FINANCIAL STATEMENT.

Manawatu Times, Volume III, Issue 10, 21 November 1877, Page 2

FINANCIAL STATEMENT.

; [Bt Electric : Tblegbaph.] _ The Financial Statement was delivered on"Monday, 19th November, 1877, by the Oplonial Treasurer, the Hon. Mr LarnachVas follows :— Mr^ StBAKEE,-^ ' - , Sir,^The4ion. the Premier a few minutes ago m his statement on the proposed policy of the Government in-, formed the HoUse that it was our desire to consolidate the administrative system of the. colony and to introduce a clear,^economical and stable plan of finances.^ This is a work on the advisability of which I think all lion, members must agree, that aTrork of such a nature cannot -be > properly accojnplished- witliout full consideration. Under these cireunistances there are . two, courses open to us, firstly to as£g • the House to vote supplies for a perioifc of three or four months, to adjourn and to meet again at an early period next year, when we should be enabled to place all our plans" before you m a matured form, and then take your verdict'upon them ; or secondly^, to take up the estimates of the late Government, make such modification as we* might deem necessary, and occupy ourselves during the recess m fully reorganising and •consolidating the present 'financial and departmental system of the colony. The' latter is the eoujse. which we have determined to adopt. At thesame time, the House has a right to expect that we. should at. least indicate our views

upon the present /financial condition of the colony i * the (character of the changes we propose to make and the necessity m our opinion that exists for making those changes: The late Colonial Treasurer has laid before this House an elaborate Financial Statement furnished with all the tables and returns that usually accompany such an important document; I therefore feel myself relieved of the duty of entering into minute details. I will admit that it would be' impossible' for me to attempt to place' more clearly before this House than the hoii. the Colonial Treasurer has done all details reference to the different loans which the Colony has" from time to time contracted; nor have I the time or v "the means at this very late period of vthe session to revise them. So also with regard to the expenditure. Anxious as we are to effect "changes of system by means of re-arrangement, economy and consolidation, yet as more than onethirdof the financial year has already elapsed, and as much patient enquiry is requisite to. prevent changes of the kind becoming mischievous and dangerous to the pubKcr^ servjce, I feel that I have no other course open to m» v at ■ the present time than to accept the estimates of expenditure /nearly as they appear m the tables recently submitted by the late Treasurer. If, however, I am precluded from, dealing with details I ask the attention of the HonsOor a short time whilst l endeavour i rjKmy point of view to indicate briefly the tendency of our present system- o£ finance, the evils to which it is rapidly leading, and the only available remedies that I can see possible to enable this Colony, without imposing enormous -,burthens : upon the. .people,' to maintain its credii^aa3^'riftg :tb'a Successful issue the great policy^ of Immigfatiori and Public Works to which the Colony is pledged by : the contracts it has entered into m relation to the works that are m progress, besides the promises of works to i be initiated^ J^ ,_:_*- ' ' . One strikmgdef ect m the^resent isys-— tern of conducting the public expenditure is that the^neral Assembly fiequently meets some time after the commencement of anew fihancial^year. rAfterthe meeting of Parliament a period of several months sometimes elapses before the Act of Appropriation passes the Assembly' Under^such a system, the expenJ&ture is conducted without.any appropriation, having been made, and solely upon the authority of Imprest Supply, \ which directs the monies to be charged m a manner thereafter to be expressed m the appropriation of the year. -The Government isHh'us able- to incur any expenditure it pleases by simply placing on an estimate any amount for any service which it thiiks proper to undertak~e, and the duty of the Assembly resolves itself rather intojthe ratification of ex-penditure-incurred -during several months of the year, than a careful watching of amounts which it is asked to vote. One of tlie duties. of the present Government will be, either to alter the A time of the; commencement of the financial year or to take care that the Assembly meet ; at an earlier period ; say not later thai the first" week m June. In the. Financial Tear '.■■lß74-5 there were outstaTiding.Treasury Bills, that is loans raised to; raeet deficiencies m the revenues of and charged on the Consolidated Fund to -the extent of £400,000 ; that amount was- due and payable m that year, but the Consoli-" dated Fund was unable to bear so larger a charge. It was hoped that this sum might be graduallyreduced by the pay-, . ment out of revenue of £100,000 per annum until the whole was extinguished. If that sanguine expectation had been, realised, there would be outstanding now only £200,000 of Treasury . Bills, of which sum a moiety would vanishconcurrenyy with the present financial year; out the present, tendency is m an opposite direction, :^f or; the amount of? Treasury -Bilis -in existence is now above £800,000, more 'than double thejgngina| sum referred to.; Instead of taere having occurred any decrease m this particular form of ; the > colony's indebtedness, the original suici may now be multiplied by two; and not only ; have we been unable out of, the superfluities of the present to pay the. deficiencies of the past, but the necessities of the present have shewn themselves to be far greater than before, and ,the Qharge upon the Consolidated Fund has now become so Targe that to meet these Treasury Bills out of the fund upon 'which they are by law a proper charge,: appears to me hopeless. In the; year 1875-6 a further issue of Treasury Bills was requisite m aid of revenue to the amount of £172,000. In the last year issue of £260, 000 became, necessary, and the late Colonial Treasurer proposed, to repeat a similar temporary borrowing this year, as a "receipt maid," but for this occasion the fund upon which the advance is to be secured is not the Consolidated Fund or the ordinary revenue of the colony, but the Land Fund of the Provincial- District of Otago. A Similar loan would "have been, raised on,(the security of .Canterbury had . it not been found possible to take £58,000 m cash from the territorial grevenue. Such a condition of affairs as Sthis is not considered by us m any way satisfactory. There appears to be a sad want of that equilibrium, that evenness of balance m our'financial system, which, ' before all things must exist if we intend to maintain bur position as a solvent state, our reputation as prudent, careful colonists, above all" our credit in # the English money market, and our position with regard to provincial liabilities. , Nor. is this all; if it were perhaps it : would not be so difficult to secure an < even balance between our means and our" requirements, as, I fear, may possibly :be the case, or, to use ahomeiy '- phrase, ;to learn, to make both ends/ meet. Last session this House finally

determined to abolish the provincial system, and m so doing had to make all provincial liabilities colonial liabilities, for which this House has to make provision. The burden which has been undertaken by that policy is, in' my opinion, greater than was ever anticipated. The difficulty of ascertaining •the amount of provincial liabilities seems to be very great, and that of finance, the means wherewith to liquidate them when ascertained, seems to me to be'grcaterstillV Up to the 30th June last, the sum of £237,500 had been advanced from loan f o meet provincial liabilities, and there existed on that date an overdraft at the bank on provincial account the sum of £105,888, or an aggregate . sum of £343,388, which may be reduced by £45,888, beihg_ the amount of balance m hand to meet liabilities on provincial account, thus leaving still unsupplied the sum of £297,500. So muchl have said for the period up to the 30th June last, r and from that time I may be allowed to travel upon a different, and, perhaps, more uneven track. There are known to be at the date on which I am speaking still, further liabilities on provincial account outstanding, amounting to £277,766, reduceable by about £300,000, due from; Land Fund and other sources, leaving a total to be provided for m some manner of £249,766 ;•- and the House, will agree with me that still further liabilities m this direction • wiljLyetinost surely present themselves. In ujirf statement of those liabilities whictß found m preparation for the late Treasurer they appear to reach a total; of £669,000. There is a; sum of £104,000 to be paid m January next to the Wellington Trust and Loan Co. for; money lent -to carry oa the important reclamation improvements on the foreshore of the- harbour.of this citjv Itis true thatthe work contracted for p^pmiscSjifb be reprqductivej but still the' works are not yet finished, arid are not likely to be before the date of payihent. It - cannot be expected' that to any extent the sale of sections can take place for to .come. The inoriey^. Rio "" doubt,^"cari be re-borrowed, upon "the .. same security, perhaps "upon, fetter terms 'than originally ; and if there were no greater difficulties to face than this, my task ' would be much easier than I apprehend it will be. From the statement of the late Colonial Treasurer the House will ha-ve? seen that there remains no available balance from the loan upon which I can pretend to charge any of. the payments; But on the other hand it is absolutely necessary to go into the money market under circumstarice to bor- . row still further, and to attempt 'to do so upon anything like reasonable terms we mtisi- be prepared to show a state of finance characterized by soundness. I ask, has there been exhibited; any stability m the finance of this Colony? During the recent past, the Abolition Act financial arrangements supposed -to bo of a very definite and permanent, character were arrived at m ref ereiure' to the Land Fund. This; grand arrange- ; ment promising durability never even saw the daylight of its existence, but fell stillborn, and- great difficulty would have arisen from this cause had not certain provisions m the .Financial Arrangement Act of "last session come to the rescue of Colonial •finance. TheeS are the very provisions 1 he late Government proposed; again to alter this year, thus removing .. every t^ace of fixity .-.acid fintiiity from the finance of the Colony. „_-.. ' ■■';■■'■._ :">•' ■,-v"'-:'..v- • ■'"■'■/ Now, Sir, to meet all these exigencies, to makeilielarge payment' on account of m tersest that the Colony has periodically to make, fo. pay salaries and to provide for the innumerable: other matters that have daily, to be met,, what is like to the present state :':of the Treasury chest ? I. Jiave ibeen ac- ; cust6med,,:Sif, to deal, and I prefer to deal with cask ; It is very much more satisfactory and more convincing to denl with than with mere book keeping, accounts. With the latter it is riot difficult to manipulate balances ; -with the former ibis riot easy to 1 •now; j\?p sovereigns when m reality only one ; eTistsf On the SOtlfbf iO^btober, theoay - i^tf which tins Government assumed office, . thfee stood to the credit of the Colony altogether, as shown by its Banking account, jtlie sum of £762,302 lls 3d. Surely -with euch lin overflowing Treasury the House. , will^ wonder what need there is for' 'any; financial difficulty. I shall at once proceed tbahow. the House of vrhJat this balance chiefly consists. To the credit of the r Consolidated Eurid there- was £.105,563 7s ' Bd;j* to' the 'credit of the Land Fund, .£544^48 lls 6d; I shall now lay before '. the Honse a full statement of cashsbalances iri hands of Bankers on the day to which I , have referred j abo a similar statement for comparison, of the 16th inst., with the -amounts of tne balance of each one of the numerous departmental accounts.