AUSTRIAL PEACE
\, It is gr&iify.Dg to be able to-state that lour ijjros.peet .of success in industrial legislation is gradually becoming assured. jf- THE DEPRESSION. f Certain trades in the Dominion have .mffered from the unemployment of some of j.their members during last autumn and .winter. Tie flaxniillers and fellmongers : Were among the earliest to fell the tightfaess of money resulting from the financial germ's abroad. Then the building trades 'Mad gen-aral labourers found many of their nvtmbes- out of work. The scarcity of employment was not universal, but was locally pei ere, especially in Wellington Every effort was made by the Government to peet the difficulty by expediting proposed {Building operations and by placing some of the men bushfellinig or on public works. Tne financial depression is now apparently pver/ the flaxmdlls arc beginning to repperr, and building contracts are being let. m'ith the spring the hijrh prices of our £ap!e exports and'the productivity generally Much has been undiminished during the pme of stress will again induce prosperity. I MINING. sThis industry is steadily progressing. Wofks for testing tho deep alluvial leads it Boss, which have been assisted by a mbsidy from the Mines .Department, are nearly completed, and it is hoped that this sompany will soon be included in the diviJend;payin;g list. The negotiations for peeting the deep quartz reefs at the Thames pee still being proceeded with, and it is apected that a start will soon be made pith the driving of the crosscut. The leposits of ' hematite ore at Parapara, hough sfciM un worked, are now attracting he attention of capitalists, and the manuacturo of iron may be added to other industries of the Dominion in tihe coursa of I few yeans. In April last arrangements were, completed with the Native owners, land the Urewera district Natives' reserves iwere opened to the prospector and miner, Hit the negotiations were so recently comtJeted that nothing definite as to the value >f the mineral wealth of the area has yet >een recorded 1 . The export of silver for pie past year is a»gain considerably in xcess of any annual export so far recorded. ' nd this also applied to the output of coal or the year. I . OCEAN MAILS ■ Negotiations have been proceeding with h& view of including Auckland as a port ►I call, of the Vancouver steamers, and am hopeful that the sympathetic attil»de of Canada will assist towards securing ;ude of Canada will assist towards soaring the desired result 1 have evoted much attention tc the posibilrty of establishing a service by New ealand steamers between Aucklapd and •»-. Francisco by way of Tahiti, only to nd that without assistance from the American Government the cost of auch a Brvice is beyond our resources. There is, iowever, some reason to believe that in te- next session of Congress the muchebited Shipping Subsidy Bill will beune.law. when a service by American earner* will, it is practically certain, be partaken At * h e same tjrrwo I /Jo not
j think we should overlook the advantages ; ' to New Zealand of having a suitable service « via Suez. It Is deeply {a be re-gretted-that after so many years of control | bj the Suez Canal Company the obtaining I of large profits is made paramount to a I lowering of tihe scale of charges, by which . increased trade by that route would be ' encouraged, to the great advantage of the i Motherland and some of her principal oversea dependencies. I am hopeful that, finally, we • may have the advantages to this country of regular services by tho three routes — namely, Vancouver, San Francisco, and Suez. These, together with the excellent direct 6ervic€3 that are being 1 run for passenger and cargo purposes bej tween New Zealand and Great Britain, _ ehould place us in a position in respect of the oversea carrying of our general trade j of much greater advantage than at pre- : £cnt exists. INLAND MAIL SERVICES. The tendering for inland mail services ! for the ensuing triennium ha* been very ,'■ satiafactoiy. Owing to the large increase in mail matter generallj, and particularly ;n; n the parcel post— the latter having rieen bj 175 per cent, in a little over two years, — an increase in tho amount required was to be expected ; out this hns not been more Ihan-mig'ht be regarded as a normal one. I have in many cases been able to authoj rise considerable extensions of frequency <!i country districts and otherwise improve the existing service.". Following the general policy of the Government, services to back blocks are being extended as rapidly as possible, notwithstanding that I the co&t is in most cases very considerably in excess of wvenu;. OLD-AGE PENSIONS. The widening of the scope of tho act of 1903 has been mainly responsible for an increased expenditure of £11,560 during the financial year just closed. As, however, the majority of those taking- advantage of the new provisions did not participate until after October the full effect will be much more pronounced during the current year, for the first six months of which tho increased expenditure has been at the rate of £26,000 per annum. Tho numtex of pansioners increased by 827, tha ' greatest numerical advance since 1900. The percentage to tho population eligible by age is 34, as- against 32 in 1908. During the early part of this year there Mas a marked increase in the number of new claims reeorocd, due, no doubt, to the financial stringency. I am glad to be able bo announce that there has been during the pa*t two .months an almost eq-ually marked falling off. The "iicxease d.ire> to every widening of the scope of the act and the natural increase which, without any advance in bhe percentage, is based upon a greater eligible population each year; necessitates considerable caution, in dealing- with demandi for further, concessions. - The question of the full, exemption of pensioners' , bona fide homes has been, raised, and it lias received considerable attention at my hands. It will further increase the expenditure, and in these circumstances it is GfAy fair that where pensioners have relatives who »re able to maintain them but allow the |irv»i to fall on the State, the pensioners' prop&^sj shoudcJ "not be
T alienated, but should go to the State. This will enable a contribution ' towards this humane fund to be made instead of the money going into the coffers of the comparatively -well-to-do people who have been relieved- from the monetary obligations that -would have been" entailed upon them but for t.foe existence of the old-age pensions. I will submit proposals this session which, while assisting pensioners, wUI at the same time check any abuses against which the State should rightly be protected. PERRY SERVICE. The development of the railways in both islands and the consequent necessity for having a complete State-owned link for the conveyance of mails and passengers between the two islands has been from timo to time receiving the consideratior of tha Government, amd the time is approaching when this important matter ehouki/ be dealt with on practical lines. Up to the present the service has been carried on by the Union Company in a satisfactory manner, but the Government is considering whether tho time has not arrived when something definite should be given effect to In ord«,r to own and control the steamers carrying the mails and passengers, a large number of the latter being travellers over the Govenimemt railways in both the North and South Islands. The .natter has been bhe subject of ne-gotiations with the Union Steam Ship Company, and! should it. assume definite shape the House will be duly advised. I am of the opinion that two steamers of the Maori type are neccb^ary so as to give a close connection on every night of the week except Sunday, thus enabling the transport of mailb and 'passengers to be carried out under the same administration at botli end.s. NAVAL DEFENCE. Hon. members are aware that the Imperial Defence Conference, which was attended by me as the representative of this Dominion, arrived at decisions in connection with the strengthening of the British navy which call for action on the part of New Zealand. Tbe offer of a Dreadnought made by this country was accepted by tho British Government, and the necessary steps require to be taken to enable tho ! vessel to be built and handed over to the ' Admiralty. For this purpose I propose to | ask the House for authority to raise a loan of up to two millions, at a rate of interest not exceeding 3i per cent. Until I the vessel is actually completed it is not j possible to say what the exact amount of the expenditure will be, but it will be within the amount I have named. Having regard to the nature of the expenditure, you will, I hope, agree with me that it ehould not be treated ag part. of our perma- • nent public debt, and I propose that we make .provision, for paying it off within ' 18 y«j.rs._ For this purpose a sinking fund of 4- ps<r. cent, will seouire to be provided, '• and proposals -ia this direction will be -sub- j mittcdf to you. It is scarcely necessary to . say anything 1 at this time in support of our offer of - the Dreadnought. The Governjnenfc made it subject, of course, to ratification by Parliament. Parliament ratified! it, and in doing 1 so acted, I am convinced, with the hearty approval of the great majority of the people. The motive throturWit was
the same. We recognised, all of us, that the- best interests of New Zealand wsire, bound up with the maintenance of British ; supremacy on the seas. That supremacy | appeared to be directly challenged. Im our 1 own.' infceirests, as well ac those of tho Empire at large, we felt that at that particular juncture the offer we made was not only opportune in itself, but was the most effective way of strengthening the Empire. At the conference the overseas representatives were of one mind 'n their willingness to take somo share in Imperial defence, though they differed as. to the ; form it should take. Local sentiment and Jocal conditions no doubt weighed witti them. Some preferred local nav>es; others, amongst them myself, thought the more excellent way was to contribute a quota to tho British navy itself. The course I followed will bo beet seen by the following correspondence, which summarises the position: — Hotel Cecil, London, August 11, 1809. Dear Mr M'Kenua, — At to-day's meeting you explained that the general idea underlying the Admiralty memorandum was that the present East Indies, China, . and Australasian squadrons should be treated strategically as one Far Eastern, or, as you thought a preferable term, " Pacific " station, and that each of the principal portions of this station should have a complete fleet unit — the Common- f wealth Government maintaining one unit in Australian waters in lieu of the present Australian squadron, and the Imperial Government providing the remaintier, the Dreadnought cruiser presented by New Zealand forming the flagship of the China unit. If Canada found her-:e!f able also to como into this agreement, her contribution to the Pacific station would be a fourth unit. I think it w-'ll conduce to clearness if I state my views in writing; hence this memorandum I expressed myself *« generally satisfied wit" this sirrangement as a strategic plan, but I would point out that if as I understand, Australia i.s providing an in<ippenc«ent unit it means the supersedi*i<? of tho prts-.n British-Australian squadrop - aDtI the fact of that boinj? done would, on its completion, determine the £ av *l Agreement with Australia and i\ew Zealand, thus creating entirely new oosition. 1 favour one great Irnl>eml na vy with all the overseas dominions contributing either in ship or any other way. anc i with ava j| able sta . tions at «ne selt'-governing dominions supplied with ships by and under tne control.. of i ., th<l ,. Admiralty. I, however, realise the difficulties, and recognise that Australia and Canada in this important matter are doing that which their respective Governments consider to be befit, liut the fact remains that the alterations xi.l- , ' bo bro «ght about upon th«> ' e f? abll ? hm enfc of an Australian unit will alter the present position with New Zeaiand. New Zealand's maritime interest? 3 . n *'f own waters and her dependent islands in the Pacific would, under the "Itered arrangements, be almost, entirely represented by the Australian flwt unit. a.nd.not. as at present, by the Imperial fleet. This important factor, I consider, necessitates sor>ie nuitabls provision being
. made for New Zealand, which country, hatf a most friendly feeling in every re-" spect for Australia .and its people; and' I am.anxioua that in the initiation New' Zealand 6hould not"- be' overlooked. £•' cotisider it my duty to "point this out, and ' to have the direct connection between New Zealand and the Koyal navy maintamed In some concrete foifti. New - /'ealand will supply a Dreadnought for the British navy, as already offered; the ship to be under the control of and stationed' wherever the Admiralty considers it advisable. '" ''• I fully realise that Hhe creation of ' , Pacific units — on© in the Ea6t, on© id" Australia, and, if possible, one in Canada — would be a, great improvement upon. ' the existing condition of affairs, and the 1 fact that bhe New Zealand Dreadnought , is to be the flagship of the China Pacific. " undt is, in my opinion, satisfactory. I,' ( however, consider it advi&ablo that a , portion of the China pacific unit should remain in New Zealand waters, .and I , would suggest that two of the new " Bristol " cruisers, .together with threo , destroyers and two submarines, should be , detached from the China station in time of peace, and be stationed in New Zea- 1 land waters; that these vessels should' come under the flag of the admiral -of the China unit; that the flag-ship should make periodical visits to New Zealand waters; and that there should be an interchange in the service of the cruisers between. New Zealand and China under conditions to be laid down. - The ships should be manned as fa.r as possible by New Zealand officers and men, and in order that New Zealandc'rs niig»ht be attracted to serve in tihe fleet local rates should be paid to those New Zealanders who enter in the same manner as under the present Ausfirailian and New Zealand agreement, such local rates being treated as dcerredi pay. ■ The determination cf the agreement with Australia Jias of necessity brought up the position of New Zealand undev that joint agreement. I therefore suggest that on the completion of the Ohm- • unit t.he present agreement with New Zealand should cease ; that its contribution of £100,000 p?r, annum should continue, and be used to pay the difference in the rates of pay to New Zealanders above what they would be paid under the ordinary rate; ,if the contribution for the advanced rate of pay did not amount to £100,000 per annum, any balance to be at the disposal of the Admiralty; the whole of this fleet unit to be taken in hand and completed before file end of 1912, and I should be glad it the squadron as a whole would then visit New Zealand on the -way to China, leaving bhe New Zealand detachment there under its senior officer. — I Texnains, your^ sincerely, J. G. Wash. Admiralty, Whitehall, 18th August, 1909 Dear Sir Joseph,— The suggestions made by you at the meeting on the 11th inst., and recited by you in your letter*, to me of the same date, have been carefully considered, and concurred in by th« , . Admiralty. The present naval *&*•»:. ment with Australia v i New Z**tytt§ •
will not be renewed, and in view of this fact and the other special circumstances referred to by you, the part of the China fleet unit, as set out by you, will be maintained in Jfew - Zealand as its headquarters. Yoar wish that the ships of the fleet as a whole — or, at anyrate, the armoured ships and the cruisers, when completed— should pay a visit to New Zealand on the way to China will also be carried out. I take this opportunity, on behalf of the Admiralty, of repeating its sincere thanks to the New Zealand Government for taking so important a part in (he inception of the present conference.-' The Admiralty feels that every effort should be made to work out a soheme acceptable to the people of New Zealand, having regard to the patriotic action taken by yourself and your Ministers in March last.— l remains,- yours sincerely, - Reginald M'Kenna. In making these proposals I acted on what, after full consideration, I believed best for New Zealand and most in accord' with the sentiments of-her people. It would be quite out of place? for me to attempt to question" or even oriticise the decision of Canada and Australia to establish local, naviea.\ : lt is for these great dependencies themselves to determine the lines on which to proceed, and I fully -recognise that they are tbie. best judges of their own best interests. It wjll be clearly understood, then, -that the reasons which moved me in the course I took had no relation to them. '" Omitting all such controversial points a*, the. difficulty -.of- maintaining j, common standard? aiwl <jf arranging inter- "■ changes, the risk of defeat in detail if the British 'fleets should' Be crushed, and so on, tliene remains one consideration, which is purely personal to New Zealand, and. in my opinion determines the vhole question—that of cost. , To -show what the pecuniary liability involved in a local fleet unit ia I quote an extract^ from an Admir-.. altj memorandum that Mr M'Kenna, -First Lord. 'submitted to the conference: 7. The 'leet unit to b<? aimed at should, in the opinion of the Admiralfy. consist of *h& follow i n sf :-- One armoured cruiser (new) of the Indomitable class, which is of the- Dreadnoug-ht tvi>>; three armoured cruisers of the Bristol, class; six destroyers; three submarines, with neces&ary auxiliaries, depot and store shiiw, en:. Such a. ne-^t unit would be capable of actio.j no*; r.nlv in defence of iilie coasts, but also of tracts routes.. »nd would be sufficienMv powerful to deal with small hostile squadrons should such ever attempt to act in those waters. 8. Simply to man such a squadron, omitting auxiliary requirement* and any i'iargin for reliefs, sickness, etc., minimum iiutnbera required would be about 2000 officers and men. according to the Admiralty scheme, the complements including: one rear-admiral or commodore and staff, <ns captain, four cdmmandens. 43 l; »upnants and sub-lieutenants, 16 engineer i.ff'osrs, besides medical and aocountanr, '. s fi?er3. warrant and petty officers of - pr-nus classes. The estimated first rost of •nilding and arming the class of ships in•""ated would be: — Indomitable icew}. ?.000,000; Bristol. £350,000;" dostrover •>*>r class), £80,000; submarine (C class). ""oo 000. It is difficult to estimate th« an- ••»' cost of maintenance — i.e., the upkeep tiull. machinery, sea stores, 'uel. ' r'\. isr the new conditions contemplated, but miy be taken tliat it would amount ao•*x J matel v to : -Tndomita bl- . £5? 000 ; " •'<*tof , £16,500; destroyer (river class 1 . •0,700: submarine (C class), £2300. Jt so • -o difficult to estimate the aniount which « -D-i'd represent irterebt and depreciation • - the first cost. The life of Lhs Indomi- ■•!■»'•? and Bristol classes is estimated at "n ••.« arSi and of destroyers and submarines ••* 15 years, but the aniount calculated on - baslf; would vary according to the rate >* interest prevailing in each country. It "»s not. therefore, been included. The '.'a' firet cost, accordingly, of buildin? and • -in ing a fleet unit, apart from auxiliaries, •mid be: — One Indomitabl* 1 (new), three Bristols. £1.050.000; sir < -s/troyers (river class). £480.000; three 6ubniines (C class). £165.000; — total. J3.695.000. And the total annual cost of viaintenanoe would be: — On'» Indomitable, .05200; three Bristols, £49.500; six destroyers (river class). £64,200; three eub-m-rines (C class). £6900 -.—total. £172.600. .0. The above figures do not include cost n" the personnel, which would have to be added to the annual charge for maintenance. Th>, activ? service pay of 2000 officers and men, their victualling, and other 'ike expenses, would amount auproxi mately to £156.000 a year, calculated on the rates payable in uhe Royal Navy. It will be noticed that, as in the case of the material of the fleet unit, the estimated cost of the personnel required to man the shif> do mi not comprise the whole cost. There would be other charges to be urovided for. as pay of persons employed in the subsidiary services^ those undergoing training, tha ?****,*+ reserve, etc.
In the course of the discussion, Mr M'Tvehna said that at Imperial rates the total annual- cost of sucb a fleet unit would be about £600,C00. Sir F. W. Borden, speaking for Canada, said that in the caee of that Dominion it could not be less than £700,000. After going into careful calculations, I stated that in the case of New Zealand it would be at the very least £700,000. Putting it at that— and lam quite satisfied the estimate is a ver> moderate one — it is manifest that such an' annual expenditure would be quite beyond our resources, and would be so for many .• years to come. The proposals made by j me involve a total yearly expenditure of £250,000, made up thus: — Dreadnought (interest and sinking fund for each of 18 yeans), £150,000; contribution to the Admiralty to cover the difference between Imperial and local rates of pay, etc.. £100,000; —£250,000. Deducting from this the £100.009 which we are at present paying as contribution to the cost of the Australasian equadron, and which w<ll be dropped when the new scheme is adopted, the neb result will be jl yearly increase of £150,000 on the amount we ait present pay. Recognising, as we all do, ou.*-dufcy to take upon us a reasonable share in the general burden of Imperial defence, I feel satisfied that neither Parliament roy the country will consider that such an expenditure will be excessive. Proposals en the subject will be submitted at an early date for year consideration. INTERNAL DEFENCE. • ,- The time has a rjciv<d -when a definite course 'must be taken with" the view of placing tbe home defence of the Dominion - oh" """a more satisfactory footing. To carry this out the defence system must undergo, a , complete reorganisation, and I propose to submit legislation this session that will substantially increase the efficiency for defence purposes of the scheme now in opera-, tion. This reorganisation will, as far as *looal conditions will permit, be on lines approved at the Imperial Defence Conference. These are designed to provide an activo (trained force for emergency, consisKo.2: of coast and garrison defence and mob ik forces. Al< arms w ; ll be so arranged ♦ hat .should l-he Dominion be required to eupplv a. expeditionary force suitable for stMV>e oversea :fc can be promptly sent, wirhouc any dislocation of our own defences. ' f propose that, all boya between the ages , of 12 and 18 ahall undergo elementary and progressive lirainirbg either in junior or senior Cadet divisions. Boys under the I former age will undergo .hysical training , only. Ail young men, except tho?e ' ptrysieaily unfit beiw-een the years of 18 , and 21. will undergo two years' oom-pukory training. This training will be on stated e venires and on half and whole uays during the year. In addit'on. there will be training on 14 days in each year iiv. a training j camp. As a further part of the proposed : scheme an active fo 1- ce will Ik> organised, j consisting of 20,000 of all ranks, composed of men between the ajr«3 of .18 ard 30 years ' who chcase to join voluntarily. Ilih force will b*» organised on Imoerial line-; as to artr.s, eauiprn^nt, establishment, and trainin?. After the*e men have completed their j services they will pass to the .-ese.-i'e. In th« I <*venfc_ of 6uch a force not being equipped I in point of numbers by voluntarily enlistinp. a selection will be uiade from t'fio^e und-ergoint? compulsory, training, as above outlined, to make uo Ihp total. This active • force will be established on tba lit March next in the larger oenfcres of population . only. The mounted rifles in the country, ■however, will bo included as the staff instructors gain experience, and es material and equipment, become available the scheme will be extended beyond -the lar«r-Pir oentres to the outly : v.? districts of the Dominion. , Cornpiilsorv training far junior and senior Cadets and young men between 18 and 21 will commence as scon ts th- a renuWto j registration can bs completed. I fell that j the useful ssrvioes cf rifle cluhs snouid not be ' lost to the Dominion, and the continuance and formation of thes-e will be encouraged in every way. All tho.=e exemnt from in tiles'* forces, and those who shall have* completed their services, may join the rifle clubs. 1 do not pronose tint fhoe=e und^rsroinsr comnuLsor" military training shall be provided vith uniform. Thoir training will take place in the ordinary civilian dres^ As it ia mo^t desirable that rhere should be uniformity between the Sf.hsme followed by the Imperial general staff and our own peneral staff, step 3 will be taken to insure the necessary similarity in train-ing and in methods of defence. As a permanent central training ground will be absolutely necessary in each island, the House will be asked to authorise the setting apart of a considerable area of Jand. say, 12,000 acres, in each island, where continuous training will take place, where the permanent instruction staff will be located, and on which the necessary buildings, ranges, and other equipments will be erected. As regards expense, the proposed
scheme may be estimated at not more than £100,000 .per- annum. This sum you will be asked to add to the present Defence vote. I propose to ask for a further - sum of £150,000-. fo~r additional armament and field equipment. The expenditure of this, amount will be spiead over a period* .of three years. - After- it has been 'ntroduced I propose to feet tip a Select Committee tocansider the proposals contained in the bill. , I feel sure the House will assist to place this important legislation on the' Statute Book this session. RETRENCHMENT. The revenue for several years had, as you are aware, continuously increased to such ' a.n extent that from time to lime heavy reductions by way of remissions both in taxation and in the receipts of various departments were effected. I would re- j mind you of the fact that during the last 15 years the total amount of remissions , amounted to nearjy seven millions, and of ' that amount during the session of 1907 Te- I missions m taxation and reduction of re- ! venue were made to the extent of £600,000 per annum. The extraordinary drop in the value of some of our principal products brought about an alteration in the commercial condition of the country that told its tale upon the revenue, and more particularly , with respect to that derived from the Cue- ' tome branch. For the six months of the present ysar the Customs revenue has not been satisfactory. It is, however, the worst half of the year, and I expect that during the remaining portions very much .better results -will be obtained. R is my duty in dealing with the financial position of the country "to provide against file possible continuance of a shrinkage, even though, it should not be to the same extent as has taken place. This fall in Customs revenue is due to a reduction In imports. In view of the heavy fall in revenue, brought about from «the causes I have indicated, on lop of the large reductions made, it ha.3 adveisely affected the ' general financial results, and necessitated a reduction of the public expenditure. The ' Government at once faced the situation, j though naturally with yeluetanoe, as the removal of m»n from their positions, with I the trouble it enlaite, upon themselves and < families, ihougii a nictt painful duty for any j Government iv perform, became a necessity, j It is net, of course, possible for the effect : of (he retrenchment to come within the I period of ona \ear. I notice that the fact I of the reductions having beon made has led I 6ome peoole to suppose thai, because this wa-s being done now", the depaitinenls must I have been overstaffed before. It is impossible for any country, where you have a largely-expanding levenue from year to year, to carry the work of the deparlmenis on without a ronoiderable increase from time to tune in the staffs, and ac the result ot a heavy 'all in the revenue the converse miut of necessity ariee. Advantage was taken of the position of affairs to amalgamate .a .lumber of departments, and where we formerly had 30 departments we have now but 19-tbat ie. 15 of the civil service and four of outside departments— namely the Government Life Insurance, the Pubfio Trust, the State Fire, and the Advances to Settlers. Some month, a S o ! i set jp a committee, consisting of , five of tie high officers of the pah- ! lie service, of wide financial experience j t-amsly— the controller and auditor-general I rhe secretary of the Treasury. Ihe torn- I nms,oner of taxes, the owishuit seorerarv I of tne Post Office, ar.d Iho accountant of , railways for the Diirpcee of examining into the wnole system of the accounts as oirn-H on to the various departments with the view ' J r es^bli<hment of a uniform system. and I hope before long lo vrcei\<> a report from Ihe offic-srs named. The oiitccme of this will certainly lea<j to 'mt'ier economies bsing effected Xecet-arily it will t-jke some time um!;T the amalgamated departments before it can be cxprcred that the full results will be achieved. I look forward within a reasonable poiiod to finci. a* the outcome of the important changes effected, that as valuable a service as wo have DOf-se-sed in the pa-st can he maintained, though on somewhat different 'me*. and on lines making for economi'dl adniin.slration. I may t<ny, f<v tiw information of t!je House, that th.-> Kitol number of employees who were affected by (.he reductions tha.t were nut into oppration ' wa-s, of all classes, 940. Unfortunately, | simultaneously with tlie ) -:avy dirp in the revenn/>, a temporary depression existed in partiens of tho cotin.cry, an'l on aoeoant of this every effort «ae> rns<le to enable cmployoca in the service to continue as long es possible, liiis was done in order to minimise afl much as possible the effect ' upon them of losing their positions • at • a time when other employment was more difficult than usual to obtain. But for this reason tire reductions that had been authorised -would ha-ve come into operation at an earlier date. ■To give those members of the service wfe>m it was found . necessary to retrench .en ■ .opportunity of obttiningr
hon^es for themselves, special blocks of land were set apart for selection by them and by other landless persons under improved farm conctiions. These sections were made available in September ' and ■ October, and "were -ialloted for amongst the applicants.. The intention of the Government.; was to set aside 400 -sections ■aig-grega'tinfc 60,000 acres. It was,' However, found that land of sufficiently good .quality and reasonably near the 'Alain Trunk Tailway, line could not be obtained! to carry , out in full the original proposals. In the Auckland laad district there were three settlements containing 86 sections, with an area' of 22,941 aores, for which 358 persons applied, jjft- Taranaki there-, were •-'two s-Btble-nienfe,^ containing 123 sections. > with ' am area^of 20,085 acres, fou which 25? persons applied. In tba- "Wdlin^ton: laad district there "were 103 . sections, ; containing j an area ot ,-143,4-lb acres, for "which there j were 550 applicant,' , The- 'total number | of sections was 310; containing an area of ; 47,444 acres, for" 'which there wore 1155 " applicants. j X,ICKNSINa LEGISLATION". I I propose to introduce important amend- . ments to the Licensing Act. I have been j for some time past impressed by the fact'; that the existing legislation is not suffi- ! ciently in accord) with the principles of democracy, and. material alteratipns in the law will ba f made both to further these' principles and to provide a fair measure of , consideration for thoss whose material in- j tercets will . b;e greatly affected, by &&& , proposed' alterations! I have't-'^Bo6gai6ea that such important changes as .those con- j tsmplated would have a diffioulty" in becoming law, especially this session, in connection with such a contentious subject-matter at? licensing legislation, and. experiencing this difficulty, I have taken steps, through, the good offices of one of my colleagues, to induce the two great parties -to this question. independently through their recognised representatives, to modify their '. full demancfc for or opposition to certain I proposed amendments. la this ami, I am ! glad to say, the results have been entirely | successful "owing to the spirit of reasonable and honourable concession on both sides. The proposals, therefore, in the Legislation T intend very shortly to introduce, have a.! ready obtained the express approval of both the parties referred to, an<; I have been requested by each independently to pass this proposed legislation into law this session. Should t'ue legislation contemplated be passed, no further amendments of the law will, it is believed, be required for seveiei year* to conw. J RACING LEGISLATION. j The attention of the Government lvas J been called to the conditions under which galloway and poiry races are conducted, . and- t is o? opinion that they ehou!d be stopped, and the House will be asked to do so. The race meetings held throughout t.he Dominion are too numerous, and ;i proposal will be submitted to limit them. I At the same time the Housn will be given the opportunity of d-eeidiintr wJiat form . of betting is to be allowed on racecourses, j Sport, racing or otherwise, followed out legitimately, is deserving support, so that ' those who 'enjoy it as a pastime or reciva- . tion /nay do so. The best way to do this is to remedy any flagrant abuses that may exist. NEW LAND PROPOSALS. A« I -ntimated earlier in the session, lext-siation will be introduced with a view to the more satisfactory settlement of th© ' land question in New Zealand. The laird , q.ie^tion beie differs ossentialiy from the sams question in the Motherland. There, n'hfv.-e the soil is almos': entirely in private hands, and th? Stare holds practically no lane's a\ai!ftb!e for disposition, the nuestion ;<> manly ons of taxation, as illustrated , }>,• the 'B I'd get now bafore the Imperial Parliament. Here, where the Crown is the owner of immense areas and still holds great t.raeifl of country yet unalienated, the question is not one of taxation, but of settlement, tenure, and limitation of area, and it affects Crown lands only. It is desirable to keep this distinction in view in considering the land prooosals I am about to outline. These will impose no tax or ot-ber obligation upon the existing rights of private landed property ; they will lake from no ma.n any interests lie now possasses, or tairden any land irow leased or acquired from ihe Crown. Every -man who now owns a freehold is entitled to it, and under no ponditions would the State be justified in -taking any step to weaken "hia freehold tenure. In dealing with the disposal of ita lands ' the State should ab- , serve two great principles; First, suitable close settlement must be promoted and encouraged by «very reasonable means; second, the State must, >in justice to it* present end future people as a whole, reserve to them- some part of that value which pubiio expenditure will create iir the lands it is now parting witii to private hands. These ii room lor md*'diva?'**-
of opinion as to the extent to which Stata operations and private effort respective 1 v create values in iano\ but while there may be this difference as to the degree there surely can be no sucb difference as to the fact that in a young and sparsely peopled country/like this, where such enormous national development work is beini? done, mainly at the expense of the people as a whole, ' some* it«creased value will b* steadily added by' the State operations to tho lands it ns_ parting with, and of that :n-creased: n-creased vaJue ;c rke people are entitled to a-t least a share. • The State's right share of the increasing unimproved value wilt roughly vary with the degree to which, that increase is dua to the activities and agencies' I have indicated, and this principle I*- have" .endeavoured to maintain throughout my land proposals. These will deal obiefly with (a) national endowment and its -income, (b) lands which hare already, been* leased for 999 years, whether originally- Crown land or land acquired under ,tfo Land for Settlements. Act ; (o) linds which have already been leased upon "t.h-© lessishokl syeti&m vr'neUYier originally Crown, lands or lands acquired unde^r t-he ta'nd ior Settlments Act; (d) the' remain; ing, Crown kinds- lying 'outside of they-, nationa) endowment area; (e> European"! lands acquired in future under the Land for/ Settlements Aet;j.(fl Native lands now, or - hereafter, to' be^faCquired by the Crown^ fot European settlement; (%) limitation ©£■', area as regards both ownership and oocupa-% tion ; (Fi) rebates .of. j»nt ; (i) small -grafting? Vans; (j) tne proceeds of the sale of oiVlinary Crown lands, national endowmentf, and the disposition of its income. I desire to say that no part of the 9.000,000 acres constituting the national endowment will bo disposed of on any tenure except thai ■ of leasehold. The proceeds from these lands will be devoted, as at present, save thai: one-fifbh of the annual income will be set apart for higher -education, and this sum will -be used for the purposes of the University Colleges^ of .Auckland, Welltngtor, Christoharch, and Dunedin. add proposal* will be submitted to Parliament showing the method in which this is to be done. I may «ay, for instance, with regard to Auckland University, that it is -intended to .utilise the present Government ' House grounds as a site for a new university building, and the Auckland University* share of the moneys comim? from the endowment lands will be voted to provide suitable buildings. I wiil ask t,he House to make the neicepsary provision to enable this to be put in hand next year. As to the lands airead.v leased for 9£9 years, it is widely asserted that the lessees earnestly' desire to convert this tenure into a freehold, and I deem it the duty of the State to permit this if it can ba done without any material sacrifice of its permanent interests. The chief advantages to the State of the present tenure are that it secures the existing condition as to limitation of area and occupation.. The value of a reversion postponed for 999 years :«t: «t not very appreciable, even where the State is the reversioner. In my opinion the conditions as to limitation of area and occupation can be effectively safeguarded even under a grant of the freehold, as I shall later show, and, this being co. the only question left is what should the !i'>Wer of one of these leases for 999 years pay for a title in fee simple. I therefor* 1 propose to offer lease in perpetuity tenants, whether on lands originally Crown lands or of lands acquired under the I«and for Settlements Act, one of the three following options:— (a) Tp_ retain t,he tenure ac it stands; (b) to purchase the freehold withm a period of two years at a price equal to tha original valuation, plus one-half of the difference between bhat value and the improved value at the dat°- of exercisin* the option : (c) purchase the freehold at original valuation, subject to five recurring charges in favour of the Crown— the first, equivalent to one-tenth of the increase in the unimproved value between tne date of th* leas.a and the expiration of the first period ■ of 33 years, end each thereafter equivalent to one-tenth of the increase in the unimproved value between the expiration of each suoceedin-g and ach immediately preceding period of 33 Tears, the. land to become an absolutely uncharged freehold at the end of 165 years from the date of the lease. The purchase money for the freehold may be either in one cash payment or hv an instalment of 25 per cent., and by the payment of the balance, with interest at 4 per cent., on ,tho instalment system prevailing under the Advances to Ssttlers Acts over a period of 3? years, with the right to nay off in whole - or in part at any diie. These changes will' create no personal liability on the part of the or -ner, but will be a charge upon the land (-pily, and be payable either in cash 'or at the owner's option by instalment* oye/ each- succeeding period of 33 years, with interest added at £4 per cent.
- % iie-newafale Lease of Ordinary Crown Lands. — Next, with regard to the tenants uu'Jcr the renewable lease system of ordinary Crown lands. Under this system the lessee - obtains a right of perpetual .l&ase subject ■: to recurring valuations every- 66 years, ugon - which valuation "the new rents! is based. Hero tthere ia secured to the State prsctically the whole of the increase of the un- ■ improved value in the form of rent at each renewal. The problem before me has been' to contrive a system und#r which the freehold might be given to these existing leaseholders while securing not .only the conditions as to area and occupation, but al«o" securing to the State some reasonable portion of the unimproved value which is already secured by the means I have indioated. Under the present "system, in my . opinion, the following 1 scheme presents a - fair equivalent from th© point of view both of the tenant and the State: .the freehold is to be given to these teteees at the • original value, subject to a recurring charge ' every 33 years equivalent to one-fifth of the i increase m the unimproved value found ~to v have taken plaos between these periods. Such a system, while it secures to the State •ome portion of the unimproved value ngbly belonging to the State, leaves the - peater portion of that unimproved value to the interest at ice simple. Affording an ample margin in his favour. To give him the fullest encouragement the purchase money payable far ffce freehold in these o«*k may be paid ac in the case above butiined in th» purchase o f lands now held undor lease in perpetuity ' Renewable Leases ofliod for Settlewent Lands.->ext as regards tie «newSJL^" *° f u W ' f ° r fet^™ent lands. these tenant* have now the r%ht to a perpetual lease with recurring valuation^ every 33 years the term being half only x t £ m of - th « renewable lease of ordinary Crown lands. It will be bered, further, that these landT acquired in. most cases more or leas Ijiigfetv improved and ready for settlement, *& mudf mo« ffi. h^ **" **» «*ainiry Crown •Si U W VCL Zt m ? n ?,. of c°n*nHm.ioation T^jiLS? other facilities of civilisation. In connection with these lands, therefore, the .State has now, fay the means of a recurring valuation upon. whafe, each new rent » to > be based 6wnf|}^ <^oured to it practically the who&ofW increase in the unimproved value*' My* purpose, therefore, m thi« case was to find some equivalent ,n the form of freehold tenure wlwoh would fairly secure to the State »- Mwonable ahare of the unimproved value 9 r -P^P 086 to* grant the freehold at the original value just as ia the case of ordinary Crown lands, toot with' double the recurring oharge— that is to fay. two-fifths instead of one-fifth of the increase in the unimproved value ♦vr U T rO|>^ ai i I*21 *2 d * •°«l uir «l 'n future under the Land for Settlements Act will be open J^J^l *5 ?* P 1 "*" 1 *. *"> fc the. fee simple, of the land leased nmay^ bet^cojaiued jupoa the rec«mns system already explained i& regards the remaining Grown fends outside of the endowment area the present optional system will continue. .* ' -*■ *. -**-x - *" wYx- E c^S,y ISITION AND EUBOLANDS SETTLBMENT 0F NATIVE The legislation I propose to introduce will empower the State to acquire, cotnpulsordy if necessary, from the Native owners 3 « T «S5?«« Native knd equivalent in value to £500,000 per annum, and in order that the most convincing earnest should be given to Parliament and to the people of New ZeaJand that this forward movement will be tafcen. I propose to ask Parliament to amend the Land for Settlements Act by increasing the present amount authorised for the purchase of lands to £1,000,000 per annum, £500,000 of which is to acquire Native lands each year to the value of the half-million. The lands r*rhen.~4o acquired will be paid for out of tbe Land for Settlements account. They will be classified into two classes, according to the degree of their improvement and' their- remoteness from settlement, and of the extent of labour, in clearing;, draining, or .otherwise 'bnagingthem into cultivation. The class "Improved Land* " will be held and dealt wifeh I m the same way as European lands— i.e., renewable leaee, with power to purchase the fee simple upon the recurring charge system. The class "Unimproved Lands" will be disposed of by the State under the optional system now applicable to ordinary ! Crown lands, but the proceeds from either lease or sale will be paid into the Land I for Settlements account. The present la-w to Native townships under existing con-* ditions requires amending, and the new Land Bill will provide for the purchase j by the Government of Native townships, J preserving allotments set aside in such ' townships for the Maoris and now occupied j by them, and these will ha disposed of ' under a freehold tenure on conditions which j : I will sub-nit in the Land Bill. j 5 Limitation of Areas. — The evil of aggre- }
{ration still prevails, and drastic measures must be employed to chock it. Moreover, the;, law still allows too large an area of /Crown land to be taken up by one person , .'and the proposed legislation will therefore provide a limit of 400 acres in respect of first claas land and » -correspondingly reduced area in respect of second and third class land. An effective provision will also 1 be made against evasion by providing that these limitations shall apply to the area to be occupied, and not merely to the area owned. Rebates of Rent. — The system of rebating 10 per cent, of the Tent payable by Crown tenants on prompt payments will be used- for the purpose of helping and encouraging settlers who undertake the burden and responsibility of a family .of children. It ie recognised that it is one of the first duties of. "the-. State to encourage in every possible way' this principal: duty of citizenship, and I therefore . 'propose that the rebate on prompt payment shall onlj be made in cases where the settler has four or more children under tho age of 16 years. Age of Selectors. — While the demand *or land on tho part of our adult people is so great, many of whom are carrying responsibilities of wife and family, the age at ° which applicants may become selectors of or ' acquire land under our land laws should be raised. At present the age mifst not be^ lees than 17, and I propose to provide that no selector hereafter shall be under the age of 21 years. Small -grazing Runs. — Provision will be made for 'abolishing the present' rigiht to a perpetual renewal of small grazing runs, and in future cases it is proposed that the right will be limited to one renewal only upon revaluation at the end of the first term. -Proceeds of Sales of Ordinary Crown Lands. — In all cases where a freehold is { granted of existing unalienated Crown lands j under any of these land proposals the title ! will be impressed with reference to the j limitations as to area allowed to be owned ' or occupied. lam convinced that the proceeds of the sate of such portion of the > national estate as remains outside our ■ , national endowment should be devoted ex- ■ cluaiyeiy to the development of this country . by .means : of public works, and therefore I propose to provide all the surplus money received in" respset to th« sale cf the fee simple of Crown lands, whether now under lease" or not— other than settlement landsshall be paid into the public account to the , credit of a separate account called the i National Development Account, and these nroneys be applied only in the development of the country by roads, bridges,' telegraphs, telephones, and railways, subject m each ' ease to an appropriation by Parliament. • The proceeds of leases and sales of settle- ' meat lands will, as hitherto, 1 be paid into the land for settlements account. NATIVE LANDS. The proposals of the Government with I r«g*rd to the jSetttement^of Native lands' will be put before you in a measure dealing 'specially with that important subject The bill^ ie in part a consolidation and an amendment~of the existing law so ~as to confirm to existing conditions, to tdie present needs of the Native race, and to the demands of the Dom Lnion as a whole. Tie coneol idation affects 71 statutes (public, private, and local), , and dating back to the year 1871. These do not contain the whole of the law relating to Native lands. It has hot been found possible to prepare for 6ubmi6saon to Parliament this session the consolidation of the special enactments dealing with Native reserves administered by the Pablic Trustee or with lands administered by the Comntiasicnar Tinder the East Coast Tru&t Lands Act, or with lands in the thermal springs district, or with lejid« vested in trustees for special purposes. I desire to assure the Hous9 that th© consolidation of the^e hicasures, with necessary- modifications, will bo introduced early next session, co thai the whole of our statute law relating to Native lands will then be completely revised And brought up to date. The process r 6i 'ascertaining Native. titles and partitioning the same into convenient areas will b° greatly improved. The provisions dealing with settlement have been extended to meet present wants, while safeguarding the interests of the Maori owners. jLt is proposed to purchase from 4he Natives as large air area as possible. To avoid the difficulties of the past, the purchases *'»11, as a rule, be negotiated with the owners in assembled meeting, duly convened, and the consent of the .majority to conclude the purchase . obtained, subject in certain cases to the partition of the interests of the dissentients. Lands now vested in Maori Land Boards and those about to be vested in accordance with the reoommen iations of the Native Land Commission will be administered practically under the existing system. Ample provision will be made to enable these boards to open the lands vested in them for settlement, such advances as may be made being se-
cuTed on the lands and the revenue therefrom. The system of incorporating owners ' of the Native lands for ' the purpose of alienating or farming their lands will he continued and somewihat extended for the purposes of alienating. All the existing rssferictions and prohibitions against alienation will be removed. STATE GUARANTEE ADVANCES. The extension of the Advances Department to provide for loans to local bodies uikl other useful reproductive objects is expected to still further promote the progress and prove of valuable service in the development of the country. The restricted amount of capital available for this purnoso under present legislation has retarded giving access to new country 1 and improving the positions^ of those in the country, but under the new scheme funds . will be much more plentiful, although the terms may not-be quite so advantageous to local bodies. -.There ore enormous undeveloped resources in the Dominion only awaiting sufficient capital to bring them into immediate use, and in return producing public and private wealth and income vastly in 'excess of the outlay of public expenditure. I , am, therefore, sanguine enough to view the future with the ' bigibest hopes for the prosperity and success of this country, notwithstanding numerous pessimistic critics. The new departure is aiao extended to the development of mining, which it is anticipated wiW be carried into effect by increased . assistance and facilities afforded by this newvlegTsl&tion to which I have referred, bq that there can be no doubt that greatly increased activity in this direction must result— that is, the development of the mineral resources of the country, which is of so much importance LAND FINANCE, ETC. In addition to the State-guaranteed Advances Bill, I hope that the House this ; wasion will put on the Statute Book the Land Settlement Finance Bill. The passing of thi3 measure will enable large areas of privately-owned land to be disposed of to those desirous of obtaining land in small areas, enabling them by an easy procedure to obtain the necessary capital for the purpos*e. So alsorwith the t National Annuities Bill, provid-ntr, as. it does, for ths protection of those lea«t able to bear the stress of unemployment due to acci- j dent or sickness. Tins bill also insures making suitable provision for (he widowed and fatherless, and I trust that the House will see the wisdom of putting this im- ; portant piece of legislation into operation. 1 so that those , whom it is intended to benefit may have the advantage of the protection which the scheme provides as early as possible. DEATH DUTIESThe existing Jaw wifah regard to the imposition and collection of death duties calk for amendment, not only for the pur- ; pose of taxation but for the purpose of I securing a fairer adjustment of these duties in accordance with both the amount of estate and shares taken by beneficiaries or next of kin. The existing scale is illo?ioal)y graduated, and, moreover, many of the largest estate* in New Zealand to-day escape taxation altogether. No matter how great tjre fortune left to a -widow or widower may bs. no outy is payable, whereas duty is payable on small estates, even if left to children, under our present law. As a further example, if £20,000 is divided among the children, all under age. the estate has to pay the same duty as if the whole amount went to one eon. I propose to introduce a new Death Duties Bill, which w-ill impose two descriotions of duty — viz., death duty in respect of the estates of deceased persons, and gift duty in respect of gifts made by a person in his lifetime. The former is substituted for the duty imposed by the existing consolidated " Death Duties Act. 1908," while the latter will take the place of the deed and gift dntv inw>osed by " The Stamp Duties Act 1908." The death duties under the proposed bill will consist of two kinds — via., estate duty and succession duty. This is not the time or ths place for details, but, Fpe&kinc generally , the new measure will deal w-ith the- eubject on modern lines and equitable principles. It will provide for a graduated rise, rising from 2 per cent, -n estates of £1000, and increasing to 8 per cent, in the cases of estates of £100,000, a&d other important alterations will be proposed. I hope to circulate the bill at an early date. Alterations will also be made in our law to bring it into conformity with the English lav? as regards tests of domicile wit!} , respect to the situation of property. Estate dirty will be- imposed not only upon the property of a deceased person which invests in his executor or administrator under his will or intestacy, but aleo upon certain other property which for this purpose is deemed to form part of his estate. For example, entailed estates property, over -which a deceased person possessed a general power of appointment, gifts m-ade by a deceased person within three years of his den*h, and settlements of property to
! take effect on the death .of a deceased person. Similar provisions to these are contained in the English law, and are distinctly necessary in order to safeguard this duty against existing and future evasions. So far I have dealt with estate duty. Unlike estate duty, succession duty will be imI posed a» in England, not upon the aggre- ; gate property of a deceased person, but upon each separate interest taken in that property by the several persons who succeed, whether as legatees, denrisees, or otherwise. The rate of dnity will depnd upon the relationship between the successor > and the > deceased. Up to a very large amount the | wioow, child, or grandchild pays -no sue- ; cession duty. Up to a large amount the man who succeeds his wife's property pays 2 per cent., and after that amount is reached the rate is increased. Other relatives nob more- remote than a ooiisin pay 5 per cent., and more remote relatives and strangers in blood pay ,10 per -cent. No succession' duty is payable on any property let in. trust for any charitable, educational, religious, or other public purpose in New Zealand. Although estates under £1000 are exempt from estate duty, they wili pay succession duty in the same manner as larger estates. Thus, if a deceased person leaves his whole estate, worth £500,~ to a stranger in blood thie sucoeesion duty will be 10 per cent., but if he leaves it to his widow or children it will pay neither an estate or nor sucoeesion duty. If, however, a man leaves an estate wor,th £100,000 to bis widow and chiidiren it will pay ■an estate duty of 8 per cent., but no succession duty except ia respect to th&t portion of the, estate which exceeds £40,000. • Duty will be imposed upon all gifts made by any person in bis lifetime, with th© exception of gifts of lees than £500 in value and ot gifts to any charitable use. The rate of duty will be 5 per cent, on the value^of the gift. It is necessary t<hat I should explain the difference between th* proposed gift duty and the existing gift duty in New Zealand to-day The new dtuy will differ from the existing duty in two eh*sf respects— first," the new duty will be imposed on all gifts whether made by an instrument in -writing or not. Under the existing law gift duty ia merely a stamp duty imposed upon the instrument of gift, if there be such an instrument; conS3quently gifts of money and other gifts, however great in value, now escape duty altogether. Recent iljustrations have shown how the existing law may be employed to effect successful evasions j of death duties in some of the largest estates. Second, the existing gift duty is levied at the same rate as the existing.; death duty, and therefore depends partly on th) 9 'aggregate value of the donor's ; estate, a-nd partly on the relationship between him and the beneficiaries, instead of | depending solely en the amount cf the j gift. The existing law, if righteously j enforced, would in many cases require the dono> to show the commissioner what property he possessed, and might involve inquisitorial investigations into a man's business and property. The proposed scheme will obviate all this: The general aim of this n3w law win be to relieve the • burden now imposed by our death duty upon the smaller estates, especially -where they go to the children and grandchildren, and to increase thfi burden upon the very large estates, which in many cases now escape taxation either wholly or in part. Another principle which has been followed is that of inducing testators to distribute their wealth rather than concentrate it upon one or a few persons by imposing an increased rate of duty where the amount left to any one person exceeds a stated sum. As I have said, the new legislation is aimed at introducing a more logical and fairer aystern into our law, while increasing upon shoulders fully able to bear it an increased contribution (in the shape of death duties). It is estimated that the amount of death duty collected on the total deceased estates taken over a period of the last 15 years has been enly a little over 3i per cent., while on estates of £100,000 and upwards the average, if you include estates given to widows, ie barely 5 per cent. These figures illustrate how inadequate the present death duties imposed in New Zealand are. They are much lower than in England at present, and substantially leGS than Ihe rate prevailing in several other Englishspeaking and European countries. It is universally acknowledged that taxation _ in tho form of death duties, so long as it imposes no hardship whatever upon the deceased's dependants, is the most justifiable of all forms of taxation in effect. It but takes from a nxaa or woman inheriting wealth come portion of that wealth which the beneficiary has not earned, and which, in many cases of intestacy, tho deceased never contemplated his obtaining BANK TAXATION. Tho banks haye not been contributing to the revenue a fair proportion of the inrome tax by comparison whh other public companies or private firms. An arbitrary method was adopted on the inception of j
Ibe land and incoms tax assessment, which > has not proved sufficiently elastic to pro- ' vide for the expansion of trade; so that, ' whilst the revenue derived from trades, • manufactures, etc, has developed rapidly, the proportion contributed by the banks has - nob increased at the same ratio as it should- ' ' have done. An increase" was made in 190$' j but even this has not recovered any of the' j lost ground. The_ ratio of the average assets and liabilities to be taken as forming the basis for taxation was increased to 10s per cent, in 1900. Since then the increased prosperity of the Dominioa, in which Ul3 banks have shared, has Turther accentuated the position; and there can be - no doubt that the banks are not paying a\' fair share of taxation; and this; as a matter of equity, they should do. I, therefore, propose to further increase the rate, in order to produce £14,000 per annum, additional, but, even then, this increase doe. not reasonably do so. and I will ask for authority, .n order to ' bring it more into-, a fair proportion of the total revenue ob-<-tained from this source, to increase the\ ' char<?e made under " The < Stamp Act, 1908," on the bank note issue from 10« per oefrt. to 15s per cent. This will giv. '£16,000 additional revenue. GRADUATED INCOME TAX. The graduated income tax needs re-ad--/listing on a more equal graduation. It is' ■ anticipated that the scale which is appended will produce an increased revenue of about £80,000, and equalise the differ T ence tn rates as between firms and persons' and companies. I propose to aek the House,';,' to make provisions for a system of graduated ' income tax upon the following scale, allowing an exemption of £300: — Under £400; at 6d in the pound; from £401 to £600, at 7drfrom £601 to £800, at 8d; from £801, to £1000, at 9d; from £1001 to £1250, at lOd; from £1261 to £1500, at lid; from £1501 to £1750, at Is; from £1751 to £2000,' at Is Id; over £2000, at Is 2d in the pound. BETTERMENT SYSTEM FOR RAILWAYS. In order to prevent the possibility of unpayable r always being established in the country — railways that upon careful examination it is found are likely to render a return of less than 5 per cent. — I propose* - to submit legislation to protect) the inroad J that such losses make upon the generalrailway revenue of the country, by the con*struction of railways' that are not likely*;' to return as low aerate of iotferewt as iitfk€ r I have named. Fortunately, there axe ! but few railways throughout the Dominion" that ar3 a drag upon the general railway revenue, and where thk k found to be, the case, an increase in the rates and "v, lessening of the service over such iines will * be necessary. Legislation upon this im-, portank matter will be submitted during ,■: the session. {, RAILWAY SUPERANNUATION FUND , AND POLICE SUPERANNUATION^ FUND. In order to birUd J _up a strong reserve for the railway superannuation funl, I propose to providfe £25,000 per a.nnutn-m support of that fund. Ail the funds, as you ere aware, have to have the guarantee •of' the country • behind them. The raiJw !y superannuation fund does not however, re- , oeive any contribution from the consolidated revenue, and I am of opinion that;', it should m this re^nect be plac-sd in a' similar position to, that of the other •■- branches of the service. I am not eatisfied : with the position of the police- supeirannua- ; tion fund The option was given the *; members of that service of joining the I '"' public service fund, but so far they have', not exercised that privilege, and I am of. opinion that this should be enforced hy''" legislation, as I do not consider that a,? separate fund should be allowed to con-. tim*e. *I therefore propose that this fund, should }y» merged, and that a contribution; of a. sum of £5000 should be paid into the public service fund upon the members of the police ©erviee joining it. ' PUBLIC SERVICE SUPERANNUATION. I propose to introduce legislation in connection -with the superannuation of tbte' public employees of the Dominion. The system has now -been upon triaJ for. some time, and as the result of careful mvesti- - Ration I fed that there should be some restriction placed upon the amount of superannuation to be paid in the fututft. . The existing- rights of the present bener nciaries must, of course, be upheld, and to enable this tp be done I propose that on • | all salaries of £400 a' year and over -ilo ' ; alterations shall be made, but those receiving below that salary at present, as wel* as thoee vrho may join the superannuation fund, shall not exceed £250 per annum. If any of those who are now contributors are not satisfied, all payments made by them, with interest added, will be returned to them, and in such cases they) will be called upon to dteduot 5 per cent, from their salaries and lodge the same, «■
.was formely the «asev with the Public Trustee. Under this alteration the super- . animation system will be a moat generous one^ but .I am strongly of the opinion, to .protect tbe absolute stability o£ the fund, .that a maximum amount of pension must be fixed in order to enable the Government to retire officers under conditions that may arise. The House will be asked to amend the act to allow of this being done. In the case of officers who have been 30 .Tears in the service, and who are not less than 55 years of age, I wish to make it clear that this provision will not give the right to any officer to retire under the conditions named, as there are many cases where good service can ba obtained up to the period now provided by the act, but cases have «isen -where a great injustice would have bsrm elbwe if men were forced out. whose services are no longer required, beforo they had reached the. period at which the law, as it stands at present^ entitles them to receive superannuation. RESULT OF PROPOSED CHANGES. It cannot be denied that in the all-im-portant matter -of defence, both internal md external, the country cannot be allowed ■ to remaicr in its present position, and to bring about the necessary improvement must entail additional expenditure, the amount of which I have already indicated. The same remarks will generally apwy to 1 the other proposed items of expenditure. As there m-uet of necessity be a oeirtain amount of doubt as to what- the position of the - Customs revenue will -be at the .end of the vw«r, which depends 'upon the general con/di£on of trade, I' feel that it is incumbent j in -the best. interests of the country that our financial position should bo put upon such • a basis as will provide both for any possible - shrinkage of Cnstoms revenue and also for - the fresh expenditure incurred by the new undertakings' that /circumstances render it necessary to establish-. To enable this to be done,- it will be necessary to provide • additional revenoie, and I now submit a pronosgJ by wbiah I consider the result . <ksirod can be "arrived at. The increased expenditure under all heads is as follows: — Interest upon the cost of Dreadnought, £70 000 4 per cent, per annum for the extinction of the loan, £80,000,— total. £150,000. Contribution to the Railway Superannuation Fund, £25.(500; contribution to the Public Service Superannuation Fund on account of merging the Police Fund, £5000 ;— total. £30,000. Additional cost of • internal defence, £100,000; additional armament and equipment, £150,000 extended over three years. £50,000 ;— total, N £150.000, which gives a grand total of £330,000. To meet this, I propose to obtain from the altered system of death duties an additional £150.000; by abolishing the break irr the long distance mileage rates upon the railway, making the rates uniform to 'Id r>cr rriile socond class, and 14d per milo first class, £100,000 per annum ; by the adjustment of the income tax by making it a graduated one, £80,000; by imposing 1 per cent, additional upon the true value of all dutiable goods, £50,000; by charging 2it per cent. -on the total receipts of ' i ace clubs, £38.«K3 : from the banks, £30.000. This prives a total increase of revenue of ' £448.000, leaving a balance of £118,000— • not, in my opinion, too large a sum in order to provide for .unforeseen expenditure. I do not think ' that any reasonable excen•tion can e' taken to the various sources from which this' increase is to be obtained. ' Tt is only fair th»t .all classes of the " community should give a slight contribution 1 towards the strengthening of our position ' in matters of defence, and in respect of the item of 1 per cent, upon Customs, I propose to ask the House for authority to -&x. it until March 31, 1911, only. "It is 'but reasonable to expect that by that time the improved and increasing condition of our trade will give a much larger return than we are at present obtaining from Customs and other souroes by revenue. I cannot impress too strongly upon hon. members and . upon the country generally the fact that in face of the concessions amounting to, in round figures, £600,000, that came into operation during that period, in- • eluding £400,000 in Customs, our revenue. " which amounted to £9.000,000 last year, was ' only £55,000 6hort of that of the previous year. Considering the difficult period through which this country passed and the feet that, so far as I am aware, every country in the world during the same period experienced an enormous shrinkage in its revenue, the results achieved by New . Zealand cannot be considered otherwise than most gratifying. And in view of the large reductions and remissions that have hitherto been granted, I do not think, recognising the necessity for our present requirements for defence and other purpose, that reasonable exception can be taken to what I now propose I trust, with incren^ing trade and genera! development, that. in he course of a few years, this incroa-? of taxation may not be required, and no one will be happier than myself when it can be taken off. I now sum up th° position in connection with the addiiional taxation that I have .illuded to undor the several headings as follows :— Graduated income tax ... £30.000 Death duties . - . 150.000 Long-distance passenger rates 100,000 & per cent, temporary increase »»nan Customs .... . 50,000
' Banks, additional taxation 30,000 t Racing clubs, 2£ per cent, on total | receipts .. 38,000 I Tofcu £448,000 .The additional expenditure to be provided ; ■ for will be £330,000, and the balance for ; ( unforeseen expenditure will be £118,000. , FINANCE, 1909-10. ! I now come to the question of the waya and means of the ordinary revenue account ' for the current financial year. In the first place, you will require to know how much our expenditure is likely to be, and then ' , the amount of revenue I anticipate to ret ceive to meet auch expenditure. Expenditure. The expenditure for the present year is estimated at £9,015,878, as against an actual expenditure last year of £8,785,513. The permanent charges show an increase of £292,767, while the ordinary departmental expenditure shows a decrease of £48,275. Dealing 6rst with the permanent charges, a large additional expenditure arises principally from the charges for in- ; terest which has to be provided for the i new loans recently raised. Under the per- ? j manenr act an additional expenditure of j £150,820 is anticipated, of which £67.000 is ■ to meet charges against the residue set ; | aside in respect of national endowment land for education and old-age pensions, £60,000 for naval defence, and £25.000 for subsidy and endowments to local authorities pro- . vided for by acts of .Parliament. The j amount required for departmental votes is , stated at £5.513,081,, or £48.275 less than i j the actual of last year.. In respect of' ; increases, the Post and Tekgraph Department is responsible for £61.351, of which £58,000 is for salaries consequent on in- - creases of salaries provided for by the Post and Telegraph Classification Act, and the absorption of the Old-age Pensions Office by that department. The railway estimate •exceeds the actual expenditure of last year by £23.192, but. having regard '; to the increased mileage' of lines that will j have to be worked during (he wholo of the current year, the eftiimtcd expenditure is , equal to a saving of £80,315. The Education Department asks for an increase of £25.206, the necessity for which must be expected so long as s^ttlsment keeps in- ' ereasiiwr and education has to be provided for. The Dofpnce Department shows an ; increase of £6933 for additional capitatipn, and the Native Department £2735, making | the total increase £119,507, asrainst which , the decreases in the other closes of cxi penditure amount to £167.782. brought, j about by amalgamation, retrenchment, and ■ non-recurrent charges. Revenue. The estimated revenue for the current yar is ,Pst down to produce £9.020,000, or £ICBIS mor-e than tho actual of last year. Dealing first with the revenue derived , from Customs, I anticipate that the im • portations during the current year may be somewhat restricted owin?* to the tightness [ of tho money market and the tendency on | the part of the merchants to carry only sufficient to meet current requirements, fhis tightness is passing away, ! ami the* increased prices new obtainable ' for our chief product — wool — should materi- i ally brighter our prospects. The population o f New Zealand has increased by 31,158 persons, of whom 14,261 represent/ ' excess of immigration over emigration. ' and ihis increase should to some extenr j increase tho revenue. Trader^ who have \ been holding back from importing are now I confronted wifch depleted stocks, and large j quantities of merchandise aro on the way j cut or are under order, and, under these ' circumstance*, I th-nk it is safe to csti mate our Customs revenue for tho current year at £2.630,000, or £171.248 less than the previous year. As to railway revenue, my colleague, the Minister of Railwa3"s. after giving the matter due consideration has estimated the railway revenue at £3,050,000, and the expenditure at £2,143,500. Thi.« will leave a net revenue of £906.500. The extension of the suburban area, and ths computation of through fares on the combined ordinary and suburban rates in tha *-ame manner as adopted t in computing the charges for the convey- | ance of goods, has decreased the gross receipts fro-n pas«engei'es to an appreciable extent. Similarly the reduction made in | the rate fci road metal, which, under the old rate, was carried at an unrernuneiative rate has detrimentally affected the revenue derived from that source, and therefore it u> not advisable to estimate more than the amount set down alnve. E".t duty is I f-tat^d at £113, C00, a s'/jilit <kc«w^ on tho actual of 'ast year, which may Lc look-e<l < for consequent on the increase of no-license areas arising from the results .f the last local option poll. The land tax estimate of £625,000 is based on th« urxlerstanding that the 25 per cent, additional graduated tax will be collected under section 53 of 'The Lard and Income Tax Assessment A.cl, 1903." o>\itig to tho numerous subj <li visions of property liable to i^raduac-ed tax a lObS will Lo .«i"taimd. but this 10--> should be made up bj tho increase of valua- [ iions ir the district > reviafl on 31st March i la^t As rvgards th-e <J?cioas< in the cstiI mate for income- tax. I hay to explain I ri<-it as- ilio a=^"- i Mient for this year w ill I be- made on ths retinas and income of tho year emie<l 31st March, 1909. I have deemed ) it prudent to take into coiu.doration the
•comparative depression that existed during that period/ and do not .think it wise to count on a revenue from that source of more than £300,000, as compared with the , ■actual collection of £321,044 for last year. . It is true 'that trade already shows a revival, but the income tax revenue wall not benefit by this until next financial year. Registration and other fees show a decrease of £24,000, as last year's revenue included a receipt of £23,500 poll tax from Chines© rmnujpration, which cannot be expected this year in view of the educational test now insisted upon. Other heads of revenue call for no special comment. RESULTS. I have now placed before you the estimates of the expenditure and revenue for the current financial year, and will proceed to eet down the estimated results at the close of tihe year : — Balance brought forward from last year, £184,321 ; add estimated revenue, £9,020,000;— t0ta1, £9,204,321; deduct estimated expenditure, £9,015,878; leaving, a surplus of £188,443 at the close of the year, subject, of course, to provision being made for items on the Supplementary Estimates. PUBLIC WORKS. The balance at credit of "the Public Works Fund on 31st March last was i £383,709, to be- augmented by the balance ! of tfo» 1908 loan not raised, amounting i to £50,000, making a total ways, and! means/ available at that date of £433,709. During the short session I found it necessary to ask Parliament for authority to raisa a . "loan of £1,250,000 for public works pur- ' poses. This amount will only be sufficient ' at the existing rate of expenditure to carry . us on till the €<nd of December. Our re- ; quirements cannot step on reaching 31st ', March, feo that we must provide to carry ' on for six months bsyond that date, and for that reason I obtained authority for another million, which will enable the con- . struetion of t.he public works fo necessary for the development of the country to pro- : oeed up to the end of September, when ' further fund? can be provided for by Parliament if required. The position of the fund may therefore be set forth as fol- , lows:— Balance 31st March, 1909, £383,709; balance loan 1908, £50,000 ; loan authorised by "The Finance Act, 1909," £1,250,000; i loaji authorised this session, £1.000,000; for 18 months' expenditure, £2,683,709. j REVIVAL OF TRADE. j The financial stringency which has pre- . vailed throughout the world cfciring the year may happily be regarded as a thingof the past. The great revival of business throughout the world, to which the price of our staple products has promptly responded, and the general tone of confidence in commercial circles, give abundant reason for predicting that the ticJz of renewed prosperity is flowing, and that before long the wealth of the Dominion will be materially augmented. Wcol has risen to a satisfactory figure, the prioe of frozen moat has advanced, and will, I hope, soon reach it 3 normal level. Flax shows an upward tendency, which competent critics are satisfied will be maintained. Wheat is high, ancV butter and choe*^ are finding a ready market. Equally satisfactory, that .\* til-known barometer of trade — the post end telegraph revenue — has a rapidly ris- ■ insr tendency, the results for the first six months of fche year showing a large excess over the cor respond ing period of 1908-9. Wha>t, then, it may be asked, is neeci-d to justify our fa.ith in the future of our country? Even the professed prophets- of evil, who wail their Jeremiahs when the smallest clouds show in th<e- financial horizon, are already changing their note now that the sky is clearing. The enormous resources of the Dominion, with a iudicious expenditure of capital in their development, will in tim& make her a much greater member of the Imperial sisterhood. That faith in her resources is shown by her sturdy settlers is clearly evidenced by the land hunger which has been so ron-' spicuou=ly demonstrated recently. Tho men who arc most competent to form an estimate of the potential nos^ibilities o>f the land of thoir birth and adoption are willing to face all the- hardships inseparable from a lifo *pent at the frontiers of civilisation in the .=uie hope of ultimate reward, which they are confident will crown j ! their efforts. The prosperity of our I Dominion will not be brought about by gloomy forebodings b?£otten by want of I faith in the future, but by a determination to meet and o\ ercomc the difficulties which may besot the way. The pecplf, animated by a desire to adrancp tin 1 interests of i l v y>ir country, should march shoulder to ! shoulder, irrespective of political creed, j and relejrat'i carping criticism to the un- , known. CONCLUSION. I have placed before jou matters of great I moment th-o importance of whir-h. I am < ' sure, will be recognised by you all By ' I giving effect to the propo--il-> that it has ( been my duty to &<H befcre you our financial position will be enormously stron^tkened. j I do not think it is wi-e for this country to continue bonowini? annually fcr public ' works to the oxtent that it has boon doing, ' and if th-> proposals I have outlined are gi\en effoct to v.c should with, I hope, an parly ir.eroa«e of revenue from the Customs, j together with a general improvement in the- _ j business of the Dominion, be able to &et
aside at least £500,000 per annum after the altered' taxation has been in full 'operation for a year. To that extent the future boxrowing for the purpose of carrying on the necessary works for the development of the country can be reduced. The prospects before us are brighter than they have been, for some time, and, with care and economy exercised both privately and publicly, the efforts of our people to improve their own position — thus at the same time improving tho position of the Dominion as a whole — must ensure success. I have the greatest confidence in our future, and the fact of our having passed through a somewhat difficult period will, I fell sure, stimulate our people to greater exeirtions, and will certainly enable them to show that a temporary set back is not going to deter them from continuing the excellent traditions that up to now have been obe bright characteristic of the oeople >l .his Dominion.
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Otago Witness, Issue 2905, 17 November 1909, Page 14
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13,960AUSTRIAL PEACE Otago Witness, Issue 2905, 17 November 1909, Page 14
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