DUNEDIN, SATURDAY, SEPT. 16. The Otago Witness.

Otago Witness, Issue 1033, 16 September 1871, Page 13

DUNEDIN, SATURDAY, SEPT. 16.

The Otago Witness.

Few Financial Statements in New Zealand have been looked forward to with greater anxiety than the one which has just been delivered. It was known that the revenue for the past financial year had fallen considerably short of the Colonial Treasurer's estimate, and it was anticipated that if the current expenditure was to be maintained, some additional means of taxation would have to be resorted to. It had also been rumoured that the Government would propose important alterations in our system of government, in order the better to cany out their scheme of Public Works and Immigration. The anxiety of the public on these heads has at length been relieved, and the hopes of some and the fears of others have been realised. As regards the revenue of the past year, we find that it falls short of the Treasurer's estimate .£IIO,OOO. Placing to revenue account, however, the unexpended portion of the loan for Defence purposes for the past year, and by some other process of manipulation which is not explained in the telegraphic sumraaiy of the Statement, he succeeds in reducing the deficiency to £16,000. This, together with an overdraft of .£60,000 which has been standing for two years, makes ,£136,000 of a deficiency to be provided for. He proposes that payment of this amount should be spread over three years, charging in each year a proportionate sum against ordinary revenue. The Treasurer it will be seen, proposes to make two ends meet by reducing the expenditure and increasing the revenue. By reducing the capitation allowance payable to the provinces from two pounds to fifteen shillings per head of the population, and relieving the provinces of the charge for provincial services, he estimates that a saving of £25,000 will be effected. The additions to the revenue, he proposes, should be effected by an increase on the Stamp Duties, and the imposition of duties upon cereals, rice, and timber. In order further to relieve the charges upon ordinary revenue, the Treasurer proposes that the Road Board subsidy payable to the provinces should be defrayed out of the loan; the amount being increased from £50,000 to £100,000. Looking at the financial prospects of the colony, the Treasurer appears to have been placed on the horns of a dilemma. Either he must take the unpopular course of proposing some fresh means of taxation, such as an income or property tax, or he must think of the present only, and propose that certain, items chargeable against our ordinary income should be paid out of borrowed money, until the revenue and expenditure for the current year should

appeal 1 to be equalised. He lias preferred the latter, as being tlic mure pleasant course, but we doubt if it \rill be recognised generally a.s exhibiting a sound system of finance. Supposing the Budget to be approved of, the position of affairs will simply be that all expenditure in the colony in connection ! with the construction of Hallways, the promotion of Immigration, the maintenance of the Colonial Forces, and the payment of Road Board subsidy will have to be defrayed out of the loan. Surely some portion of this expenditure should be charged to the ordinary revenue of the colony. The proposals with reference to the modification of the machinery of Provincial institutions are provokingly meagre. If these modifications are to have immediate effect given them, we shall have to look forward to the fresh election of a Superintendent and members of Provincial Council within the next six months, as it would be impossible to reduce the number of members of Council without dissolving that body, In modifying the Provincial system of government, it is evidently implied by the Treasurer's language that the Government will to a great extent be guided by the wishes of the House on the matter. "We are also told that in certain cases, where Provinces are unable to fulfil their functions, it is intended to propose that the General Government should take charge of their affairs, but no mention is made of the form of local government which will be provided as an alternative in such cases. Some measure to provide the means of local self-government to Provinces which abdicate their functions as such, will have to be introduced by the Ministry, and there is a strong party in. the House that will certainly attempt to make such a measure apply to all the Provinces. We must, however, defer further consideration of the Government proposals on this subject until we are in possession of a copy of the Financial Statement. "With reference to the construction of Public Works under the auspices of the General Government, it is highly gratifying to read the Treasurer's proposal that no railways should be constructed which do not at once promise to pay working expenses. Should this principle be adopted by the Assembly, and fairly carried out by the Government, it will prove a death blow to the hopes of such Provinces as Wellington, which anticipated a large expenditure upon railways. It will be very difficult, however, for any Government to contend against the pressure which will be brought to bear by the wily Superintendent of Wellington and his phalanx of votes, to secure the construction of railways within that Province, however apparent it may be that such lines will not pay working expenses. Another principle which the Treasurer seeks to be recognized with reference to the construction of railways is, that a power of local rating should, under certain contingencies, be provided. The proposal that, in thecaseofthe Middle Island, the cost of each line of railway, when completed, should be charged against the land fund of the Province within which the railway has been constructed, will take no one by surprise. The Treasurer will fairly argue that where large sums are being expended within the Colony out of borrowed money, it is the duty of the Legislature to see that additional .security is provided for the public creditor. Upon the question of Immigration, the correspondence on the subject which passed between the Colonial Secretary and the Superintendents of the different Provinces, during the recess, and which has been published, fully prepared us for the statement that the General Government have determined to take the management of Immigration into their own hands, as they have found that the plan of co-operating with the Provinces will not answer. It Avill be seen, also, that it is the intention of the Government to ask the Assembly for power to take land for the purpose of settling immigrants. We wait for further details concerning this and other subjects before dealing with them. Upon the whole, we are of opinion that a careful examination of the Budget \vill fail to satisfy permanent residents in

the Colony. There are undoubtedly .some good features in the policy which has just been enunciated, but the calls which it is proposed shouM be nuule upon the loan fur purposes which i -light ti be defrayed out of ordinary revenue, will cause reflecting persons to wish that the Ministry had taken, a common sense view of the financial condition of the colony, and had manfully resolved to provide for the future in a way which, however unpalatablo it might temporarily prove to be, would tend eventually to advance the prosperity of the country.