FINANCIAL STATEMENT.

Manawatu Herald, Volume II, Issue 26, 21 November 1879, Page 2

FINANCIAL STATEMENT.

In making his statement of the financial affaii-H of the colony, to the House of Representatives on Monday last, Alajor Atkinson fcaid it was necossarythat he should o:ill to the mind of the committee our present financial position— a position, which he ventured to say, was unparalleled in the history of tho colony, for with abundant natural resources, with excellent credit, and with an increas ing ordinary, revenue — notwithstanding great commeroial depression — we find ourselves reduced to such a position as to cause the gravest anxiety to all true friends of the colony, and to necessitate important measures of financial reform involving largo additional taxation.

The following is a resume of the state ment. • CONDITION OF THE CONSOLIDATED FUXD RE

SEUVE. la the speech wliich I had tho honor to address to the House on tho 14th of October last, I showed tha*. tho total expenditure within and on account of the year 1878-79 was £4,000,901 ; that the total reqeips amounted to £3,875,13 T. I showed that tho deficit of £131,8n would have been i' 50,000 le.ss hal the land tax for tho half year been collected within thn year. But I did not mention, as perhaps I ought, that the bills taken on account of tho salo of the old Supreme Court site and the reclaimed land,^ ia Wellington, and amounting to £82,524 8s 4d, were included in last year's revenue accouut ; of this amount £33,114 15a 8 1 ha? been paid, and £19,103 12s **d remains still outstanding. I foaivl these bills credited to revenue iv the Treasury accounts, and did nob therefore disturb tho arrangement, although I am clearly of opinion that thay should not have boon credited as if tho amouuthad been received iv cash. Ut course, but for this mode of treating these transactions, last year's deiic.it would have been £>14,348, instead of £131,824. This, then, was my sfc irting point for the current year— a deficit of £131,824, to which I lidded the estimated expenditure for the year 1879-80, amounting to £{.974,031., taken from the Estimates left in the Treasury by the late Government, and obtained £1,105,838 as the year's estimated oxpendifcme. from tins amount I .deducteJ the estimated revenue derivable from our present sources of Income, amounting to £3 193,5)00, and arrived at a total estimated deficit of £911,958, to be provided for in some way this year. ESTIMATED EXPEXDITUHE ASD IXCOME OF TIIE VKAII 1579-80 ÜBVISKII. Sir — Siucu I last addressed you on this subject, the Government have gone carefully through the estimates of expan liture, as left by our predecessors. Tlieso were necossariiy imperfect, no provision having been made fur several necessary services; and the Estimates, as now presented, show an hici-easo of £86,011., the tutu] amount being £1,013,078, instead of 4-3,074,034.. Tliese figures make the total of tiicse Estimates larger by £0,117 than the actual expenditure of the previous year; but it must bo mnembei-od that they include provision for interest on the new loan and deficiency bills to the extent of Ml 18,00.), as well as the expenses attending the second sitting of Parliament within the year. We shall also, during the recess, carefully examine into tho present organisation of the Civil Service, and sco how far, by the combination of necessary olfieos and the abolition ot unnecessary ones, the expenditure nan bo further reduced next year. The estimate of revenue has also been carefully reconsidered, but, with the advantage of four months' actual collections to guide mg, I am unable, 1 regret to siy, to iucrease the amount estimated. It is possible that the Land Fund may be under estimated, but 1 do not see any reason to expect an appreciable increase i i 1,-md sales uutil a fall takes place iv the price of money, and this cannot be hoped for until a good harvest ha* been successfully housed. It may then, I think, be fairly stated, that our receipts from taxation are steaddy increasing, as also our receipts from services rendered, and that the slight check which the revenue derivable from these sources has met with during the current year is tempo rary only, and is fully accounted for by the general depression of trade throughout the world. This fact should, I submit, give us confidence in the future, as showing indisputably that our population is hard "working and prosperous. In tho financial year 1870-77, we received from land sales i' 870,819; pastoral rents, £i:J5,036; total, £1,005,855. In the year 1877-7«: land sales, £1,440,834; pastoral rents, £145.738; total, £1,535,56-2. Last year : land sales, £737,C>94 ; pastoral renta, £132,0->5; total, £869,729. And the estimated revenuo for this year is for lanl sales £218,000 ; pastoral rents, £132,0.'0 ; total, £380,00 J. public deep. Our public debt on tha 30th June last amounted to £-2:3,222,311, treating tho guaranteed debentures as practically issued, and including Treasury bilU outstanding, of which £142,000 mature on Ist March next in London, and will have to be re-issued : tho annual charge for interest and sinking fund in respect of this debt was £1,-232.119. Since then we have issued deficiency bills to the amount of -I'GOiyJOO, and when the loan of £0,000,000 is raided' our total gross debt will amount to £i 8,522,31 1; or deduct, ing the accumulated Sinking Funds, our net public doht will bo £35,U3 ) :5()4, subject, to an auuual charge of about £1,400,000 for interest, and £116.176 for sinking fund, making together, £1,516,170— an annual burden requiring our most watchful attention, and one which can only be borne if our taxation is properly adjusted, and our financial affairs managed with discretion. It may bo gratifying to the committee to learn— though the amount is small— that last year we redeemed out of accrued sinking funds debentures amounting to A' 7 1,00 0; of these, £58,000 represented the whole of the outstanding debentures issued under the Wellington Debts Act Amendment Act 1876, and £13 000 represented a portion of those issued under tho North Otago District Public Works Loan Act, 1872. PUBLIC WOHKS FUND. I showed in my speech of tho 14th October las f . th it we began the year ending 30th June, 1870. with a cr.'dit balance of i'2.056,!M0, including advances outstanding amounting to £ 1 55y<!60, and this yeir with a nominal credit balance of £506,205, but that of this sum £298,543, consisted of advancos outstanding, which, as lion. memrers are aware, areiu fact moneys spent but not yet brought to account, so that wo really began the year with only £207,662. This includes, as cash on the credit side, -the whole of the loans (including the guaranteed •debentures) authorised to date except the £5,000.000 loan. I furfchor slowed that we had spent in tho first quarter of this year — that is, up to the 30th September last — some £504,733 of tho £5,000,000 loan, and that we had entered into contracts and engagements which would necessitate our finding £733,553 more by 3 1st' December next, and £921,818 between that date and 30th June, 1830— in other words, that the late Government had in various ways anticipated the new loan to the extent of £2,220,104, including £14O,000forcontigont defence, and £200,000 for the purchase of native lands, but exclusive of cost of raising the loan ; and that in addition to this large

sum, which is payable by the 30th of June next, there will be liabilities outstanding at that date of a further surr of £957,177 for land purchase, and £128,815 for contracts entered into before tho present 'iovernment took officer Those figures were dispnted at tho time I spoke by tho late Minister of Public Works ; tut I regret to say that, after a most careful re-examination of the whole subject, I find that the figures I then gavo were strictly accurate. The Colonial Treasurer then dealt with the proposals for equalising expenditure and income in future nfc some length. He then referred tj the Property Tax, and : n the course of hi< remarks on this subject, snid— "The proposal of tho Government is to tax all property, whether real or personal, that a man possesses, after deducting in each caso his just debts, and also a sum of £300 as oxempt. from taxation ; but, as I have suid before, to exclude all incomes. It is very difficult, with the data at my command, to estimate accurately what, such a tix will produce. We know, however, that the valuation under the Land Tax Act gives £99,500,000 as tho improved value of real property. It is estimated that the total personal property owned in the colony is not leas than £18,7u0,0U0, malting a gross total of taxable property of £118,200,000. Deducting from this £>,OOO,COO on account of tho £3UO exemptions, w'get .£113,200,000 as the net taxable amou-iit as far as it can now be estimated. I give this estimate with some diffidence, but I think I have rather under than over stated the sum which will be subject to taxation. Ta'an? therefore £ ! 13,2 JO.OOO as the sum liable to taxation, this at one penny in the pound, the amount tho G-overnmcnt propose to ask for, will give £470,000 as the product of the property lax. TUB NEW TABII-'F. I have said, Sir, that the Government propose to raise additional Customs duties. With respect to tho encouragement of local industries, I have had many communications with arentlemen interested in tho promotion of local manufactures, and a Committee of this House has still the subject under its conside ation; but the time at the disposal of the Government has baen quite iuadequato to doul in a comprehensive manner with so important; a subject. The Govern men fc, therefore, propose to app.uut a Royal Commission during ths recess to examine and report upon the whole subject of the best mode of fostering and proraotiug local industries. Iv the meantime, the Government propose ta admit many articles duty free, so as fco assist local manufacturers as much as possible. lint, sir, before mailing any remarks with respect to tho articles upon which new or increased duty is to be charged, it will be b9tter to say a few words upon a question which has b_>eu muuh disc issed — the duties upon tea and su^ar. Upon theso articles we do not propo3e to re-impose the duties remitted last year, but it may be necessary to re-impose them next year upon a general revision of taxation. The art : oles upon which we propose to increase or imposo duties are — Almonds and nuts, chaff, cark.-*, dried fruits, fresh fruit other ttuu oranges and lemo'.is, window gl ss, grain and flour, malt, split peas, hops, iron fencing, tanks,' mutches and vestas, preserved mii!<, perr'u-iiery, patent medicines, timber, salt, stearine, spirits, Tobacco and cigars, wins, and all goads ut present charged with ad v;>loro;n duty. The total amount these duties are estimated to pioduee is about £3(.'0,009. We propose, us will be eoi'ii, to reimposo tho duties on timber and grain. We think experience has shown that their repeil has very injuriously affected the local shipping trade, mkl also the timber industry, which was a growing and important one, and whHi we are coi'tainly not justified iv seriously crippling without some compensating adviititiiafu to the tftate, but which we altogether fail to see has followed the repeal of ihe-c duties. We propose to increase the duties on spirits and tobacco. With regard to spirits, we shall ask for an increased duty of 2s per gallon, granting at the same time an allowance for such as are under proof the same as is now charged upon spirits over proof. This mode of levying the duty is, I believe,' the custom in almost ev«ry other country. To make up the loss to the revenue which will result from this allowance for spirits under proof will require an addition of at least 6J per gallon, so that the proposed increase is really only Is 6d per gallon, or in the whole £44,000 ; giving a total on spirits, wine, &c, of £56,000. We propose to increase the tobacco duty by Is per pound, and to authorise its manufacture in bond, granting as an encourage ment to its loc \l manufacture a bonus, for tho next two yefvrs only, of fid in the pound upon the quantity of t"baceo manufactured and duty paid in the colony. Tli-; increase on this item is estimated at £50,00i>. From spirits, wine 3, &c, and tobacco, including cigars and snuff, I hope, then, to obtiin £106,000. lam aware that in increasing these duties somo risk is run of inducing illicit distillation and smuggling — there is always, as every one is aware, a danger and possibility of this when duties are increased — and the Government are by no menus certain that iv consequence of the increased duties the revenue may not be defrauded in the manner mentioned, but they do not think this will occur to any lar^e extent, and they believe, looking at our requirements, that upon no articles included in the tariff would Parliament up prove of increased duties so readily as upm spirits and tob<;cco. Nothing but our own experii'nsocan tell us when we have reached the maximum duty which, these anicles will bear without loss to the revenue. STAMP DUTIES. Major Atkinson next referred co the proposed increase in the stamp duties, which he said would be only upon successions. It is estimated to increase the ivvonue by £16,000. SUMMARY OF PROPOSALS. Summarising, then, my proposals, they will stand thus : to be raised by property tax. £470,000 ; by Customs, £000,000 ; by stamps, £16,000 . making a gross increase to tho revenue of A' 736,000; from which, however, must ba deducted the remissions .stated above amounting to £20,000, together with the land tax £147,300, which it is proposed to merge in the general property tax, 7iext year, thu3 giving a net increasii of £618,700. It is proposed, the i, by those means to raise £618,700 additional revenue; if this be added to the revenue from present sources, estimated to amount, exclusive of land sales, to £2,945,90 '•, wo get £ {,564,000 as tho total revenue for the year. Tho esii m,ated expenditure I have taken as probably £3,439,949; and if wo deduct this sum from tha revenue we arrive at an estimated surplus of £74,651. From thusrj figures I think hon. members will see that the proposals of tho Government, if they should meet with tho approval of tho House, will, without aDy reasonable doubt, equalise our expenditure and income. Aftei* explaining lmw the deficiency for the current year was to bo met, and stating that the financial year would now elosoon 31st March, instead of as formerly, Major Atkinson moved the resolution affecting the change in the duties, a$ recommended in the statement, which was curried on the voices.