THE PUBLIC ACCOUNTS.

Otago Witness, Issue 877, 19 September 1868, Page 2

THE PUBLIC ACCOUNTS.

Thi* great political feature of the Financial Statement is of course the proposed abolition of the partnership accounts between the Colony and the Provinces. In proposing this abolition, the Government adopt the scheme put forward with much force of argument by many of our Financial Reformers, and notably by Mi Stevens. • Should it be adopted by the I Legislature, the system which the Treasurer advocates will certainly be as he describes it, ' the greatest reform in the Constitution of the colony which has ever yet been accomplished.' The argument's in its favor, from one point of view, are plausible enough, and cannot fail to carry ■weight wherever they are listened to Impartially. The details of the scheme propounded by the Treasurer are by no means likely to attract the admiration of Provincialists : but as a mere question of finance, the scheme itself is entitled to our careful consideration. The arguments urged by the Trea- j surer on its behalf have been heard 'before ; but they are worth hearing again. The existing financial system, so far as relates to the distribution of revenue, is marked by its inevitable want of 'equity. The Consolidated Revenue is cfeclited to the Province in which it happens to be collected : and yet revenue is, in manycases, collected in one'Pjrovince while it is in reality contributed -by another. The Customs revenue of Otago is .greater than that of Southland ; but a large proportion of it is drawn from the latter Province, ■which however gets no credit for its contribution. The Customs duties collected in Wellington during last year averaged £3 10a. 7d. pey head of the population while in Marlborough those duties averaged only £1 7s. Bd. There is no reason to suppose that the population of Marlborough individually consumes a less amount of | dutiable goods than the population of Wellington ; and yot the proportion of revenue collected in Wellington from that source is th^ee times greater than the proportion collected in Marlborough. The result of this system, as it affects the Provinces, is obviously fatal to those Provinces which do not possess much, commercial activity. If the revenue collected from dutiable goods were credited to the localities in j •which the goods are consumed, the system ■would be free from the objection urged : but so long as it is credited to the localities in which it is simply collected, the objection remains unanswerable. But the weightiest argument advanced against the present system is of a strictly political character. That system is vicious, because under it the revenue which is raised by one Government is spent by another. The result is that there is no check to the spirit of extravagance, and no encouragement to the practice of economy. Money is demanded on all hands ; it must be raised, no matter at what sacrifice. It is raised by the General Government and spent by the Provincial administrations. And here, we are told, lies the great difficulty in the way of reducing the taxation, j There is no possibility of reducing it, be- ! cause the demand for money from the Provincial Governments is incessant. Ministers tell us they are anxious to lessen our taxes, but are utterly unable to do s). Strict economy, for instance, has put it in their power to save a sum of £32,104, on the estimates of expenditure for services provincially charged for the current year. ' Instead, however, of this saving being available for the purpose of effecting an instalment of that reduction in the taxation of the country which we are all anxious to see accomplished, the ■whole of it will swell the payments to be made from the Colonial Treasury to the several Provincial Governments. I need hardly say,' adds the Treasurer, ' that . under a financial system of which this is an essential feature, auy large reduction in the taxation of the colony must be almost hopeless." The payments made to Provincial Treasuries during the last ten years are as follows :—: — im-59 d5G0,C15 IS3B-G0 65.881 18'fO-GL 108,174 ISGI-G2 12i),:!78 1862-03 214,--)31 186.^-61 282,0Gl 181H-U5 2b9,273 ZWw-liG y07.2-i7 18C6-G7 822,902 1867-68 (cloven months) . . 2i)2,308 These are the. principal arguments put forward by Mr Hall against the present financial system. The resolutions submitted at the close of his Statement propose the abolition of this system on and after the first of January next. 'This will end the diatinptiou which has for ten

years been maintained between general and local charges. All the appropriations will be general appropriations. There will be no contingent balances to be the subject of dispute between the Colonial and Provincial Treasuries. The accounts will be reduced to the simpler and more natural form which they present in other civilised countries.' This brings us to the concluding portion of the new scheme ; and here we find that the tail is armed with a sting. The Government will relieve the- Provinoes of the care of the Harbor Service, receiving the port dues and- pilotage fees now paid to the Provinces : and, they will do this as a matter oV economy, by means of combination with, the Customs Service. For police ancl, gaol 3, the Government will retain the advantage of local administration, and provide for them by a capitation grant of seven shillings per head. The money thus rayed must be strictly accounted for by Jpe Provincial administration; and moreover the police and gaols must be subject to the inspection and report of an officer appointed by the General Government. The Provinces are to retain their Land Funds and other strictly local revenues. The Treasurer then shows us by means of a table how the various Provinces will be affected by his system. The result is, or rather will be, that Otago .will lose, during the financial year, £10,894: Nelson, £20,453: Wellington, £11,100 : Westland, £2,213 : Canterbury, £76?. On the other hand, Auckland will gain £9,195 : Taranaki, £1,967 : Hawke's Bay, £3,093 : Marlborough, £2,132: Southland, £17,974. The cost of the Harbor Department of which Otago will be relieved, is L 2,49 1: and it will receive £16,999 under the capitation grant. This is the position which the Province will occupy after the withdrawal of the moiety of the Consolidated Revenue. Under the present system, while that moiety is received, Otago has a balance to its credit amounting to £30,385 ; the estimated moiety of the consolidated revenue for the year being £131,918. The balance sheet ■which the Treasurer offers us instead of this, is not one which most people in Otago would, consider satisfactory ; but the consolation offered us at the same time is this, that Otago is one of those Provinoes in which much of the revenue collected is in reality paid by another Province, and therefore the loss involves no real injustice. When the lean kine are swallowing up the fat, it must be a satisfaction to the latter to know that the being swallowed is rather an imaginary than a real grievance.