FINANCIAL STATEMENT.

Oamaru Mail, Volume XVII, Issue 5315, 1 July 1892, Page 3

FINANCIAL STATEMENT.

(bt telegraph.) Wellington. June 30.The Colonial Thwmrer (the Hon John „ delivered his Financial btatcin Committee of Supply of the gb«e of Representatives this evening as fo v*Bccs-— 1 am S lad to bo :lWe to con " tnL-ite the Committee upon the result 1 t rear's figures in connection with i nhnarv revenue and expenditure of t ° fnnv * The figures express, in terms tvfc nniiot fail to he understood, that ifcfflendin? power of the people has in--pd and that a more widely diffused prevails than has existed for a £ time previously. I shall allow them to tell their own story. rnVSOUDATEI. FoD-ORDEfAKV REVENUE L account. p«enne and Expenditure of the V'car 116 IS9I-02. Table No. 2. n.o -"venue for 1891-92 exceeds the JSte'by L 57.237 16s Gd. The estited revenue from ordinary sources was % down in last year's Statement at riOSSSOO, to which had to be sul.se«„tlv added LSOO, tax on totalisator u ts and also L 282,300 from delienLotted for Sinking Fund increases ZL the year. These figures give an Stc<l total of L4.273.8CW. The rcrne actually received amounted fu 361,087 10s Gd, or L 87.257 IBs Gd more than was estimated. In the tables ■rtfocbed hereto will be found details of v.. jevenue tinder the various heads as -jrfaallr received, compared with the estiL Tjje principal items of excess were : Customs, L 00,271; railways, t - r/n) - miscellaneous, L 4,804; and Pro„''tTT'ix excesses, L 4.326. On the other Cj, st ,mips produced 1,14.050. beerduty t»3)2, anil depasturing licenses L 3,004 , "revenue than was estimated. Passing „n to the ordinary expenditure of the mar, the estimated charges, after provulfor the Supplementary Estimates, .mounted to 14.219,532. The actual exI oS n(litnre was, however, only 14,192,94/ I fi<s(f,or L« 554 13s 7d less than was estiI anted- jKirticulars connected with I e5» expenditure will be found in the I tables annexed, and also in the annual I joppipriation account. I may be perI however, to refer briefly to some I „f the hrger items shown in the tables. I Interest and Sinking Fund was underspent I &vU7,3SO, owing principally to an ovjrI estimate of the amount required for payI Bent of interest on 3A per cent, stock I jnd en debentures issued under The Go- ■ eminent Loans to Local Bodies Act, I iStj. Subsidies to local authorities were I orer-estimated by L1T,239. the local I Mies not having put in their applica- ■ fens to the extent they did in the preI ratis wir. The Ministers of Mines and I Lmds have effected a saving of L 7,531 on I the votes under their control, principally I Mile in the stock branch, and in the De- ■ a saving of L 6299 has B fen effected, of which Police contributes ■ [i2TD. Other departments, deluding ■ t ' M civil list expenditure, contribute small ■ jjrjjgs amounting altogether to L 13.036. ■ Ugefigures produce a total expenditure fetkn the estimate of L 61,448. L nder ■ :' :e Permanent Acts, there has been an esessof L 23,076 arising from ail undergimateof amounts payable to Harbor Ms and other local authorities, and of fesnnwnt of compensation payable to »atH3 of the civil service for loss of ■ tae. On some classes the annual ex- ■ eiaie has been exceeded, principally k&Postal aud Telegraph Department, ibi-Ljxs an excess of L 7556. Some eiaaciU amounts and services not proTai- bring the excess of expenditure feiKsaving of L 26.554 13s'7d. &SSSSR EXPENDITURE OF THE LAND Fund Account. Eisnal revenue amounts to L 103,240 2? £ while the estimate was L 92.700. isfej in an excess of L 10.540 15s 6d, E3>sd froru cash sales. The estimated nrai'tnre was L 128,174. The actual were Ll-30,031 5s 4d, or LISS7 5s Mare than the estimate. Tlie Comaitee will remember that, in last year's Fincial Statement. I provided for the KKmplited deficiency in account to iktie estimated deficit. On the passk d the Supplementary Estimates, a sit increase to the estimated expendite took phce, raising the deficit to 13,0. Taking, however, the excess of ®ipts over the estimate, it was only falsi necessary, on the close of the year, la tsinsfer Ll<f, 532 7s 2d, so as to balance 4s cash, leaving L2IS7 2s 6d, a credit absented by outstanding advances to icraaes. R&axs or the Year 1891-92. b now my pleasinir duty to inform of the results of the past Atrial year, so far as they affect the account of the colony. The receipts, as before stated, amounted «U. 361.057 16s 6d, and the overto L 168.140 10s Id. This hit;, however, been reduced : tt>rtLmce with my promise in my Statement) by applying Win aid of the construction of roads paid out uf the Public Works and L11>,532 7s 2d to cover the jetton cash balance of the Land account, so reducing this surplus year s trins ictions to L 121,608 2s result which cannot fail to l>e to the Committee as to me. a addition to the surplus proper of *e must add the surplus at the 'i l ' 1891, amounting to L 43.965 after having used ' LIOO,OOO to Qr i '" at ' n - debt, as I indicated t one ln mi * made in ™it. Putting the two together 2s lld : »id L 43.965 15s 6d), j 1 (>5.573 ISs sd. which is of the elasticitj T *' a } tic t :l l resources, and affords ptoot ! of the care exercised by my eS In t ' le administration of the ' en . ts c °minitted to them. If furwere wanting, it would be Ae Statement of "Liabilities" . e " 1-nauthorised " expenditure, i t ' le smallest record ; Pt'BUe Works Fo"i>. . , to simplify the accounts, it 1 er^ to amalgamate Parts I s balances, therefore, on the - - IS9I, were thrown together, 5 ne balance of Part 1., I J® on that date to L 292,015 4s 4d. 1 j ll to this there was the asset of t s 3l under section 31 of the >- toans to Local Bodies Act, 5 ? e , tw o amounts produced an 0 ee of L 361,959 5s 7d. is f year further debentures, it tho R„, uls ,md Bridges Conif were converted and it H th « present value of L 1904 y Bo[Li- ec t ' le Government Loans to t® _ es -^ ct ' ISS6, and became an ® t' le Fund. Debentures Tt 0 were issued under f® to tf, . t ' ,e last-named Act in S3 Keinscrifitions, and the prom to this Fund. Some rr. T s " ms also paid in, ■^*enL 12s »<i- As l have 1 m my explanation of H l -130 fid? 6 the Consolidated r ' Wa ,' s transferred to Part 1., " c means, to assist in the VH 1 "9 !)W. roat^s a nd bridges to Part T S °^.' ;Ul( l submitted for further aided during SSir>t? ei derived from the ia& ' rT unc l- s released under % "® L?°" s ? lidated Stock Act, t* > stat °ment I indicated "t t.o r ; )e received from this ca^cu l a * :e< l a t niore »as T-)T(- -i e Precise amount i 8s sd, while a

final settlement has not yet been come to with the Commissioners in respect of the balance of securities of the Sinking Fund of the New Zealand Loan of 1860, ■which are not of a liquid character. Summarising the above, the funds of Part I, have been augmented by L 412,167 Is 2d ; on ordinary departmental services L 312,482 5s 3d was spent; and, in accordance with my promise of last year LIOO,OOO of the released Sinking Funds was used to extinguish a portion of our floating debt. The total charges amouuted, therefore, to L 412,482 5s 3d, and the available balance of the fund remaining for further appropriation amounted to L 299,578 9s, including the sum of LB7B 8s 9d, balance of the asset tinder the Government Loans to Local Bodies Act, 1886. In a separate table will be found a statement of the liabilities of this part, amounting to L 250,063 16s (kl. The Greymoutli Harbor Board having obtained additional borrowing powers to the extent of L 50,000, debentures were issued for the advances already made to the Board, and the temporary assistance which had been given was thus placed upon a satisfactory footing. Part 11. On the 31st March, 1892, the available balance of this Fund amounted to L 356,107, and during the past year the sum of L 79,130 0s 4d was expended, leaving a balance of L27C.976 19s 8d for further appropriation. The liabilities are set down at L 63,806 17s 7d. SuiLMARV. Although parts I. and 11. are, in _ every respect, separate ways and means, it may be convenient to show an analysis of their several balances, and of the total produced by the two, thus :

[The Treasurer here dealt with the conversion of stock.] Consolidated Fcnd—Ordinary Revenue Account. Expenditure of 1592-93. The Estimates for the year ending 31stMarch, 1893, have been prepared with great care, and will be presently laid before you. The expenditure proposed amounts to L 4,101,397. Under the heading of "Interest and Sinking Fund" there is a saving upon actual expenditure of last year of L 57,159, partly arising from the conversion operations of previous years and the fact of a half-year's interest only coming to charge in the present financial year in respect of some four millions of debentures convertible into four per cent stock. Another saving has been effected by reducing the interest paid for the use of Trust Funds from 5 to 4i per cent., the Government believing that-, taking into account the r:\te of interest prevailing in the London market, 4i per cent, is sufficient to pay the various departments in the colony for the use of these moneys. Under the heading of "Special Acts" there is an increase of LII.OOO, due principally to having to provide for the full payment of members' honorarium, as against the lesser amount paid last year, in consequence of a second session. There are also increases in certain departments. In the Post and Telegraph Departments the increase is L 5208, principally due to the operations of the Classification Act; in the Education Department the increase arises from the estimate of the augmented school attendance for the year, and amounts to L 13,813. There is also an increase in the Lunacy and Charitable Aid Department, caused by the opening of a new lunatic asylum at Porirua, and an additional number of patients, requiring larger supervision, The Agricultural Department, which was last year under the heading of the Minister for Lands, shows an increase of LBOOO. This is the first time a vote has been placed on the Estimates to organise this Department. The increase is mainly due, however, to the proposed expenditure, which was last year provided in the vote for the Lands and Survey Department, and from unexpended items of the Live Stock Department, which are again proposed for appropriation. The " Working Railways Department shows an increase of L 9814, arising from extended traffic, affording an estimated increase of revenue to the amount of LIB,OOO. In consequence of the capitation being fixed by Act, the Government have no control over the bulk of the expenditure in the Education Department, and can only place before you a careful estimate of the amount required ; but it will be some compensation to know that for every pound spent in this direction value is received, and that a larger number of children are receiving instruction in the State schools. It is a subject, of course, for regret that we should have to propose a larger sum of money for Lunacy and Charitable Aid ; but I feel sure that the administration of this Department will bear the strictest scrutiny. The Post and Telegraph Service is now subject to a Classification Act. The classification of officers is virtually complete, and the salaries have been fixed according to rank in the service. The increase is not unduly large. The work is growing, and the revenue is rising in proportion, cable communication with Australia has received attention on the part of the Department. On the other side there are several decreases, notably in the Colonial Secretary's Department of L 14,634. The Treasury also shows a decrease of L 4450, and a saving of L 4841 has been effected in the Defence Department. Some further small decreases make up the total of L 29,593, and eliminating the absolutely necessary increases of the Education and r "Working Railways Departments, we have a net decrease of Departmental expenditure amounting to LBOSI. I was unable i last year to provide for a sinking fund in respect of the Government Loans to Local Bodies Act, 1886, in consequence of the absence of statutory power to enable me to set aside the moneys I had intended for the purpose. I propose this year to take power by an Act for an appropriation of sinking fund, and for placing the moneys in the Public Trust Office with a view to provide for the extinction of the debt.

Land Fukd Account, 1892-93. The estimated expenditure on this account for the year is L 134,162, compared with the actual expenditure of last year of L 120.032. There is an increase of L 2125 in the first item representing increased payment of "thirds" to local bodies. The main increase—Ll4,s23 —is in the Survey Department, the total amount this year being estimated at L 109.162. Tliis increase has been arrived at from the necessity of providing for the work of opening up land and carrying on settlement. Many of the surveys have been for years in arrears, and the growing demand to open up sufficient country, both in the North and South Islands, can only be met by providing for a large increase in the staff of field surveyors. A considerable portion of this expenditure will take place in consequence of the cutting up of runs in the South Island for settlement purposes. The Department had before it the responsibility of either increasing the estimate for the surveys, or leaving the survey work undone. This question was carefully considered by the Government, and they had no hesitation in coming to the conclusion that the interests of the country required that tlie surveys should proceed at an equal pace with the demand for settlement. The estimated revenue for the current year consists of—Cash sales, L 44,000, and sales on deferred payments, L 55.000. The total amount is L 99.000. This is less than the estimate for last year, aud less than the actual revenue received, which amounted to L 103,241. It would not be safe to estimate for a larger revenue than I have done, unless the policy of sacrificing the land for cash is resumed—a policy the Government have not thought it right to pursue. In deference to the opinions expressed last session in the House, I have not amalgamated the Laud Fund Account with the ordinary revenue, and the anomaly remains of having to provide for a deficiency in this department out of the Consolidated Revenue. The excess of expenditure over revenue, it will be seen, amounts t0L35,162, which will have to be made good by a transfer from the Ordinary Revenue Account. I think the time is not yet far distant when this separate account will have to be absorbed in the ordinary revenue, and the annually recurring deficit effaced from the Estimates. There is less reason now to keep them distinct as the larger portion of the work done by the Survey Department and debited to the Laud Fund Account is in connection with perpetual leases, the revenue dericed from these being credited as territorial revenne in the Ordinary Revenue Account of the Consolidate!' Fund. Ordinary Revenue for. the Year 1892-93. I have estimated the ordinary revenue for the current year at L 4,045,800, which, with debentures to be issued against the Sinking Fund increased L 280.300, brings the total estimated revenue up to the sum of L 4,326,100, against L 4,361,085 of actual revenue, including L 282.300 Sinking Fund debentures received last year. I have not thought it ad vis able to estimate the Customs duties at the same amount as they actually realised last year. I am thus acting on the side of caution in estimating the receipts, as I have done, in consequence of the large amount of imports which came to hand towards the end of the last financial year, and I have thought it advisable to base my calculations upon the first half of last year. The stamp revenue is estimated at L 622.000, against the actual receipts last year amounting to L 600,050. Some large estates of deceased persons will be dealt with in the present year, and the increase is principally in the way of legacy duty. The railways have been put down at Ll, 140,000, instead of Ll, 121,990 received last year, or an increase of about LIB.OOO. The Commissioners have gone carefully into the prospects of the railways, and they put. down this as the least that may be expected from this source of revenue. It will be remembered that the increase of the expenditure was L 9814. The depasturing licenses and rents termed ''Territorial Revenue" are estimated this year at L 195,000, against L 206,196 received last year. The decrease of no less than L 11,196 in this item may be briefly said to be due (1) To rents paid in advance early in March of the last financial year ; (2) to the selection by the Midland Railway Company of some of their Canterbury area ; (3) ti temporary loss on runs resumed in Canterbury, Otago, and Southland, which may not be re-let or disposed of during the current financial year. There will be an increase in the small grazing run and perpetual lease rents, which will partly compensate for the loss, but, on the other hand, the miscellaneous territorial revenue will be smaller. One of the principal items of the consolidated revenue account is the Land and Income Tax. In my Financial Statement of last year I estimated the amount which would be derived from this source at about L3o0 } 000, and I have adopted that amount in the present Estimates. In making the forecast of the amount to be received I had calculated, in order to maintain our finance, on the realisation of a sum nearly equal to that which was obtained from the Property Tax. which, last year, realised L 356.741. The exact amount which the Land and Income Tax will produce has not yet been ascertained, but I have obtained figures approximating closely to the actual amount, which, I think, we shall receive in the present year, and I have the gratification to inform the Committee, that, taking the various sources from which the Tax will be derived, the estimate will be realised. I shall refer again to the subject. Estimated Results of the Year 1892-93. As I have already stated, the net surplus brought forward from last year amounted to L 165.574, after paying off LIOO.OOO of floating debt and transferring L 30.000 to the Public Works Fund for the construction of roads and bridges, and, after having made good the deficit of L 16.532 in the Land Fund Account, the estimated amount of revenue for the year is shown at L 4,326,100, making a total revenue of L 4,491,674. The estimated expenditure, as I have shown, is L 4,161,397, and, deducting this from the revenue, we have a surplus of L 330.277 at the end of the present financial year, subject, of course, to any Supplementary Estimates. The Acquisition of Native Lands. The time has, I think, arrived, when the native lands, which are rapidly increasing in value, from the progress of colonisation going on around them, should pay the same taxation as other private lands are called upon to contribute to the Treasury, and to local bodies, or a certain proportion of them should pass into the hands of the Government at a fair price and be used for the purposes of settlement. The Crown lands available for settlement are rapidly becoming exhausted, and the question becomes pressing : What is to be done with the comparatively large tracts of native land remaining in a state of nature, barring the march of progress, and contributing nothing in return for the benefits conferred by the industry of the colonising race 1 What the Government may do with least opposition and in the shortest time is to acquire some of this territory by purchase. The native owners have not been unwilling to sell, and large areas might have been obtained if funds had been available. In no case should the owners be deprived of their land so as to leave them destitute ; but, subject to this reservation, the. natives might be asked to hand over, for a suffix cient price, certain blocks to the Grown. 1 If this be done, ?ind the work of settle- j 1 ment allowed to proceed in the native!

territory, the , rating of native lands might be deferred. It is accordingly proposed to submit to Parliament for consideration a measure intended to provide for the acquisition of native lands, to an extent not exceeding an expenditure of L 50,000 a year, on the self-acting principle, which will permit one-half of the purchase money to be invested as an endowment, bearing interest at four per cent., for the benefit of the owners. Thus the tribal owners will, in the first place, be provided with sufficient reserves to enable them to protect and maintain their material independence from the possibility of want, and, in the second place, every seller will have secured to him an annuity, transmissible to his descendants. Both colonist and native may in this way combine to carry out a scheme which will secure, on the one hand, the settlement of the country and, on the other, permanent welfare of the native people, and one which will have the effect of gradually bringing both races under the one law. The Acquisition of Private Lands. The Government believe it to be a matter of the first importance that the work of colonisation should be renewed in many parts of the colony where landed monopoly prevents the increase of population, or where the consolidation of estates drives people into the towns or out of the country. To acquire land to be settled in moderate-sized an*l small areas a Bill has been prepared to enable land to be purchased, subject to such checks and safeguards as will absolutely prevent the possibility of the system being abused. For the present, the measure need not provide forthecompulsorytakingof land. This may become necessary in the future, but it is believed that voluntary sale will provide sufficient land to enable the system of re-colonisation to be fairly tried before another step in advance has to be taken. The argument generally urged against the purchase of private land for settlement is twofold: It is maintained that while there is Crown land still open for sale in any part of the colony it is not a wise policy to make purchases of private estates, and that it is impossible to provide protective checks sufficient to prevent abuses arising in the purchase of private lands. To the first contention it may be replied that if land is not available for settlement in Canterbury or Otairo the unplaced population may prefer an Australian colony to another part of New Zealand ; while, with regard to the second objection, the settlement of the land by a numerous population paying a five per cent, rent on the price is a complete answer. It is also beyond dispute that the cultivation of small areas enables a higher rent to be paid than the cultivation of large ones. In this instance the State as coloniser seeks no profit save the indirect profit and national advantage of a thrifty and industrious people, contributing their fair share to the general revenue of the colony. The Government, looking to the absolute requirements of the South Island, attach the greatest importance to this measure, and hope Parliament will determine to give it the force of law in the present session. LAND AND INCOME TAX. The Cjmmittee will, no doubt, be triad to learn some approximate results of the assessment of land and income. Obtaining returns of income has been a difficult matter, chiefly because there was no trustworthy information as to persons who should pay income tax, and consequently forms could not be delivered. Again, many persons who should send in returns are more or less in ignorance of the provisions of the law, hence they have not forwarded them. However, enough information has been gained to indicate that it is not probable that the estimates of L 40,000 from business, and L 15,900 from emolument and employment (founded on 6d up to LIOOO and Is above this amount, with an exemp tion of L 300), will be reached. Ido not anticipate that the result will be seriously below the estimate, for it is expected that the number of returns will lie largely aug merited, and an examination of many of the incomes and the deductions therefrom will result in material alterations in the direction of a larger assessment. The estimate of L 47,000 for companies will probably be somewhat exceeded, but the exact figures are not yet at my command, though I am able to say it is certain that the estimate will be reached. The Graduated Land Tax may be set down as aboutequalling the estimate, and may be taken as producing L 60,000, possibly more, for here again the exact figures are not obtainable in consequence of the reductions made by Boards of Review not having yet been taken into account. The ordinary tax on land that is on mortgage, and on land less improvements to the value of L3OOO for each owner and certain deductions by way of exemption, was the part of the new scheme of taxation that was most severely attacked by the opponents of the Government. My forecast of the result was freely criticised. It was alleged over and over again that the calculations must have been made on a wrong basis. Elaborate statements were prepared to prove that I had been oversanguine, if not reckless, and I understand that it has been prophesied by many as certain that I should have to announce a serious deficit in this source of revenue. I was aware that the assessment of improvements would be a difficult process, and that owners and assessors would frequently differ widely in their calculations as to the value of improvements, the benefit of which was exhausted. I have pleasure in stating that information has been most readily accorded by the great majority of owners, and they have assisted the officers of the Department in arriving at the fair value of land and the improvements thereon. lam able to state with confidence that the assessment is the best and most accurate that has been made in the colony, and I am happy to inform honorable members that the result has been so far satisfactory that there will be a surplus under the head which will secure a small excess on thewhole scheme. When further information is obtained I shall submit some amendments in the Act for the consideration of Parliament. Civil Service Pensions. The Committee will not be prepared for any proposal which would revive the system of pensions which was repealed in 1871, subject to existing or accrued rights at the time, yet it has not been unrecognised that some provision should be made for those who have spent the best of their days in the service of the country, and have arrived at the time of life when they should give plaoe to younger and more vigorous men. The Government are of opinion that the Civil j Service in this respect should be placed in a position of self-reliance, not dependent on what might be considered a but contributing out of their salaries a certain proportion—about o per cent. This would go to build up a fund out of which insurances and pensions or annuities would be paid on a definite scale. I have, therefore, the satisfaction of informing the Committee that the Government Insurance Department has prepared tables, copies of which will be placed before Parliament, providing for an insurance equal to a year's salary should the officer die before the age of 60 or a life annuity commencing at that age, when he will be expected to retire from the service. Should he be retired before that age, not from ill-health, he will also be entitled to compensation from the fund, varying with the length of service, but, after a few years 1 service, amounting to considerably more than the accumulated deductions from salary. If he is incapacitated from ill-health payment will' be made out of the Consolidated Fund of a month's salary for each year of service, and this is the only liability that will fall i (For continuation see fourth page )

Part I. Part II. Total. 1 Cash in the Public Account ... .€125,322 10 3 ;inos,nos u 3 £294,201 4 G " Fixed deposit in London 30,000 0 0 30,000 0 0 Advances in the hands of officers of the Government ... ... ... GO,777 10 0 2,098 r> 5 G2,S7i> 5 5 Temporary investments — Guarantee Debentures of the loan of 1S70 10,000 0 0 106,00(1 0 0 110,000 0 0 •tj per cent, stock of 18S4 5,GOO 0 0 fl,000 0 0 Government Loivns to Local Bodies Debentures 23,000 0 0 23,000 0 0 Westport Harbor Board Debentures 28,000 0 0 28,000 0 0 Greymouth Harbor Board Debentures ... 10,000 0 0 10,000 0 0 Balance of assets under section 31 of Government Loans to Local Bodies Act, 1880 878 8 9 — 87S 8 9 1 Totals £2!)0,r>78 !l 0 £270,970 li) 8 17)70, .m."! 8 S 1