THE New Zealand Times (PUBLISHED DAILY). TUESDAY, APRIL 22, 1890.

New Zealand Times, Volume LI, Issue 8970, 22 April 1890, Page 4

THE New Zealand Times (PUBLISHED DAILY).

TUESDAY, APRIL 22, 1890.

With vihieh are incorporated (he Wcihvgiui. Independent, ettahliehed IS id, and the Nev Zealander,

THE COLONIAL FINANCES.

It was our fortunate lot on Thursday last to place before the public the most favourable and cheering information with respect to the condition of New Zealand's finances and trade that this Colony has ever yet been able to offer. It was not alone the fact that the official balance-sheet for the year showed a surplus. That in itself might not have possessed great sigui ficance. Surpluses have been annßunced by Treasurers ere now which on investigation turned out to exist only on paper through astute manipulation of' the accounts. On <thepresent occasion, however, it has bedn, clearly proved that such a process was impracticable, even had there been the slightest inducement to resort to it. Under the system now pursued liabilities cannot be wilfully held over in order to swell a surplus. This, indeed, has been frankly admitted by a leading Opposition journal. It is one very satisfactory feature of the position that no sensibh or intelligent person, whatever his political opinions, can, without exposing hmself to public derision, attempt to dspute on this score the existence o! the surplus The surplus is an eitablished and agreeable fact. But in addition to this satisfactory report of the colonial finances we were able lo announce the remarkable news that the value of the exports for the year hid amounted tn 9f millions sterling and showed the extraordinary ncrease of a million and a halt sterling in a ’single year, being moreover 3* millions in excess d the import, notwithstanding that the. latter had increased during the year. ' No English mail has hitherlp taken Home such cheering and encouraging news respecting the position and prispects of New Zealand as that whicV went by last Saturday’s po»t via Sa» Francisco. 1

There are two or three pointi of in terest in connection with the figures published in our issue about which it may be worth while to offer a few explanatory the first place, among tte items of revenue is one whMi may puzzle some readers ; —“ Sinkng-fund debentures, L 275,200. w At irst sight it may seem strange that such an item as this should appear aapng the year’s receipts. The - emanation, however, is very simple. Tie sum in question is in reality enterd on both sides of the account; bejnf included in the expenditure entry “ Interest and sinking fund, £1.89,602.’’ It will be remembered that it 1884, Sir Julius Yogel carried an At vijtually discontinuing the further payment of sinking-funds. This payient could not be absolutely abolisbd, but the Act provided that debentces might be created against each year! successive accretions to the fund, aid that the proceeds might be usee in aid of revenue, a practice whih has ever since remained in force The system of providing silking - funds for the gradual extinctin of public loans is not, nowaday, generally favoured, by leading finanial authorities. It is found needlssly burdensome, because so much bore money has to be raised by taxatin over and above the amount of th annual interest, while, usually, t 6 _ indebted colony is going on borrwing afresh at the same time that it i thus laboriously paying off, by instalients, an old loan. Had it been cmpulaory to pay over to the Sinkiq Fund the

£275,200 in question which was raised by taxation—instead of merely paying it in with one hand, as a matter of form, and taking it out again with the other—nearly £200,000 more would have had to be extracted from the taxpayers’ pockets by means of additional taxation. As it is the money is raised according to law, but it is immediately reclaimed by the Consolidated Fund, and so it is sst down on both sides of the colonial balance sheet. Nobody suffers, and the taxpayer is substantially relieved.

Wi‘h respect to the question whether the Primage Duty can properly be included in the ordinary revenue, we have already shown clearly that this is a perfectly regular and proper proceeding. It has been argued that the duty was imposed for the specially-expressed purpose of paying off the balance, £128,000, of the floating debt left by the Stout-Yogel Government. This is inaccurate. The duty could not be levied for the purpose of “ paying off ” the debt, inasmuch as it was only pro posed to be levied for two years, and was estimated to yield but £116,000 in that period. So it could only go toward paying off the debt, the balance having to be found out of the ordinary revenue. In other words, the Primage Duty was to aid the ordinary revenue in order that a surplus might be created, which, if Parliament pleased, might be used in extinguishing the debt in question. It has served its destined purpose of assisting to create a surplus—having contributed £55,000 toward this year’s surplus of £115.000 —and in all probability that £55,000, together with another £13,000, from other revenues, will be taken out of the surplus to pay off the outstanding balance of £78,000. But the Primage Duty was not specifically imposed for that or any other expressed purpose. The Treasurer in his Budget speech said he should ssk the House to impose the duty to aid in paying off the debt, but it was imposed without any such restriction of appropriation. The House left itself wholly free to appropriate the proceeds for any object that might seem suitable, and they could be devoted next session to roads or schools or railways. The Government cannot appropriate the duly. They can only make proposals to the House, and the House is free to deal with the matter as it pleases. Parliament resolved to raise this sum over and above the requirements of the Colony’s regular expenditure, in order that it might be better able to pay off that floating debt. Had there been a deficit, the Primage Duty, as a matter of course, must have been absorbed. As it is, there is a balance to the good of which less than half is furnished from this source. There can be no doubt whatever that the proceeds of the Primage Duty are moat legitimately included iu this year’s surplus, and it ought to enhance the moral influence of the sur plus on New Zealand’s credit abroad that there js a practical consensus of opihidh in favour of applying that surplus in the first instance toward the extinction of the unfunded balance of the Colony’s floating debt.