking Funds are unjust to ourselves and unnecessary for the assistance of posterity, the method is also legitimate. It may therefore be accepted as a very happy thing that in this first year of the operation of the anticipatory clauses of the Consolidated Stock Act of 1884, we have a surplus even of only .£22,000. The expenses of defence incurred in consequence of the Russian, difficulty, are of course not included in the ordinary finance of the year, which we have been considering. But as those expenses were unavoidable and honourably .necessary, the fact of their existence need not diminish our satisfaction at the out-turn of the general finance of the Colony.