The Financial Statement.

New Zealand Mail, Issue 956, 27 June 1890, Page 18

The Financial Statement.

Early in the day the Postucaster-Goneral asked the indulgence of the House lor the Premier, whose medical adviser, he said, positively ordered him not to read the Financial Statement in the evening. He had to a9lc, therefore, that one of his colleague should be allowed to read it. The House affirmatively answered “ Aye,” and Mr Ballance intimated that the Opposition would be willing to do anything that suited the convenience of tho Premier. (Hear, hear.) When the House sat at 7-30 the galleries were fairly full, although the attendance generally, like that of many recent years, was not so large as it used to be. Sir Harry Atkinson, who came into the Chamber before any business was done, and handed the Estimates to the Speaker, was received with hearty cheers from all Bides of the House. He took an opportunity of thank, ing the House for its generous conduct toward himself, and assuring it that his inability to read the Statement did not arise from any neglect on his part. (Cheers.) The Postmaster-General read the Financial Statement, t e begun by referring to the surplus which was the result of the financial year, and expressing an or int-n that it arose less from the steady improvement in the condition of the Colony than from the large economies and careful administration which the present Parliament had inaugurated. The rapidity with which land had lot?- n taken in small areas was referred to as a gratifying proof of progress. Having urged the necessity of careful and vigilant administration, and referred to the false impressions prevailing-in England and Australia about New Zealand, and the desirableness of dispelling >t through Parliament and the press, Mr Mitchelson proceeded to place before the House the transactions of the past j ear.

CONSOLIDATED FUND. The estimated expenditure for the year 18S990, including charges under special Acts and the supplementary estimates, -111101111161 to L 4 150,703. The actual expenditure was L4,121’812 : there was therefore an unexpected balance of the amount authorised of L2B.SGI. He estimated (including the primage duty) to receive during the year a total ordinary revenue of T. 4.157.500 ; the actual amount received was L 4 209 ’'47 ; the total revenue therefore excee’ded’the estimate by 131,447. The Customs wero thiin the estimate by L4»i,120. The stamps exceeded the estimate by L 24,705, and the railways by LG3.340 The’estimated expenditure of the Land Fund, including supplementary estimates. was 1428,149. The actual expenditure was Ll2l 919. The expenoiture was therefore less than the estimate by L 6230. Of this expenditure there was paid to local bodies for rat e s on Crown lands 1.11.684. and L 18,159 in respect of receipts from deferred-payment lands, the actual receipts weie L 87,692, as against L 136.100 estimated. The expenditure having been L 121.919, and the receipts L 57.692, there was a deficiency of L 34,227 for the year ISB9-90. The deficiency would have been less by 1414,000 if land to that value which was sold had been paid for in cash instead of, as it was, in scrip issued for military service and

under the Forest Trees Planting Encouragement Acts. FINANCIAL RESULTS OF THE YEAB. The surplus with which we began the year was L 27,768, after paying off 1.50,000 of the deficit at the 31st March, 188 S; and the ordinary revenue received was L 4,209,247. The amount available to meet expenditure was therefore 1.4,237,015, and the total expenditure having been L 4,121,841, there was a surplus for the year of 1.115,174. This surplus, of course, included the primage duty, L 55.826. It would be in the recollection of honourable members that he expressed a hope when the primage duty was imposed, notwithstanding the fact that it was only estimated to produce about J. 116,000 in two years, that he should be able within that period to pay off the whole balance of the deficit of L 128,605 which stood at the end of the year 18S7-SS unprovided for. At the end of last financial year the primage duty had only been in force twenty-two months, and the amount it had reached was only 1.101,958, yet he had found himself in a position to pay off the whole of the L 125.605 some months within the period originally anticipated. The primage duty, as honourable members would recollect, was only imposed for two years, and expired on the 30th instant. Whether or not it would be desirable to continue this duty for some time longer was a question upon which he should have something to say presently. The final result for the year, after paying what was left of the deficiency of L 125.605 —namely, L78.G05 —was a balance of 1,35,569 with which to begin the year. The liabilities at the end of ti e year were less than those of the previous year by L 15.186, and less than the average liabilities of the last nine years bv L 36.783. These facts “ would be a compledfanswer to those persons, who, professing to be well-informed, are either so ignorant or so disingenuous as to talk of the surplus of last year as being manufactured by holding over liabilities at the end of tho financial year.” He combated the assertion that the book-keeping was faulty, and explained his method. LAND FUND. The deficiency of L 34,227 iu the land fund, added to the deficiency at the beginning of the financial year, made a total of L 45.716. As the Minister of Lands said last year, the present system could not be made self-supporting, and it was clear that if we weie to continue this system of free choice of tenure we must face the fact that it would be impossible to carry on the settlement of the country without large extraneous aid to the Land Fund. During the three years the late Government were in office the receipts from sals of land fell short of the charges fixed by law, and the costs of survey, administration, etc., by L 147,200, without counting the amount expended from other funds in the purchase of the land, on roads to open it up for settlement, or in settlement itself. For the two years and a half to the 31st March last, during which the present Government had been in office, the receipts proved inadequate to meet the ordinary charges by L 90.354. THE PUBLIC DEBT. The gross estimated public debt of the Colony on the 31st of March, 18'0, was L 35,667,950, and the accrued sinking funds L 1,383,432, or a net debt of L 37,284,515, of which sum there remained unexpended L 961.300. He proceeded to recite the transactions of the year, in respect of the conversion of 5 per cent, debentures into 3-J per cent, inscribed stock, etc., and pointed out although in some instances the result had been to enlarge the public debt, there had been a considerable saving to the Colony in the annual charge by reduction in the rate of interest. Several loans were falling due in the course of the next two or three years. In some cases the accrued sinking funds would probably suffice for their redemption ; in others the debentures were convertible, under agreement with the holders, into 4 per cent inscribed stock. With regard to the remainder, theie was authority to renew some of them for a short term ; but in preference to doing so it might be found desirable, in making provision for those which are not renewable, to deal at the same time with those which are, and so make one operation do for all. ■ There was, however, no necessity for legislation on the subject this session. Referring to the issue of L 2,700,000 per cents inscribed stock, he thought the price realised —L9S 16s 8Jd —was very gratifying, as a proof of renewed confidence in the Colony. . PUBLIC WORKS FUND. Summarising the condition of this fund, he s* : d : I have not considered it necessary to enter into any particulars regarding the expenditure out of the Public Works Fund during the past year, as full information on the subject will be given to the House when the Public Works Statement is made. Summarising the transactions of the year, we find that we began with a balance of L 1,445,670, increased to L 1,458,195 by certain receipts, L 12.525 : that we expended L 410.729, including over L 28.000 for the purchase of Native lands; and that we had a balance in hand on the 31st March last of L 1,047,466, against which there were liabilities outstanding amounting to L 314.932. The following are the particulars of the unexpended balance : —Cash in the public account, L 322.978; cash on fixel deposit in London, L 30.000 ; temporary investments —debentures of the loan of 1870 guaranteed by the Impeiial Government, L 476.000; Westport Barbour Loan debentures, L 56.000; Gnymouth Harbour Loan debentures, L 5000; Consolidated S'ock debentures, L 15,500; in the hands of officers of the Government, L 54.014 —L959.492 ; available under section 31 of the Government Loans to Local Bodies Act, 1886, L 87,974; total, 1.1,047.466. It will be observed that included in the balance are debentures of the Westport Harbour Board for 1.56,000, and of the Grey mouth Harbour Board for L 5 00. It was deemed expedient to take up these debentures temporarily out of money’s at’ credit of the Public Works Fund, and other debentures of the same Board out of the Post Office Account, to enable works urgently required and in progress to be carried on pending full consideration of the whole question of dealing with the requirements of the respective harbours and the best means of obtaining the funds which might be deemed necessary, rather than, that the Boards should attempt to float their loans either in London or in the Colony. Iha Westport Board was authorised in 1884 to borrow to the ex’-ii ’ f 1.500,000, and has borrowed L250,t0u, of v i=h 1.150,000 is guaranteed, and was raided a a 4 per cent loan in London; and .LIO'V.OO, of which the 1.56,000 referred to is a part, has been temporarily advanced upon security of the like amount by the Post Office and Public Works Fund. The whole of these moneys are exhausted, and it will be necessary for the present to continue to make small advances from the Public lYorks Fuud, upon security of a further issue of debentures. The Greymouth Harbour Board has exhausted its borrowing powers. The authority was for Xj150,000, of which 1/100,000 was guaranteed, and raised m Liondon along with the Westport L150.00C. The amount borrowed has been all expended) and in

meantime it has been found necessary to make advances to the extent of aboutLsooo. Llie government have now under consideration certain proposals with regard to these two Harbour Boards, and an early opportunity of discussing them fully will be afforded to the Mouse.

GOVERNMENT LOANS TO LOCAL BODIES.. Up to the 31st March, 1889, the Ireasury had borrowed L 200,000 for the p u-pose of malting loans under the Government to Local Bodies Act, 1886 ; and last year further sums were from time to time. borrowed to the amount of L 50.000, making in all L 250.000 at the 31st March, 1890. The debentures issued for this amount bore interest at the rate or o per cent per annum, and mature on the Ist March, 1892. At the 31st March, 1889, the total amount advanced to local bodies was L 192.316, and last year the sums so paid amounted to 1.59,763, making a total of L 252 079, reducible, however, by L3BBO for refunds, etc., to L 245.199, leaving a balance in hand at the er.d of the year of LIBOO. At the 31st March, IS9O, the engagements of the Treasury in respect of these loans amounted to L 14,928, and applications had been received for Xj39,530 more, which had been granted cn the usual understanding that all the steps necessary to complete the security for the loans would be taken before any payments were made. At the Ist February, 1890, the amount of debt standing inscribed in the Treasury register, including the equivalent of the converted debentures issued by local bodies under the Roads and Bridges Construction Act. 1882, was L 328,950 ; and between the Ist February and the 31st March, 1890, further payments to the amount of L 14.752 had been made, which carrieu interest at 4 per cent, until the Ist February, 1891, when, with interest added, the amounts so paid would, in accordance, with the.provisions of the Act, be also inscribed in the Treasury register. With reference to sinking funds, the Government had continued the practice of issuing short-dated debentures until a fitting time arrived for their redemption by a 4 per cent, or per cent, loan, when Parliament would be asked to make provision as provided by the Act for the sinking fund.

ORDINARY EXPENDITURE FOR THE YEAR, 1890-91. X now come (proceeded Air IMitchelson) to the consideration of the expenditure and revenue for the current year. The estimated ordinary expenditure is L 4,127,417, full particulars, of which will be found in the estimates, which will be in the hands of honorable members this evening. With the exception of the Postal and Telegraph Department, salaries have been increased in very few cases, of which explanations will be given by Ministers when the estimates are considered in Committee, The aggregate increase which has taken place in the Post and Telegraph .Department amounts to L 5271. The Government have thought it desirable to classify the Post and Telegraph officials under a system which it is proposed to apply to the whole service, should the Civil Service Bill pass, which the Government will introduce shortly. The increase caused by the classification of the Post and Telegraph officials amounts, as I have just said, to L 5271 fur the current year; and before the several, classes have obtained their maximum, salary the total increase will be L 19.569. This will take between five and six years to accomplish. . That the maximum amount, however, will be reached by the time named rests of course on the assumption that no vacancies will occur either through death, resignation, or otherwise. But this is not at. all likely to be the case, and it may be anticipated that the total increase will tie considerably less than the sum named. This department, considering the responsibility devolving upon its officers, has, as honorable members know, been fur a long time underpaid in all its branches. The total proposed increase for the year in salaries is L 5271, of which L 4471 goes to officers whose salary is L2OO a year or undei In most of the classes of expenditure little or no increase has been made over the estimates of last year. I shall briefly explain the chief items of increase in the remaining classes. In education there is an increase of L6OOO. This is less than the amount wh;ch the annual increase of scholars for capitation would give. In the Native Department the increase of L 4.400 is entirely owing to the appointment of additional judges in the Land Court, and expenses of the Commission under the Act of last session. In working railways there is additional expenditure proposed of LIS,OOO. This arises from additional mileage opened for traffic, and the increased, cost of iron. In public buildings there is an increase of L 27.400, mainly for school buildings and a building for deaf mutes. In defence there is a small increase, but the Government are of opinion that the provision made is not sufficient for such a force as our defence works require, and it is the intention, of my colleague the Defence Minister to bring the matter before the House, and, if his proposals are approved, further provision will have to he made. In connection with this matter is the question of our contribution under the Imperial Act. It is possible that a payment may during the year have to be made on this account; but, as it is uncertain, I do not propose to ask a vote. The amount can only be small this year, and if anything has to be paid I propose to make the payment out of “Unauthorised.” Members will observe that there is a large reduction in the Postal and Telegraph Department. This arises from no provision bping made for the San Francisco mail service after the expiration of the present contract, and from other items, full explanation of which will be given by the PostmasterGeneral when the estimates come before the Committee. I much regret that the San Francisco service is likely to f .11 through for a I time, as the New Smith Wales Gov.-rnment have positively refused to join in the subs dy, an I I fear that there is small hope of the Imperial Government agreeing to pay for the conveyance of the mails to and from London and San Francisco. I cannot, however, believe that wa are likely to be long without a good steam service between Auckland and San Francisco. With reference to Mr Goschen’s proposals for the reduction of the postage to the Postmaster-General, when making his statement with reference to Hie mail services, will explain fully as to how the proposal can be given effect to without Joss of revenue to the Colony. Honorable memheis will be pleased to observe that the amount of tile proposed appropriations for the cm rent > ear is slightly lase than the amount v ned last year-the respective totals bring 1.1,98 !, 834 and L1,957,2.>7 — notwithstanding the fact that the Railway Commissioners require LIB,OOO more than they did last year, and that we propose.an extra expenditure of L 15,000 for school-build-ings and LBOOO for an institution for deafmutes. The total estimated expenditure chargeable against the Land Fund is L 116,557. This is less than the provision made last year by over LII,OOO. The reduction .is caused through rates on Crown and Native lands being no longer payable except in certain cases, the Act having expired on the 31st March last.

SCHOOL BUILDINGS AND THE PRIMAGE DUTY. Dealing with the revenue for the coming year, he first drew attention to the question of providing the necessary means for school buildings, and the provision required for lunatic asylum buildings, hitherto . charged against the balance of loan money originally set apart for the purpose. . He. went on : The question of locally charging, if not the whole, at any rate a part of, the cost of school-build-ings has been mooted from time to time, and the matter has been carefully considered by.the Government. We have come to the conclusion, however, that it would be very difficult with fairness to the several localities to make such a charge, and that it might seriously.injure our system of education in the country districts to do so. Yet we do not see our. way at the present time to charge the Consolidated Fund with the school-building vote as a permanent thing. We think the whole matter, wants further consideration, and are of opinion that it would be wise for the House to mako extra provision fur school-buildings, and also for lunatic asylum buildings, which I regret to inform the Committee are not nearly equal to the present requirements. This extra prevision should be made for a limited time only, during which period, I trust, the growth of our ordinary consolidated revenue will render it possible to charge these buildings against it, if Parliament shall determine that it is a charge which ought permanently to be borne by the ordinary revenue. The Government therefore propose to continue the primage duty for another two years for the purpose of providing funds. for school buildings and lunatic asylum buildings. The Government think that the time has arrived when, the Minister of [Education should have. more direct control over the vote for school buildings than has hitherto been the case, and we. shall ask Parliament to amend the law so as to enable the Minister to have an effective voice in determining what buildings are unnecessary. We think also that, wherever possible, future buildings should be of stone or brick in preference to wood. My colleague the Minister of Education will shortly, go fully into this matter, for the information of the House. THE REVENUE AND THE PROPERTY-TAX. With respect to the property-tax, he said : The Government have had under their careful consideration during the recess the question of the incidence of the Property-tax. The strong antagonism which seems to be felt against the tax in some important districts of the Colony Would alone have demanded an exhaustive reconsideration of the subject, and such a reconsideration the Government have given the matter ; but, I regret to say, without seeing their way to reduce, much less to abandon, the tax in the present state of our finance; our present necessities making it impossible for ns to forego any appreciable part of the sum now raised. That sum, it must be remembered, is estimated at no less than L 305,000 for the present year; and the practical .impossibility of obtaining anything like that amount from property in anything tike as equitable a way, and the great diversity of opinion amongst the members of the present Parliament, as shown in the discussion upon the amendments of the Act proposed by the Government, render it unlikely that it can be satisfactorily dealt with during the present session. The question of a change in the form of our direct taxation must be left to another Parliament. But it has to be remembered that, in one form or another, substantially the sum I have named must be found. In my last year's Financial Statement I submitted certain proposals to raise the necessary funds to extend the Otago Central Railway to Eweburn, and to construct the Puhipuhi Eorest Tramway. Unfortunately the House rejected those proposals when they assumed the form of Bills. The Government have had the question of these works again under their consideration —they still think 4 them of great importance, and that they should be executed—but, after the action taken by the House, they do not think it their duty this session to again propose their execution. The Government would have been pleased if they could have seen their way to make any proposal to reduce taxation. We are, however, convinced that it is impossible, to make any further appreciable reduction in the public expenditure unless we are prepared to largely curtail the public conveniences which are now enjoyed, and the absence of which would be felt a-3 hardships. I feel sure the inhabitants j of the towns will not give up their conveniences, and I fear, if the country people are | deprived of theirs, it will be another obstacle to the settlement of the country lands. It must also be remembered in reference to the reduction of taxation that there are services still chargeable upon the balance of the old loans for which provision must be made upon the consolidated revenue in the near future, if we are to keep a sound finance. But, although we do not find ourselves in a position to propose any reduction of taxation generally, the Government will make proposals with a view to give effect to the recommendations of the Mining Conference as regards abolition of the gold duty, and substitution of other revenue in its place. In ISB7 the Government proposed that T,40,000, the proceeds of ths L 400.000 shortdated debentures issued to meet the deficiency at the end of 1888, should be applied yearly to extinction of that deficit. It was found too great a strain on the taxpayer to do that, however, and the Government did not now see their way, either, to give effect to that proposal. He estimated that the total ordinary revenue of the year would be L 4.159,000 upon the present basis o* taxation. From Customs he expected to obtain L 1.480,000, from stamps L612.C00, from railways Li,080,000 ; the latter was the estimate of the Railway Commissioners, and seemed to him to be probably under the amount that will be realised. The estimated revenue from the land fund was L 96.600, or slightly over the amount received last year. ESTIMATED RESULTS OF TEE YEAR. I have said that, the estimated total ordinary expenditure for the current year amounts to L 4,127,417 ; the estimated revenue to L 4,159,000, to which I add the surplus of L 36,509 with which I have shown we began the year after paying off the balance of the deficit of 1j128,605. We shall, therefore, if our estimates are reilised, have a surplus of L 68.092, subject however to a deduction of 1,20,000 to which I shall refer presently, leaving an estimated surplus of L. 48,092, which, honorable members will agree, is not too large a margin to work upon, especially when it is remembered that supplementary estimates have yet to be provided for. SETTLEMENT OF CROWN LANDS. In the light of what he had previously said, the question how the funds were to be obtained for carrying on the settlement of the land—that was simply for the Survey and Crown Lands Departments and for making roads to render the lands fit for the occupation of settlers —was to be considered. It was estimated that, even witli only the present amount spent on roads, in the next two years a million acres would be taken up on settlement

conditions, and that probably considerably more would be occupied if greater facilities in the way of roads were given. How, then, was sufficient money to .be obtained for surveys and administration without unduly forcing the sale of Crown lande for cash, finding, as they did, that the people preferred perpetual-leasehold tenure ? . It seemed to him that, for a time at least, it must be borne by the consolidated revenue, and he should therefore ask authority for L 20.000 as a grant-in-aid for this year, that being the estimated amount required. He thought it best to take the required assistance in this way as a distinct vote, because it was most desirable not to run the risk of bringing the proceeds of land sales into the ordinary revenue, and it would naturally be inclined to drift there if they once charged the cost of surveys as ordinary departmental expenditure. It was clear that money for this purpose could only be obtained in one of three ways—from loan,, from the consolidated fund, or from the land itself. I he Government were not prepared to recommend a resumption of ordinary borrowing for this or any other purpose. It was clear that they could not spare the necessary amount from the consolidated fund. They must therefore fall back upon the land itself, if this could be done without a deterrent effect upon settlement.in consequence of the apparently enhanced price which our proposals involve. As the perpetual lease tenure was growing in favour, the cost to the Crown would in the first instance have to be provided by ths Crown, so that provision must be made for purchase of land, survey, and roading. The Government thought the land must be made to bear the cost, and that it could be done in such a way as not only not to retard settlement but actually to promote it. The general outline of the scheme for doing this was as follows :—A block of land, for instance say of 10,000 acres, is to be opened for settlement; the roads would be laid out, and the sections surveyed ; the cost of forming and metalling the main road through the block would be estimated and added to the cost of clearing and forming the district roads. The total amount thus ascertained suppose is L 5000; a rate under the Rating Act would then be struck over the block to cover that amount, less the present value of the thirds, as though it were a district raising a loan under the Government Loans to Local Bodies Act, and the County Council in which the land was situated would be asktd to superintend the execution of the work under regulations approved by the House. * liey should propose that in bush districts all road-making, excepting the first clearing of the main roads, should be offered to the settlers in the first instance, so as to give employment to them for the first year or two, when work is most required near his home by the small bush-settler. If this system was carried out he thought it would give great satisfaction and confidence to intending settlers by insuring the making of the necessary roads as they are required—the money being at call and depending upon no contingency—and enabling the small settler to earn a fair amount of cash at a time when he most needs such help. No fresh borrowing powers would be required if this plan met with the approval of Parliament, as there is ample provision under the Government Loans to Local Bodies Act; a slight amendment of that useful Act extending its provisions to land about to be offered for sale being all that is required, the purposes for which the advances are proposed to be made being identical with the purpose for which the Act was passed. No doubt it would be said that this was bort owing, and so it was, but for a purpose already affirmed by Parliament, and within the limit now fixed, the only difference being that the money would be provided at a more suitable and useful time. This seemed to the Government by far the simplest and safest way of raising the funds, and no strain would be put on the colonial revenue. It must be remembered that after this year the present arrangement of finding money out of loan for settlement could not be continued. L 262,600 had been found for this purpose, and tlie available loan balance would be exhausted by the end of the year. The Government had under consideration the question of any possible amendment of the land laws, with a view of still further increasing their efficiency in promoting bona fide settlement. They thought an amendment desirable, increasing the power of the Boards and the Minister to prevent dummyism, although, as tar as could be ascertained, there was in fact, little now practised; but, however little, it must be stopped. They were also of opinion that in bush districts, and where drainage is needed, it would be of material assistance to the settler of small means if the rent for the first two years could be postponed and distributed over the rest of the term, both In the case of perpetual leaseholders and de-ferred-payment selectors. A Bill to give effect to these proposals would be introduced shortly. PURCHASE OF NATIVE LANDS. On this subject he said : If the settlement of the North Island is to be pushed forward, provision must be made for considerable sums from time to time as opportunity offers for acquiring Native lands. Authority has been granted by Parliament to temporarily apply a portion of the loan for the North Island Main Trunk Railway to the purchase of Native land within the prescribed railway area, and about 759.431 acres of land have already been acquired, and much larger areas are now under negotiation. The Government propose to ask for L 125.000 more this year for this purpose from the same source ; and as honorahle members know, it is proposed by the sale of the land so purchased to recoup the loan the amount lent, and a separate account is kept of all sales made within the prescribed area. But there is a large quantity of Native land outside the railway area, which, in the public interests, ought to.be acquired by the Crown, and settb d. Hitherto funds have been piovided for thi-purpose by ordinary loan, but no attempt has been made by setting aside a portion of the proceeds to create a fund for further purchases. We propose to ask the House to cieate such a fund by setting apart a block of, say, 250,000 acres in the North Island, and by paying in future into a separate nccou t a certain peicent ge of the proceeds of all such lands sold for cash or deferred payment, and also of the rent, of such lands let on perpetual lease. This land has, in a . re, been handed over to tlie Crown Lands Department, and the balance of it has only lately been acquired. In the meantime, pending the disposal of the land set apart, it will be i necessary, for three or four years cert inly, io ' have cash available at the rate of about L 30.000 a year for buying Native land. This money will, of course, have to be raised. The Government will ask Parliament to authorise the Treasurer to advance it from the fund authorised to be raised under the authority given by the Government Loans to Local Bodies Act, the limit set by that Act being sufficient to cover all our requirements. . Some honorable members will no doubt think it would be better to ask for separate authority to raise tbii money ; but the Government will not ask for more borrowing power than they already possess, which they do not think it would be W to extend. There is, as no

doubt the Committee are aware, power given to the Government under the Loans to Local Bodies Act to raise money either in London or the co'onies. Up to the present time no debentures under this Act have been issued to the public, it having been found more convenient to invest our own funds in such debentures as have been issued ; and, although they bear nominally 5 per cent interest, the money does not really cost us more than slightly over 4 per cent. We should also have had some difficulty in finding a better investment for our funds. Should, however, the proposal I now submit be acceptable to Parliament, and as our Public Works Fund becomes exhausted, it may be advisable to make an issue to the public, and we think this can be done with prudence and success in the Colony. I think that we shall find no difficulty in disposing of locally such an amount as may be required from time to time at 4 per cent at par, if Parliament will, as we propose, allow an issue not subject to the property-tax. And if we can issue it at that price it will really be as profitable a transaction for the Colony as an ordinary short-dated loan raised in London. THE STATE AND PROSPECTS OF THE COLONY. The Treasurer referred to loss of population by emigration as an adverse fact that had been unduly magnified to our great disadvantage. Immigration had always exceeded deaths and emigration, but in 18SS there was an excess of 9175 of emigration. Taking the last three yeais’ quinquennial periods, that loss happened in one year only, but in the last period—from ISSS to 1889 —the net loss by emigration was 2416, a number composed of women and children, mostly children, in the proportion of 18 to 1. In adult males there was a net gain of 432. Considering that only L 1,640,300 was spent on public works during the three years ISB7-90 as against L 3,477,500 in 1884-87, the fact spoke volumes for the inherent attractiveness of the Colony to those who really knew it. He went on to say that this suggests at once the real difficulty, and its solution. We want the men and women of the Old Country and elsewhere looking for a new home for themselves and their children after them to know truly what this country is ; that, I firmly believe, would draw them here, and then we want to put them on the land. We may be certain there will always be a considerable outflow of population from this as from each other colony ; and this will be increased under any monetary depression. In the year I have named, 1888, the departures by sea from New South Wales were in round numbers twice as many, and from Victoria nearly three times as many, as from New Zealand ; while, of course, the departures by land from those two colonies would also be very numerous. It is on the other side of the account —the arrivals —that the unfavourable difference appears. We could well afford to let as many of our population go as New South Wales or Victoria if we could only attract as many as they do. In other words, we are ' again facing the great problem which has so often engaged the attention of the Committee and of Parliament, how, as I have said, to get those who would be glad enough to make a home here settled upon our land. Now, let us see what statistics will show us. I have had a table prepared by the RegistrarGeneral from the agricultural statistics, showing the agricultural holdings of one acre and over in extent for the last 15 years, beginning February, 1876. A study 'of it will, I am sure, reassure any persons who have doubts as to our very substantial and remarkably steady progress to February of the present year. In 1876 the estimated number of adult males was 115,553, and the number of agricultural holdings was 17,259 for that number. With, on the whole, a remarkably steady progress year by year, we find the number of holdings increased in February, IS9O, to 38,178, and the estimated number of male adults then amounted to 164,392, so that the proportion of agricultura l holdings to every 100 male adults had increased from 14‘S8 in 1876 to 23’22 in 1890—in other words, out of every 100 men in 1876, when the Colony was considered most prosperous, there were 14’S8 men cultivating land, whereas in 1890 there were 23£ so employed, Then, as to the nature of tlie holdings year by year, or, at any rate, period by period, we see a gradual diminution in the average size of the holdings, and the experience of the last year has shown us that the perpetual-lease tenure, as we now have it, is the tenure which gives most satisfaction to the public, enabling a settler to reserve the whole of any capital he may have for the purpose of establishing himself upon liis farm, instead of having to pay it away in buying his land. The industries also showed great progress, and tables in connection with them would be presented, from which it would be seen that the value of exported agricultural produce showed an extraordinary increase from L 588.022 in 18S7 to L 1,424,297 in ISS9. Another table would show that the large flock owners—those owning over 20,000 sheep—had increased from 139 to 152, or about 10 pier cent. ; the intermediate owners those holding between 10,000 and 20,000 —from 201 to 239, or nearlyl9 per cent. ; and the small owners —those holding under 10,000 sheep—from 6517 to 10,146, or 55 per cent. The frozen meat trade had assumed very large proportions, and was now a settled and important industry of the eon try. It had grown in value from L 19,339 in ISB2 to 1/783,374 in 1889, and was, undoubtedly, capable of practically unlimited expansion. As one of the indicat ons of the improving condition of the people it was gratifying to find, from the returns, a continued increase in the number of depositors and in the total amount deposited in savings banks. On the 31st December last there was in ail the savings banks in the Colony L 2,855,644 at credit of 110,480 persons, as against L 2,691,692 at credit of 103,046 on the 31st December, 18S8, being an increase of L 166.952 in amount and of 7434 in the number of depositors. Of the total amount deposited, 1,2,191,451 was in the Post Office Savings Bank, arid LC67,193 in the banks established under the Act of 185 S. Since 1856, when the total amount was 1,2.133,780, the dep f.ii.s have increased thus : L 273.995 in 1857, 1.283,9 i 7 in IKSS, and L1G6.952, as already stated, in 18S9. In total nurnb-r of depositor the inorsase from 91.293 in 1886 has been as follow-- 6200 in ISS7, 5550 in ICSS,1 C SS, and 7434 in 1889. The total number of depositors had increased from 84.488 in ISSS to 90,609 in ISS9. The increase in ISS7 was 4853, in 1888 4764, and last year it was 61 SI, so that >inc“ ISS6 the total number h is increased ' y 15 798 depositors. In each of the four yeais comprised in the table the number of depositors having sums not exceeding L2O to their credit was as nearly as may be three-fourths of the whole number : and that there had been throughout the four years a steady percentage of increase relatively in the number of depositors in each of the eight divisions in which they have been classed in the table. The average amount at credit of depositors in all the savings banks in the C lotiy on the 31st December last was 1,25 17s SJ. as against 1,20 2s 54 on the 31sfc December, 1888,

The Government Insurance Department Also continues steadily to grow and to maintain its popularity. The department in the last year issued policies for a total amount of insurance of L 751,255, which almost equalled the amount of new business done in 188 S. The sum of L 7573 was received as the price of annuities sold during the year; that was very nearly three times the sum received for annuities sold in the immediately preceding year, when the receipts were only L 2795. The total income of the department last year was L 298,710, being L 16,509 in excess of the income of the previous year. The amount of the accumulated fund at the credit of the office at the end of the year was L 1,582,447, showing an increase of L 129.969. The number of policies in force at the end of the year was 27,218, including 100 annuity policies, insuring L 7,326,129. The mortality statistics for the various colonies showed the per centage to be the lowest in New Zealand—9‘4o. With regard to registered friendly societies, the assets as at the end of 1888, were returned as of the value of nearly L 410,000. An increase of L 30,000 might be reasonably assumed s for the year, making, as at the end of 1889, a total of L 440,000, of which L 17,000 was deposited in the Post Office Savings Bank. The funds of other societies organized for purposes of thrift and registered under the Friendly Societies Act amounted, at the same date, approximately to Llo,ooo, and the funds of registered trade unions to L 6500. The Treasurer admitted that in spite of these signs of substantial progress what Is known as trade in its more limited sense was dull, and expressed his opinion thus as to the main cause : “I believe it is the practical abandonment of our long-continued practice of borrowing very large sums of money in the London market by the Government and private individuals that is at the bottom of our trade difficulty. We have long recognised in a vague sort of way that the difficulty is connected with the cessation of public borrowing, but few of ua have recognised the potent factor which the borrowing bj r private persons of outside eauital has been, and still is, in our financial condition. It may seem a curious and startling thing to say, but I believe it to be true, that the cessation of private borrowing in the various forms of credit given in London to our settlers has as much to do with the present trade difficulty as the cessation of our public loans. The subject is a difficult one, and requires close attention to master it.” He went on to place before the House the facts relating to our public and private borrowing : —I regret to say that we hn.ve no returns of mortgages, either local or British, before 1878. We find from the land-tax returns of that year that the British mortgages then amounted to L 10,123,000 ; in 1882 we see by the property-tax returns that they had increased to L 15,018,000 ; and that in ISSS they had reached their maximum of L 16,832,000, because in 188 S—the year of the last return made—they had fallen to L 16,205,000. I think it very doubtful if in IS7O the British mortgages reached more than L 3,000,000, but we will assume that they did reach that sum. . If this was so, then British capital was pouring into the Colony during the fifteen years from 1871 to 18S5 at the rate of nearly one million a year to assist private enterprise. But against this has to be set the interest paid upon this amount during the same period. I estimate that the interest paid upon these mortgages from 1871 to ISSS was rather over L 10,500,000, leaving a free balance during that peri d for expenditure within the Colony of about L 3,300,000. besides leaving our whole produce free ; but it will be seen that towards the latter end of the period the amount of increased debt was less than the interest which had to be paid in London : for instance, the additional debt on mortgage incurred between ISS2 and ISBS was, only L 1,800,000, and the interest paid was probably slightly over L 3,000,000. The large trade which had been carried on with the aid given by this borrowed money began now rapidly to contract, and nothing could stop that contraction unless private borrowing was to continue from the outside. But not only did no further borrowing outside take place, but since 1885 our outside mortgages have decreased by LG27,000, while the interest on them paid outside the Colony since ISSS to the end of last year was about L 4,000,000. This striking change in our monetary relations with London must of itself be still producing a large disturbance in our trade. I have made no mention here of our other private outside debts, amounting to, at the outside, L 8,000,000, but they, of course, are also being contracted, and tending to produce the same result. Leaving now the question of private borrowing, let us see what the Government have been doing in the way of loans on the London market for the last 20 years. Of the net proceeds of these loans during that period the Government has received and expended L 27,000,000, and the total interest and sinking fund paid has been L20,500,£00, We have therefore received of borrowed money about L 6,500,000 more than we have paid for interest and sinking fund during the period. The expenditure by Government from loan during the last three calendar years has been greatly reduced, and only amounted to L 2,570,000, while the interest paid was L 4,250,000 ; so that we find that at the termination of the three years ending 31st December, 1889, the Government.had. arrived at a very similar point in its financial history to that reached by the outside private borrowers in 1885 —the interest, in the case of the Government, 1 exceeding the borrowed money during the three years by no less than L 1,650,000. and for the last year exceeding it by Ll,ooo 000 We find, then, that the Government have remitted to pay interest for the lasc three years L 1,680,000, or at the rate of, say L 560.000 annually : the remittance last year being about L 1,000,090, owing to the reduction in the public works expenditure ; and the amount remitted, it must be remembered, is estimated —as in the case of private borrowers —after deducting all the incoming borrowed money brought to credit. But, beside the Government borrowing and the private borrowing, we must also take into account the borrowings of the boroughs and harbour boards. These amount to about L4,5.'0,000. These bodies have paid in interest about L 2,200,000 ; so that they have had, after providing the whole of their interest and sinking fund, say L 2,300,000 to spend upon their wo. ks. Summarising then what I have said, we find that the total amount borrowed under these three heads from 1871 to 18S9 may be taken as L 45,300,000 ; while against this, about L 33,200,000 has been paid away in interest and sinking fund, leaving about L 12,100,000 free money. The net result has therefore been that, from 1871 to 1890, the Colony has been able to u-*e as it liked the whole of the proceeds of its exported produce, and has had besides to spend L 12,100,000 of borrowed money, or on the average L 600.000 per year, the average gradually tapering off until for the last two or three years we have not had any free money coming in, but have had still, of course, to bear our full burden of interest. We have now reached a stage when Government and private borrowing in London has ceased, and we find ourselves in

this position : that instead of having the whole of the proceeds of our exported produce, and, say. L. 600,000 to spend as we please per annum, we have no loan money coming in, but we have to find from our exported produce L 3,250,000 to pay our London interest.

. . . . I think we have at last peached the full limit of the difference of exports over imports which our indebtedness to the Mother Country requires, unless we make up our minds to pay off the capital of our debts and are able to do so. It seems to me that we have now practically borne the crucial test, the heaviest strain that can be put upon us, if we refrain from further borrowing, and that we have shown our strength is ample to carry us through. From what I have said it is clear that, owing to the determinationof the people to cease borrowing, our distributing trade must be brought down to normal limits. Other causes were the disinclination of capitalists to invest in new enterprises, the practice of the banks of contracting that part of their business represented by discounts, the increased thrift of the people (as shown by the savings banks figures), and unreasonable competition, _ bad debts, and losses in consequence of business. Our prosperity mainly rested on the effective occupation of the land, and this again on our land laws. He thought that with the amendments he had proposed it would be very difficult to devise laws in a more liberal spiiit, or more likelv to promote settlement. The difficulty was. however, to open up the country by roads ; and where was the money to come from? No doubt settlement could be stimulated to a certain extent if Parliament was prepared to give material assistance and facilities for settlement to persons of the smallfarmer class possessed of limited means, but as far as he could judge, this class could not be obtained in any large numbers. It was worth the attention of Parliament to consider whether special settlements, such in some sort ns originally founded this Colony, might not be introduced at certain places; but the work would be one of some difficulty ar.d would require great care. The Government had had under careful consideration the fact that in parts of the Colony where no Crown land remained, there were blocks in private hands suitable for any subdivision required to make settlement closer. They thought the provisions of the Land Act, 1885, for t.be acquisition of land for village settlements, ought to be extended so as to cover the case of providing small holdings suitable as well for agriculture in its ordinary sense as for fruit-growing and spade industry. The Government intended to in ingin a Bid to make the necessary alteration ; but the principle of the Act—that no land shall be acquired without the owner’s consent, and no purchase valid until by Parliament —would be kept intact. RETROSPECT AND COMPARISON. This being the last session of the present Parliament, he should review shortly the financial operations of the Parliamf-nt. He referred to the retrenchment of ISSB-9, by which L 291.410 was saved, some members might ask How is it, if such large reductions have been made in the expenditure of 1889-90 as compared with that of ISB6-87, that the total expenditure for last year was L 4,243,761, while the total expenditure for the year 1886 87 was L 4,280,444, a difference of only L 26,353 in favour of last year? The increase of interest and sinking fund from LI 642,876 paid in ISB6 87 to L 1,897,603 paid in 1889-90 is the main reason; but the comparison was not quite fair, as the amount paid in 1886-S7 would have been L 1,676.320 instead of L 1,642,876. had not L 33.444 been thrown forward into the next year by conversion operations. The increased amount for interest and sinking fund was L 254.727. In respect of this increase, however, the present Government were only directly responsible for L 40,000, being the interest on the loan of Id ,000.000 authorised by this Parliament in ISBS. The balance of the increased charge arose from the issue of the whole of the loan for the North Island Main Trunk Railway ; from further debentures issued for the increase of the sinking funds—of which there are now outstanding L 939.054; from further debentures issued to provide loans to local bodies; and from debentures for the amount of deficit, outstanding on the 31st March, 188 S, which was funded, and sundry other small amounts. For these increases the Government were only so far responsible that they continued and had carried on cautiously the policy approved by more than one Parliament. But another question arises here, the answer to which seems to puzzle many people : it is, ■why so large an increase in taxation was required if such large reductions in expenditure were being made. The increase in taxation, notwithstanding the large reductions in our public expenditure, was rendered necessary, in the first place, because the recurrent revenue of 1886-S7 (that is, the ordinary revenue, excluding certain items which would not recur) was insufficient toeover the expenditure of that year by L 405.219, leaving out of the computation the interest, L 33.444 thrown forward, to which I have referred. These figures can be verified by any one who will take the trouble to look into the published accounts, and <he Financial Statement of the late Treasurer. The lion-recurrent items in the revenue of 185657 were, first the aid received from loan LI 18 912 ; then the released sinking fund, 1.104 767: difference —*iz, L 17.475 —ietween 1,37.859 the mu plus in the Ordinary Rev enue Account, with which th» year 1886-87 began, and L 20.354, toe deficit in the Lanu Kin d Account; and certain recoveries in the Laud Fond, 1.22.509; and to these had to be added the deficiencies with which the year ISSG 87 ended —1.92,293 in 'he Ordinary Revenue Account, and I 54,263 in ills J.aiid Fund .Account. These sums an onnt to 1.405,219 ; rind, excising the transactions of the tears XBS7-88 and ISBS-S9. that is the amount which Sn ISS9-90 we should have Lund deficient had the revenue and expenditure of 1886-87 as above revised been continued without alteration in 1889-90 ; that is to say. the expenditure of the year, exclusive of the deficit at the beginning, would have exceeded the revenue l-.y E L405,219. Next we have to take into account ■4954 727, the increased amount, for interest mul ’sinking fund paid in 1889-90 over that paid in 1886-87, which I have already explained. Further, we paid off 1.50,000 of the deficit of 1.128,605 at the 31st March, 1888, unprovided for. 3o that the total amount •which would have had to be made up in last year was L7'>9,9<6 ; but a’lnwing for the growth of certain branches of the revenue, .which is r.ow found to have been abort 1.103, 000, the amount required to balance the account was L600,94G. Aud the necessary equilibrium has been established in the first place, as I have shown, by reduction of expenditure to the extent of L 291,410, while, had the House approved of some other proposals the Government made, the reduction would have been increased by L 45.000 more ; and, secondly, by additional taxation, estimated to yield L356.0C0, bat actually yielding a little less, or about L 315.000 ; and, thirdly, by the ordinary growth of certain branches of revenue. By these means—that is, by economy, and additional taxation to about an equal

amouut, and by the ordinary growth of certain branches of our revenue —we have been enabled to turn what I have shown would have been a deficit on 31st March, 1890, of L606,94G, supposing the land fund was balanced by cash sales, into a surp us of L 115.114, afoer providing for all services chargeable against the ordinary revenue account and paying off Loo,oC(j of the deficit outstanding on the 31st March, 1888. This is a result of which I think the country. Parliament, anH, 1 hope I may be allowed to say, the Government have reason to be proud. He claimed that the Government had fully carried out what they promised in the Financial Statement’,of ISSS, namely :

Firstly : To see that our ordinary expenditure is reduced to the lowest practical point; and, this being done, secondly : To devise a means to raise sufficient revenue to prevent the recurrence of a deficit, and in doing this we must, as far as can be done without loss to the community at large, assist our local industries and manufactures; and lastly: We have to reduce the expenditure of borrowed money on our public works to a much greater extent than was proposed last session. Lastly, but not least in importance, lie pointed to what had been done in connection with the settlement of the land. The acreage per annum of all lands not .storal disposed of had been practically doub that of lands dispesed of on settlemen conditions more than doubled ; while the total cost of administration has been diminished by 27 per cent., so that it now stands at 4s per acre for each acre disposed of, instead of 10s per acre as formerly. The. total settlement-land disposed of during the previous three years was 700,006 acres ; during the last two and a half years it was 1,150,000. Even at the very satisfactory rate rats at which it was at present being taken up—about 450,000 acres a year—there was fully two years’ supply on hand. The increased number of agricultural holdings for the past year was 1000 in excess of the annual average increase of such holdings for the past six years. It was important to note that the proportion of selections voluntarily made under settlement conditions as against cash sales had increased from 4 to 1, at which it stood under the administration of the late Government, to 7 to 1 under that of the present Government; and that the present measure of occupation, the average area under all tenures, including small grazing runs (but excepting pastoral leases), was just 200 acres per selector. It behoved us on all accounts to see to the utmost of our ability that se’ llement was not anywhere stopped or starved for want ot roads. It concerned the Colony no less than the settlers themselves that settlement should be not only pussible, but prosperous! In conclusion (the Treasurer said) I will say that I have endeavoured, and I hope not unsuccessfully, to place before the Committee a true picture of the financial and general condition of the Colony. 1 claim to have shown that our finance is well under control; that, although we have borrowed largely outside the Colony, vve have—not of course in every case but on the whole —publicly and privately, invested our borrowed money so as to produce satisfactory results, as witness the material advantages enjoyed by the population generally, and the very large and increasing amount of onr exported products, which for last year were valued at L 9,012,008, or at the rate of Ll 4 14s 7d for every European man, woman, and child in the Colony. I have shown that the so-called exodus of our population is no exodus at all in the sense in which it has been used ; that the reduction of our public expenditure would account for a much larger number than have gone ; that the real cause of emigration being more than immigration has been not the increase of the former, but the decrease of the latter, which no doubt is largely due to our unfortunate habit of selfdepreciatiou, creating at Home the false impression, to which I have referred, as to our real condition. I repeat that the number of people leaving our shores during the year ISSB was in round numbers only one-third of those who left Victoria, the numbers leaving the respective Australian colonies during that, year being—New South Wales, 43,681 ; Victoria, 60,229 ; South Australia, 12,750 ; Queensland, 23,059 ; Tasmania, 17,936 ; New Zealand, 22,781. The problem therefore for our solution is not so much how to keep our settlers, but how to induce others to come. ) have shown the large increase since 1876 in the actual and proportionate number to the male adults of agiicultural holdings. I have shown that onr Crown lands are being settled in small areas at the rate of 450,000 acres a year. 1 have shown that the stagnation in outtrade arises partly from general causes, and partly from the contraction of expenditure in consequence of the cessation of outside borrowing, and that it will no doubt disappear as soon as, by reason of the great and increasing productiveness of our industries, our trade has assumed its normal condition. I have shown that our population, as a whole, is well and profitably employed. It is clear, therefore, that no heroic policy is required to set ns right. All we require is a steady pursuit of our present policy, of careful economy in the administration of our affairs, a Steady refusal to again resort to borrowing to make matters more pleasant, and a determination to net our waste land settled as rapidly and as well as possible, by offeing everv f ici’ity to (hrwe 1 mv among us who, rlissati.fi d wit-n toe pro: peel* in their present employments, a, e capable and desirous _ of sett.li goo the land, and by inducing the immigrnti m of a desirable class of persons to supplement tin-so already here. Put in afew last words, I wm d s y: Sober finance, extended settlement; incieased industries —these, with never-failing confidence in our future, will carry us prosperously on, and leave this land as a noble inheritance fur our children. (Cheers.) Mr B ALLANcrc asked when the discussion on the Financial 'ostemenr., which was a long and important one. would be token ? The Premier said he was willing to begin it on Tuesday. SUPPLY. An Imprest Supply Tiill for £2OO 000 (£150,000 Consolidated Fund and £50,000 Public Work« Knud) was Ir.troducsd and passed. A supply of £519 0 0 tor renewal of-deficiency bills was also passed. THE PRIMAGE DOTY. A formal recommendation having been received from the Governor to maae provi sion for the .primage duty, the Premier, in answer to Mr Mock, said a re olu* icc,. which was at once submitted, was simply to continue the primage duty for three months. Mr Hutchison protested that it was an imposition of fresh taxation, hut the Premier said the House could always decide what should be done In the matter. Mr Hutchison called for a division on the motion that the resolution be agreed to, but did uot persist-, and the resolution was passed. THE NATIVE COMMITTEE. Several motioas for committees were p«L and Mr Taipua objected fco the inclusion of

interested members on the Native Affairs Committee, especially Messrs Arthur and Kelly. The Minister agreed to postpone the motion till next day. Mr Fish supported Mr Taipua in a suggestion that South island members should also have seats on the Com. mittee, and Mr Hobbs retorted that South Island members did not care to be on it. He pointed out that the Native members were frequently interested. Mr Kelly, hiving made an explanation, Mr Arthur (who made hia maiden speech) spoke very vigorously in support of a contention that be had always acted honorably in Native matters, and that the Natives did not care to have an expert on the Committee. After a short discussion the debate was adjourned till to-day. The House rose at 10.35.