FINANCIAL STATEMENT.

Taranaki Herald, Volume XXIV, Issue 2426, 8 July 1876, Page 3

FINANCIAL STATE MENT.

( Continued from our last).

Sir Julius Voqel proceeded to say— To the ~-"~ROAD DISTRICTS AND BOROUGHS tho subsidies payable by ' tbe legislation of last year to Road Boards aud Counties from the Consolidated Revenue and Land Revenue, amouuting to £2, to £1, we intend to equally divide between the Road Districts and Counties. Tho license' fees collected within their limits we propose to givo to the Counties ; the license fees and £1 to £1 to Boroughs, we aro still willing to givo ; only we think some duties should be entailed on Boroughs, in return. It sems to us they, as well as Counties, should contribute to the support of CHARITABLE INSTITUTIONS, and we propose to make this a condition of the grant. We shall submit a provision by which outside districts using these charities may be called upon to to assist them. We shall not require boroughs or counties to retain the management of these institutions in their own hands; on the contrary, we would much rather see it in the hands of committees, private charity beiug invited in aid. whilst they are in Government hands private charity is discouraged. The Corporations and County Councils by making grants to these institutions proportionate to the amounts privately contributed would eucourage private assistance and save a great deal of money. We shall be willing that the consolidated revenue shall in like manner contribute ss. for every £1 raised by private subscriptions. The Government of the Colony will thus bo spared work it is not desirable they should perform, and the Consolidated revenue will be relieved by supporting these institutions beyond the rateable contribution. I have mentioned the expense of inspecting them so as to see that they are properly managed. In the term "charitable institutions" I do not include LUNATIC ASYLUMS. The charge for these we place upon the Cousolidated revenue. We propose to assume the charge of, aud responsibility for, THE RAILWAYS. There m^anauswcrable reasons to which I have already referred for thin step, the only question is on what terms should it be taken, for the proposal is that in consideration of the Colony accepting the liability for constructed and authorised railways, and for those yet required to complete the trunk lines, also the liability for the cost, past and future, of immigration, a certain contribution from the land revenue should be made. We do uot see how otherwise it can be done without recourse to large direct taxation. Nor do we see how there cau be two opinions as to the fairness of the proposal, considering j how the railways and immigration have raised the value of the waste lands of the Crown, and made them more saleable. THE LAND REVENUE of each Province should from the first have been made to bear the interest on railways in course of construction within the Province. My colleagues showed last year that it was a mistake to suppose that we bad paid that interest out of borrowed money ; that, notwithstanding a limited power to do so had been taken, it had not beeu exercised to an amount that more than covered the special revenue contribution devoted to public works, in the shape of one-half of the stamp duties. Iv theory, PAYING INTEREST OUT OF CAPITAL while works are in course of construction, and considering such interest part of the cost is sound, aud for private enterprises may be reasonable enough, but iv practice public instinct rebels against such a course when pursued by a Government, and I was very glad the year before last to be able to state in Committee that the proposal of Government was to take tho whole responsibility of interest on cost of works finished or unfinished upon the revenue and not to use power we possessed to partly charge it to loans. But whilst the Colony was thus careful to refrain from charging on loans an expenditure open, as I have said, rather to an instinctive than to a theoretical objection, it did not as might well have been done, relax its previous intention, nor make the Provinces feel the burden of uncompleted works. It adhered to principle, as between itself and Provinces of capitalising interest on costduring construction and relieving them of all charge until railways were constructed, equipped, and opened for traffic and w ere handed over to them or worked on their account. Thia renlly amounted to the Colony, from the consolidated revenue lending to the Provinces money on permanent loan. I hare more than once said we had to submit to expenditure to induce Provinces to rest contented with our performing work so signally useful to them as railways with which we have literally gifted them, for up to their completion, they not only incurred no charges but eagerly enhanced their revenues by sales of land induced by prospect of railway communication. I do not hesitate to say in letting the consolidated revenue bear the cost of interest ou these works whilst in course of construction, we submitted to an expenditure which should hfeye been charged on tbe land revenue of Provinces respectively interested. This plan cannot be continued if we are to place the consolidated revenue on a satisfactory footing. We must remember that we cauot spare a part of it to relieve the land revenue from contributing to the cost of interest, whilst works that benefit that revenue are being contracted, on the ground of saving the Consolidated Revenue from the burdcu of interest on incomplete works. A contribution from the land revenue, so justified aud strictly accordant with the conditions under which the Public Works policy was instituted, and iudeed, tho original intention was to look to large assistance from the waste lands. I have referred ag yet only to burden of interest on works completed, but we must also bear in mind it is not to be expected that the railways when completed will at ouce yield in excess of working expenses sufficient to meet interest on construction. Such result would be scarcely desirable for it would necessitate the adoption of Very high rates and utter ignoring of all questions of convenience and promotion of settlement iv favour of an iron inexorable rule of working the railways only to make them yield as much profit as possible. There is no reason why the land revenue should not, and every reason . why it should bear a portion, if not the whole of the coat of difference between interest paid and that recovered in the shape of profits in excess of working expenses. But then we are met with the condition. It is inexpedient to work each line separately, and therefore contribution must be made an arbitrary one. We might have proposed a contribution from the land fund in the shnpe of a uniform percentage ou the gross revenue, and have enabled the fund to meet it without lons to tho provincial districts, by raising the price of land. But although there would be no actual loss to provincial districts, such a plan would war with the sentiment which has rondc the compact of 1856 to be looked upon as something more than nn economical arrangement. Wo believe that whilst the people within any provincial districts would object to the proceeds of land travelling beyond tho boundaries of districts, they will willingly recognise the fairness of contributing from the laud fund stated interest on tho cost of railways within their own boundaries. Taking into consideration the clement of .interest on incomplcted railways making present expenditure more unproductive, it scema to US tho contribution should bu larger at first find gradually dimiuinh. The contribution we propose from the laud fund of each provincial district ia for three yeurs two per cunt, for the

next three years one and three-quarters per cent, and for the next three years one and nhalf per cent on the total expenditure on railways within such district. After which time we' think they should be sufficiently productive for consolidated revenue to bear the whole responsibility. THE LAND COMPACT OF 1856 cannot be left without further romark. Whilst, as I'have said, we are willing to respect it in the spirit and letter, we are not willing to condemn a large portion of the Colony to nn outcast existence. There are parts of the Colony which at present do not enjoy a considerable land revenue. I say it advisedly, at present, for there are many who think that in course of time the districts which now yield little land revenue, will yield more than those which at present are more fortunate; but an old adage says, "That whilst nature slowly allows the herbago to grow, a very useful animal must starve," and it is not enough to point to eventualities to satisfy the pressing wants of considerable portions of the Colony, Their case we are of opinion must be met, and we propose to meet it by making the consolidated revenue guarantee to them a sufficient revenue from the land to meet the prescribed payment the land is to bear. Thus, whatever we charge specially on the land, such as cost of surveys, iuterest on provincial liabilities, including the interest on railway*, and the £1 to £1 subsidy to road districts we propose shall be guaranteed year by year | from the consolidated revenue to be recovered without interest from any surI plus land revenue. In the future the whole I country will thus enjoy certain advantages ' whether or not the land revenue in any par- ■ ticular Province, is equal to the demand for I a particular year. [ THE INTEREST OX PROVINCIAL LOANS will be assured, and so also will be the cost of education, and the subsidies to Counties, Road Districts, and Boroughs. Some of the Counties will bear the cost of education and t the subsidies to Counties, and Boroughs. Some of the Counties will be more fortunate thau others, on account of the surplus laud revenue they will receive, but they will all have the .62 to £1 subsidy ; the other half going to the Road Boards, the licenso fees, tolls, and a power of adding to their own revenue. Honorable members will have understood from what I have said that the Government consider the time has come when THE UPSET VALUE OF LAND SHOULD BE INCREASED. Admitting that, as it was to be expected, the most accessible lands have first been selected, it is to be remembered that the value of all land has been enlarged by the settlement and public works which have been progressing for many years, and that some of the very best laud is now only becoming available by reason of the communication which is being opened up to it. Interest ou money is less than it was in the early days of the Colony, and every reason ia short points to the expediency of KAISING THE PRICE OP LAND. What we intend is to ask the Assembly to concur iv raising the upset price wherever it is less than £2 an acre by about 25 per cent., without, however, interfering with the different land system in force throughout the couutry, with two exceptions, one that we propose to repeal all power to make free grants of land including those under the Immigrants Land Act, the other that we shall ask the Assembly to agree to a much < ENLAHGED SYSTEM OF DEFERRED PAYMENTS. We nre convinced that no artificial system of special settlements will compare with a general provision, open alike to new corners aud old settlers, to rich and poor, to acquire on easy terms of settlement a homestead of 200 acres. To a young man growing up in the Colony, this will be a priceless boon. We had considerable hesitation ia deculiug whether it was expedient to recommend that the upset price of land in Canterbury should be increased without that the price should be higher thau it has been during the past year, but we could not come to the conclusion to raise it anywhere this year over £2 an acre. All these matters I can only touch upon now, but it is evident that the Government having intimated the intention of asking Parliament to raise the price of land, it is not desirable to allow speculative purchases at existing prices. In the interval, if no action is taken, the land offices where land is open for selection will be crowded. To-morrow I shall therefore ask the Committee to agree to a resolution to the effect that upon purchases of land made after this date, any addition that by law this session may become payable on similar land, shall, as a conditiou of the issue of the Crown Grant, be payable oa laud taken up between the present date and that of the coming into force of the General Act increasing the price. This resolution, I wish it to be distinctly understood, will in no way bind the House to agree to the additional price, nor will it iuvolve any extra payment in anticipation of the law, but it will prevent speculation on the issues of the deliberation of the Assembly, whilst it will leave the Assembly time for considering the question. I appeal to the Committee to accept the resolution in this spirit, and not io discuss the question of the increase before there has been time to take the whole financial statement into consideration. With the suggested change from the Abolition proposals of last year, wo believe we ma}' dispense with direct taxation for Colonial purposes, and those changes on education to be partly charged on the land revenue, and the bulk of the cost of charitable institutions, exclusive of Lunatic Asylums, to be devolved on the boroughs and counties. There is bosSdes the change involved in taking over the railways — and with that is involved the condition of a stated contribution from the land fund of each Province to to the railways within its boundaries — one other point I should mention is, that wg think if a limit be not set to TERM OF SUBSIDIES TO COUNTIES, ROAD DISTRICTS, AND BOROUGHS, then, as was the case with the Provinces, when the Assembly comes to vary their revenues the demands will arise to accept the liability for their loans. It is too much to suppose, as thcao institutions progress, that the consolidated revenue or lan i revenue can give equally progressive aid. The increase year by year will be very large, and with the probability of such large increases, I hope it will be considered that Parliament should not bo bound beyond , the following terms, viz., that consolidated revenue shall pay to the Boroughs, Road Districts, or Counties £1 for £1 for live years, and thereafter the question of its continuance be open to tho consideration of Parliament, and that on like conditions, and for a, like period, it should guaranteo tho payment of £l to £1 out of tho laud fund. I venture to think these plans meet fairly their many-admitted difficulties; they still leave the Provinces to enjoy their own revenues. Iv no part of the country can such distress and destitution in respect to public insitutions exist as has before existed. The consolidated revenue will have only a certain loading. If necessary the revenue must be added to by taxation, but there Seems to be more probability as the railways are completsd, and the heavy liability which their incomplete, and therefore uureinuncrativc condition, occasion*, is lessened, that taxation may be diminished instead of increased. It is to be hoped that the system of giving away land will not be continued. We, indeed, start with a reduction of taxation in ono direction ; for wo purpose, ns I have already stated, to abolish all education rates.