THE New Zealand Herald. AND DAILY SOUTHERN CROSS. WEDNESDAY, MAY 30, 1888.

New Zealand Herald, Volume XXV, Issue 9067, 30 May 1888, Page 4

THE New Zealand Herald. AND DAILY SOUTHERN CROSS. WEDNESDAY, MAY 30, 1888.

Nobody had any other expectation than that the Financial Statement which Sir Harry Atkinson has had in hand, and which was delivered in the House of Representatives last night, would prove a very disagreeable dose to swallow. That expectation has been fully realised. The duty on tea is increased from 4d to 6d, being double the amount levied in Victoria or in New South Wales, while on the whole Customs tariff increases are made which are estimated to yield £207,000. One half of the tea duty is to be devoted to giving the local bodies a subsidy of 5s in the pound of their rates, but if in the future half of the tea duty does not yield enough to pay ss, then the local bodies must stand the loss. We may briefly run over tho story of our latest budgets, to show how we came to occupy our present position. In 1870, New Zealand entered upon the public works policy, which, under the manipulation of Sir Julius Yogel and other politicians, has turned out so disastrously. For some time all went well, and New Zealand had a boom. The profuse expenditure of borrowed money increased the revenue, and caused inflation in every direction. When our Statesmen began to be pinched they resorted to expedients of every kind. The Government threw overboard several Departments they had formerly taken charge of, much as sailors in distress throw overboard heavy cargo when the ship is in danger of sinking. Roads and bridges were thrown on to the counties and other local bodies, while by one lift the great item of charitable aid was cast upon local taxation. Then Sir Julius avoided the difficulty and danger for one year by " collaring the- sinking fund." But, practically, borrowing- is now stopped. The loan authorised a few days ago was passed last year, and of course by this time has been largely anticipated by public works which have been in course of construction. The revenue can gain very little by any money to be borrowed now. We must balance revenue and expenditure. We have been burning the candle at both ends, and we must now save at both ends. We must raise our taxation and cut down our expenditure. It must be obvious that the public have declared that they will not consent to any further clever expedient to stave off) even if such a thing were practicable, which it is not. They are determined that the position shall be faced. We can scarcely stand any more taxation ; but we will rather make an effort to bear a greater burden, if imposed in such a way as shall not tend to drive capital and population out of the country, than that we shall any longer dwell in a fool's paradise. Every person and every institution all over the colony are facing the worst, and in i regard to our national finances we must do the same.

The present Statement fails naturally to be compared with the budget laid before the House of Representatives on May 10, 1887, by Sir Julius Yogel. Then it was shown that the revenue had not come up to the estimate by £192,493. The Customs had not reached the estimate by £124,235; stamps had fallen short by £16,337 ; and railways by £157,813. There being then no sinking fund to fall back upon, Sir Julius Yogel said the people must submit to additional taxation to the amount of £250,000 per annum. The country, however, which was then feeling the pinch of depression, rebelled against the proposals of the StoutYogel Administration, and declared that no further taxation should be imposed till at all events large retrenchments had been made. An appeal was made to the country, and the Stout-Yogel Ministry was thrown out. Then on the let of November Sir H. Atkinson made a kind of interim Financial Statement. This showed that the Customs revenue was still falling. He then estimated that the revenue for the six months ending 31st March, 1888, would amount to £2,019,460, making a total of £3,788,507 for the year, as against £4,156,184, as estimated by Sir Julius Vogel. By the present Statement, it is shown that the revenue has fallen short of the lesser estimate, made only about five months before the close of the year, by £105,336. A striking feature of the revenue of late years is the falling off that has taken place in spirits. We give the figures showing the falling off in each year:— 1883-84 m. £7,006 1884-85 — ... 25,804 1885-86 ... ... — ... 17,916 1886-87 20.070 And this notwithstanding that the duty was increased from the 20th of June, 1885. The falling off in another large class of articles has also been something enormous. In regard to spirits, the reduction has been usually ascribed to an increase of sober habits. We believe that it is very largely owing to the diminished purchasing power of the people. This view is confirmed by the great falling off that there has been on ad, valorem goods. As between

1885-86 and 1886-7, there was a difference of £65,000 on ad valorem goods. The Customs revenue for 1886-87 was £124,235 less than the estimate, and that estimate was less than the actual receipts of the previous year by some £4000, so that the Customs revenue for 1886-87 was less by more than £129,000 than the receipts of 1885-86. The Customs revenue in 1882-83 was £1,494,000, while for 1886-87 it was only £1,289,000. In regard to the principle which has operated in the formation of the enormously severe tariff which is now in force, the Colonial Treasurer states that a freetrade tariff and a prohibitive tariff are both incompatible with the amount which must be raised,and that in adjusting the duties they have endeavoured to assist the local manufacturer. It is obvious, however, that the main ; principle which has guided the Treasurer is to raise the titmost amount he could. Some of the duties proposed are very high, and we should think are apt to defeat the Treasurer's intention. We doubt very much whether he will be able to receive the amount he calculates upon. There will also, we doubt not, be numerous complaints in regard to the working, of the details of the tariff.

On the important subject of the expenditure of loan money during the year, the Government has determined not to let any further contracts on the North Island Trunk Railway, and to do very little work anywhere else. The loan money will be kept in hand to make things safe. We must speak in terms of strong approval of the proposals of the Government with respect to the abolition of departments. The Public Works Department is to be done away with. This might have been done years ago, ior the public works which have been carried on could easily have been directed without a whole Department existing on them. It seemed as if New Zealand was to be compelled for ever to support a Department on the same scale as when wo were spending millions every year. The Native Department also can easily be spared. These changes will enable the Government to make great sav ngs. Nobody can be satisfied and pleased with the Financial Statement. All the public expenditure which tended so greatly to maintain the revenue is now to be stopped, while a very heavy load of taxation is placed upon the colony. We deprecate a number of the heavy duties imposed, and believe that they will injure and impede the trade and commerce of the country. But, at the same time, we cannot see a way out of the difficulty. We cannot see that anything is to be gained by getting another set of men to take the places of the present Ministers. So much money must be obtained, and if it is not raised through the Customs, it must be raised by direct taxation. The colony must do its best in the meantime, looking forward to the period when by increase of population and by revival of trade, the amount of necessary taxation can be raised, while at the same time many of the Customs duties may be lowered, and the property tax may be swept away.