THE Otago Daily Times. SATURDAY, JUNE 29, 1872.

Otago Daily Times, Issue 3244, 29 June 1872, Page 2

THE Otago Daily Times. SATURDAY, JUNE 29, 1872.

Decidedly the most important subject with which the Assembly will have to deal during the forthcoming session is that of Finance. A spirit of recklessness has characterized the proceedings of the Government and Legislature on this important point for a long time past, which, if not abjured, will before long bring about serious financial difliculties. Every one who says this is at the present time branded: as a traitor to his country. No invective is thought too strong by those who are reaping advantages from the existing style of things when they have occasion to speak of those who condemn the course which the Colony is pursuing. The comparative ease with which the recently issued debentures of the Colony have been sold is held up as a certain sign, not only that our credit is good in the money markets of the world, but that it is extremely good for us to have such liberal credit extended to us, and to avail ourselves of it to the fullest extent possible. This sort of argument is flaunted before the public as a complete answer to every one who ventures to say that it is as bad for communities habitually to live beyond their incomes as it is for individuals. It is. quite a common thing for individuals to get more credit than is good for them. No one who has lived long in the Colonies has failed to acquaint himself with the truth of this. There are few who could not point to instances of irretrievable ruin that have ' fallen upon persons or firms with whom they have beenacquainted,asadirectconsequence of excessive credit being held out to them. Something similar will presently be found to be quite true for New Zealand. Happily, nations, and particularly young ones, do not fall into ruin which is irretrievable, but they always have 'bad times' of it as a direct consequtnce of financial imprudence. When these periods of national embarrassment come round, every one feels the evil results of the past folly and extravagance. For what is passing to-day, a retribution of this sort is as certain as the present extravagance is flagrant.

If the financial affairs of the Colony were as readily understood by the populace as are the advantages for which prudence is so often thrown overboard, it would be impossible for the Legislature to go on year after year involving the country in debt for matters which ought to be provided for out of current revenue. We and others have for a long time past raised a cry against the system of a yearly deficit being tided over by increasing the loan liabilities of the Colony. But very little heed is given to all the warnings that have been uttered on the subject. It isjimpossible to believe that this would be. so if the people of New Zealand properly understood the course which the Government, backed up by a subservient Legislature, has been pursuing. People do not believe that we are .spending more than £5 a year for every £4 of regular income, and that as a consequence something like a fourth part of the ordinary expenditure of the Government is each year provided for by increasing the funded debt of the Colony. If they did believe this—and it is a most indubitable fact—they would readily see that if there be any time when such a thing might be tolerated, this of all others is not such a time, when Aye are largely borrowing for the construction of public works, and for that purpose adding every year £50,000 or .£60,000 at least to our annual expenditure for interest of money. Borrowing for the purpose of improving internal communications and so forth, is ii legitimate thing, and may safely be carried on up to a "certain limit — that is, up to "the point that a reasonable taxation will supply means for meeting the yearly engagements which such borrowing entails. But if Aye have already reached the point when no reasonable amount^ of taxation will provide the necessary income for meeting these engagements, and carrying on the Government of the country, it is evident that we can .^escape ultimate

and very early coming embarrassments only by the adoption of one or other of two courses. Either .we must cease from increasing our annual burdens in the way of interest and sinking funds until we have a prospect of meeting new ones legitimately out of revenue, or we must so sefc our liouse in order, so reduce the other drags upon our income, as to provide the means for such, new burdens. As the Government and the Legislature have resolutely sefc their faces against adopting either one or other of these courses, the Colony must be in financial trouble within a very short period. And in the present state of public feeling, we fear that nothing short of imminent embarrassment will put a curb upon this licentiousness. The probable end will be that the grand ' colonising policy' which, if conducted with prudence, might have produced such happy results, will be ' brought up with a round turn' as similar schemes have been in not very distant countries, and a vast amount of trouble and misery will be inflicted on the community.

For our part, these accusations of ' fouling our own nest,' of being influenced by petty spite or personal or party grudges, will not deter us from the expression of the strong conviction we hold otL this subject. This is precisely the time when the attention of the public ought to be aroused to a question which is of vital importance to all who look upon New Zealand as their home. To the waifs and strays who have no ties to the country and no stake in it, the present state of things is quite delightful. But to the bona fide colonist, to the man who is settled on the soil, who has a family dependent on him, to whom the prosperity or adversity of the Colony means personal prosperity or adversity, this state of things, and the prospect it entails, ought to be the subject of grave disquietude.