GENERAL ASSEMBLY

Timaru Herald, Volume IX, Issue 343, 9 September 1868, Page 2

GENERAL ASSEMBLY

FINANCIAL STATEMENT.

Wo give the following portion of the Financial Statement delivered by the Acting Colonial Treasure? on tho Ist instant, roserving tho latter portion until another Ljsuc: — Mr llaij, said : Mr Carleton, if it is usual for the person upon whom it devolves to furnish tho annual statement of the financial position of the colony to bespeak from thecommittee an indulgent hearing, I think that thu circumstances under, which that task devolves upon my gives nielft claim to a more, t han ordinary measure of such consideration. I need hardly tell the committee that I have to speak of financial depression — that, for the first time m tho history of this colony, its revenue exhibits a falling oS, lorresppnding but too truly with the general commercial depression which we know to exist throughout the colony, I labour also under personal disadvantages, liaviug but very recently undertaken,' and being but temporally m- charge of the office of Treasurer, aud huviug had to discharge its functions at the same time with the ministerial and parliamentary duties of my own department. I feel sure, however, that I shall be aided m the discharge of the .duty now before me by. a largo measure of that indulgence of which I have had at>i»i»dant experience during the time I have occupied a seat m this Uouse. I will promise the committee, iv return for this favour, that my statement shall be as short as I can make it, consistently with a clear explanation of the important facts of which the committee and the colony will be anxious to be informed. It will probably be for the convenience of the committee that I should recall the anticipations put before it last year by -tho Colonial Treasurer iv his financial statement, and the proposals which he submitted', and which received they sanction of Parltaineut ; that J. should show tlio extent to' which' those anticipations and proposals have been realised and carried out; that I should, then explain to the committee the provision which the Government believes to be required for tho current year ; the means by which that provision should be attained; and ; the manner m which the financial relations of the General aud Provincial Governments should be adjusted. I will refer first to that new system of keeping the colonial accounts, and of ascertaining tho amounts payable to the provinces, which was introduced by the Public Revenues Act of last session. That Act became law on the 10th October, 18C7, but its operation extends back to tho commencement of the last financial year, namely, the Ist July 1867. We hove heard m some quarters expressions of dissatisfaction at the working of this Act ; it is complained that it h&a uot placod the provinces m .possession of' their accounts n« soon as was promised, although it was undoubtedly done so sooner than heretofore, and that full payments of. sums due have not been punctually made, jl do not deny that the Act requires modification, and thu Government hopes to receive, during tho present session, such a report from a Departmental Commission, which has been appointed on tho subject of the accounts as will enablo it to propose substantial amendments. No doubt tho Act has introduced improvements into the Colonial Financial System, but m doing so, it has sot to the department by which it hiis to be administered a task of the arduous character of which the committee is probably not fully aware. It not only imposes upon the Treasury itself a very large increase of work, to bs discharged with a promptitude never before required m New Zealand finance, but it has extended to tho 420 Receivers of Revenue, and the 360 Paymasters and Sub-paymasters scatterod throughout tho colony,' the duty of keeping m many cases two, aud m some cases four sets of accounts, aud of reudcriug these accounts monthly. Any failure ou tho part of any of these officers to keep the accounts of the several fund* entirely separate, or any error m. these accounts, or m one of the 60,000 vouchers and receipts sent up by them, gives riso to corrections, correspondence, and loss of time. It must bo obvious tliut the getting into complete working order so extended and complex a machinery must necessarily be a work of much time and .great labour, if, indeed, considering the qualifications of a great portion of the agents by whom it has to be worked, it can ever, without considerable modifications, realize the expectations 'of its projectors. The difficulties I have referred to were immensely ugjfravated by the time at which and manner m which the Act was brought into operation. When it became law, one quarter of the financial year was already closed and a second was commenced under the old system. It was impossible to make arrangements for the adoption of the new accounts, including the preparation of. books and forms, and the instruction of tho various officers at headquarters and throughout the colony, until the Ist of January. Then the accounts for the first half-year, which had already been made up, had to be entirely reconstructed upon the system laid down m the uew Act — a work of Tory great labour, especially as it had to be carried on simultaneously with tho 'ordinary duties of the deportment. This work .has only recently been completed. These difficulties were further increased by the neoeasity for adjusting a number of unsettled accounts extending back for several years, . for which the Public Revenues Act makes no proper provision. It was only after these obstacles were overcome — which has recently been accomplished, at the cost of an amount of continuous exertion on tho part 'of the officers of the department which I confidently assert has not been exceeded iv any establishment m ; the colony — that the new system can be said to have started, and since that time the niqnthly statements »nd payments liave, with one exception, beou furnished within the time required by law. In future there is no reason to apprehend that the required accounts will not be forthcoming with reasonable punctuality. I of course except that period of .difficulty for the Treasury accounts which elapses between tho expiration of one Appropriation Act and the passing of another^during which the expenditure of the colony cannot be classified - in' the books of the _ treasury, because po classification has been established by law. During this period -the .account-keening must necessarily fall iuto atrear, the effects of wbjch will be felt for some time alter the passing of the Appropriation Act ; but during this period payments will be made to the provinces as nearly ■ m 'accordance with the amounts, which will, ultimately be due as it is possible to estimate them. In spite, of the drawbacks I have enumerated, I -am now enabled to lay before the committee detailed accounts of the receipts and expenditure of the colony for the" past financial year, within tho time , prescribed by lav, and at , a much: earlier period than lias ever yet been accomplished. This is the earliest date at' which suoh account* have eyer been, published, and 1 tho first occasion on which, the Colonial Treasuxor ' 'has', ever been table to embody' them m his financial statement. The committee ■will, jdoub,tieiti, afltee with me that the! comparatively advanced period of the session fa> which, it has hitherto been found

necessary to defer the Financial Statement js a source of considombie pctbkc -isoenyeeience, which ought, if possible, to be obtiated. It ma/ .be done m two ways— namely, either fey postponing thfe -ineetfug of Parliament to *<iaUr time, of theyear, oriy making the financial-: year ternijnate sooneis and m either case makiug provision m: tstr!ippropriation Act forea«ying on'.the -scnvice of the Government for six weeks after the termination of the financial year. The Government wiU, hereafter, submit a proposition on this subject. The- next poimt to which I will ask. the attention of the committee is the subject of the ielaims sad *o»nt«r»claims of the Imperial and the New Zealand Governments. At the lime tfte last financial statement was made there were large disputed accounts outstanding. Tfao mother country claimed from the colony L 1.304,963. The colony claimed from the mother country L 906.556. There did not appear much probability of either elai'ii being paid, but their existence was a source of dissatisfaction, itnd-of «erioue injury to the jp-jlony. The committee is aware that these claims are now settled by each party giving to the other a rtdoose from all further demands, liiis settlement cannot, m my opinion, be looked upon as any concession on the part «f the Imperial Treasury. It is, no doubt, an advantage to the colony to have cleared out .of its way a largo and formidable' claim, consisting though it did of charges which m many instances were quite untenable, and m some actually preposterous, but still a claim urged with all the weight and authority of the Imperial Government, and one the continued existence of which could not but seriously affect the financial credit of the colony. For these reasons I think it U a source of satisfaction that these accounts can now bo considered .finally closed on the terms I hare mentioned, although I believe that, if the case could have been referred to an independent and impartial tribunal for determination upon considerations of equity and good conscience, and upon a comprehensive review of all the circumstances of the case, New Zealand would have been pronounced a creditor of the mother country to a Very large amount, I canno* leare this subject without referring to those persons who have chiefly contributed to the settlement which has been arrived at— to Mr Weld, who by tiie transmission of LSOO.OOO of debentures, when we had nothing else to send — satisfied the Imperial authorities of the anxious desire of the colony to discharge to tho utmost its honourable obligations j to my hou. friend the Colonial Secretary, to whom is duo the credit of having first asserted the counter-claims of the colony; to the Hon. Major Richardson, for having, m his valuable and elaborate report, supplied an array of foots and evidence m support of the colonial claim, without which that claim wogld doubtless never' have been suocessful ; and finally to Mr Vitzherbert for the judgment, perseverance, and tact with whicli he combated tho sorious opposition which our claims encountered, and for the success with which his efforts were ultimately attended. Our acknowledgments are also due to the present Secretary of State for the colonies for the considerate and liberal, manner m which he has dealt with the question, and which forms a remarkable contrast to tho conduct of the Imperial Treasury. . Tho. committee will doubtless be as glad as is the Government-to bid a final adieu to this unpleasant and unprofitable subject. I now come to the estimates submitted to the committee last year of the ordinary revenue of the colony, and have to show to what extent Uiose estimates have boon realised. In doing this I quote from the public accounts of the colony for the financial year 1867-68^ already laid upon the table. It is well 'known that the revenue" has* fallen short of the Colonial Treasurer's anticipations. The case stands as follows. — Estimated consolidated revenue for 1807-68 — Customs, L 870.00 0; ' bonded warehouses, L 500 0; stamps, 75,000 ; miscellaneous, L134,00p; making a. total of LI.OSI.OOp. Actual consolidated revenue! 1867-68 — Customs, L 789.81 4; bonded warehouses, L 4,85 1; stamps, L 55.40 5; miscellaneous, U. 27,637 ; -L 980.70 7; raised by treasury bills, L25,000j , makiujT a total of L 1,005,707. This is d del flciency on customs of L 80,198, and ou stamps of LlG,p9s. The occurrence of an actual, decrease'in the revenue of the colony is so novel, I believe so unprecedented a feature m Now Zealand finance, that it may be apt to create { a more unfavourable impression tlum a careful study of the circumstances under Which it has occurred will at all justify. The year iv which this falling-off has taken place has been one of general depression, uot only for this colony, butforthe neighbouring settlements, for the mother country, and indeed for the whole commercial world. It has been a year m which the expenditure occasioned by the presence of large bodies of her Majesty's troops has been almost entirely withdrawn, and m which the colony has , ceased . to feel the stimulating effects of the disbursement of those large sums of money raised by loans, geuoral and provincial, which only, now remain to bo paid. When these circumstances and others affecting this colony m particular, such as tho reduction to the extent of nearly one third m the value of wool, which is one of our main articles of export, are considered, I think the result which I now state to the committee, so 'far. from being a came fpr gloom and despondency, is valuable testimony to the extent and elasticity of the various resources of New Zealand. Tho returns to be attached to this statement, will show that trade, although dopressed, is intrinsically sound, tho total exports being almost on a par with the imports.- Thero are one or two features m the revenue receipts for tho year which pppear to deserve the notice of the committee. Tho depaitments with -which I am more immediately connected, namely, the post-office and telegraph, have not only not shared the general depression, but show an increase both m their gross earnings and m tho amount of business transacted by them. This is eminently satisfactory, as the business of those departments is considered to furnish a more correct index to tho general condition of the people than any other branches of the publio service.: The proceeds of •stamps have fallen very j short of the amount estimated. To some extent this is no doubt to be attributed to tho same causes which have lessened our receipts from other sources, but there is also reason to believe that the uso of stamps, m cases where tho law requires it, is to a great extent neglected. The Government has under consideration measures for repressing this evil, and has given directions for prosecutions to be instituted whenever and wherever an evasion of the law is discovered. I lay upon the table a detailed' return of the duty stamps : sold during tho past yearj it shows rssultsj both ouridus'ahd instructive. " Frbm'the'coihparison of estimated (and actual Jtjceipts, I turn to the subject of the expenditure which has been incurred. The actual ordinary expenditure of the- Colonial Government for 1867-68, exclusive of payments to provinces amounting to L 260.683, and of payments amounting to L 31.823, chargeable to provinces under Speoial Acts (as Provincial Interest and Sinking ,fund>.Promaial -Auditors' salaries, Ac), was as follows :— Actual ordinary expenditure for General ''Government services' for 1867-68— Civil Li«t, £19,026 Is 3d j Permanent charges, 1220,436 Us 94 1. Class I,*Publio Domains, L 4,434 6s ; Class EL—Public Departments, 1*40,685 8s Bd i j Class IIL— Law and Justice, L 59.425 13s 8d ; Claw IV. — Postal, L 125,855 4s 9d; Class V.— Customs, L 38.527 6s 7d % Glass Vl.— Native, L 21.200 19s 8d; CljujsVll. — Militia and Volunteers, Li 8,708 7s 2d; Class Vlll.— Miscellaneous, Special, and Temporary, L 45,026 Is lOd: Audit Committee,. X1S0 ; Expenditure unauthorised by Parliament, L 202 3s Id; making a total of L 59.3,£78 4s 54 This, would leave an apparent saving-npon'the expenditure authorised by Parliament of L 154.196 6s 7d. A considerable portion of. this., saving is appv rent only. Prior to the passing of '' The Public Revenues Act, 1867/* payments made on account of stripe*' fendmttl m a given financial year, were, as far as practicable, included m tlje published accounts for that year, although actually made m the year succeeding.- -In, accordance with this custom tho accounts for 1866-67 were kept open natal the 9th July, 1867, w a* to jnclude the fttlarief

: fpr June, -which wore, ,of course, .not iibtil the beginning of July ; these salaries ' appear, therefore, iiu. the puolished ivccounts for the year 1866-^. Under tiie Public Revenues Act, however, (the accounjte for tho je»r must include only siinis ac£ua% disbursed during the yeafj aid. as -the saJ.ij-. " for June, 1868, coald iiot op^paW'bni V XJ^ month of July, it has nofc^been possi!^ t : • l include them m the a.cca\&W'i^\i~"- : - Hence the accounts for .thi| > .£ - :.^::,jiß'! '■->:■: .■.'■■■ will be found to include only '."!rfr/-r; ....:.; h^ aalaiie^^and.' Mmv. uxpeaditui-a -tti.-uu-- itdottj-- 1 appears to be diminished thorebv K> t!n> i extent of about £51,000. lam anxious that j this point should be clearly understood, m < order that --it may- «>t btr Mppo9eiJ*-thri Government is .ehufiling! os'-uui iaewal saving ! what is after aU but an involuntary transfer from one year's aceoaut to auother. There have, however, been actual savings «f some considerable value. The expenditure I have stated to the committee, js taut for which duly authenticated vouchers liavo been received m the Treasury, but does not indued sums issued from the Treasury by ' way of advances but not yet accounted for; this mode of dealing with tho accounts is prescribed by the Public Revenues Act. To : arrive, therefore, at the total cash issued during the year, ; we must add to tho expenditure brought to account, the difference between the adranqo outstanding at the commencement and at the close of the year. This difference amounts, m the present case, to L 75.405, making the total issues from the Treasury, for the services above enumerated, L 668.983. Deducting the total issues from the Fund during the year, ior-all purposes, from the total receipts, there remains to the Treasury, as shewn by the printed accounts, a balance m .the Bank of L 46.079 15s lid. Of this sum L 25.000 will be required to pay off the Treasury Bills to that amount, isiued during the past year m aid of revenue ; the balance is fairly available for 'the service of the current year. In addition to this cash balance there also remains to the colony an available asset m the shape of theadyan.ee made some time' 'ago to the Province of Southland, and amounting. (with- inteiwt; to,^l*t December next) to L 55.117. This money can now be drawn at any tinie,haviug beeninSsed. under the Consolidated Loan Act. I shall, whon treating of the expenditure for the" car- ' rent year, state how it is intended to ■ dispose of this amount It has n/>fc been. io> -the power of the Government during the past year to take up any of the Treasury Bills issued iv preceding years m ■ aid - of" revenue. ■ The amount of these bills now m circulat ion (exclusive of the L 25.000 abeady' mentidtied) is L 125.000. The amount of the trust funds,, m the hands of the Government is at the pro-' sent moment larger than it has been at any period of the history of., the cpkmy, paring reached, on the 30th June last 1 tile sum of L187,Q00. .The. increase is mainly attributable to 'the extent of the deposits which hare been pade. ia the Posi-oflice. Savings Banki, which reached £115,000 on the hist duy of July, and is "valuable testimony to the usefulness, of these institutions, as well as to the foresight and thrift of a large part of the population. A part- of the sum I liave, named has been invested by the Comptroller in' Treasury bills, a part m ColoniulDebentnroß, and' the' balancb was-in the bank on the 30th June last. It has,. l believe, 1 been tho practice of every -successive Treasurer of New Zealand to draw_ tU;-. attention of the Legislature to the fact tliuf t'vuit funds had, by hir predecessor, -been -n;->s'r> ; priated to the exigencies -of.tlio.publio sorvi..-. ' and to express his owii steadfast ■'.■'-.■: ■ r.-i-i.t.-----tion to adopt a diiferent-couiise ; this i-. ;\..»-- , over the first occasion on which these t <•.■■!■ lent indentions ; .liaro been. ; fully. iv:.'..MPil. j Leaving the subject of the current income and expenditure of the' past year, I wiilnow j lav before tho committee a stateui^iit of -.v'.Liit . has been done under the Finance Acts' of last session. The Surplus Revenues Arlj usLiut'iic Act provided that L 31.053 10s 7d should be paid by the provinces of Iliiwko's Bny, Otogo, and Southland to Che Colonial Treasury, aud by it paid over to t)ie provinces of Auckland, Wellington, Nelson, and Canterbury. The payments. to the latter provinces have been effected m quarterly instalments. Tho contributions of Otago aud Southland have been raised under the provisions . of tho Public Debts Act ;' and the interest and sinking fund on the sums so raised now form a charge against those two provinces, m the proportions specified m tho Surplus Revenues Adjustment Act. Of the notion taken by the Government under the- Act for consolidating tho numerous loans of the colony and provinces, full information has already been laid before tho House, ' Mr Fitzherbert," acting iv London on behalf of the Colonial Government, has offered to the holders of ,both colonial and provincial five v.nd, six per. cent, debentures, terms of conversion which, while presenting to those holders considerable advantages, will secure to the colony and the several provinces, if the ■whole of these loans' are so converted, an annual saving of interest and sinking fund of L 40,000, against which must bo set an increase m the amount of, capital debt to bo ultimately repaid of L385,150r The result of this operation, npto the latest dates of which we have advices, is that already a reduction m the ! anritial charge upon tho colony on account of, its loans, far more than commensurate with the increase of the , capital .debt, has" been' job-,, tamed ; and there is every reason to believe that the ultimate- result of the mission on which the Colonial Treasurer is now engaged will be a further considerable diminution of these annual charges, as well as the accomplishment of 'that' desirable object, the substitution of one description of New Zealand Stock for the great variety of loans by which tho colony, up to the present time, Jbas been represented m the ' tibndbrt money market. I feel *ure the. committee will agree with me as to the advantages of such a reault, and will concur with the": Government m its appreciation of the judgment, care and •zeal displayed by Mr Fitzherbert m the discharge of the important teek entrusted to him r and the successful accomplishment of which, we are assured on the most satisfactory, independent testimony, is mainly to be attributed $o his exertions and his ability. In addition to the financial operations m LondW : which I have mentioned, the Colonial Government has, under the provisions of the Public Debts Act, been called upon to provide L 27.280 for the payment of debentures issued under H The Nelson Debentures Act, 1858," .and which became payable on the 'lst July' Idit. These debentures are, by section 2 of the Public Debts Act, niado payable by the colony, but. the Act makes ; no provision for the recoveryfrom the province of Nelson and Marlborou<;h of the money thus paid; the matter stand? over, therefore, for adjustment by the Gentia: Assembly., In compliance with the request, from the Superintendent of -tv'eiliii&ton," twelve months' notice: has been given for .paying off, on the Ist July, 18§9, loans amounting to L50,0Q0, raised undor the Wellington Loan Acts of 1854 and 1855, and bearing iutercst at 8 per cent. This further proof of itlje provision made by the Assembly for the consolidation of Provincial liabilities'' cannot !be otherwise satisfactory to the committee., By the Public Debts Act, expenditure was authorised for* taking up loans of Southland and other provinces, and for extraordinary services, such ai lighthouses; marine surveys,. telegraph extension, -&c., . to .the amount altogether, of Ll,114,00& ' This- sum has been raised under the- Consolidated Loan Act, or rather bonds to thai nominal' amount have been issued m London; realising at; &f per cent a cum of 14,080,p80. The, manner m which this money has' been or will be disposed of if shewn by a tabular statement which I beg to lay upon the fable. .In reference to the figures given'in this teble; I beg to add 1 the following remarks i — Tho payment •of the certificated liabilities of .the prpvinoe of Southland mentioned m this statement has chiefly to be made m London, and, by the last? advices from <-Mt .FHzherbe.rt,, he^*saa abont to take steps for effecting this payment. The lighthouses, telegraph... extension, and marine surreys, are m progress ; the latter wo*, baa been esrioaslyi impeded by thie, boisterons -weather which' has prevafled dnring .(3u! hut »Htunu> and .vrin|ter, jjni which

'has been moat unfavourable for operations of this nature ; the expense of this survey will the estimate by about LSOOO. Thti amount appropriated for lighthouses, although not actually expended, has been to a 'ecfu :! ■VraM-.- -?1 -it <->'i* i-Hcfea for, and the f«A- ;api;r.t .: >.' '~ii'- r-'! }>."■ required. ibjitiJP- '; • -it.-'. •'■■■■ ..r.: :■: :•- ]••'.:'. ■• service : f*^c .-: . -..'-■-•■■!■ -■ '•■ i>- :■■■■-'■■<■■* -■ ■'■'■ '■ l'-r thf- ' ■■■:'■:■■■:■.■ L\-<.:-, ■:*s:x?.---i-.:. T!;^. ■ Osiii-i:.t.-s iu.-i.iii--; i-.»:i:s jv-.ji.ii.li.- en i.i'juUi.i of j>;:> :jnd 'rtttWßrwi'ffiiHTarir-ssttlp*!, zed. ■for.tsp'sftts-'?-. iu-^nnvd m ioc-.iiing (Ji-'sa ou.ihcir hii.|J. I licetl not point out that these .items,, which li;ive iiuuit-d so often and so largely iv New h ZF:lliitrii estimates "oflaV J3Trs,"ls ii legacy* lo~* ■ u» from ibnner Governments, 1 from' the obligations of which we have been powerless to escape. The committee -will hear with satiaftction that, except a trilling payment still to ■ be incurred for surveys, the obligations entered into with the military settlers arc at last completely discharged, and the gulf m which, year after year, bo much of the good money of the colony lias been swallowed up, is at length dosed. It will .be recollected that the sum set apart for contingent defence was intended to meet expenditure m which the Government might iiecoruo involved by renewed If atirc disturbances. Although events during the past year m the neigbourhood of Opotiki would, m strictness, hare justified the expenditure of a considerable portion of this .sum, it bad, as will be seen by the tabular statement, been untouched, except to a small extent, before the 30th June. ' Since that date, chums upon this vote have been cons : derable ; but I still entertain the hope expressed, on a recent occasion, that, unless the existing operations assume wider dimensions, or are more protracted than there is at present reason to anticipate, their cost will be covered by the unexpended balance of the voto for Contingent: Defence. Tlio committee will perceive that the amount authorised to be raised m lieu of unissued provincial debentures is iv excess of that which has 1 been actually wanted. This is owing to the fact that, a few days before the public Debt* Act was posted, a considerable portion of. the. Canterbury Debentures, which this Act was intended to cover, hod been sold m the London 1 market, of which, fact neither the Goverameat nor the Legislature could be •" aware when ,the^ct was passed. The general result, Sir, of proceedings taken under tho Public Debt* Act is, that the total sum realised is/ owing to the discount at : whioh , the bonds were issued, less by L 26.000 than . the nominal amount authorised to bo raised, but is still, for the reasons shewn m the tab!* ■ T'tliave produuetl,,, m. : excess. .by about L.13,063 of the amount really required for tho various purposes' specified m the AcK This amount the. Gorernment proposos, after dc- v „ fraying the cost of raising this loan, ana.''/ wlrich will amount to LIO.OOO at least, to devote to the paying, off Treasury Bilhj now m i circulation.- - Tlio indebtedness of tlio ■colony will therefore not be increased, if the whole sum raised should not be required for tlie "purposes specified m this Act; 1 have thus stated generally what lij.b been done under the Firance Acts of last scssior, WithTa : view 'iof Supplying full information; ' as to the indebtedness of Now Zealand, I lay : „• before tho committee two tables, shewing the position of the debts of the colony on tlie aoth Juno last. Tho first gives full particulars of each of tho existing 'loans of the colonial or of tho several Provincial Govci-n-----;:)-.'iit:'; tho second shews tho actual annual ! (••a.fiMPii •■.-. '-•■tjuiroii from the. colony aud from ' • -vsh p.' •■ -"'U'.i en mvouiit of these loans. \"i !ii' rti .-ti-.> i'.vj .lubji-bts which camo befo c . tli:? IfvAsp 3'aat. heaaion whieli'tlip Government " i Ufci 10 submit, for it.-» consideration, vi 7 , , f th" fri * lir * °f ''>'- province of Turauuki. and tho . !- | question of tho onfiwuterl lauds. Tho comj mittce is doubtlciiS »«ure of the nature of tho ! cluims of the province of Tnranaki arising ■ under tho financial arrangements of 1856. According .to the terms of that arrange - nient, L 20.000 was allocated to Taranaki, without interest, for tho purchase of native laud-, and until tho whole sum was expended an annual subsidy of L 2,200 was to be paid (o the province. . Ouly lA,OQO has been expended iv purchasing native lands, and tho annual subsidy continues to be paid. Wo propose to extinguish this claim by a special arrangement, which will require a bul to be introduced for this The bcco d subject to which I alluded, viz., the confiscated ' lands, ia doubtless a most unsatisfactory one to many members of this committee, Mid to none more so than to tho Cqlonial Treasurer. In the last session of the Assembly the Go vernment was authorised to expend out of tho proceeds of .confiscated Jands a sum of L 34,750 to defray certain liabilities and charges m respect of. fliese lands! " These liabilities cony sist principally of payments for snrreya , actually executed, of compensation due to\. ■ friendly natives -for their land included m confiscated, blocks,, .and for which, m most . cases, 'courts of law have decided 'the exact • tjiey are entitled to receive ; there wcro filso payments to be. mado for public worts contracted forwJicn, the confi«cntediunds.wero ' under tho nianagcment of the Superintendent of Auckland. During Iho year "some" 'new expenditure ""hay bear* racnrred-in purveying---land for sale; -but the greater part of tlie j outlays hatfbeen^ for obligations actually due "' beforej the h^t session^ or beconijbg^dn'e undty contracts outore'd-iiito bdfore that time i they ■ were, |n fac.t,"qttite" J beypnd the control of tho | Government. ' The. sum realited from tbe'eour ■ fiecoted lands- during' the year has -proved * altogether insufficient; to meet these liabilities ; • but considering .thpir origin .and character,' we ; hate felt it to Be a duty to the colony to take ' upon ■: ourselves^ the resoonsibilltr^ of di»cbargingr i^'any^raCeTThejmoSr 1 presiing'of these debts, and upoh^furuTghlrig this House", * as is neddf ul m 'such cases, at tho earliest opportunity with a full statement of our proceedings, of asking for its sanction and ' approval. Unpjeaieut asyit 'mayrbe to see the' Treasury of the colony still drawn upon for! an estate which wo were led to believe woold-long sinoe'bave become a source of conr " ' siderable income, I feel sure there is hardlyone member of this House who will deny that the; honor of this colony required that the obligations I have- described 'should be discharged without further delay ; and especially that it would have been a notional disgrace if the Government had turned a deaf ear to' ~ those friendly allies whoso prdperty- has *boen taken from them by the authority of an Act of 'this Legislature, and whQ.harc for years been waiting for payment. The' total receipts from, the confiscated hinds during the year, including fees on Crown Grants, has been L 11.029. The expenditure has been ( L 26.410. Unfortunately this dbea'note'xhausfthV subject. ' The chums already p^id are' only the.moßt pressing ones ; to discharge the remainder, aud il'.>iiipTefe~su(rh "surveys and'othcr p're,i,!iu''iaHries as< v are indispensable for-.effecting a, - 4i!a of tho land, will require a sum of L 28.000. . • r p aro satisfied, r after careful inquiry, that " thei eoii6seuted lands" -will realise at' least- this 'amount within the next .two years. But tho debU of tho colony ought not to remain unpaid for that tuner, ntJr eansatei be ejected - unless preliminary expenses are incurred for surreys; we*hall'therefore r a«k' the^fionse to Authorise the above .-sum to be advanced by means of Treasury 'Bills, repayable within two -year*; -and- -made--* first- charge-on the< proceeds of the confiscated: lands- TThiw no expense will eventually be, thrpwn . upon the colony." The subject will be mbrtf "fully stated to the Qooto by my. Hon. frfehd the Oommisi ; .'. sioner of Customs on a- fature ( .o<^ca«ipn r ', Int^ the' meantime I lay before the committee a -tabular statement shewing . fbe^tptal amount,, of land confiscated, tlie amount 'already dis-posed-of; and the amount now saleable. -This — statement tends to shew tlxat these lands may still rieturn come ; considerable siuris to^the" j ; Colonial Exchequer. I have thus endeavoured ' to place the committee m possession of as full information as tfinff'-will alia*" tespecl&fg e rtj4 income and expenditure Qf,the colony for the pact year, respecting the' 'action taken under the: important Acte -p&sged jjljinag tfr° but session of the Assembly, and respecting the present poßitionjof%e:pplonjj r so,fflr.a«.if.aß the i result of such action. Notwit'hstanaing . the period of depression through which ire have passed, I cannot but consider the result to Ue on 7 tt* w^^"hi^BataSfecfcV.l #&ef v

turn to the future. Before, however, pro-c-cding to the estimates for the year 1868-69, I will briefly state to the committee the disposition which *he Government proposes to malto of the 1.55,14 V which, as I have already stated, will be recovered from the province of Southland during the present year. We propose to devote L 15.000 to the erection of a new Government house, and to provide increased office accommodation for the officers of the Legislature and of the Government As to the necessity for this item, I beUeve that Httlo if v/ difference of opinion will be found to prevail. The character and condition of the residence now provided for hia £sxedllcncy the Governor must be admitted to be discreditable to tho colony ; and while m the present condition of the colonial finances, we arc as anxious as parliament can be to avoid any large expenditure, we believe that a sum of LIO.OOO (m addition to the proceeds of Lowry Bay, which we hope to dispose of) is the least that will provide a suitable and commodious residence at the seat of Government for the representative of her Majesty. The necessity of further accommodation for officers of the Government arwell as of the Legislature for which the remaining LSOOO will be required is very obvious. A considerable number of the departments of Government are now located m rented buildings m different parts of the town, an arrangement involving not only*ieej*Bi!tlen*j)!le annual oatlay, but constituting a serious obstruction to the prompt and efficient transaction* of the public business. The marine survey, for the .reasons already xe&rred to, has proved more expensive than was anticipated ; to meet this outlay, and to complete the survey of the West Coast, which is now m hand, a further vote of L3OOO will be required. The completion of the telegraph to Auckland will probably cost LISOO m addition to the turn estimated for it last year. For • sum of L7OOO the tele* graph could be extended tte Wanganoi.; looking to the 'important advantage* to be anticipated 'from .telegraphic communication between that place and the seat of Government, and to the probability of the line being highly remunerative, the Government will be glad if the House should think right to sanction this work being proceeded with. The remaining balance of about L 28.000 the Government proposes should be reserved to meet any extraordinary expenditure which it may be necessary to incur m the suppression of renewed Native disturbances, if such should unfortunately occur. I know that thi*,proposal will meet with opposition m some quarters ; but anxious as the Government is to avoid involving the colony m any fresh outlay which ■can with safety be avoided, we think we should bo shrinking from a solemn duty if we did not juk the Legislature to place m our bands the means for dealing so promptly and efficiently with any renewed disturbances as may prevent it being developed into a general outbreak. - I will now ask the attention jrf the committee to the ordinary income and expenditure of the current year. After a very careful con^ sideration of the condition of the colony, and the circumstances by which its sources of revenue are likely to be affected, I feel justified m estimating that the receipts of the Colonial Treasury for the financial year ending 30th June, 1869, will probably be as follows : customs, LSOO.OOO ; bonded warehouse, L 6.500; stamps, LG3.000; telegraph, L 15.000; post office, L 60.000; (Miscellaneous, L56,000j snaking a total of L 1,000,500. The principal items m this estimate, namely, the proceeds of customs duties, is put down at but little more than the amount which it realized during the past year. Many members of the committee will doubtless consider that more sanguine anticipations would have been justifiable, and it is -undeniable that the extraordinary richness of the northern goldflclda furnishes a strong argument for such an opinion. Tt is, Jjpwever, but prudent to anticipate, from the increasing attractiveness of the northern district, some diminution m the ponads&et mid revenue of other parts of the colony. We "have estimated the customs revenue of Auckland at L 25.000 m excess of last year, but we must expect o> corresponding reduction m Weatland, north and south, and the same may bo expected m the case of Otago. The tttamp duties may fairly be estimated to yuflfc jo. larger sum than has been realized during the preceding year, as a considerable amount of legacy duty, the payment of which could mot bo enforced before the present time, will bo received during the current twelve months. I have next to state the amount of money which, after the practice of that resolute .economy with which, as alteady stated, the estimates for the current year feave beea prepared, appears to the Government ia«ispensable for the efficient maintenance of the: public service of tfce aelony. *Eae estimates are as follows;— Estimated ardiuaty expenditure, 1868*69— ci»il list, L 27.500-; per-, manent charges, L 320.542 ; class 1.-^puWic' domains, L3,88O; «*ass ll.— publie department*, L37.8G3 i «lass lll.— law and justice, L 55.687; elaaa IV.— postal, LIOfVMML ; class V.— customs, L 41.781 j class Vl.— native L 1£,38 4; Glass VII. — miscellaneous, special and iewpwww, L 80.029; -Ckee .TOIL ~ militia and volunteers, L 22.18 3; defence /charged on loan m 1867-68), L 47.497; making a total of L 704.647. The only item m which there is ! any increase is that of "Charges on Public Loans." This is accounted for by the interest, Ac, on the additional sum of L 260.000, which, as I have already explained, has been raised for the several services «wmenUd ia tfee Public Pebts Act of last session. In nearly every other class of expenditure then is a decrease, the amount being ia many cases considerable. This has not been arrived at without much care and exertion, act merely m the : prepara-' tion of these estimates, but by a constant endeavour on the part of the Government during the recess to effect redactions and combination of offices whenever and Wherever this could ba 4e*e, and pubKo moTOy e»ul& be saved, withoat real injury te the publfff service. I have no faith m the. economy which i» merely attempted, during the .sitting of Parliament. Tho largest savings of which these estimates exhibit are, m the, Postal Service, m the department* of Law and Justice, and m the Native and Defence Departments. The diminution ia the sum pro-* posed for Postal Services is caused m a great measure by the smaller, contribution which owing to the establishment of the Panama Mail Services, U mow made by New Zealand to the cost of that by way of Sues causing a saving of not far from L 20.000 a jear. The other steam mail services maintained by the colony are also, fewer m number than formerly ; aad I have been compelled, though reluctantly, to d'*""r"* lltl to some extent the accommodation hitherto furnished by the inland mail aerrieesu The savings on postal arrriees amovnt altogether to L 4&,178. In the department of Law and Justice a considerable, nonpar a 6M.nct. nagiatoatee have been dispensed with, nod other seductions have been effected as opportunities presented themselves. The sum asked for Native purposes is reduced from L 23.544, as voted for 1867-68, to LlS.3B* *> r tho ]»*•«»* /•"JvJ". both case* this ia an addition to the L7OOO provided by tiw» Civil List, aad to the permanent appropriation, of L4OOO contained jn the Native School* A«t It i» only fiur.to state that a portion of the sum provided on the CRvil -List for Native purposes temaina unexpended, and will .be. drawn if required. CfiftecoalMMtect,]