THE FINANCIAL STATEMENT.

Star (Christchurch), Issue 655, 29 June 1870, Page 2

THE FINANCIAL STATEMENT.

[by electric telegram]. We are indebted to the General Government for the following summary : — Wellington, June 28. The Financial Statement was delivered this evening. The following is a brief abstract: — The Colonial Treasurer commenced by asking the indulgence of the Committee, on the ground of the early period at which the statement was made, which bad entailed a very large amount of extra labour. The financial measures of last session had answered their purposes. The curtailment of the advance system had enabled a large sum to be brought to account at the end of the year, which would otherwise have appeared as a charge against this year. The Annuities and Life Insurance Act had been brought into operation with great success, and measures would he proposed to increase its usefulness. The total debt on colonial account, less sinking fund accrued, was £4,200,000, of which £528,000 was represented by Treasury Bills. These bills would remain a floating debt until November, 1874, when it would be finally decided whether the amount should be paid off or added to the permanent debt. Last year's -statement was delivered before the accounts were completely made up, but the computations have been closely borne out He wished to remove any misunderstanding arising from what he said last year on the large apparent excessive expenditure arising out of the advance system. That system was tb blame, not those who administered it. He .would endeavour to apply in the present statement as rigourous a criticism of tbe position of affairs as might be applied by an impartial critic not responsible for his proceedings. After paying off liabilities and engagements on account of last year, and bringing to account £150,000 of Treasury Bills authorised, there would remain a surplus of £76,000 for the present year. That amount was exclusive of £60,000 overdraft, which had not been paid off, as the overdraft was merely a convenient mode of anticipating the revenue distributed over the colony, and there was virtually no cost for interest on account of it. The Trust Fund was in a satisfactory condition ; the state of the Post* office Savings Bank account was a pleasing testimony to the frugal habits of the people ; the Special Fund account was very complicated, owing to a number of old balances. It was believed that £25,060 would be recoverable from the Special Fund, to be paid over to the Consolidated Revenue, exclusive of a balance to credit under the New Zealand Settlements Act, which would be applied to the payment of Treasury Bills issued under that Act. A separate banking account would be kept for the Special Fund in future. The financial year was not yet ended, and only an estimate could be made for nearly the whole of the present quarter. All liabilities payable on account of the year's services being included, there would be an expenditure of £74,000 in excess of rotes, but on other votes there hid been a saving of £12,000, the £74,000 including £40,000 of expenditure under a special order for defence purposes. The Government were satisfied that those excesses were independent of credits to vote, which would reduce them by a considerable sum. Although incurring the excess of £40,000 was quite legal he was willing to admit that it was a violation of the understanding come to last session, tbat Parliament should be consulted if the £200,000 voted for Contingent Defence was ex.ceeded; but it must be stated, in explanation, that as soon as it was ascertained there would be an excess on the £200,000, Parliament was convened to meet at the earliest possible moment. The colony had been saved any contribution for detention of Imperial troops. Ihe year's revenue had yielded as closely as estimated. The total expenditure would exceed the total receipts by £35,000, but against this deficiency it must be recollected that the expenditure included £24,000 for advances to Southland, £15,000 for the

■■■■■--_■ . Wanganui bridge, £10,000 as an advance to the Patea settlers, and £25,000 for roads in the North Island. To disprove the statement tbat we were borrowing money to pay ordinary charges, he had analysed the expenditure of laat year. He found that the ordinary expenditure amounted to £442,000, repayment of debts by Sinking Fund £46,000, exceptional and reproductive expenditure £334,000. The General Government share of revenue amounted to £540,000, so that the total of Ordinary Expenditure with Sinking Fund added was considerably within the amount of ordinary revenue. In these computations defence expenditure was regarded as being extraordinary expenditure. The Government submitted that when, in 1863, it was agreed to borrow I money for defence purposes, and a large annual charge was thereby imposed, it was rendered impossible for the colony to continue to pay out of the revenue that annual charge, and also to pay out of revenue a heavy current war expenditure. Borrowing money was the only plan by which to f aßten upon the Uorth Island a fair Bhare of the liability paid out of current revenue. The defence expenditure was finally settled year by year between the two Islands, according to their share oi! current revenue, but if it was considered that the North Island would, when settled, contribute fully an equal share to the revenue, it would be seen that by defraying war expenditure out of borrowed money the ultimate cost would be more equally distributed. Tbat plan would leave the surplus Ordinary Revenue to be employed, either for reproductive purposes or to enable taxation to be re* duced. He would now describe the proposed colonization operations. The principles on which the Government proposals were based were : — First : Both Islands should aid in the work. Second : Both Bhould share in its results. Third : That as few political changes as possible should be made. Fourth: That allowances ahould be made for the varying conditions and circumstances of different parts of the celony. The wants of the colony were publio works in the shape of roads and railways, and immigration. The two being most closely allied, it was proposed to enable the provinces of the North Island to acquire a landed estate to the amount of £200,000, the cost to be charged upon these provinces, and tbe lands or their proceeds to be used for railway and immigration purposes. It was proposed to expend £400,000 upon roads in the North Island, and to give an equal amount to the Middle Island, to be spent exclusively on railways, and to be divided amongst the provinces in proportion to receipts from them to the Consolidated Revenue. It was proposed that during the next ten years a system of railways should be constructed in the North Island from Auckland to Wanganui via Taupo, with connections to Wellington, Napier, and New Plymouth ; in tbe Middle Island, from Nelson to Picton, thence to Amuri, Christchurch, Timaru, Oamaru, and Waikouaiti ; from Dunedin to Tokomairiro, Molyneux, md Winton, with connections to Tuapeka, Clyde, Cromwell, Arrow, and Queenstown. These railways should be commenced from a number of different points, and be constructed as cheaply as possible, the work being continued as traffic demanded. Payment should be made in money, or by guarantee, or by subsidy, or by land, or by two or more of these modes. The General Government would enter into contracts for the construction of the linea at the wish of the provinces, the cost to be charged to the provinces, or to be defrayed by land, but half the amount of Stamp Duties to be allocated specially for railway purposes. The lines should be so devised and constructed that a considerable portion of the cost could be defrayed out of returns as works were pushed on. It was proposed to authorite £200,000 to be advanced by provinces for water supply on goldflelds; £60,000 to be spent on Telegraph erection, and a million and a half on immigration. The total expenditure of ten millions would be spread over ten years, but it was com* puted that a great part of that sum would be defrayed out of land, or be represented by guarantee of interest. Immigration should be regarded as essentially a reproductive work. The total amount proposed to be borrowed during the ten years was six millions, inolusive of any loan obtained from the Imperial Government. The announcement of the Commissioners about the million guarantee was gratifying, but the conditions were not yet known. Immigration, it was proposed, should be conducted systematically under a varied form, to make it suitable to the peculiar circumstances of the colony. Each province would be supplied with immigrants at the . request, of the Provincial Government, half the cost to bring the immigrants' out being defrayed by the province by an annual charge of thirty shillings per immigrant. Calculations proved that all these proposals, supposing they came I sooner or later under one management,

could not entail upon the colony liabilities which it womld be beyond the power of the colony to meet.- He was not of opinion that increased taxation would be necessary, indeed he proposed that the tariff should be reduced ; but even supposing that the construction of railways and the introduction of immigrants did necessitate some amount I of direct taxation, after the lapse of three or four years the benefits would fully compensate for such . taxation. He repeated however, that he was not expressing an opinion that such taxation would be necessary. He laid it down, as indispensable, that immigrants should be carefully selected, that the colony and not the mother country must haye tbe sole, cbarge of the work, and that the colony would not consent to accept tbe refuse population of the Imperial country. In carrying out these arrangements, specially •■ with a view of dealing witli the taxation, it became imperative that the partnership between the provinces and the colony should be dissolved, and a fixed payment per head of population be substituted. But in order to preserve existing relations, and to prevent inordinate demands from Government sources, it was desirable that the charges upon the provinces should be kept just as at present, and the capitation allowance would be simply a substitute for the moiety of revenue. It was proposed that the allowance should be £2 per head for the first year, and that it should be reduced 2s a year for five years, the allowance then remaining at 30s per head, to be added in the caso ol Westland, on account of the large proportion of adult population. For the Maoris, a special allowance of £3000 would be made to Auckland and Hawke's Bay ; £1500 to Wellington ; and £500 to Taranaki. The Government proposed that £50,000 should be annually allocated to the provinces in proportion to their population, to be divided as subsidies according to Road districts ; the use of that sum for the specified purpose to be carefully guarded, and the yearly distribution to be approved by the Assembly. The total proposed payments to the provinces, including the £50,000 for Koad dißtrictß, would be £52,000 more than the provinces had received this year. A statement of the separate results Of the change showed how very unequally and unfairly the present system had worked, for under it Canterbury had been an extraordinary loser and Westland a large gainer. Westland was supposed to have absorbed a great deal of Nelson revenue. Undtr the capitation allowance scheme, Auckland would gain £8400, Taranaki £6600, Wellington £8900, Nelson £8500, Marlborough £5400, Canterbury £25,000, Otago and Southland together £2600. Hawke's Bay would lose £100, and Westland would be a loser by £13,000. Against the proposed yearly reduction of the capitation allowance down to 30s must be set the fact tbat after this year one-half the Stamp Duties would be set apart for railway purposes independently of that allowance. Upou the important subject of reciprocal arrangements with other colonies and countries, it was proposed Jo avoid technical duties, as to the imp sition of differential duties, by taking pawer by Act to pay bonuses on certain imports, according to agreements, such bonuses not to exceed in any case the amount of duty. Aa an assertion of the principle, it was proposed at once to give bonuses on the importation of Australian wines. He considered that the tariff required adjustment, and, without raising questions aa to free trade or protection, he was willing to admit that tbe amount of revenue required should be the test aa to the tariff. Therefore, while proposing some increases of duty he also proposed decreases, and as far aa possible the articles on the two sides were on a par as to popular use. It was proposed that the increases should come into operation at once, but that the decreases abould not take effect until the lat of October next. The alterations were : — Bacon and hams, from Id perlb to IJd; beef and pork (salted), from 2s per cwt to 4a ; butter, from ld per lb to 3d; cheese, frora ld per lb to 2d ; biscuits, from 3s per cwt to 6s ; potted meats, from 2s 6d per cubic foot to ss ; jama from 2s 6d per cubic foot to ss ; fish, potted and preserved, from 2s 6d per cubic foot to 5s ; fish, dried and salted, from 2a per cwt to ss; oysters, preserved, from 2s 6d per cubic foot to ss ; flour, from free to ls per 100 lbs weight ; wheat, from free to 9d^per 100 lbs ; barley, from free to 9d per 100 lbs ; maize, from free to 9d per 100 lbs ; oats, ditto ; rice, from 2a per cwt to 2s 6d j maizena, from' Is per cubic foot to 2s £groats, from Is per cubic foot to 2s ; hay, from free to 10a per ton $ chaff, from free to 20s per ton ; eggs, from free to Is per cubic foot ; cordage, from 3s per hundredweight to 6s; soap, from 2s 6d per hundredweight to 3s'6d ; blankets and rugs, from 3s per cubic foot to ss ; leather, other than stle, from ld per pound to 2d ; saddlery and harness, from 2s per cubic foot to 48; furniture, from 6d per cubic foot to 9d ; doors and sashes, from Is each, p and per pair to 2s ; timber,} sawn, from la per 100 feet to 2b j shingles, laths,

palings, rails, : posts, doubled in each case ; wine in bottle, from 4s per gallon to Ss. The proposed decreases were :— Sugar, from 9s 4d per cwt to 8s 4d ; bags and woolpacks, now paying ls 6d per cubic foot, to be free ; iron fencing, now paying Is per owt, to be free ; iron gates, now paying 4s per cwt, to be free ; nails, tacks, rivets, and tools, now variously charged, to be free ; holloware, now paying 4s per'cwt, to be free; weighing machines, now paying 4s per cwt, to be free ; sash-weights, now paying 4s per cwt, to be free ; sad irons, now paying ls per cwt, to be free ; iron safes, now paying 4s per cwt, to be free ; steel, now paying ls per cwt, to be free ; axles and arms, now paying 2s per cwt, to be free ; grindery and lasts and pegs, now paying is per cubic foot, to be free *, copper manufactures now paying 4s per cwt, to be free ; japanned and lacquered metal ware, now paying 4s per cwt, to be free ; papier-mache ware, now paying ls per cubic foot, to be free ; liquorice, now paying 2s 6d per cubic foot, to be free ; alum, now paying 3s per cubic foot, to be free ; arsenic, now paying 5s per cwt., to be free ; spirits of tar, now paying 6d per gallon, to be free ; pitch and tar, now paying ls per barrel, to be free; American enamelled cloth, now paying 5s per cubic foot, to be free ; hair seating and upholsterers' webbing, and springs, now charged various sums, to be free ; brewery and distillery plant, now charged various sums, to be free. A bonus under the reciprocity arrangement already described, of 2s per gallon on Australian wine in bottle, and a shilling per gallon, on such wine in wood. The Government proposed that the future defence expenditure should be defrayed out of borrowed money, tbat provision should be taken for five years, tbe amount for tbe first year being £180,000 ; for the second, £160,000 ; and for each of the other three years, £150,000. The expenditure for the ensuing year is estimated at £489,000 for General Government purposes, and £414,000 for Provincial services ; the latter sum to come out of the £561,000 payable to the provinces. The total estimated expenditure is £1,050,000. The estimated revenue is £1,056,000, leaving a surplus of £5000 or £6000 on the year. From various sources, recoveries, &c, there would be, in addition, over £70,000 available for the year, making a surplus of £78,000 at the end of the year. That surplus he proposed to leave to be dealt with next session, when a decision could be come to whether to pay off Provincial debts or reduce taxation If tbe House desired it, the Government wero ready to carry out their various proposals this session, bo impressed were they with the importance of the measures and their necessity for the progress of the colony; but if the House preferred it, the Government were willing to go to the country on their proposals. He hoped Hon. members would not permit any feelings entertained against the Government to interfere with the consideration of their proposals, which it was believed would raise the colony from its present depressed state to one of prosperity and enable the population of the colony to do justice to its large resomrces.