THE FINANCIAL STATEMENT.

Timaru Herald, Volume XXXVI, Issue 2414, 17 June 1882, Page 2

THE FINANCIAL STATEMENT.

[Br Tklegbaph.] "WBLLWaion, June 16. The Fintncitl Statement was delivered this erening by the Hon. Major Atkinson, who ■pake as follows :— INTRODUCTORY. Mr Hamlin, — I am presenting the Budget thus carl; because the Government aro anxious that the House should bare an ample opportunity of carefully considering and discussing the financial position and requirements of the colony. In furtherance of this object, which I feel ture will meet with tho approval of the Committee, I hop> to place the Estimates m the bands of hon. members not later than to-morrow, and I venture to express the hope that, lbs House will consent to the appointment of an early day for going itto supply, and not permit tha postponement of so vital a question as Ways and Means until the end of the session, when hon. members are often unable from mere physical exhaustion to give the subject that attend' n which its importance demands. The Committee will be glad to learn that th« reports which hare been m circulation for some time past to the effect that there is a considerable surplus standing (o our credit upon the transactions of tha year are substantially correct. I shall cot, therefore, trespass to-nhht t> so large aa extent upon the patience of hon. members as I have been compelled to do on tome former rccasions. My Statement will be short, but I muit still atk. forth" indulgence of the Committee while submitting for their information the somewhat dry details of the financial results of the list annual period and the prcp3sal9 of the Government for the present EXPENDITURE OF THE ORDINARY REVENUE OF THE YEAR 1881-82. The expenditure for the year under permanent Acts of the General Assembly was estimated at LI ,570,9 19, including 11,499,318 fcr interest end sinking fund ; while the amount voted for departmental service* was L1,757,R60. The total estimated expenditure sanctioned by Parliament was therefore L 3.328.579. The actual expenditure was L 3,278,820, being L 49.759 lets than the estimated amount. Tbers are no items of tho expenditure which appear to call for special remark. Hon. members, on referring to the appropriation account presented to the House pursuant to the Public Revenues Act, will be able to see the services m respect of which the expenditure has been less or more than the amounts voted. The outstanding liabilities on the 31st March, 1882, amounted to L16i,394,and at the cloae of the pi6t financial year they amounted to L 165.514. I may inform the Committee that included m the liabilities on the 3 Lit March lait is a sum of L 24.000 for sinking fund to the 13th March, 1882. In respect of the LBOO,OOO of unsold debentures of that portion of the loan of 1870 amounting to L1.000.C00 which is guaranteed by the Imperial Government, tbe Imperial Act ptovides for a sinking fund of 2 per cent per annum on the entire amount of the guaranteed portion of the loan, or bo much of it as is raised for the time being, commencing at the date at which tbe whole of the loan is raised, or on the expiration of ten years from the passing of the Act, whichever date happen! first. Whentbe fint remittance of the sinking fund wai made, namely for the half year to the 13th March, 1883, it wae considered tbat provision was required only for the sinking fund pivable m respect of tha debentures for L 200.000, which had been sold ; and not also for the debentures for L 8:0,000, which, though created, had not been placed m circulation. The quojtion waß, however, reconsidered upon the receipt of a despatch from the Secretary of State for the Colonies to His Excellency the Governor, and the Government determined to provide a sinking fund for the whole guaranteed loan of L 1.000.000. Remittmces have been made accordingly to the tru»t-e« of the fund. ORDINARY REVENUE OP THE YEAR 1881-82 Table No. 4. The estimated revenue of the year, exclusive of revenue derived from sales of land, was L 3,297,600. The actual amount paid into Ihs Pub'io Account was L 3.458170 being L190.5?0 m exceia of the Estimates. Hon. members will find on reference to the comparative return which will be appended to this Statement that we are indebted to the Customs revenue for tbe larger portion of thia excess, L 125.107 having been revived from that source. The revenue from stamp dntiei was 111,115 m excess of the E»tim»te». Miscellaneous reoeipti were also m excess by L 34.243, while from depasturing liceaies rent*, 4c, we obtained L 46.852 more than we anticipated. On the other hand the amount derived from the property tax fell ehort of the estimate by L 19.026. Of thii turn L 9270 his yet to come m. L 2200 representi the amount estimated to be received from Building Societies, wh ; oh were afterwards rendered exempt, and L 7656 is an over-estimate. The revenue from railways proved to be L 85.266 leu this the groii

estimate, but hon. member* will gladly learn that the net receipts from the railways, which were e»tima»ed at 1*361,744, amounted to 1368,927, or 14183 more than estimated. LAND BAIE3 OF THE YEAR 1881-82 Tables Noa. 1 iND 2. Following the courts approved by Parliament m the session, of 1880-81, a saparate account of the land sales hss been kept. The expenditure charged against the fund during the year amounted to L 338.076, including 1136,861 for subsidies paid to local bodies. The amount to ted for departmental services chargeable on the land fund was L 154,510, ■while the amount actually expended was 1137,297, being L 17.213 lea» than the vote. The liabilities outstanding on 31»t March, 1883, were 125,188, as against L 37 561 on 31it March, 1881. The receipts for the year from land tales were estimated at L 333.000. The amount actually received and paid ti the public iccount wts L 317.063 of which L 283.136 was for lands told for cash, |and 134,927 the last instalments for, tales on deferred payment. Adding to the receipts of the year the balance at the credit of the land fund account on the 31it March, 1881, amounting to L 32.373 and deducting the expenditure, we hare a balance of this account or 111,360 at credit on 31st March, 1882. PUB HO WORKS FOND. Tiblks Nos. 1. IKD 3. The appropriations on this aoconnt for the ysar ended 31st March last amounted to £1,89 V,554. The actual expenditure, however, was only £977,836 including £454,221 for railways. Particular! of this expenditure will be found m the tables annexed to this Statement. Fuller information than is them given Kill be laid before the flouie wheu my bon. colleague, the Minister for Publio Works, makes hii annual Statement. The liabilities outstanding at the oloaa of the year amonnted to £880,276, particulars of wbioh will also be found m Tables appended. During the year special receipts and recoveries amounting to 142,378 came to the credit of the fund, and on 31«t March, 1882, the balance remaining unexpended, subjiot, however, to the liabilities I have just mentioned, was 1.924,885, consisting of cssh m the Bank of New Zealand L 647.645, advances m the hands of officers of the Government L6o,3l9,debentures of the loan of 1870 guaranteed by the Imperial Government, L 135.300, amount invested m debentures of the New Zealand Government L44.C00, and temporary advances made on certain other securities L 37.500. The balance at the credit of the fund on tho 31st March, 18S1, was 11,860,373, and on the 31st March, 1882, it was 1921,865. The extent to which it was diminished during the year was therefore 1935,508. These figures show that the fund has been carefully husbanded, so as to extend the expenditure over the time we had agreed sot to again go upon the London market. Hon. members will observe that there was sufficient money m hand on the 31st March, ISS2, to carry on public works without a break or stoppage until about the end of next February at the tamo rate which they have bean prose euted during the last year. Included m the liabilities of the Public Works Fund at the end of the year is .'the sum of L 338.876 for the purchase of native land?, particulars of which wi'l shortly be placed before the House by my colleague the Nativo Minister, who will alto state the proposals of the Government with reference to cur future policy m the purchase of native lands. In th» meantime I may inform the Commit! eo the amount which will be required this year to complete the pnrchate of those blocks which the Government bave derided to acquire will probably not exceed Li 00,000. THE PUBLIC DEBT. Table No 5. On the 31st March, 1881, the gross public debt of the colony amounted to L 29.165.511, subject to a deduction of L 2.057.242 for accrued sinking fund. On the 3 lit March, 1882, the debt was 129,948,711, and the sinking fund had increased to 12,266,418; the Bet debt being thus 127,680,293, or 1572,024 more than it was the previous year. Thi» increase of debt is thus explained : — Of the Treasury Bills which on the 31st March, 1881. formed a portion of the Public Works Fund, sales to the amount of 1431.3C0 have taken place. These bills had been taken up m 1880 with money standing to the credit of that f and, as there was then a Urge balance sot wanted for immediate expenditure requiring temporary investment. They have now been sold, and the proceeds paid into the Public Works Fund, as the money was required for works authorised by Parliament. The debt has also been increased during the year by further advances, amounting to 1364,700, obtained m london on the security of the debentures of the loan of 1870, guaranteed by the Imperial Government. With reference to the 1800,000 of Imperial guaranteed debenture), I may perhaps remind the Committee that although m speaking of the amount of public works debt, tbey are always treated as cash ; as a matter of fact, they have never been sold, but are used to provide a working balance to save interest by inch turns as are required- according to the state of the Public Works Fund. I may mention, on the other hand, that the debt has practically been reduced during the year by the addition of £209,176 to the accumulated sinking fund, to which hss to be added 114,800, for the debentures of the North Otago diatrict public works loan of 1872 have been reduced. The net increase m the total amount of the debt is thus as I have said, 1672,021. SAVINGS BANKS AND GOVERNMENT INSURANCE DEPARTMENT. Before I proceed, Mr Hamlin, to sum up the financial results of the year 1881-82, it may not be out of place for me to. state a few facts m connection with the Government Savings Bank* and life Iniurance Departments by way of illustrating tho steady progress of the colony, the rapid advance of these institutions, and the growth of habits of prudence among the' people during; the last ten yean. In 1871 with a population of 266,986, the amount standing at the credit of open accounts m the Government Savings Banks was 1357,654. These accounts were 10,549 m number, and the average amount at the credit of each was L 33 18s Id m the Savings Banks established under the Savings Banks Act 1858. The total amount at the credit of depositors on the. 3Ut December, 1871, was 197,312, distributed over 3728 accounts, the average amount at credit being 126 2s 6d. There was thus a total sum of 1454,967 m the tarings banks m 1871 at the credit of 14,275 penons, the average amount for each being 131 17s sd. On the 31st December, 1881, the population of the colony was 500,910. There were 51,008 open accounts m the Government Savings Bank*, aggregating m amount 11,232,783, or an average of 124 3s 4d at the credit of each. . In other Savings Banks there were on the same date 10,016 open accounts, the total amount of credit being 1316,727, or an average of LSI 17» Id for each account. The total amount of deposits m the Savings Banks m the colony at the end of the year 1881 was therefore 11,549,515, bftlongingto6l,os46'epoiitors with . an average of L 25 7s 7d at tho credit of oach, at against L 454.966 m 1871, and 14,275 depositors with an average of 131 17s sd, the population during the 10 years intervening having increased from 266,986 to 500,910. The«e flgnrei are well worth the consideration of hon. rjembera. They show the remarkable exteDt to which advantage of the Savings Banks is being taken by the people for whose beneSt they were established. The population hss barely doubled itself since 1871, while the number of depositors has inoreased nearly fivefold. Intimately connected with the subject of the prudential savings of the community, are the question* of life assuranct and the growth of tho Government Insurance ..department, established m 1870, at a time when publio confidence m many English Assurance Companies was severely shakrn and with the avowed objects of giving the assured the absolute security of the colony. The Department has since • ex- • bibited a progressive advancement which warrants the statement that the experiment sanctioned by the legislature twelve years ego has now been proved a complete success. This scheme may be justly deicribed as the only successful institution of the kind set on foot by any Government, and hai attracted the attention of the various othei oolonial Governments. The premiums wen from the first fixed at what were deemec their lowest rates commensurate with a pru dent regard to safety and without any idei ■of : proflt .or bonuses. But sotwithatandios these low charges, oareful management together with the favorable influence of i

„ healthy climate and comfortable social con' ti ditions, hare produced results more ra'iifac- ) tory than was eipocto.l. Tiio buainess of the Department io the first ton years of iti , existence producer) a profit of 177,100, at " shown by the valuation report of the JU>' dor actuaries, wbiob woslaid before P»rliomei.tl»ol ■' session. The bu»r eta done has increased 0 from 460 policiei issued up to June 1871, c insuring L 206 000, to a total of 16,90fl policies S is>aed during the eleven years ending June ' 1881, insuring upwards of L 68.00.000, being ' equal to an annual average of 1500 policies * imuring fully half a million each year during 1 that period. The buiiness of the year now 9 approaching its clots will, lam informed, con- '■ tiderably exceed that average and probably '■ reach 1600,000. The growth of the asturn ance fund is not less satisfactory than has r been the progress of the annual business. '■ From a sum of LSOOO m band m June 1871, s the accumulated fund by June 1881 had expanded to ovor 1.557,000, and now it hat reached nearly 1650,000. Agreeably to the wishes of Parliament nt expressed last sassion, an industrial brunch, enabling persons to insure their lives for sums ranging from 13 upwards by means of weekly payments, was opened m the early part of March last, and during the 13 weeks which have since elapsed 2tOO industrial policies have been issued. The average amount insured for all ages is about 125 per polioy, and for adults' lives about L 55. As m thfl ordinary branoh of the Department, so also m the industrial branch, any surplus profits which may ari<e will be divided among th* assured, a provision which is quite a novel feature m what is termed industrial nssuranc*. To facilitate the payment of small quarterly premiums, there will bo provided cards on which postage stamps can be affixed until the amount of the quarterly premium it reached, and the cards can then be deposited m a post office, where credit will be given for the premium they represent. Arrangements are are also being completed by which tho PottOffice Savings Bank depositors may make payment of premiums out of their deposits by moans of an inetruction to Postmasters for that purpose, thus saving trouble and socuring the maintenance of the policy. These facts and statistic* show the remarkable growth and still increasing progress of the Department which it 'evidently supplying a great public want, and is now so far advanced that the Government, as I have on former occasions mentioned to the House, hire decided to 39k Parliament to place it under the conduct of a Board. A B'll to carry this object into effect has been prepared and placed before members. Before lowing lha subject of life insurance, I may offer a few additional figures showing further the remarkable stimulus given to that form of family provision since the establishment of the Government scheme m 1870. The number of life policies m force m New Zealand that year has be<ra estimated at 2000, insuring about L 1,000,000. Last year there were io force m round numbers 24,000 policies insuring 1.8,300,000, of which more than one-half is insured m the Government Department. This gives an incresse for the leriod of 22,000 polioies and 17,300,000 m the amount assured or eleven times the number of persons, and more than soven times the turn insured m the colony eleven years ago. FINANCIAL RESULTS OF THE YSAR 1881-82. The Committee will remember that Parliament finally determined m the session of 1881, that m future the revenue sf the year should be the actual receipts paid into the Treasury during the year, and that the year's expendi ture should be the actual money paid away during the year, thus obviating the necessity for keeping open the year's accounts m order that assets may be realised and liabilities paid before a final balance could be struck. The new method is accordingly introduced m tho accounts of the year 1881-82, and I venture to hope that the greater simplification of accounts whioh has been effected by the change will commend itsrlf to Parliament.. Hod. members will find on referring to the Financial Statement which I had the honor to make last year that, excluding the land sales from the consolidated fund, there was a deficit on the 31st March, 1881, of 156,663. but that including land sales, there was a surplus balance of 126,706 to. the credit of the colony upon the actual transactions completed within the year. As I have stated already, the ordinary revenue of the consolidated fund for the past year amounted to 13,438 170, and the expendi'nre to L 3,278,820. The ordinary Tevenu^, therefore, exceeded the expenditure, by 1209,350, and deducting from this sum the deficit of the previous year, L 5667, wo have a credit balance of L 203 683 at the close of the financial year 1881-82 on this division of account. But though for reasons which have been frequently stated it was determined that a separate account thould be kept of land sites, it must be borne m mind that the revenue from that source still remains within the consolidated fund, and is liable to meet the charges of tbe publio debt, should it ever be necessary to use it at any time for that purpose. Sat the colony now no loogsr ralie* lpon land sales m any way as a means of obtaining revenue to meet the ordinary services of Government, and has thus removed one condition which made sound finance impostible. When, however, we come to consider the whole transactions of the year, it is clear that tbe proceeds of the land sales and tbeir expenditure must appear m the Account. We find then that the total moneys received and paid into the Public Account during the year, including land tales, was 13,805,233, and the total expenditure, including charges under the land Sales Act, 13.616,895. The receipts were thus 1188,338 m excess of iho expenditure, and adding to this sum the surplus at the close of th* year 1880-81, 126,706, we find that we have a credit balance on the' 31tt Marcb, 1882, of 1215,041. This result is on a upon which I hope I may be allowed to congratulate the Committee. It fully bears out the opinion expressed by the Government m 1879 that the grave depression and the deficit then existing were temporary and remediable, and shows us that the course then determined upon by Parliament,of a rigid economy and sufficient taxation has restored the finances of the colony m a remarkably short time to a thoroughly sound condition. We may we'l, Mr Hamlio, be proud of belonging to a people and a country which can m such circumstances produce suchreiults as these m a period of two years. LOCAL FINANCE. The question of local fioaice has bden again carefully considered during the recess, and the Government have thought it advisable to issue a circular tol csl bodies, asking for their opinion on this subject, and aUo upon some important questions relating to the constitution of tbe County Councils and Road Boards. I shall shortly ask leave to introduce Bills to give effect to such alterations as the Government think necessary m the conttitution of these highly useful local bodies, and alto to make sufficient provision for their financial requirements. Ido not propose to trouble the Committee with any particulars of the propostd Bills, asitwill be more convenient tods so when the Bills themselves are under consideration. I ought, however, to say that the principles which the Government have taken for their guidance m preparing these measures are, first, that the local bodioi should be left b» free as possible from central control ; second, that they should have conferred upon them all powers which can be advantageously exercised by such bodies ; third, that their finances should be as distinct ns possible from colonial finances, and that their revenues sloutd be sufficient. The necessity for dealing with this subject during tho present sossion is admitted upon all sides. The question is not one which thould be treated as a party question, and I venture to hope tho Government will receive the hearty support of both sides of the House m providing the country districts with meant of performing th* important duties which have been imposed upon tbem of making and maintaining a large proportion of the roads of the colony. ESTIMATED EXPENDITURE FROM ORDINARY RItVENUE, 1832-83. £ now come, Sir, to the consideration of „ the estimated expenditure of the ordinary 9 revenue for the current year. This may be d conveniently divided, following the usual j custom, into two parts,— the permanent l 9 charges and the annual appropriations. The ir permanent ehargei, amounting to 11,627.512, . c include pensions, payments under the Civil d Litt and other Act*, and the large item o! „ interest and linking fund, which this year wil is, amount to 11,554,818. Inoluded m tbit c however, is the sum of 124.000, due fo f arrears of sinking fund upon the ImperU * guaranteed loan of 11,000,000 of 1870, ti

which I bave already referred. The total present annual charge upon our debt is therefore 11,530,843, and not L 1,554,848,, 554,848, at might be supposed from a casual intptction of the accounts without this explanation. It must, also bo borne m mind that of this 11,554,818, no less a sum than 1270,000, or nearly one-sixth, is for linking fund. In other words, we shall pay this year Li ,284.848 for interact and L 270.000 for the redemption of the debt. This point it often overlooked when we pprak of the annual charge of our debt, but, as hon. members will see, it is of some importance when we with to ascertain exactly our financial position. Tbe estimated annual appropriation for tliii year amounts to L 1,851,127., 851, 127. This shows an apparent increase upon last year's vote of 193,468. I say apparent bocauae the services for which a large portion of this extra L 93.468 it required were paid for last year out of loan. Hon. members will find on referring to tbe Public Accounts that the votet for militia and volunteer! and for police and conttabulary for the lait year, charged against the contolidated fund, were only 1143,015, wherias they are this year L2L4,009,a difference of L 71.994. whioh previously was paid out of loan. This 171,994 then, it not an increase of proposed expenditure but really the transfer of a charge, from loan to consolidated revenue, of what I regret to say is for the pr«tent neceisary expenditure, although happily, the cause for muoh of it is, as we believe, fait passing away. Th's transfer I am sure the Committee will approve, for although suoh expenditure baing temporary and extraordinary, may be considered a fnir charge against loan, still, it is very desirable to pay for such services out of revenue whenever the revenue will bear them, as is now the case. Of the ba'ance of L 21.474, LI O,OOO is for an abatement of the rabbit nuisance, whioh last year was provided for m the land fund estimates. Ths remainder may be said to be comprised chiefly of increased charges for working some newly-opened section! of railways, for exohango on remittances to London to pay interest, and for tome necessary increase m tbe smaller salaries of Civil servants. I have been thus particular, Mr Hatnliu, m railing tho attention of tho Committeo to this apparent increase, becauso tho Government arc anxious that a -watchful cyo should bo kept upon any proposals for increased expenditure, -which should not be permitted unless shown to be absolutely required m tho interests of good government j for it is certain, unle33 wo exercise great earo m this matter, the return of prosperity will ngain lead us to extravagant expenditure. I must here, Sir, point out tho fact, which I hope hon. members will boar m mind, that m this cstimnto of expenditure I have only provided the sum of L 40.000 for hospitals and charitable aid, tho amount voted last year. Upon this important question I shall speak more fully presently. ESTIMATED REVENUE FOR THE TEAR 1882-83. Tadlb No. 7. I -will now nsk the Committee, Mr Hamlin, to turn its attention to the consideration of tho rcTonuo for the year 1882-83. I anticipate, if taxation is to remain unaltered, with tho property tax at ono half-penny m tho £, that we shnll receive a total ordinary revenue of 13,393,500, exclusive of land sales. I have thought it prudent to estimate only a moderate increase m the several items *of revenue, full particulars of which, compared with tho actual receipts of last year, will bo found m Table No. 7a attached to this Statement. It is possible that the reveuuo may exceed my estimate, but, considering tho circumstances of the colony, I think it bettor not to speculate upon increases which, although possible, may never arise. I estimate tho revenue, then, at 13,393,500. To this must be added the balance of 1203,683 which stood to our credit on tho 31st March, and wo then have the sum of 13,697,183 as the total amount available for tho services of the year. Now, if from this we take 13,478,639, tho estimated expenditure to which I have already referred, there will remain a balanco of L 118.644 at tho end of the current financial year. So far, Sir, all has been plain sailing. We have had to deal only with facts and with estimated results, which approach to something like a certainty ; but we ore brought face to face with a problem by no means easy of solution : How can this surplus bo dealt with to the greatest advantage to tho community ? What relief, if any, can bo given to the tax-payers of the colony ? But before these questions can"bo answered satisfactorily, it will bo necessary for me to revert to tho question of hospitals and charitable aid as I promised to do. Tho total public and known private expenditure upon hospitals and m charity last year was, m round nuinbors, LBB,OOO, and for practical purposes wo may assume that an equal amount will bo required this year. The 'sum was made up by contributions from tho consolidated fund of L 29.000 j stoppages from subsidies from local boards, and |from tho public, L 22.000. The present to say— of providing tho necessary funds is irritating and unfair to most, if not all, parties concerned m tho charitable administration of tho colony, and it is, I think, clear that tho timo has come when this important subject will liavo to bo dealt with upon somo comprehensive principles. It may be taken for granted that the indigent and the sick poor must bo fed and clothed and properly ooked after by tbo community. Should private charity fail to moke proper provision — and that private charity will fail to make a sufficient provision I fear is only too evident — tho State then will have to undertake this business m somo form. This being bo, it would seem that there aro practically only three courses open for us to follow. Tho indigent and tho sick poor will have to bo maintainod by a poor rate, supplemented by privato benevolence> or by large grants from too consolidated fund supplemented by private benovolenco, or by a system of national assistanco. It may bo impos3iblo to deal with this largo question during the present session ; but as there is a great, .and I bolievo a very general repugnance to a poor rato, m which I strongly sympathize, and as grants from tho consolidated revenue are, to say tho least, very undesirable, I propose to submit a scheme of national assurance for tho consideration of tho Houso, which I believe to bo thoroughly practicable, within tho means of our pcoplo, and which would mako the necessary provision for the sick, tho widow and orphan, and tho aged. It is possible that my enthusiasm has carried me too far upon this subject, and has made mo too hopeful ; but I have given tho question much thought, and am convinced that the scheme which I shall at an oarly day submit to tho HOll9O is within tho bounds of practical politics for us m this colony. Should, howover, tho proposal onljr lead to ft dispassionate discussion of this important matter wo shall have advanced one step towards a solution of what I venturo to think is ono of tho great problems of tho age — a problem which, though happily not so urgently pressing upon us as upon older communities, where tho distribution of wealth is at present much more unequal, is still ono it behoves us, as tho founders of a nation, to grapplo with, and to tho best of our ability solvo without delay. I havo said that it is very probable that we cannot deal with this quostion during this session, but whether we do to or not, sufficient provision will have to be made for the expenditure of the ye»r. Tbe Government propose, pending further consideration of this subjeot, to tako the whole oost ot hospitals upon the consolidated fund, and for this purpose I shall have to atk for a vote of L 50.000 for their maintenance. Should this be granted, we shall ask the continued assistance of the looal Boards or tbe loo.il Committees as tbe cats may be, m tbeir management, for without oareful looal tupsrvison abuses of a sorioui nature are sure to oreep m. With regard It) charitable aid, now costing about L 40.000 a year, I shall ask for a vote of 120,000, and propose that this relief should be given a* far as practicable through looal institutions, the Government granting pound for pound. . If this proposal should meet with the approval of the Committee, I shall hare to increase the 140,000 for hospitals and charitable aid, which I mentioned a* inoluded m my estimated expenditure to 170,000, thus disposing of £30,000 of tba surplus. The balance then of 1118,544 whioh I taid would probably be to our credit on tbe Slit Maroh 1883 will be reduoed by this means to 188,644. I wil now turn, Mr Hamlin, to the consideration of the question what relief,' if any, ran be given to the taxpayer! of the colony. We bave now only « turplus of 188,644 at a margin after making the temporary provision I have jnst

prnpmrd for the services of the year, whioh ire not of a permanent character, amounting to ab ut LIOO.OOO. With such a surplus we might, if wo did not intend at we do to go upon tbe London money market early next year fora further loan to continue our publio works scheme, safely reduce taxation by at least 150,000, but taking all tbe circumstances of the case into consideration, I do not think it would be prudenb to reduce taxat'on at present. If it be determined to borrow more money to enable us to complete our mein lines of railway, it will obviously be neoessary to continue taxation at such a rate as will insure an ample margin of revenue to pay the interest on the money borrowed. Ttntion must as a matter of course remain at a high rate until the workt now being constructed out of loan are completed and have had time to become productive. Sir, we f*el assured that what the House detires and what the country demands is steady progress with our public works i that we thould pay our way fr-m year to yefir, and not again fall into debt for current expondilnre ; and although we are apparently raising left revenue this year than will cover our expenditure, it must be borne m mind that the temporary and extraordinary services wh'oh are tbit year being charged against the ravenue amount to more than the difference between the expenditure and revenue, and that the use of a turplus for such a purpose is quite legitimate finance, when there is no reasonable doubt that next year the revenue will be ample to provide for the service of ths year. ESTIMATED EXPENDITURE AND RHVRNUE FROM LAND SALES, 1832-1883. TABLB No. 8. The estimated expenditure chargeable against the land sales fund is as follows : — For charges fixed by Acts of the General Assembly, L 41.500} for the Crown Land Survey and Mines Department, L 153.810. The receipts from land sales are estimated to reach L 354.000 for the current year. Adding to this sum the balance at tho beginning of the jenr, LI 1,360, and deducting tho estimated expenditure, 1195,310, we have a balance remaining of 1170,050. The question of the disposal of this balance must be postponed for the present, until the legislature has determined what form of aid shall be given to local governing bodies. Tho proposals of tho Government m referenoa thereto will bo submitted when I introduce tho Bills which bave been prepared for dealing with this subject. lOOAI INSORIBED STOCK. It will be m the recollection of tome members that last year I intimated to the House tbe intention of the Government to submit for consideration a Bill authorising tho ipsne at par of a loan of 1250,000, tbo principal and interest of which would be payable m New Zealand only. Circumstances prevented tho Government from giving effect to that intention during the last eeision of Parliament, but steps are now being taken to prepare a Bill, which will be tubmitted for the consideration of the Home m the current session. I have drawn the attention of the Committee m a previous part of this Statement to the very large accumulation of money m the Savings Banks m the colony, and the Government think, as I remarked m the Statement I had tbe honor to make latt year, that many of tbe depositors of this money, as well as tbe publio generally, might be glad of a more permanent form of investment if one can be provided which is at the same time seenre and easily convertible into cash. I propose, as before, that tbe loan shall bear interest at a rate not exceeding 5 per cent and that the proceeds ■•hall be paid into the Fublio Works Fund to be appropriated by Parliament. I also propose that the loan shall be issued m the form of inscribed slock, with the right to the tub(cribert to obtain at any timo when desired bonds payable to bearer of 110 and upwards. The Government believe that securities suoh as those I have described will find favor with the publio so soon as their nature is generally understood. Tbe loin will be disposed of equally as it comes into favor, the object of the Government not being to obtain funds for expenditure, but to provide a class of security for the investment of tavings which seems generally to be desired, and is likely to havo a very beneficial operation. INCIDENCE OF TAXATION. I ehouU now like, Mr Hamlin, witlifthe permission of the Committee, to s*y a few words about a question which I think well worthy of our attention at the present, viz.— tbe incidence of our taxation. Does our present taxation press unfairly upon a particular class, and especially upon that class which is the least able to bear it, because if so, although we might not be able to reduce the total amount, we might be called upon to shift the burden from the weak to other and stronger Bhoulders. I havo, Mr Hamlin, been looking into tbit question of the incidence of taxation m order to ascertain th« amount borne by the different olsssrt, so that relief might be given if necessary to those upon heavily. I ihall state broadly, for the information of the Committee, tbo results of my inquiries, referring hon. members for partiou* lars to Table No. 9 published with this Statement. The results of my inquiries seem to me to show that taxation it, upon the whole, fairly distributed over the community, although what is fair iv such a case is a proper' subject for discuaiion, and a question upon which there may be a great diversity of opinion. For the purpose of comparison I have divided the population iuto threo classes whioh for the object I have m view, may be considered a natural division : — First, the wage earning class, whioh I shall hereafter for convenienco call the industrial olast, consisting of 312,436 souls, exclusive of 11,903 domestio female servants j second, the intermediate class numbering 96,260 souls. This class it composed of all those who are known by the census as not belonging to the industrial class, and who do not pay the property tax j and, third, the class whioh pays the property tax, consistiog of 68,445 souls. The total taxation upon whioh my calculations are based for what we term taxation proper, as distinguished from what is paid for services ronderod, is 11,717,748. This was made up as follows : — Customs, L 1.276,199 ; stamps (not including pottage stamps), L 126.14 8; property tax, L 257.600. From tbe Ouetoms duties deduct the duties paid on wines, spirits, foreign beer, and tobacco and sugar used m brewing (13493) and the amount (L 5512) estimated to be paid by the Maoris on general customs, and also tbe duty paid on cotton piece goods, wbioh are now free ; these amount m all to L 683.794. I make these deductions because, with the present information at my di<posal, it is impossible to apportion each class the expenditure under the heads of wiuoi, spirits and tobacco with any accuracy and because the other article! enumerated do not come within the scope of the enquiry. But I have no doubt that if we oould moke now s true distribution of tho amount paid under the heads of wines, spirits and tobacoo, we should Bnd that the intermediate and property clashes pay a large share, and that the relative proportion between the three classes which I am about to give, would be but little if at all ohanged. I assume, of course, a moderate use of these articles. If used m excess, it is impossible to say wbich olass may pay most-, but I think it will be genorally admitted, or at any rate ought to be admitted, that those whose spirits or tobacco, or any other article, are m excess, to whatever class they belong, are fair subjects for heavy taxation. Now, 1 have received from sixteen of the chief towns m the colony trustworthy information at to the actual expenditure of a large number of mechanic! and laborers. I bave compared the expenditure so obtained with the expenditure or the same clasiet m England, and find only such difference at the change of cirouinttonces would lead one to expect. I think, therefore, we may take these retnrns at approximately accurate for. practical purposos. I believe that further information which I am collecting will generally bear out tbe results now given, and that any error which may be found m my estimates will be m the direction of a slight over-estimate of the amount paid by the induttrial class. The returns to wbioh I hare alluded show that the* average amount paid to the Stats by ftmiliei of the industrial class avsrsge 16a 6i per member, or a total of 1214,522 for the various families. Thit estimate it made from the actual expenditure of fifty-six typical families resident m all parts of the colony j but .to thit amount we mutt add tho duty, 151,246, paid by 49,355 single men,' equal to 11 Ot 9d per head, "and the duty, 13983, paid by single women over 18 having oeoupationt, equal to 19s lid per

head. The aggregate of these amounts i« L2R9.751, thus giving an average over tbe whole clatt of 17s 3d per head. But to this amount we must add 110,311, being the duty p K id by the 11,903 domestic female servants for drapery at 17t 3d, equal to 9d per head, thus (iving a sum of 1280,063 as the total taxation paid by the industrial class, exclusive of course of the duties on spirits, wines, etc., tobacco and colonial beer. I have included all tho dnmettio male servants and the married couples at terries at paying m the industrial clats, although probably the cbinfpart of their contumptiou ought to be credited to tbe intermediate and property clanec This, I need hardly remark, maket no difference at to tbe average rate per head, but only m the total paid by the clats. I have, following the best authorities on Ihia subject, included the duty payable upon articles consumed by domestio female servants, except wearing apparel, m the amount paid by tho intermediate and property clarses. I have said that the total amount paid by the industrial class is 1230,062, and that thit amount is ascertained by meant of ths actual expenditure made by fiftys'x families m various parts of the colony, and that tlieso returns have been carefully cheeked by comparison with the expenditure of the tame clait m England, proper allowanco bting made for iho difference m circumttnncos of the two population! aud also by due consideration of what it is possible for this clatt to spend on dutiable goods, after providing from tbeir earnings for the other necetsaries of life and for houte rent. If we now deduct 1280,062, tho amount paid by tbe induttrial claia from the total duties which we are now considering, we get L 312,348 as tbe Customs dutiet paid by the intermediate and propertied olaese*. This amount, after careful consideration, I have divided at an equal rate per head between the two olnstes lait named. This will give per head for each of the olatsrs 11 It lid. The total revenue collected for stamps (exclusive of postage ft amps) is L 126.149. This I have also divided at an *qual rate per head between the intermediate and propertied classes. It gives for eaoh member of tho intermediate and propertied classes 15s 4d per head. I think there can be no doubt that tbe stamp duties are paid by tbeio classes. It is postiblo that a small amount may be paid by the industrial class, but it is so small that it oould not appreciably affect the results as between the various classes. We find, then, that the stamp duties paid per head by the intermediate class is 15s 4d, and the customs duliefl LI 17e lid. This gives LS 13s 3d as the total sum per head paid by the intermediate claas, and a total for the class of L 56.272. The property e'.tm, I have assumed, pay an equal amount per head with the intermediate olass for Stamps and Customs. They, however, paid with the property tax at a penny m the £ (wbioh it wat at the time to which my calculations relate), L 3 16s 3d per head for that tax, making a total por head of 16 9s 6d, or a total for the class of 1439,819. With the property tax, however, at one half-penny m the £, the amount paU per head by tbe property clisi would only be 14 10s 10} d, or a total for the class of 1310,719. To summarise them, we find that the industrial class, consisting of 312,436 souls, exclusive of 11,903 domeitio female servants, pays L 369 751, being at the rate of 17s 3d per bead, or, including the drapery duties paid by these domeitio servants, L 280.0 62 j the intermediate clasr, consisting of 68,455 aouls, pays L 439.819, being at the rate of L 6 8i 6d per head- that it with the property tax at one penny ; but if we ttka that tax at oce halfpenny, they pAy L 310.719, or at the rate of 11 10s lQ\d per head. These amounts are, at I hive already taid, exclusive of the dutiei upon spirits, wine, tobacco and colonial beer, and do cot include, for obvious reasons, thit part of our so oilled taxation, wbich is paid for by each cla'B m proportion to use for services rendered by the fr'tate, such as Pott Office, Telegraph, Court fees, <tc. Hon. membert will, I hope, understand that m speaking of the expenditure at per head I only use a form of expression so far at the intermediate and property classes are concerned, individual expenditure being widely different according to meaonand habit*, but with the industrial ol»s the difference is not to wide with taxation. It it of course impaieible to meet individual cases. In apportioning tbe taxation of the community, we must take a wider view and deal with classes by contidering tbeir circumstances and numbers. It is difficult to exaggerate the importance of this subject, for badly adjusted taxation means undue exaction from some class or classes which cannot fail to bo detrimental to the community ai a whole ; while on the other hand fairly adjusted taxation means that the publto burdens are borne with as much ease bs their extent will admit, and I will express the hope that thit quettion will receive the careful atteatiou of hon. members, and of all interested m the publio welfare throughout tbe colony, so that when our flnmnciat position permits, wo may dc*l with the subject on broad and intelligible principles. PROPOSED LOAN. I have now, Mr Hamlin, only one more subject to deal with, but although last, it is by no means leatt m importance. I refer of courae to the question of a new ban. We bave first to consider whether a new loan is advisablo this year, and secondly, if the first question is answered m the affirmative, bow much will it be desirable to borrow ? Now with regard to the first quettion, we must, m order to arrive at a reasonable conclutioo, consider tbe itate of the Publio Works Fund and the amount we can prudently expend per annum. I have already taid the balance m the Publio Works Fund on the 31st Maroh lait was 1924,865, with outstanding liabilities at that date of 1541,400, exclusive of liabilities on the land Purchato Account, for wbich we mast add at least 1100,000 ; so that m addition to the 1541,400 whioh it m course of expenditure under existing contracts and authorities, there only remained m hand at the beginning of the financial year about L 283,465 for continuation of the works already begun, and for new works, for whioh liabilities have not been incurred or appropriations made. We thus tee that if no authority for another loan is granted tbit year, our apending power on publio work i for one year and three-quarters, after paying for the outstanding oontracts and engagements to which I have referred, will only amount to L 283.465, because if a Loan Bill were patsed next session, the money could not be raised before about December, 1883, and the Government are quite determined not to enter into engagements m anticipation of railing money at a particular date. Tbe question then narrows it* elf to thit : Is it prudent at this present lime, and under tbe present circumstances of the colony, to borrow again j or ought we to be satisfied with a total expenditure of 1924,865 io tbe twentyone months commencing with tbe current financial year P Sir, the Government ire fully aware of the responsibility tbey incur m placing before the Committee their answer to the question. They recognise clearly the principle that before the pub io debt it increased the g»in to the colony thall be teen to be more than commensurate with the increated liability, and tbey believe that a case within this rule has bow arisen. They think that our ordinary finance being restored to a satisfactory condition, and our main trunk lines of railway being still incomplete, it it now prudent to raise a freth loan for the purpose of completing these railways, or carrying them a ttage nearer to completion, and for oertain definite and important publio workt. In thit opinion the Government are ttrengthened by the fact that the railways already made are now paying practically four per cent annually on the amount expended on their construction, and that they are stradily improving m this respect. The Government therefore, Bir, recommend that a loan should be raised, but only if the money can be borrowed at a reasonable rate of interett, and the authority of Parliament will be atked to empower the Government, if neoeiaary, by postponing workt so to arrange the expenditure at to enable them to wait for a favorable market. We have now to oontider what amount should be raised, and this must be decided bi two oontiderttions :— (1) The amount whicfc can be profitably expended on neoeisary ot directly reproductive publio works j (2) th< amount upon whioh' w* enn afford to pay m terest without placing undue burdens upon th< people of the colony. Now I am afraid thai there are so many necessary or directly r* productive publio works only waiting to b done for the want of cash to do them, tba

we shall find no practical limit m that direction, and this fact wm no doubt the cause of our fa> too hriih expenditure m the put. From the paat we should tike warning, and prooeed at a very much more moderate pace than we hare been doing upon the arerags for th» last ten yaara. We roust confine ourselves for the future m the expenditure of borrowed money to works of mceaiity or to worka which are directly reproductive, and atrictly limit tlie amount apeot yearly upon eueh works by our oapacity to pay the intereit with tolerable eaie. It ia, m the opinion of the Government., of great importance that the colony abou!d ateadily pursue a progreaaire policy, and that our main trunk lines ihould be puahsd on aa vigorously aa ia compatible with the means at our disposal. The UoTernment then, taking into conaideration all the ciroamatancea of the colony, and acting upon the prinoiplea which I hare juit laid down, bam determined, Sir, to propoie to Parliament a loan of L 8,000,000, to be raiaed and tzpended at a rale not exceeding L1,C00,000 per annum. My honorable col'eague the Mini»ter for Publio Werka, when he makea the Public Worki Statement, will inform the Committee m detail of the itema ef the propoaed expenditure and »f the mode by which w« hope to conflne the expenditure to apecifio worki determined upon by Parliament before the money ia borrowed. The Government attach great iinportunoe to this provision of the propoisls. It ia, I think, claar, looking at the experience of the paat, that if our future borrowing ia to be governed by the prudence wbich ia essential, ne must carefully caniider what worka wearejuatified m constructing, at what rate of speed they ihould be conatrocted, and at what coit to the Btate. When we hare determined theae condition! we are then m a poiition to decide upon the amoUDt to be borrowed. Upon these rules of oonduot m thia matter, which lam aure will meet with the hearty approval of the Committee, the Government have noted m arriving at the amount which they propoae ahail be borrowed. CONCLUSION. Mr Himlin, I have now done. The Committee, I am sura, will not be diiappointed at the shortness of my Statement when it remembers that this is the natural and nppropriate result of the aimplicity m keeping the colonial accounts which we have been enabled to adopt. I will only add one word. In 1879 I atated to the Committee fully and fairly the position ot the colony, neither concealing nor exaggerating the grave difficulties which had then to be met, and I pointed out the obvious remedies. That Statement baa often been characterised, especially by those who hnH taken the least trouble to matter it, aa too darkly shaded and as giving too gloomy a view of things. Though it has been attempted to disprovethe facto, and thefigurei which I then adduced ; Sir, I venture to say that exoept so far aa the gloom wai m the facts themselves, it never had any existence. It certainly was not of my importing. It was prudence, not folly, to look onr difficulties fully m the face. It would have been folly, and not prudence, to doubt that we could overcame them. Ihe Government and this House had full confidence not only m the vitality and vast resources of the clony, but (which was no leas important) m the willingness of lbs colonists to make the necessary sacrifices, and that confidence has been amply justified by the faoti I have just had the hunor to liy before the Committee. As prudence and economy and cautisus and wellconsidered advance m pubic worts as funds became available was our rule then, and has been since, ao it should be now and m the future. I have full confidence, Sir, that bj following that rule faithfully we shall not only maintain, but aa the resources of the country become developed we shall steadily increase, the present (satisfactory condition of our finance.