THE FINANCIAL STATEMENT.

New Zealand Mail, Issue 1169, 27 July 1894, Page 26

THE FINANCIAL STATEMENT.

THE SCHEME FOR ADVANCING CHEAP MONEY TO FARMERS. In the House on Wednesday night (July 25), in Committee of Supply, the Hon J. G. Ward, Colonial Treasurer, delivered the Financial Statement, of which the following is a lull summary Mr Guinness, —In inviting the attention of the Committee to the consideration of the financial position of the Colony, I desire to say that it will be my aim to place the same before you as lucidly as possible. _ I entertain the opinion that it is not, as is frequently said, the business of the Colonial Treasurer to attempt in any way to misrepresent the fio-ures showing the position of the finance of the Colony in order to make the results appear better than they really are. It is the duty of the Treasurer to state clearly, concisely and accurately what our financial position is, and my object will be to do this ; if I fail to succeed it will not be for want ot an earnest endeavour on my part so to do. CONSOLIDATED FUND (REVENUE ACCOUNT OF 1893-94). I need scarcely remind honourable members that the year through which the country has pressed has boen remarkable for heavy fall in the values of some of our principal products, accentuated by one of the worst harvests ever recorded in the history ot the Colony. In the face of this it would be not unnatural for many honourable members to anticipate a marked variation for the worse in the revenue of the year as compared with the forecast which it was my lot to give when placing my estimate before you last year. Under these circumstances it will, I am sure, be all the more gratifying to the Committee when I tell them that my estimate of the revenue of last year has been substantially exceeded by the actual results. The figures are —Estimated, <£4,546,700 ; actual, £4 653,038, or £106,338 more than the estimate. The stamps revenue] * contributed

the largest excess, namely, £ 15,947: then the Customs, £35,502; territorial, £13,059; and other heads of revenue made up a total excess of £11(5,584. On the other hand tlie railways fell short by £7,452, and marine and miscellaneous by £2,794, making altogether £10,240 less than the estimate. Although there was a shortage of railway revenue, the net estimated return from this source lias been very nearly reached by the saving on tlie estimated expenditure, thus : loss of revenue, £7,452 ; saving on expenditure, £G,197 : net loss of revenue on estimate, £1,255. On tlio expenditure side of the account a solid saving has been made. The estimated disbursements were put down at £4,460,547, while the figures brought to charge amount only to £4,386,359, or £74,188 less than was anticipated. In only one class of the annual appropriations has there been nny excess, namely, in the Department of the Commissioner of Stamps, arising from the large increase of business in tlie Lands and Deeds Registry Offices throughout the Colony. I rather doubt whether such a record of small excess on votes has ever occurred before : at any rate it says a good deal for the careful manner in) which my colleagues have authorised the expenditure in the departments committed to their care. Amongst the permanent charges the amount set down for payment of interest and sinking fund was overestimated by £16,001, arising out of the conversion operations, which cannot always be accurately estimated in advance. It is unnecessary to run through the various classes in which savings have been effected. The only one calling for remark is the Lands and Survey Department, which shows a saving of £10,297. This is due more particularly to tlie circumstance that some very large Native surveys could not be arranged for until the latter part of the year. A saving is also caused by the Native Land Purchase and Acquisition Act not having come into operation until the beginning of thqyear, as provision had been made for additional surveys under that Act. RESULTS OF THE YEAR 1893-4. The land fund, as a separate account, has been done away with. I am therefore now able to show at a glance the entire transactions of the revenue account of the Colony. This alteration has very much simplified the account, as it enables honourable members to see at once, in the balance, how much the actual surplus was with which the past year closed. We commenced the year with a balance of £283,779: to this add actual receipts amounting, as I have before stated, to £4,653,038, making a total of £4,936 817 ; .and after deducting the ordinary expenditure, £4,386,359, we had a gross surplus left of £550,458. These handsome results enabled me to transfer without difficulty the £250,000 which Parliament had decided should be devoted in aid of public works expenditure, leaving, after such deduction, a surplus of revenue of £300,458. Out of this amount, however, an additional extraordinary charge of £10,220 in connection with the purchase of the Cheviot estate was provided. Taking this from the £300,458 leaves an actual net surplus of £290,238 on the 31st March last. This sum, which is even better than the balance at the close of the preceding year, will, I am sure, strengthen our credit abroad and be hailed witli general satisfaction in the Colony. Every effort was made in the Treasury to pay the claims which had reached the department, and the statement of liabilities conclusively proves that vouchers have not been held back

The “ unauthorised ” charges for the past year will be found to have been much less than any submitted for the last twenty years ; indeed, I doubt if an expenditure under this head of only £11,585 has ever been beaten. 1 may therefore be pardoned for pointing, out how jealously and carefully the expenditure has been scrutinised and kept within the votes sanctioned by Parliament. TREASURY BILLS ACCOUNT. We were able to pay off during the year such Treasury bills as it was found necessary to issue from time to time in anticipation of revenue. The public works fund held at the close of the year 1892-93 guaranteed debentures of the Immigration and Public Works Loan Act, 1870, amounting to £120,000. The consolidated fund took up those debentures under the authority of the Public Revenues Acts, and now holds the £476,000 of guaranteed debentures, instead of the public works fund as heretofore. •PUBLIC WORKS FUND. Part I. The expenditure during the year was £333,300, which was less than that of the preceding year. This negatives the assertions which have been made that the cooperative system would force upon tlio Colony a large and uncontrollable public works expenditure. The receipts, including £250,000 transferred from the consolidated fund, amounted to £419,353, and, adding £177,606 brought forward at the beginning of the year, produce a total of £596,959. Deducting from this the expenditure of £333,300, we have a balance of £263,659 left towards meeting the expenditure of the current year. Amongst the receipts is the sum of £163,702, balance of released sinking fund arising out of the conversion of the guaranteed half-million issued under the New Zealand Loan Act, 1863, series 1915, and which was held by tlio Bank of England as an investment bearing 4 per cent, interest. Liabilities amounting to £214,742 are detailed in tho usual table. Part 11. The balance to commence the year was £152,943, to which was added a small receipt of £2428 transferred from part 1., and, deducting the expenditure of £76,174, there remained a balance at the close of the year of £79,197, subject to £28,866 of liabilities. THE CHEVIOT ESTATE ACCOUNT. The trustees in this estate have been finally paid the amount of the purchase-money, and instructions have been given to the AgentGeneral to include the £250,000 of debentures issued under authority of the Cheviot Estate Payment Act, 1893, in his preseut conversion operations, so that the ultimate capital cost to the extent of £250,000 will only carry interest at the rate of 3) per cent per annum. There is a balance of £13,527 due by the estate account to the consolidated fund ; and I shall probably ask the House for a vote for this amount. THE CONVERSION ACCOUNT. The ordinary details which accompany my Statement show that only three conversion transactions have been completed during the past year, namely, £400,000 debentures, due Ist March, 1893, issued under the Public Revenues Act, 1889, and to which I referred in my Budget Statement last year ; £500,000 of Imperial - guaranteed debentures issued under the New Zealand Loan Act, 1863, maturing in 1915 ; and a small parcel of £2OOO debentures issued under the Auckland Loan Act, 1863. For the complete conversion of these loans, including expenses, 3|- per cent, stock was inscribed at the Bank of England to the

amount of £1,038,180; and, upon the halfmillion guaranteed loan becoming converted; an amount equal to over £260,000 of sinking fund was set free. This, when applied in. accordance with the provisions of the law, enabled the public works fund to be augmented to the extent of £163,702, thus providing substantial assistance towards the prosecution of public works and the remunerative employment of our workpeople. To effect these transactions I may briefly state that £420,000 of 3| per cent, stock was sold to convert the £400,000 public revenues debentures, £616,000 of similar stock to uplift the guaranteed half-million, and £2IBO of stock to convert the £2OOO provincial loan. THE LOANS TO LOCAL BODIES ACCOUNT. Up to the 31st March last the sum of £545,167 has been raised for the purpose of granting loans to local bodies, and a further sum of £67,833 has been raised for the purposes of section 2 of tlie Government Loans to Local Bodies Act Amendment Act, 1891. Adding to these figures the amount (£89,800) created in respect of the debt of £59,878 8s 9d due to the public works fund for debentures issued under the Roads and Bridges Construction Act, 1882, afterwards inscribed, we have a jtotal of debentures created and issued amounting to £702,800, the proceeds of which have been carried into the loans to local bodies account. The disbursements to the same date have been as follow : £544,948 has been paid over to local authorities, and £67,833 to the Lands and Survey Department ; £89,800 has been transferred to the public works fund : leaving a balance of £219 of cash at the close of the year. The grants to local authorities continue to increase in the aggregate. For the year 189293 they amounted to £74,445, while last year they reached a total of £87,151. The necessities of new settlement in the North Island are accountable for the increase. THE PUBLIC DEBT. The gross public debt on the 31st March last stood at £39,826,415, showing an increase of £568,575 over the amount at tlie close of the preceding year. But £477,466 of this increase was by special authority, and consisted of debentures issued for purposes giving immediate returns. A further issue of £16,300 under the Naval and Military Settlers’ and Volunteers’ Land Act, 1892, took place, and additional claims under this head will have to be provided for during the current year. The accretions of sinking fund for tlie year show an increase of £84,398, after eliminating the amount accrued under tlie New Zealand Loan Act, 1863, belonging to the half-million guaranteed loan, tlie sinking fund of whiok passed into tho public works fund by process of law, after the redemption of Consolidated Stock Act, 1884, debentures. Tho net public debt on the 31st March, 1893, was £38,144,070, and oil the 31st March last it is stated at £38,574,491, or an increase of £730,421. during the year, which is explained by £568.575 increase of debt as before mentioned, and £246,244 of sinking fund of the loan of 1863, released upon conversion of the guaranteed half-million. Deducting from these figures the natural increase of the remaining sinking fund, £84,398 as previously stated, we arrive at £730,421, representing tlie net increase of tlie public debt. FINANCE OF 1894-95. Last year we asked for £4,460,547 out of the ordinary revenue of the Colony, but for this year I do not think we shall require more than £4,301,098. These figures show a net saving of £159,449 on last year’s estimates, notwithstanding an increased population entailing an increased expenditure. I will briefly explain tho principal items of decrease. Expenditure Under Permanent Acts. The largest sum—namely, £157,021 —is in tlie annual charge for interest and sinking fund. With the consent of the trustees of the sinking fund of the consolidated loan of 1867, it has been decided to alter the method of contributions, which are allowed to accumulate during each twelve months before the annual “ drawing ” takes place. After careful consideration and considerable correspondence I decided to do away with the charge for interest and sinking fund on bonds which had already been converted, and confine ourselves to making provision only for the bonds remaining in the hands of the public. After this jmar the charge for interest on the Consols will diminish in proportion as the debt becomes extinguished by the annual drawings ; under tlie former method it steadily increased year by year. The alteration in the method of charging interest on the Consols did not come into operation until after the first quarter’s payments of the current year under the old system had taken place : there will therefore be a further diminution of interest charged in connection with the 1867 loan when tho estimates for next year are laid before you. The charge under this loan for interest and sinking fund has been diminished by £182,957, and the conversion of some provincial and other loans increased the saving to £189,344. On the other hand, the interest charge has been augmented to the amount of £32,323 owing to the issue of additional 3£ per cent inscribed stoex, and to the croation of debentures for the purpose of satisfying the roading requirements of local authorities, and for the purchase of Native and private lands to be thrown open for settlement.

The total set down for the payment of permanent charges under special Acts will be found to be in excess of last year’s estimates by the sum of £8922, and this arises chiefly (with the exeeption of £IOOO under the Payment of Members Act) from increased prolusion having to bo made for the payments to local authorities of revenues which we are obliged by law to hand over to them. Departmental Expenditure. Passing on to the departmental estimates, you will find a saving of £21,311 in the Colonial Secretary’s Department arising out of the absence of the main cost of tho late general elections, and non-recurrent items amounting to some £BSIO, which were last year provided for in the miscellaneous vote. Savings amounting to £12,316 have been made in the estimates of the Treasury, Customs, Defence, and other departments. The Comissioners of Working Railways have been able to effect a saving of £9821 in their estimates. The reduced proposed expenditure of the ordinary annual departmental character as compared with last year’s estimate amounts to £43,418. But it is necessary to make increased provision for certain public services, such as education, postal and telegraphic conveniences, the survey of our lands, and other expenses, the. cost of which is certain to augment in a ratio with the increase of population and the necessities of the country. For such conveniences we have to pay an extra cost of £19,688 for postal and telegraphic services, £5282 for education, £2797 for surveys, and £2321 for police protection. Some smaller items, making up £l6l'), swell the total increases to £31,698, which deducted from the savings, as before stated, reduces our departmental estimates

for the current year to a net saving of ■£11,750 over those of last year. Estimated Revenue. I estimate the ordinary revenue for the year at £4,235,000, as against £4,262,200, the estimate for last year, and £4,368,538 of actual receipts. Although there was an actual excess of revenue over the last year’s estimate amounting to upwards of £106,000,1 have not deemed it prudent to take as a guide these increased receipts in estimating the current year’s figures. I prefer to err on the right side. Owing to bad harvest, low prices, and slight financial disturbances, the receipts from railways and Customs show a falling-off. If, then, there should be a disparity between the estimated and the actual results, the discrepancy will place me in no financial difficulty. No Colonial Treasurer should run the risk of having to announce a “ deficit ” —such a word should have no place in New Zealand Budgets. Having therefore considered that £4,235,000, or £133,538 less than last year, will be received during the current year, a few of the principal differences may be explained. In the Customs the estimated decrease is £55,503. Although our Customs duties have fallen somewhat during the first three months of the year, I do not think there is sufficient cause for any fear of the drop continuing. Stamps revenue shows a decrease of £36,648, but as the actual receipts last year were £48,947 in excess of the estimate, and arose principally from unanticipated death duties, I think I should not be justified in expecting a larger revenue than the amount set down. The contemplated partition of some large estates may reduce our income under the land tax ; I have therefore deemed it prudent to estimate only £350,000 from land and income tax, or £11,976 less than last year from all sources. In beer duty a reduction of some £IBOB occurs. The Eailway Commissioners supply us with figures showing a decrease of revenue amounting to £5548, and, considering the unfortunate collapse in the grain trade, the smallness of their estimated decrease shows their faith in an almost corresponding increase in other branches of their carrying business. “ Eegistration,” “Marine,” and “Miscellaneous” show a net increase of £1004; but “ Territorial ” has been decreased by £23,059, as my colleague the Minister of Lands is of opinion that it is prudent to provide for a decrease this year in consequence of the bad season. In addition to the above, the receipts for the year are aided by the creation and issue of debentures under the Consolidated Stock Act, 1884, for the estimated accretions of the sinking funds during the year. forecast, 1894-5. You will like to have a forecast of our position on the 31st of March, 1895, so I will gather together the figures I have been explaining, and re-state them thus : Estimated expenditure for 1894-95 £4,301,098 Estimated revenue 4,352,800 Excess of revenue over expenditure ... ... ... £51,702 It must not, however, be forgotten that we closed last year with the satisfactory surplus of £290,238. Our severest critics will not, I suppose, object to our bringing forward this surplus in aid of the current year’s transactions. Therefore, adding the surplus of £290,238 to the excess of revenue over expenditure for the year of £51,702, we arrive at a gross surplus of £341,940, out of which we propose, as before, to transfer £250,000 to the public works fund for construction of reproductive works, and in aid of the settlement of the land. Our net surplus at the 31st March next should be £91,940, subject to further reduction after the Supplementary Estimates have been provided for. PUBLIC TRUST OFFICE. The properties in the Public Trust Office at the close of 1893, and subject to wills and instruments of trust, had increased in number to 371 from 354, and in value to £543,238 from £442,671 at the close of 1892. In every branch of the business of this office there has been an increase; and the properties in the office of all classes at the close of 1893 were 2040 in number, of the estimated total value of £1,450,917. The Act of 1891, by wh ; ch the Colony guarantees the capital funds of estates in the Public Trust Office, as well as a common rate of interest on these funds, is bearing good fruit. The security of the capital funds will always be the principal consideration of those who may arrange a trust or make a will, and the larger the amount of the capital fund of a property the greater is the concern for security. I shall ask the committee for a sum of £340 in this year’s appropriations to meet the deficiency arising from bad and doubtful securities on which the capital funds have been lent of estates in the Public Trust Office.

The Natives show an increasing confidence that the lands which have been reserved for them will bo so administered by the Public Trustee that the owners will derive the greatest possible benefit. In the district of the West Coast settlement reserves, the distrust with which the Natives formerly, regarded every-proposal to make use of the idle reserves has disappeared, and opposition to settlement has given place to a desire that the reserves not necessary to the Natives for their own residence and cultivation should be leased for the purpose of the income.

An area of 17,600 acres of these reserves, which were idle and unoccupied, has been leased in 96 sections since the passing of tho West Coast Settlement Eesorves Act, 1892, and the survey of an additional area has just been completed of 9000 acres, which are about to be offered on lease at onco. From these new lands the income of the Natives has been increased by upwards of £I6OO, and the total income of the reserves from £11,600 to £14,300, which will provide an allowance of not less than £7 a year to every man, woman and child of the Natives who are interested in the land. And these Natives have, besides, for their own free use, a large area of some of the best portions of the land. GOVERNMENT INSURANCE DEPARTMENT. The accounts of the Government Insurance Department will show that it never occupied a stronger position than at the present time. The new business of the year was virtually £IOO,OOO in advance of the business of 1892, whilst the expense rate still further declined, and now stands lower than at anytime during the last eight years. After having made very substantial reserves, a cash surplus of £140,000 remained, and has been converted into reversionary bonuses, which have been added to the policies in force. The result of the triennial investigation shows the financial condition of the department to be unquestionably sound. The mortality amongst the policyholders continues to be remarkably light, and the sums assured, with bonus additions thereto, have now reached nine million pounds sterling. The funds steadily continue to accumulate, and at the close of the year to '' 4- ‘

THE DEPARTMENT OF INDUSTRIES AND COMMERCE.

Becognising the many avenues that well* directed efforts might discover for the advancement of our industries and commerce, the Government decided during the year to create a department whose special duty is to develop and further the interests of the industrial and commercial community of this Colony. The work of this department seeni3 likely to be of considerable advantage to the Colony generally, and, although still in its infancy, the work it has already done has proved the wisdom of its establishment. When a delegate was despatched to Canada to represent the Colony at the Ottawa Conference he was specially commissioned to obtain from every possible source data which might be of service in opening up trade with foreign markets. The Department of. Industries and Commerce will give publicity to those particulars, for the benefit of colonists.

DEPARTMENT OF AGRICULTURE. The work in this department has steadily increased, and the endeavours made to assist settlers by supplyinginforinationhave met with cordial approval. A very large number of specimens of plants, insects, &c., have been sent for investigation and report. A shipment of the Hessian fly parasite was received from Home, successfully hatched and liberated. Another consignment is expected. Dairying has continued to develop, and there were 178 factories and creameries at work last season, being an increase of 34. The increase in the output of butter was 10,838 cwt, valued at £31,943 ; but, on tho other hand, there was a decrease in cheese of 8949 cwt, valued at £14,922 ; the total output being:—Butter, 62,500 cwt, valued at£265,959; cheese, 37,363 cwt, valued at £83,017. Although these returns show a decrease in cheese, it is believed there was really no actual decrease in the quantity manufactured, but through some cause it was not exported till after the end of the financial year, as tho quantity shipped in April shows. . A very large quantity of fruit is annually imported into the Colony, and an effort is being made to supply local markets by improving our own fruits. POSTAL AND TELEGRAPH CONFERENCE. At the first Australasian Postal and Telegraph Conference held in New Zealand in March last, a resolution favouring the continuance of the San Francisco service was carried. , At a later period of the session the House will be asked to renew the service for another term of three years. Now that wool is to be admitted free into the United States —a great advantage to this Colony—the maintenance of direct steam

communication between New Zealand and San Francisco becomes the more desirable.

The question of establishing a CanadianPacific steam - service connecting Australia, New Zealand (the steamers calling at one main port m the Colony) and Vancouver, to alternate with the service via San Francisco, so as to secure to the colonies a fortnightly Pacific mai,-service, was also affirmed. Should it be practicable to secure such a service, Government proposes to recommend the payment of an annual subsidy of £10,090 for a reasonable term of years. THE CANADIAN CONFERENCE. Judging by the reports already received of the work done by Mr A. Lee Smith, both at the Ottawa Conference and elsewhere, since leaving New Zealand, I feel sure that his mission will result beneficially to our industries and commerce. PACIFIC CABLE. The Postmaster-General was authorised to guarantee a subsidy of £IO,OOO a year as New Zealand’s contribution to a Pacific cable. The Government is impressed with the advantages, both national and commercial, that would follow upon the establishment of the proposed cable, and will promote it to the utmost. Since the resolution of the Postal and Telegraph Conference was published, renewed interest has been manifested in this question. Two private offers have already been received to lay the cable under the conditions imposed by the resolution. SETTLEMENT OF THE LAND. The demand for Crown lands during the past year has been considerable, and the Lands Department has been kept busy to meet this. Over one million acres of land were thrown open for selection under settlement conditions and for cash sales, besides about one million seven hundred thousand acres for pastoral purposes. The whole of these areas were not taken up, for much of the land remaining in the hands of the Crown is of inferior quality : indeed, the want of good land to meet the demand for settlement is very pressing. Under the Land for Settlements Act, 1892, a good number of offers were received by the Government, and many of the estates were of a character which might with advantage to the State have been acquired and settled on. But still the limit of area with which lands acquired under this Act can be divided —viz., 320 acres —prohibits the Government from acquiring some of these properties which are otherwise desirable. It is proposed to remedy this defect by the Bill now before the House. The number of estates purchased was five, of a total area of 9113 acres, the total cost of which, including purchase, administration, roads made and yet to be made,

was £39,117 12s lOd, or considerably within the limit allowed under the Act. When the whole of the lands are selected, which will probably be as soon as certain road-works are completed, the estates will bring in a return of s'B per cent, on the expenditure. Through causes which have nothing to do with the Cheviot Estate itself, the cash sales have not equalled our anticipations, consequently larger areas have been offered for lease than was originally contemplated. The results up to the present time may be stated as follows : The total area purchased is 84,755 acres, and, with two reserves containing 600 acres of Crown lands, and 120 purchased on the boundary, makes a total of 85,475 acres. Financially the position is as follows : —Original cost of tho estate, £260,220 ; works and improvements, £22,250 ; or a total ef £282,470 ; deduct cash receipts, £35,921, leaving £246,549. As the land leased is bringing in a rental of £13,339, it follows that we are receiving over 5 per cent, on the £256,147, and still have to the good some reserves and township sites not yet disposed of. THE BANK OF NEW ZEALAND. Circumstances of an unusual character have recently caused prominence to be given to the banking institutions of the Colony. I take this opportunity of complimenting the House upon the courage displayed by its members —a marked characteristic not altogether unexpected —in dealing with a critical emergency. I refer to tho State guarantee which was given to the Bank of Now Zealand a few weeks ago. There have been many proposals urged from time to time for the creation of a State bank, and there have been many hopes expressed that such a State institution would sooner or latter be established in this Colony. I will not trespass upon the time of the House in inviting honourable members to say whether or not the creation of a State bank would have been a solution so satisfactory as many predicted. It would, in my opinion, bo undesirable for tho Government of the Colony to conduct the business of an ordinary bank. It would not be an easily-managed concern ; it would be open to some, if not many, abuses ; it would bo calculated to offer opportunities for things to be done which should not bo done. But a financial institution guaranteed by the State, supervised by the State, and controlled by the State must in the very nature of things bo a bulwark against extraordinary financial fluctuations calculated to impede the industrial and general progress of the Colony. Wo have now all the machinery necessary to enable the Treasury to control the note-issue, should this ever be

deemed desirable. We have now the necessary channel through which much of the important business that will in the future be carried on by the Colony may be more effectually and expeditiously performed. Tho Government are of opinion that neither of the other colonial banks will, as the result of the legislation giving tho Bank of New Zealand a State guarantee, be prejudicially affected; and tho Government are carefully watching matters, as they do not intend, nor have they any desire, to injure them. THE WORK OF SETTLEMENT. The great work of settlement in this Colony must be carried on vigorously. It has often been said, and I shall be excused for saying it again, that from the land the wealth of this Colony must come. In the Middle Island the best of the land is, as you'are aware, in the hands of private owners. Tho resumption of a portion of this land by the State is a necessity, and, to enable land to be acquired at fair value, the House will be asked to assent to an amount of £250,000 being provided for the purchase of private lands, and out of that sum the necessary expenses for roading, surveying, subdividing, and promoting settlement will be paid. For the important work of making roads and constructing bridges to open up lands for settlement, and for subdividing and clearing them, a further sum of £250,000 will be asked for. The Government feel sure that our fellow-colonists will recognise that, if the great and important work of obtaining and opening lands for settlement is to be gone on with, it is clearly incumbent upon them to meet the enormous demand which is daily being made upon them. LOCAL GOVERNMENT. Tho Government were very anxious to submit proposals this session to extend the powers of local governing bodies, and to dea 1 with the pressing necessity for reform iu the administration of charitable aid. There have been so many important matters affecting the welfare of tho country demanding the attention of the Government, however, that it has been found impossible to give effect to this wish. Many of the local bodies are financially in a very unsatisfactory state, and in order to assist them it has been decided to bring in a measure authorising them to levy rates upon Crown lands. From this source it is anticipated that they will receive about £10,090. POST AND TELEGRAPH SERVICE.

The staff of the Post and Telegraph Service is yearly increasing in numbers. The service is now classified, and it seems to the Government that it is desirable to establish a per-

manent appeal board to enable the officers to submit reasonable complaints from time to time concerning their positions. I will submit a scheme to enable this to be done. Under it the service will elect one representative from themselves to sit on the board, and the clref executive officer of the post and telegraph branches respectively will be appointed by the Government to the board. All appeals, after being dealt with by the board, will be referred to the Postmaster-General, whose decision will be final. As the work of repairing and laying _ cables for the carrying on of the telegraphic business of the Colony is yearly becoming of greater importance, it has been decided to have a cable-steamer specially made for this work.

ASSESSMENT OF LAND. It is a matter for regret that since I last addressed you concerning the business of the Taxing Department the country has lost the services of a valuable and faithful officer by the death of the late Commissioner of Taxes, Mr 0. M. Crombie. I do not propose to continue the triennial assessment of land, but in lieu thereof I shall propose a much simpler scheme, under which an opportunity will in the meantime be afforded for the redress of grievances which may exist under the present assessment. Thereafter particular districts of the Colony will be assessed at such intervals as circumstances require. The change will not affect the next collection of land-tax. LAND-TAX ON NATIVE LANDS AND MORTGAGES. It is also my intention to bring under the operation of the land-tax all interests of Maoris in lands leased to Europeans, and mortgages belonging to Maoris secured upon land. ASSESSMENT OF BANKS. I shall also submit a proposal which will place on a more equitable footing than heretofore the taxation levied on the profits of the banks doing business in New Zealand. The proposal will be of the most reasonable nature, and will be brought forward not so much with the object of obtaining additional revenue as of more fairly adjusting the contributions by the various banks under the income-tax. I am of opinion that we should adjust our system of taxation so as to hold out inducements to banks to bring money into the Colony for investment. ASSESSMENT OF FIRMS AND OTHERS. I have had under consideration a scheme, which I shall submit to the House, under which firms and individuals which have no representative in the Colony in a position to make the annual income-tax return on behalf of the principals will be reached, and it is by the aid of the Customs Department that the income-tax payable by these firms and persons will be collected. Owing to the difficulty experienced by the agents of foreign trading ships in making returns of income-tax, I shall also propose to reach them through the Customs in a manner which will be at once fair and equitable, and which will entail the least possible trouble on the agents. One or two other matters which require adjustment and simplification in the land and income-tax will be submitted and further explained when the Bill embodying these proposals is brought down. The provisions of the Bill mil not be retrospective, and will, I think, commend themselves to the House, my object being to simplify as far as possible, and remove any anomalies from, the system of direct taxation which has now been generally accepted by the Colony. THE MINING INDUSTRY. I am of opinion that further aid should be given towards inducing miners to settle on the land, and the construction of roads and tracks to open up the country in mining districts, and also that aid should be given towards prospecting, especially in testing deep levels. I believe that this would greatly extend the field for mining operations, and afford remunerative employment to a larger population than at present engaged in this industry. The question of proclaiming rivers and streams as channels for the deposit of tailings and debris from mining claims has received the attention of the Government, and I shall ask the House to make provision for the conservation of the interests of those engaged both in mining and agricultural pursuits, where the latter are affected by the streams, channels or tailings connected with the mining industry. PROMOTION OF SUGAR-BEET CULTIVATION. During late years the phenomenal success that has attended several important steps that have been taken in the exportati n of frozen meat,and in the development of the dairying industry, has more than ever impressed upon us the desirability of adopting wliat is generally known as “mixed farming.” A large and valuable field lies before those who are enterprising enough to embark upon the cultivation of sugar beet, and have the requisite knowledge and capital to enable them to be successful. It is but fair to assume that people would shrink from the possible loss that such a great undertaking might possibly cause to them, and I shall ask the House to agree to a bonus being paid, to the amount of ,£50,000, for the production of sugar-beet for a limited period. COAL MINES. In order to further augment the value of the coal mines in the Colony, the time has, in my opinion, arrived when the country should be prepared to pay an export bonus upon coal despatched to foreign markets. For the purpose of enabling a fair effort to be made in this direction, the House will be asked to consent to the payment of a bonus of 2s per ton upon 50,000 tons of coal if exported within twelve months from the Ist October next. The necessary conditions for this will be furnished in detail, one of which will be that the coal in question must be sent to foreign markets, viz., markets beyond Australia. ASSISTANCE TO FRUIT-GROWERS. The magnificent climate that has so often formed a theme of admiration of both residents in and visitors to the Colony makes me believe that advantage is not taken of the fruit-producing powers of this Colony to anything like their full extent. One of the causes which has hindered the successful production of fruit has been the free admission into the Colony of Pacific Islands, Tasmanian and Australian fruits. It would seem to me that, while we are protecting our industries and endeavouring to find fresh avenues for the employment of our people, those desirous of using imported fruit should be prepared to pay higher prices in order that fruit may be profitably produced here, and that a duty upon fruits which can be grown in the Colony should be levied for this purpose. Then, the railways, which have been made for the general use of the people, and for the primary object of developing the resources of the country, should be placed at the service of the fruit-producers at greatlyreduced rates. In that way fruit-producers living at a distance of, say, a hundred miles from a consuming centre could have their

fruit conveyed as cheaply as the more favoured 'producers living, perhaps, only 20 miles j distant. I am convinced that, while the imi position of a duty against the imported article i would restrict the use of outside fruits, such | a duty and a low railway tariff would give a great impetus to the industries of this Colony, and create such a local competition that it would be only a short time before better fruit at a low price would be at the disposal of the people. SMALL DAIRYING. Small settlers in various parts of the Colony have been greatly assisted by the carrying on of the smaller class of dairying business. The railways have not, to the extent which they ought, enabled this class of settlers to get their products at reasonable rates to the larger consuming centres. The Government are of opinion that the producers of such articles as butter and eggs, who are largely dependent upon the sale of these for a living in the larger centres, should have extended to them privileges similar to those which are suggested for the facility of the transit of fruit. The railways should be used for settlers of this class for the purpose of overcoming the disabilities arising out of distant markets, or of making it as desirable for settlers to live at a long distance from a town as to live where those now more favoured do, having selected an allotment closer to a city at an earlier date. I earnestly commend the above suggestions to the careful and thoughtful consideration of honourable members. RECIPROCAL TARIFF. I would direct the attention of honourable members to the policy which has so prominently characterised the neighbouring colonies for some years past: I refer to the policy of raising their tariffs. These increased tariffs have had the effect of limiting the outward trade of this Colony. I believe that a colonial reciprocal tariff entered into would confer greater benefits upon Australia than upon New Zealand. But, in order to enable friendly commercial relations to exist betwixt the colonies, I would, at all events, favour a tariff treaty being entered into with any of the colonies that would agree to exchange their products with us. I do not believe in a policy of retaliation, but at the same time I am of opinion that it is unwise to stand by and allow the present state of affairs to continue without looking to our own interests and conserving our own industries. If the gold and specie which was exported from New Zealand to Australia is not taken into consideration the balance of trade last year was greatly in favour of the other colonies. Their importations to New Zealand during the year 1893 exceeded our exports to them by the sum of £422,734, exclusive of gold and specie. FOREIGN COMPANIES’ DEPOSITS. It will, I think, be generally conceded that it is the duty of the Government to see that locally-established institutions are not made to contribute more to the taxes of the country than rival institutions, which I will, for the sake of distinction, term “ foreign companies.” With this object m view I will ask the House to assent to proposals for the conduct of the business of foreign life assurance, foreign fire and marine insurance, and foreign accident assurance companies carrying on business in this Colony. I will ask that foreign life assurance companies should deposit with the Public Trustee the sum of £50,000, either in money or in approved New Zealand securities, or partly in one and partly in the other; and that foreign marine and fire assurance companies should similarly deposit £20,000, and that accident assurance companies should likewise deposit £15,000 ; each deposit to be made within six months of the passing of the Act. Upon a cash deposit the rate of interest to be allowed will be 4 per cent. only. STAMP DUTIES. My colleague the Commissioner of Stamps has had under consideration the disparity that has existed for some time in the stampduty charges on marine insurance policies in this Colony and in England. In his opinion it has had the effect of transferring to England a large portion of the business that should have been carried on here, and a consequent loss of revenue has resulted. I therefore propose that our stamp duty should be assimilated to that of England, and you will be asked to agree to legislation giving effect to this proposal. I may mention that the British rate is 3d per £IOO, while that which has existed here has been Is per £IOO. I anticipate that this change will add to rather than diminish the revenue from this source. TARIFF. I intimated last year that it was ‘ ! inadvisable in an expiring Parliament to attempt to deal with this large a.nd important matter,” and I said it would be necessary “ in the first session of the new Parliament to deal with the question of the tariff in a thorough and comprehensive manner.” I fear that the number of things to be considered by the Tariff Committee may prevent their reporting in sufficient time to enable the Government this session to deal with the matter in as exhaustive a manner as they consider the importance of the subject demands. NATIVE LAND PROPOSALS. That so much of the vast areas of Native lands in the North Island are unoccupied has militated very greatly against that important part of the Colony. My colleague the Native Minister will submit a Bill to Parliament this session which will tend to remove this most undesirable state of affairs. The object of the Bill will be to consolidate the provisions of the several Acts affecting Native lands and Land Courts ; to enable the exchange of lands between Natives. Provision will be made for the transmutation of the tenure of freehold lands held under the Native custom ; for facilitating the settlement of blocks of land owned by large numbers of Natives; for the incorporation of Native owners ; for entirely dispensing with applications for rehearing, and the attendant costs thereon; for the appointing of a Court to hear appeals, the decisions of which Court shall be final and conclusive; and for prohibiting private dealing in Native lands. With the removal of these difficulties —by giving fair value to Natives for their land, and by insuring good titles to the land—it is contemplated that a large area of Native land will be offered to the Government. To meet this, and to road the lands and to put them in a position for beneficial occupation, the sum of £250,000 is considered necessary. FINANCIAL AID TO SETTLERS. There has been no little controversy upon the question of providing cheap money for the use of settlers in this Colony. Many schemes have been propounded, and various ideas put forth. The Credit Foncier system has been advocated. The establishment of a State bank lias been urged. The issue of paper money has been suggested, and many other i proposols have been made. As the result of very careful consideration, I have come to the conclusion that none of these methods would immediately enable the Colony to ! obtain the great advantages which necessarily will follow the flowing into it of money to

be utilised by settlers at a low rate of interest. The first essential to the successful introduction of money into the Colony is to give an assurance to those from whom it is obtained that their loan is safe. Under the proposals which I am about to submit to you, it will be conceded that this important point has been provided for. I propose, on certain conditions, to ask the House to assent to legislation authorising the raising in London of a sum not exceeding £1,500,00(1 per annum, to be advanced, to settlers in this Colony on freehold security, and I propose that 31 per cent, inscribed stock be issued from time to time to provide the requisite amount. It may not follow that in the course of a year the whole amount named will be raised for the purpose of advances. If, for example, approved loans amounted to £50(),000, then inscribed stock for this sum only would be issued. After careful consideration, it seems to me to be infinitely the best plan to obtain the money directly on behalf of the Colony, and for the Colony to hold the securities against the advances that may be made. The greatest good will in this way be conferred upon those requiring money at low rates of interest. It is intended that a lending board should be set up, with certain defined powers. To stipulate that these advances should only be made upon a 50-per-cent, valuation would, in my opinion, entirely neutralise any general good that the scheme is intended to confer. lam of opinion that land values have generally in this Colony reached their minimum. There are, of course, exceptional cases where owners adhere to higher values than the land is really worth; but I think I am right in saying that land may not in the future be expected to further depreeiato in value, and as population increases, and the country becomes settled, the acreage value ofland, now at bedrock, must show a tendency to rise in proportion. I believe that, with a lending board and a proper system of valuations, it will be quite safe to authorise the board to advance up to two-thirds of the value of the security. It is not intended by the Government that a large profit should be made out of settlers. A margin of 11 per cent, will more than cover ordinary expenses, and will provide the basis of an assurance fund. The scheme is a comprehensive one, and it has, I think, the merit of being safe, practicable, and sound. I can with confidence commend it to the careful consideration of members on both sides of the House, whose co-operation I ask in assisting to solve what is admitted to be one of the most difficult and at the same time unavoidable problems that it has become necessary to deal with during, late years. The country must have a plentiful supply of money. It must not be dependent upon the whims of investors, who in the past have made use of it just as it suited them, and too often have shown, unfortunately, a desire to withdraw their money without reasonable cause, thus creating embarrassment, and in many cases sad distress, among those affected. THE MONEY MARKET. It is generally admitted that there has been what is termed a tightness in the moneymarket in this Colony for some time past. Various reasons may bo assigned for this. Without discussing hero the causes, I may say that, in my opinion, mone.y in this Colony will before long be plentiful, and that with an additional supply a drop in interest-rates may bo expected. It seems impossible for the vast accumulations of wealth'nowbeing hoarded up to continue long without being remuneratively employed. With this belief I some weeks ago notified the various departments which are in the habit of investing portions of their funds with the Treasury that, for the future, no investments will be made at a higher rate than 4 per cent. Dear money is not a good thing; on the contrary, it brings in its train many evils. No country can enjoy solid prosperity if rates of interest are ruling high. 1 feci satisfied, from a careful study of the causes that have conduced to the tightness of the money-market, that our colonists may now look forward hopefully to a relaxation in this direction. THE THRIFT OF THE PEOPLE. Members are aware that former Governments have from time to time given much thought to the best means of assisting our fellow - countrymen in their laudable endeavours to save and lay by for the proverbial “ rainy day.” My colleagues and myself cannot be accused of any want of energy in this direction ; indeed, we think we can point with pride to the many benefits it has been our good fortune —through the Legislature—to bestow upon our fellow-workers. The Post Office Savings Bank, it is recognised, presents a thoroughly safe, and in the large majority of cases a singularly acceptable, channel for depositing the surplus moneys of our wage-earning and trading classes. But it has been felt for years, and is further proved by our periodical bank returns, that, if further conveniences were afforded to the people for the investment of their saving-3 under the guarantee of the State, a large number would be only too glad to avail themselves of the opportunity. Some form of security would be welcomed whereby at a minimum of trouble people could avail themselves of the State guarantee coupled with a fair rate of interest without limit of principal, and upon terms which would enable them to deal with their security as easily as with a bank-note.

With this object in view, the Government have determined to create colonial Consols. A Bill will be introduced for the consideration of the House embodying what the Government believe and hope will contain only simple machinery to enable the (hriftof the people to be safely secured, and at the same time to provide facilities for the realisation of the investments when occasion requires it. We propose to take authority to inscribe Consols to the amount of one million sterling. Savings will be received and inscribed at par in any sum from £5 upwards. We have decided that a rate of interest not exceeding 4 per cent., payable half-yearly, will prove a sufficient inducement to the public to largely avail themselves of this form of security. In order to make the scheme thoroughly popular, we shall utilise the money-order offices of the General Post Office throughout the Colony, so that moneys can be received for inscription at these offices, and the half-yearly interest thereon likewise paid at any office the lender desires. As a further facility to those of the public who may choose to invest their savings, means will be devised whereby they will be able to have their moneys transferred, should they so desire it, to a negotiable interest - bearing document. These would always command at least par value in the , pen market. If the thrifty public choose to avail themselves of the facilities offered by this mode of investment, there is no doubt the Government will be able to use these funds most advantageously in promoting the development of the country. I am aware that the scheme I have simply outlined is in the nature of an experiment,

and it is possible that its advantages will require to be gradually understood, but I feel convinced that the proper time has arrived to offer a form of investment which absolutely meets the essential requirements of perfect security, coupled with a fair rate of interest, placed within the reach of every individual throughout New Zealand. Under any circumstances, should the public avail themselves of this method of investment more freely than I anticipate, the issue will be limited to not more than £500,000 during the present or next financial year. PRIVATE SAVINGS BANKS. The Government have carefully considered the question of allowing private savings banks to continue as separate institutions. I think it will be generally conceded that, where the Colony offers such facilities for the investments of the people as at present exist under the Post Office Savings Bank system, together with the proposals which I have now had the honour of submitting, no particularly good object will be served by their continuance. Legislation will therefore be submitted to prevent any new private savings bank from being established, and to provide machinery for the absorption of the existing ones. The existing institutions will not bo pressed to wind up, but I hope the advantages of the proposed system will bo sufficient to induce them to avail themselves of it. It is only fair, in the opinion of the Government, that no loss should result to depositors and others who may be interested in these banks should any action be taken in the direction indicated. OLD-AGE PENSIONS. The question of old-age pensions, which for many years lias been before the English public, still remains unsolved. The objections which present themselves to any and every scheme propounded in England apply with more or loss force in Now Zealand. The grant of a State pension to all arriving at a certain age would not only necessitate a greatly-increased taxation, but would also add disproportionately to the burdens of those least able to bear such increase. If the pension were to be granted to those only who could prove need, it would be difficult to separate the recipients from the non-recipients without injustice and without discouragement to thrift. Nevertheless, the aims of the friends of the scheme are so high and noble that they must have the warmest sympathy of all humane minds. Members are aware that a Select Committee is now sitting to consider this subject, and it is hoped that they will be able to make some practical suggestion. CONCLUSION. I am not egotistical enough to suppose that the history of our finances and our proposals, as outlined to you in the foregoing, will receive the approval of everyone. The opponents of the present party in power will exercise their ingenuity in an endeavour to point out what, in their opinion, are defects or blemishes. This is as it should be. Healthy criticism does good. I can say, however, that my desiro has been that the true financial position of the country should be placed before you as clearly as possible, and without any attempt at concealment. Difference of opinion we may have upon matters of policy. Varied views, doubtless, will exist upon many of the proposals contained in the Budget. I feel sure, liow- >• -ei% that whatever differences may exist, we can at any rate unitedly congratulate ourselves upon the excellent position that the Colony stands in at the present time, recollecting as we must that during the last few years there has been a series of financial upheavals throughout the civilised world. These have disturbed trade and commerce, and through them have reflected upon every occupation. To such an extent has this been the case that thinking men may be excused for wondering how it is that our little Colony has withstood the storm so well. Though we have had our troubles, he would be an unpatriotic man who would say that we have not to a marvellous degree steered clear of the shoals that upon all sides for a time beset us. Everv colonist should be proud to know that, in the face of abnormally low prices and a bad harvest, and notwithstanding our trials and difficulties, our resources, so great and so varied, combined with the industry, thrift, and determination of our people, have enabled us not only to hold our own against the wave of depression that has so injuriously affected many other parts of the world, but to so forge ahead in material wealth and prosperty that we to-day occupy the strongest position financially of any country in the Southern Hemisphere. Our position is sound. It has in the past been a characteristic of our colonists to overcome all obstacles which stood in the way of progress, and the same undaunted energy and perseverance may in- the future be relied upon to further raise the good name of the Colony.

I feel sure that the proposals which the members have so patiently listened to will prove an immense advantage to the Colony. They are destined to give an impetus to trade, and will, without doubt, assist in the development of the industries and commerce of New Zealand. The Hon Mr Ward resumed his scat amidst cheers from both sides of the House. THE FINANCIAL DEBATE. In reply to Mr Mitchelson, Mr Ward said that the Government would be willing to take the financial debate on Friday or on Tuesday, as the Opposition wished. Mr Mitchelson suggested Tuesday, and the Colonial Treasurer agreed to that day.