FINANCIAL POLICY OF THE MINISTRY.

Otago Witness, Issue 824, 13 September 1867, Page 1

FINANCIAL POLICY OF THE MINISTRY.

(From the Daily Times Sept. 6.)

The Financial Policy of the Government is meeting with violent opposition from all sides of the House, excepting only, of course, from the Auckland members, to obtain whose support was its chief object. There is very little disguise attempted to be thrown over the matter. In all but plain words, Mr Fitzherbert admitted that one of the objects of the Government was to secure the confidence of the members of the Northern portion of the Colony, and that he was glad to think he had done so. The supporters proper of ■the Government of course feel themselves vilely sold. They feel the Government has thrown them over, to purchase those from whose hostility, a few weeks back, they saved it. What the Auckland members have done, the Otago or Canterbury members, if they were unanimous, might do ; in short, there would be an end to Parliamentary Government, if it were allowed that it is legitimate of a Government to take a solid block of its opponents, and, in order _to purchase their support, to thrown over its own proper supporters. The Stafford Government has forfeited every trace of respect. That it continues to hold its place, is due to the want of a common ground on which to oppose it. Neither the Centralists nor the Provincialists have confidence in it ; but they cannot agree on the grounds upon which to turn it out ; and, more, they cannot agree upon a Government to replace it.

The discussion first turned upon the ■whole policy. Mr. Vogel, who first spoke upon the subject, ended his general criticism by a specific resolution, directed against the most glaringly objectionable feature,- There can scarcely be two opini'/s upon the subject of the expediency of taking advantage of a legal technicality, to issue a larger amount of securities unnerthe £3,000,000 Loan than the Assembly intended should be issued, or than the persons who took up the Loan understood were to be issued. The Government have, it is understood, yielded the point, and the resolution is likely to be withdrawn in favor of one touching another point of policy. Mr. Stevensannounced his intention of moving a resolution to the effect that the Loan Allocation Act should not be repealed, but tlrat its operation be suspended for only one year. Upon this point, there is a great deal of unanimity ; and i+ is hard to see how the resolution z,m be opposed, excepting by the Auckland members, and by those who support the Government on personal grounds. There is absolutely no consideration proposed to be given for the immense debt "tho Colony is asked to relinquish. The Middle Island might give that and a great deal more, upon the condition of its liabiP.,, f nr Native aid Defence purposes be;- „ • iu.ed in future ; but it is a decided ■ -v * of the policy of the Governnv -it xt the Colony is to continue ]' v'4e r- '-itherto. It is, in plain words, a i itss- ;~ -v al-out £300,000 that the Colony is afdui to make : of about £50,000 to Taraniiki, and of about £200,000 to Auckland, to say nothing of the smaller amovnts to Hawke's Bay and Wellington. These are debts for which the Provinces are liable on account of the policy of 1863. Upon the understanding that that liability would be confirmed, the Colony contracted a debt of L 3,000,000. And now it is asked to relinquish the amounts, for no reason whatever, excepting that by doing so Auckland will r e gratified ; or, as it is pv.t, that Auckland's necessities require it. But why not apply the same reasoning to other cases ? There is scarcely a Province of New Zealand not in pressing want of money. There is not one Province in ' the Middle Island, the colonising operations of which have not been disturbed ard interrupted by the drain on its resources that same 1863 policy has entailed. What is fair to one is fair to another. Nay, if extreme need be the test, is there not an instance to hand? Aiieklaud's position is not nearly.' so ,ba<l ns that into which Southland has npt only fallen, but been permitted %o remain, and hundreds of persons have been ruined in consequence. The arguments applied to . Auckland ■equally refer te Southland. But, says Mr. Fitzherbert, Auckland made a bad

bargain in 1856. No one knows better than himself that that bargain was a bargain, and that it cannot be permitted to be disturbed. He is obliged to say so whenever he refers to it. But still he does refer to it with the obvious intention of directing people's minds to the thought that it ought to be disturbed ; or rather, his very proposals are an attempt to disturb it by demanding unnecessary concessions on account of it.

His proposed gift to the Provinces of L 183,000, on account of alleged overpayment of surplus revenue, is a mere sham. The money has been paid. If it has been paid out of available revenue, it is only by manipulating the accounts that the Provinces can be made to appear to owe that sum. By the Surplus Revenue Act, they arc entitled to all available revenue not otherwise expended. If the payments have been made, not out of revenue, but from other sources, then they stand in the position, .that out of future revenue or loan, they will have to be provided ; they, in fact, will be in the position of expenditure yet to be provided for ; and, however they are charged, the Provinces will be liable for them. There is no getting out of one of the two positions. If the L 183,000 has really been paid out of revenue, then the Provinces have got their own, however the accounts may have been worked. If the £183,000 has not been paid out of revenue — if it has been paid, and a deficiency to the amount created, then the deficiency will have to be made good out of some source for which the Provinces will be jointly liable. In this case there is no present to the Provinces. The Provinces will be giving themselves their own. But in the case of the allocation of the debt, the money has been absolutely paid and brought to account. The Colony has provided it ; it has paid it, and is asked to relinquish it. In the other case, the Provinces have either been paid the money out of revenue which, under the Surplus Revenue arrangement, belongs to them, or they will have to pay it, or provide it when the deficiency comes to be made good. (From the Daily Times, Sept. 10.) The Province of Nelson has taken the initiative in opposing the one-sided Financial scheme of the present Government ; an example that ought to be followed by every Province in the Middle Island. It is strange, indeed, that neither Cante'-burv nor Otago has moved in the matter. It is one of the disadvantages of being so far from the seat of Government, that the doings in Wellington appear something like the actions of a Foreign Government, instead of proceedings in which every one in the Colony has a direct and personal interest. Seldom has any plan proposed by a financier been so glaringly partial, and still more seldom has partiality been so flimsily veiled. It by no means follows that, because, in opposition to the measure, those who moved resolutions were unsuccessful, all opposition should cease, and the Colony submit tamely to the adoption of some of the most objectionable arrangement that could have been proposed. When a people find that the voices of their representatives are overborne by a phalanx of members, bound to a Ministry by ties that foster the interest of the section of the Colony they represent, atthe expense of the rest, it is for them to make themselves heard by every Constitutional means. Notwithstanding the plausibility of Mr Fitzherbert, and his address in endeavoring to show that he had dealt liberally with each Province, it is plain that he has purchased the support of the Northern, and especially the Auckland, members, by propounding a scheme whereby the Middle Island Provinces are to be saddled with expenditure, admittedly, not in any way for general benefit, but for the special advantage of particular Provinces. It is not necessary to allude to the debt alleged to be due' by the Provinces to the Government. We' have ' already shown that if it really existed, there is a mode provided for dealing with it, "very' j much fairer and very different from that sugges + ed by Mr Fitzherbert; But there are two other features that specially require notice : the proposal to repeal the " Loan Allocation Act," and to raise such an additional sum under the Three, Million Loan Act, as shall realise to the Colony the sum of Three Millions sterling, thus adding to the public debt

tlie amount of discount a + . which the Colonial Stock was negotiated.

The "Loan Allocation Act, 1865," was passed, in order fairly and equitably to charge Provinces, in which portions of the Loan were expended for permanent improvements, with tho amount. The Preamble specifies that the objects on which the various sums were expended were, " For the cost of surveys, public " works, and other expenses incidental to " the location of settlers, the introduction " into the Northern Island of New Zea- " land of settlers from Australia, Great "Britain and elsewhere; compensation " in respect of land taken under ' The " ' New Zealand Settlements Act, 1863 ;' " and generally for the formation and " colonization of settlements under the " last recited Act. All which expen- " diture has been incurred for the per- " mancnt advantage of the respective " Provinces in or on account whereof such " expenditure has been made." When, after a form of examination into the matter, the various sums -.harged against each of the Provinces interested were made known, it was felt at once that the amounts allocated were ridiculously small. With that, however, it is too late to deal, nor need it have been mentioned, did not the fact add to the injustice proposed to be perpetrated. The rate of interest chargeable was only 6 per cent, per annum, a rate at which, at the time, no loan could have been negotiated by tnose Provinces. They thus etajoyed the benefit of borrowing to the amount of the sums expended, under the guarantee of the Colony, while at the very time other Provinces, among which was Otago, were suffering from inability to raise loans through their political connection with the Northern Island. The amounts charged against the Provinces were — Auckland, 1A86,707 16s 8d ; Wellington, L 14,541 8s lOd ; Hawke's Bay, L 2727 16s lid ; and Taranaki, L 39,979 Us 3d. It will be remarked that these were sums actually expended, so that, without any discount whatever, those Provinces obtained that share of the Three Million Loan, negotiated by the Colony at a discount. Nor were the terms hard on which they obtained it. The third clause provides that the interest and sinking fund " shall be paid or accounted for " by the Provincial Treasurers," or it "maybe deducted and retained by the " Colonial Treasurer, out of any moneys " that may be payable to such Provinces " at the close of each quarter of the financ ial' cial year. " That is, althmigh a Colonial Treasurer might do such a thing as enforce payment, he was not obliged to do so.

According to Mr Fitzherberf-, three out of the four Provinces thus benefited come forward in forma pauper is, and plead inability to pay, and so he proposes to release them from all liability. Singularly enough, there is a special provision in the Loan Allocation Act, apparently introduced to guard against such a proposal being carried into effect. Our information from Wellington is not sufficiently ample to enable us to say whether any proposition has been made to comply with the terms of the Act, but the second clause specially enacts "that the amount " charged against any Province under " this Act shall be subject to" reduction, " or increase, by Act of the General As- " sembly, after inquiry by a Commission, " to be appointed by the Governor, to " ascertain and report to him on or before " such a day as he shall in the Commis- " sion appoint," &c.

Two years only have elapsed since the " Loan Allocation Act" was passed. The war that was then raging i 3 over, and does not appear likely to be renewed. That there is the inevitable reaction taking place in the Provinces, consequent upon transition from war to peace, is not denied. Even 'the advantages derivable from those permanent improvements, effected at so cheap a cost, have not had time to develop themselves. When Mr Stafford' was roused to reply to some remarks made by a member for Otago,, lie ventured, upon the assertion that the resources of the Northern Island were so superior to those of the Middle. Island, that- its exuberant prosperity was destined, at no distant period, to throw its poorer neighbor into comparative shade. Surely, then, no reason has been given why such advantages, at the'expense'of their more industrious fellow-colonists, should be conferred upon Provinces that will be so well able to bear the burden. But the whole affair is

too transparent to be disguised. Northern, support has been purchased ; the Northern members are united in the common interest of wiping out their liabilities ; the Middle Island members are divided, and unless vigorous steps are taken by the people, by remonstrance and by petition, the financial scheme, however unjust and obnoxious to Southern interests, will surely be adopted.