OUR FINANCES.

Otago Witness, Issue 878, 26 September 1868, Page 1

OUR FINANCES.

The most important question for the people of Otago, in connection with the financial policy bf the General Government, is what the practical effect of the changes proposed will be upon the revenue available for public purposes within the Province. That the arrangements sketched by Mr Hall in his financial statement will be brought into force, there can now be no doubt. They may be modified in detail, but their essential principles have apparently been accepted even by the Opposition, and it seems to be quite within the range of probabilities that they will pass the House almost in the identical form in which they have been presented to it. What difference will the new system make to Otago ? Thab is a question in which all are interested, whether they be Provincialists or Centralists — of the Constitutional or of the Country party. It is known from what Mr Hall himself stated that the Provincial Revenue must suffer from the change. But the financial affairs of New Zealand are so proverbially complicated that we doubt whether many of our readers know ho w to ascertain what the full result of the change will be ; and we are quite sure that if they did know, very few of them would have the patience to go through the calculation. We propose to-day to make a rough estimation of it by comparing the Estimates laid before the Provincial Council with what they would probably have been, had the proposed changes in General Government Finance been in operation at the time. The system at present in force leaves for strictly Provincial appropriations one half the Consolidated Revenue — i. c. one half the gross receipts from Customs and Stamp Duties. The appropriations made by the Assembly are the first charge on this. These include the expenses of collection, which are charged to each Province as actually expended within it, the expenses of the Supreme, District, and Resident Magistrates' Courts, costs of Criminal Prosecutions, of the Coroners' Department, and of the Lands and Deeds Registry Offices, the cost of internal Postal communications and of Post Office Establishments within each Province^and the sums expended in Militia and Volunteers, Out of the share of the Consolidated Revenue belonging toOts^o the

Assembly. has "made appropriations for all these - purposes, and it is only the balance, after - these are paid, that is handed 1 over to the Provincial Treasury and left for appropriation by the Provincial Council. Mr Vogbl, wheir he • brought down his estimates, put down £$5,000 as the supposed i value of this balance for. the year ending 31st March next. •' He based his estimate on that made of the whole Consolidated Revenue by Mr Fitzhekbebt last year ; but having ascertained, by observation, that the revenue collected in Otago would not reach the amount relied on by the Colonial Treasurer, he made a correction accordingly. In place then of the £85,000 which Mr Vogel expected to receive under the existing system, what would have been our position had the new financial scheme of the Government been then absolutely at work? The calculation in the way of a rough estimate is not a very difficult one. A grant out of the Consolidated Revenue at the rate of fourteen shillings per annum per head of population (the seven shillings per head mentioned in the Financial Statement is for the half year only), would have been available for the purposes of police and gaols, and the charges which now figure on the Provincial Estimates for Interest and Sinking Fund on Loans, and for •Harbour establishments, would have been taken off our hands. The population of this Province as arrived at by the last Census is 48,569, making the capitation grant for Police purposes equal to £33,008 Cs. The estimates, ho-wever, for the current year for these purposes, only show a total of £27,210 7s 6d, or, if we add the Escort Service, £30,145 17s 6d. Hence, as it is proposed to restrict the purposes for which the grant is used to these alone, and to have a strict audit by which to enforce the restriction, Otago would lose about £4000 of her share, ' or would have to increase her establishments, in order to swallow it up. By the latter course she would gain noting whatever. We may therefore take the absolute cash transfer from the General to the Provincial chest as likely to be, in round numbers, £30,000. Against* this, however, we must set the loss of the Harbour Dues, which were estimated to bring in £2,500. These will, of course, be seized by the Colonial Treasurer, if he undertakes the payment of Harbour Expenses. On the other hand, the estimated expenditure on the Harbour Department is £4,646 11s for the year. The annual charge for Interest and Sinking Fund of our Provincial Loans stood before the recent conversion of a part of them, and after the loan of 1850 had been paid off, at £55,280, exclusive of any expenses which may attach to the payments. Under the Consolidation, especially if the holders of all our Debentures choose to exchange them for those of the General Government, this annual charge will be reduced. It is impossible, however, to estimate what this reduction may eventually be. For onr purpose we may lake them at their original amount, because the operation of conversion having been undertaken by the colony, there can be no reasonable objection tothe general revenue having the benefit of it. Tims then it appears that, had the proposed system been already in force when the Provincial Council last met, the difference in the Estimates for the year wouid have been, as follows : On the side of Ways and Means, instead of £65,000 to come from the Consolidated Revenue and £2500 from Harbour Dues, we should have had only the Capitation Grant of £30,000 ; on the side ot expenditure we should find the sums £55,280 Interest and" Sinking Fund on Loans and £4500 for Harbour Department omitted. Ways and Means would have t-een £57,500 less, and expenditure £59,880 les3. .And, in fact, this rough estimate is not very far from what the real result on our next year's Provincial Revenue will be. It differs very much from the popular idea on the subject, but that is nothing new in connection with any matter of public finance in New Zealand. jgjThose who fancy that Provincial Institutions- -in Otago at least — can be overturned or abolished so long as the bulk of the people is satisfied with them, have very exaggerated notions of their dependence upon, the General Government. £85,001) is a large sum, but it was after all only one-fourth part of the total Revenue with which the Provincial Council of Otago dealt in the way of appropriation during its last year, irrespective of its great contribution to the General Revenue of the Colony, Otago raises within herself, a Provincial Revenue of a :

quarter of a £ million -sterling annually. Indeed during the year 1867 the purely Provincialßevenue exceeded that amount by a very larsa>>sum; It need not be feared therefore that the new financial scheme of the Government will do anything towards the abolition of Provincial Government here. Until the mass of the people in this Province are ready on other grounds to exchange it for something else, the financial question will not bring about a change. Indeed, the existence on the spot of so great an organisation of Government, commanding a local revenue so ample, would seem to point quite the other way ; leading in fact to the' expectation. that at no very distant day this part of New Zealand may attain to the rank of a distinct colony.