FINANCIAL STATEMENT

Star (Christchurch), Issue 4414, 17 June 1882, Page 4

FINANCIAL STATEMENT

The following is the text of the Financial Statement delivered in Committee of Supply last night by the Hon the Colonial Treasurer, for which we ore indebted to the courtesy of the Government : — Tho Hon MAJOB ATKINSON said : Mr Hamlin, I am presenting the Budget thus earl? because the Government are anxious tbat tho House should have ample opportunity of carefully considering and discussing the financial position and requirements oi the Colony.- In furtherance of the object which I feel sure will meet with tbo approval of the Committee, I hope to place the Estimates in the hands of hon members not later than to-morrow ; and I vesture to express the hope that the House will consent to the appointment of an early day for going into Supply, and not permit the postponement of so vital a question as Ways und Mean 3 until the end of the session, when hon members are often unable from more physical exhaustion to give the subject that attention which ita importance demands. The Committee will be glad to learn that the reports which have beeu in circulation for some time past, to the effect that there is a considerable surplus standing to our credit upon the tran-. sactionsoi: the;, ear, are substantially correct. I shall not, tb er^toro, trespass to-night to so large an extent upon tho patience of hon member* 1 , as I have been compelled to do on some former occasions. My statement will be short, but I must still ask for tbo indulgence of the Committee while submitting for its iaforma-mat-ion tho somewhat dry details of the -financial results of the last annual period end tho proposals of the Government for the present year. EXPENDITUBE OF 'IBS ORDINARY BEVENUE OF THS YEAR 1881-82. Tho expenditure fo<* t!o year, under Permanent Acta of the General Assembly, waa estimated at £1,570,91.), including £1,499,318 for intfrc-t and sinking fund, while tho amount voted for departmental servicos wa3 -£1,757,660. Ihe total e-jtimatcd expenditure sanctioned by Parliimcnt was thereforo £3,328,579. The actu-J expenditure was £3,278.820, being £49,75:-* less than the estimated amount. Th*-™ ure no items of thiß expenditure which appear to call for s pedal remark. Hon members, on referring lothe appropriation account presented to the House, pursuant to the Public Bevenuea Act, will be able to see tho services in respect of which the expenditure has been less or more than the amounts voted. The outstanding liabilities on March 31, 1882, amounted to £164,394. At the close of the prec?ding financial year the amount waa £165,514. I may inform tho Committee that included in the liabilities on March 31 la_t is a sum of £24,000 for sinking fund to March 31, 1883, in respect of the £800,000 unaold debentures of that portion of the loan of 1870, amounting to £1,000,000, ■which 13 guaranteed by the Imperial Government. The Imperial Act provides for a sinking fund cf 2 per cent per annum on tbe entire •.mount of the guaranteed portion of the loan, or so much of it aa is raised for the time being, commencing at tho date at which the whole of the loan is raised, or on tho expiration of ten years from the passing of the Act, whichever date happens first. When the first remittance of sinking fund was made, namely for the half-year to March 31, 1881, it was considered that provision was required only for the sinking fund payable in respect of the debentures for £200 000 which had been sold, and not also for the debentures for £800,000 which, though created, had not been placed in circulation. The question was, however, reconsidered upon the receipt of a despatch from the Secretary of State for the Colonies to Hia Excellency the Governor, and the Government determined to provide a sinking fund for the whole guaranteed loan of £1,C€0,000. Bemittances have been made accordingly to the trustees of the fund. OEDINAEY BEVENUE FOB THE YEAE 1881-82. _ The estimated revenue of the year, exclusive of revenue derived from sales of land, was £3,297,650. The actual amount paid into the public account was £3,438,170, being £190,520 in excess of the estimate. Hon members will find, on reference to the comparative return which will be found appended to this Statement, that we are indebted to Customs' revenue for the forger portion of thia excess, £125,107 having been received from that sourcs. The revenue from stamp duties was £11,115 in excess of the estimate. Miscellaneous receipts were alao in excess £34,243, while from depasturing licenses, rents, etc., we obtained £56 852 more than we anticipated. On the other hand, tho amount derived from the Property tax fell short of the estimate hy £19,025. Of this sum £9270 has yet to come in ; £2200 represents the amount estimated to be received from Building Societies, which were afterwards rendered exempt, and £7556 ia an overestimate. The revenue from railways proves to be £25,266 less than the estimate, but hon members will gladly learn that the net receipts from railwaya, which were estimated at £364,744, amounted to £368,927, or £4183 more than was estimated. LAND SALES OF THE YEAB 1881-82. Following the course approve, i by Parliament in the session of 1880-81, a B--j_rate account of land sales has been kept. The expenditure chargod against the fund during the year amounted to £338,076, including £136,861 for -subsidies paid to local bodies. The amount voted for departmental services chargeable on Land Fund was £154,510. The amount actually expended was £137,297, being £17,213 loss than was voted. The liabilities outstanding oi March 31, 1882, were £25,188, aa against £37,561 on March 31, 1881. lie receipts for the year from land sales were estimated at £333,000. Ihe amount actually received and paid into the pnblie account waa £317,063, of which £282,136 wa3 for lands sold for cash, and £34,927 caah instalments for sales on deferred payments. Adding to the receipts of the year the balance at the credit of the land fund account on March 31, 1881, amounting to £32,373, and deducting the expenditure, we have a balance on this account of £11,360 at our credit on March 31, 1882. PUBLIO WOBKS FUND.

Appropriations on this account for the year ended March 31 last, amounted to £1,892,554 The actual expenditure, however, was only £977,886, including £454224 for railways. Fuller information than is given in tho tables appended will be laid before the Houso when my hon colleague, the Minister for Publio Works, makes hia annual statement. The liabilities outstanding at the close of the year amounted to £880,276, particulars of which will alao be found in tho tables appended. During the year, special receipts and recoveries, amounting to £42,378, came to the credit of the fund, and on March 31, 1882, the balance remaining unexpended, subject, however, to the liabilities just mentioned, waa £924,865, consisting of cash in the Bank of New Zealand £647,646, advances in the hands of the officers of Government £60,039, debentures of the loan of 1870 guaranteed by the Imperial Government £135,300, amount invested in debentures of the New Zealand Government £44,000, and temporary advances made on certain other securities £37,500. The balance at credit of the fund on March 81, 1881, was £1,860,373, and on March 31, 1882, it was £924,865. The extent to which it was dirnini-ihed during the year was therefore £935,503. These figures ahow that tho fund has Leon carefully husbanded, bo as to extend the expenditure ovor the time j we h_d agreed not again to go upon the London market. Hon members will observe that there waa sufficient money in hand on March 31, 1882, to carry on public worka without break or stoppage until about the end of next February, at tho stme rate which they have been prosecuted during last year. Included in the liabilities of the Public Works Fund at the end of tho year is the sum of £338 876 for the purchase of Native lands, particulars of which will shortly bo placebefore the House by my hon colleague, the Native Minister, who will also state tho proposals of Government with referenco to our future policy in tho purchas; Nativo Land. In tho meantime I may i;i -n the Committeo that the amount wr* ii will bo roquired this year to completo tho purchase of those blocks which Government havo decided | to acquire, will probably not oxceed £100,000. THE PUBLIC DEBT. On March 31, 1881, the gross public dobt of the Colony c mounted to £29,165,511, subject to a fV.'uc:ion of £2,057,'? 42 for accrued sinkinr fund?. On March 31, 1882, tho debt wai £29,0_6,7i1, and the fi* : -ing fund had increased to £2,266,418, tbe net debt being thus ££7,680,293, or £572,024 more than it

wae the previous year. This increase of debt is thus explained. Of the Treasury bills ! which on March 31, 1881, formed a portion of the Public Works Fund, ealea to the amount of £431,300 have taken place. These bills had been taken up in 1880 with money standing to tbe credit of that fund, as there was then a large balance not wanted for immediate expenditure requiring temporary investment. They have now been sold, and the proceeds paid into the Public Workß Fund, aa money was required for works authorised by Parliament. Iho debt haa also boen increased during the year by further advances, amounting to £364,700, obtained in London on the security of the debentures of the loan of 1870, guaranteed by the Imperial Government. With reference to the £800,000 of Imperial guaranteed debentures, I may, perhapa, remind the Oommittee that although in speaking of tho amount of Publio Worka Fund they are always treated aB cash, aa a matter of fact, they have never been Bold, but aro- used to provide a working balance to save intereat by borrowing upon them fremtimeto time only such eumaaa are required according to tho state of the Public Works Fund. I may mention, on the other hand, that the debt haa practically been reduced during the year by the addition of £209,176 to tha Accumulated Sinking Fund, to which has to be added £14,800 for debentures of the North Otago Distriot Public Worka Loau of 1872 redeemed, the net increase in the total amount of the debt being thus, as I havo eaid, £572,024. SAVINGS BANK*-* AND GOVERNMENT INSUBANOE DEPABTMENT. Before I proceed, Mr Hamlin, to sum up the financial re3ult3 of tho year 1881-2, it may not be out of place for me to state a few facta in connection with the Government Savings Bank and Life Inaurance Department by way of illustrating tho ateady progress of the Colony, the rapid advance of these institutions, and the growth of habita of prudence amongßt the peoplo during the last ten years. In 1871, with a population of 266,986, the amount standing at the credit of open accounts in the Government savings bank was £357,654. These accounts were 10,549 in number, and the average amount at the credit of each waa £33 18s Id. In the savings banks established under " The Savings Bank Act, 1858," the total amount at the credit of depositors on Dec. 31, 1871, was £97,312, distributed over 3726 accounts, the average amount at credit being £26 2s 4d. There was thus a total aum of £454,966 in the Savings Banks in 1871, at the credit of 14,275 persons, the average amount for each being £31 17s sd. On Dec 31, 1881, the population of tho Colony waa 500,9 i0; there were 51,008 open accounta in the Government Savings Banks, aggregating in amount £1,232,788, or an average of £i 4 3a 4d at the credit of each. In the other Savings Banks there were on tho same date 10,046 open accounts, tho total amount at credit being £316,727, or an avorage of £31 17s Id for each account. Tbe total amount of deposits in Savings Banks in the Colony at the end of the year 1831 wa» therefore £1,549,515, belonging to 61,054 depositors, with an average of £25 7s 7d ut the credit of each, as againßt £454,966 in 1871, and 14,275 depositors, with an average of £31 17 a sd, the population during tho ten years intervening having increased from 266,986 to 500,910. These figureß are well worth the careful consideration of hon members. They Bhow the remarkable extent to which the advantage of the Savingß Bank iB being taken by the people for whose benefit they were established, tho population having barely doubled itself sinco 1871, while the number of depositors has inoreased nearly fivefold. Intimately connected with the subject of the prudential savings of the community, are the questions of life assurance and the groirth of the Government Insurance Department, established in 1870, at a time when public confidence in many English Assurance Companies was severely shaken, and with the avowed object of giving to thoße assured the absolute security of the Colony. The department has since exhibited a progressive advancement, which warrants the statement that the experiment sanctioned by tho Legislature twelve years ago haa now been proved a complete success. This scheme may be justly described as the only successful institution of the kind set on foot by any Government; and the example thus offered has attracted the attention of various other Colonial Governments, and also the Indian Government. The premiums were from the first fixed at what were deemed the lowest rates commensurate with a prudent regard to safety, and without any idea of profit ; but, notwithstanding these low chargeß, careful management, together with the favourable influences of a healthy climate and comfortable social conditions, have produced results more satisfactory than waa anticipated. The business of the department, n the first ten years of its existence, produced a profit of £77,000, as shown by the valuation report of the London actuaries, which was laid before Parliament last session. The business done has increased from 460 policies, issued up to Juno, 187 1, insuring £;06,0 0, to a total of 16,900 policies, issued during the eleven years ending June, 1881, insuring upwards of £5,800,000 ; being equal to an annual average of 1500 policies, insuring fully half a million each year during the period. The business of the year now approaching ita cloae will, I am informed, ■ considerably exceed that average, and probably reach £600,000. The growth of tho Assurance fund is not less satisfactory than haa been tho progress of the annual business. From a sum of £5000 in hand in June 1871, the accumulated fund, by Juno 1881, had expanded to over £557,000, and now it has reached nearly £650,0C0. Agreeably to the wishes of Parliament as expressed last cession, an industrial branch, enabling persons to insure their lives for sums ranging from £3 upwards by means of weekly payments, was opened in the early part of March last. During the thirteen weeks which have since elapsed, 2100 industrial pclicies have been issued. Iho average amount insured for all ages is about £25 per polioy ; for adult liveß about £55. As in the ordinary branch of the department, bo also in the industrial branch, any surplus profits which may arise will be divided amongßt the asßured, a provision whioh is quite a novel feature in what is termed industrial assurance. To facilitate the payment of small quarterly premiums, there will be provided cardß, on which postage stamps can be affixsd, until the amount of the quarterly premium ia reached, and the cards can then be dotosited in PostOffices where credit will be given for the premium they represent. Arrangements are also being completed by whioh Post-Office Savings Bank depositors may make payment of premiums * out of their deposits by moans of an instruction to postmasters for that .purpose, thus saving trouble and securing the maintenance of the policy. These facts and statistics Bhow the remarkable growth and still increasing progress of the department, which ia evidently supplying a great publio want, and is now co far advanced that the Government, aa I have on former occasions mentioned to the House, have decided to ask Parliament to place it under the conduct of a Board. A Bill to carry this object into effect has been prepared and will be placed before members.

Before leaving the subject of life insurance I may offer a few additional figures, showing furthor the remarkable stimslus given to that form of family provision since the establishment of the Government scheme in 1870. Toe numbor of life policies in force in New Zealand that year haa been estimated at 2000, insuring about £1,000,000. Last year there woro in force in round numbora 24,000 policies, insuring £8,300,000, of which more than one-half ia insured in the Government Department. This gives an increase for tho period of 22,000 policios, end £7,303,000 in the amount assured, or eleven times thd number of persons, and more than sevon timeß tho sum insured in the Colony cloven yearß ago. FINANCIAL BESULT3 OF TEE YEAB 1881-2. Tho Committee will remembor that Parliament finally determined in tho session of 1831 that in future the revenue of the year should bo the actual receipts paid into the Treasury during the year, and that tho year's expenditure should bo tho actual money paid away during tho year, thus obviating tho necessity for keeping open the year's accounts in order that tho assets might bo realised and liabilities paid before a final balance could bo struck. Tbe new method was accordingly introduced in tho accounts of tho year 1881-82, und I venturo to hope that tho greater simplification of accounts which haß beon effected by the change will commend itself to Parliament. Hon members will find, on referring to the Financial Statement which I had tbe honour | to mako last year, that excluding the land i sales from the Consolidated Funds, there was a I deficit on March 31, 1881, of £5667, but that

inoluding land sales, there was a surplus balance of £26,706 to the credit of the Colony upon the actual transactions completed within the year. Ab' I have stated already, the ordinary revenue of the Consolidated Fund for the past year amounted to £3,488,170, and the expenditure to £3,278,820. The ordinary revenue therefore exceeded tho expenditure by £209,350, and deducting from this Bum the deficit of the previous year (£5667), we have a credit balance of £203,683 at the close of the financial year 1881-82 on thia division of account, but though, for reasons which have been frequently Btated, it waa determine! that a I separate account should be kept of land sales, it must be borne in mind that the revenue from that source Btill romains within the Consolidated Fund, and is liable to meet the chargoß of the public debt, should it ever be necessary to übo it at any timo for that purposo. But the Colony now no longer relies upon land sales in any way aB a means of obtaining revenue to meet the ordinary services of Government ; and has thus removed one condition which made sonnd finance impossible. When, however, we come to consider the whole transactions of the year, it ia clear that the proceeda of the land saleß and their expenditure must appear in the account. We find, then, that the total monies received and paid into the public account during the year, including land saleß, was £3,805,233 ; and the total expenditure, including charges on the Land Sales Act, waa £3,616,895. The receipts wero thus £188,338 in excess of expenditure ; and adding to this sum the eurplua at the close of the year' 1850-81, £26,706, we find that wo havo a credit balance on March 31, 1882, of £215,044. This result is one upon which I hope I may be allowed to congratulate the Committee. It fully bears out the opinion expressed by Government in 1879, that the grave depression and deficit then existing ware temporary and remediable ; aud shows us that the course then determined upon by Parliament, of rigid economy and sufficient taxation, has restored the finances of the Colony, in a remarkably short time, to a thoroughly sound condition. We may well, Mr Hamlin, bo proud of belonging to a people and a country which . can, in such circumstances, produce suoh results aa theso in a period of two years. LOOAL FINANOE. The question of local finance has been again carefully considered during the recess, and Government have thought it advisable to issue a circular to local bodies, asking for their opinion upon thia subject, and also upon some important questions relating to the constitution of the Couuty Councils end Boad Boards. I shall shortly ask leave to introduce Bills to give effect to such alterations as the Government think necessary in the constitution of these highly useful local bodies, and also to make sufficient provision for their financial requirements. I do not propose to trouble the Committee with any particulars of the proposed Bills, as it will be more convenient to do so when the Bills themselves are under consideration. I ought, however, to say tbat the principle which the Government have taken for their guidance in preparing these measures are first that the local bodies should bo left as free aB possible from central control; Becond, that they should have conferred upon them all powers which can be advantageously exercised by euch bodies ; third, that their financoß should be aB distinct aa possible from the Oolonial finances, and that their revenues Bhould be sufficient. The necessity of dealing with this subject during the present session ia admitted upon all sides. The question is not one which should be treated aa a parby question, and I venture te hope that Government will receive tho hearty support of both sides of the House in providing the country districts with the means of performing the important duties wbioh have boen imposed upon them of making and maintaining a largo proportion of the roads of the Colony. ESTIMATED EXPENDITUBE FBOM OBDINABY EBVENUE, 1882-83. I now come, Sir, to the consideration of the eitimated expenditure of the ordinary revenue for the current year. This may be conveniently divided, following the usual custom, into two parte, the permanent charges and annual appropriations. The permanent charges, amounting to £1,627,512, include pension payments under the civil list and other Acta, and the large item of interest and sinking fund which this year will amount to £1,554,848, Included in thiß, however, is the sum of £24,000 due for arrears of sinking fund upon the Imperial guarantee loan of £1,000,000 of 1870, to which I have already' referred. The total preaent annual charge upon our debt is therefore £1,530,848, and not £1,554,848, as might be supposed from a casual inspection of tho accounts without thia explanation. It muat also be borne in mind tbat of this £1,554,843 no leas a sum than £270,000, or nearly one-sixth, ia for Sinking Fund ; in other word a we shall pay this year £1,284,848 for interest and £270,000 for redemption of debt. This point is often overlooked when we speak of the annual charge of our debt, but as hon members will see, it is of some importance when we wish to ascertain exactly our financial position. The estimated annual appropriation for this year amounts to £1,851,127. This shows an apparent increase upon last year's vote of £93,468. I Bay apparent, because the services for which a large portion of thia extra £93,468 is required, were paid for last year out of loan. Hon members will find on referring to the Publio Accounts, that the votes for militia and volunteers to police and constabulary, for last year, oharged against the Consolidated Funds were only £142,015, whereas they are this year £214,009, a difference of £71,994, which previously was paid out of loan. This £71,994, then, is not an inorease of proposed expenditure, but really the transfer of a oharge from loan to Consolidated Bevenue of wbat I regret to say is for the present necessary expenditure, although happily the cause for much of it is, as we believe, fast passing away. This transfer I am sure the Committee will approve, for although Buch expenditure being temporary and extraordinary, may be considered a fair chargo against loan, still it is very desirable to pay for Buch services out of revenue, whenever the revenue will bear them, as ia now the case. Of the balance of £21.474, £10,000 is for abatemont of the rabbit nuisance, which last year was provided for in the Land Fund estimates. The remainder may bo said to be comprised chiefly of increased charges for working some nowly opened sections of railways, f or-exehange on remittances to London, to pay interest, and for some necessary increase in tho smaller salaries of Civil servants. I have been thus particular, Mr Hamlin, in calling the attention of tho Committee to thia apparent increase, because the Government are anxioU3 that a watchful eyo should be kept upon any proposals for inoreased expenditure which should not be pormitted unless shown to be absolutely required in the interests of good government; for it ia certain that unless we exercise great care in this matter tho return of prosperity will again lead us to extravagant expenditure. I must here, Sir, point out the fact which I hope hon members will bear in mind, that in this estimate of expenditure I have only provided the sum of £40,000 for Hospitals and Charitable Aid, the amount voted last year. Upon this important question I shall speak more fully presently. ESTIMATED lIEVENUE FOB THE YEAB 1882-83. I will now ask the Committee, Mr HamliD, to turn its attontion to tho consideration of tho revenue for the yoar 1882-83. I anticipate if taxation ia to romain unaltered, with the Property tax at ono hulfpenny in the £, that we shall receive a total ordinary revenue of £3,393,500, exclusive of land sales. I have thought it prudent to estimate only moderate increases in the several items of revenue, full particulars of which compared with the actual receipts of lust yoar, will be found in Tablo No. 7 A attached to this Statement. It is possible tbat the revenue may exceed my estimate, but considering the circumstances of tho Colony I think it hotter not to speculate upon increases which, although possible, may never arino. I estimate the revenue thon, at £3,393,500. To thia must be added tho balance of £203,683 which stood to our credit on March 31, and wo thon get the sum of £3,597,183, aa the total amount available for tho services of the year. Now, if from this we take £3,478,639, the estimated oxpondituro to which I havo already reforred, thero will romain a balance of £118,544 at tho end of the current financial year.

So far, Sir, all haa beon plain-sailing. We have had to' deal only with facta and with estimated results, which approach to somothin, like a cortauoty, but wo aro brought faco to face with a problem by no moans easy of solution. Hqw can this surplus bo dealt with

to tho greatest advantage to the community ? What relief, if any, can be given to the taxpayers of tho Colony? But before these questions can be answered satisfactorily it will be necessary for me to revert to the question of hospitals and charitable aid, as I promised to do. The total publio and known private expenditure upon hospitals and in charity last year was, in round numbers, £88,000 ; and for practical purposes we may assume that an equal amount will bo required tbis year. This sum waa made up by contribution from tho Consolidated Fund, £29,000; stoppages from subsidies to local bodies, £37,000; contribution from local Boarda and from the public, £22,000. Tho present system, or want jf eystem 1 ought rather to say, of providing tho necessary funds ia irritating and unfair to most if not all parties concerned in tho charitable administration of the Colony, and it is I think, clear that the timo has come when thia important subjeot will have, to be dealt with upon some comprehensive principles. It may bo taken for granted that the indigent and the sick poor must be fed and clothed and properly looked after by the community. Should private charity fail to make proper provision, and that private charity will fail to make a sufficient provision I fear iB only too evident, the State then, as the State, will have to undertake this business in some form. Thia being so it would eeein that thore are practically only three couraea open for ua to follow: — The indigent and the sick poor will have to be maintained by a poor rate Bupplomented by privato benevolence, or by large grants from, the consolidated funds, supplemented by private benevolence, or by a system of national assurance. It may be impossible to deal with thia large question during tho present session, but aa there is a great, and I bolieve a very genoral repugnance to a poor rate, in which I str jngly sympathise, and aa grants from the consolidated revenue are, to say the least, very undesirable, I propose to submit a scheme of national assurance for the consideration of the House, which I believe to be thoroughly practicable, within the means of our people, and which would make necoaiary provision for the Bick, the widow and orphan, and the aged. It iB possible that my enthusiasm has carried me too far upon this subjeot, and has made me too hopeful, but I have given tbe question much thought, and I am convinced that the scheme, which I shall at an early day submit to the House, is within the bounda of praotical politics for ua in this Colony. Should, however, the proposal only lead to a dispassionate discussion of thia important matter, we shall have advanced one step towards a solution of what I venture to think is one of the great problems of the age— a problem which though, happily, not so urgently pressing upon us &b upon older communities, where the distribution of wealth is at present much more unequal, iB Btill one it behoves us as founders of a nation to grapple with, and to the best of our ability solve without delay. I have eaid that it is very probable that we cannot deal with this question during this session, but whether we do bo or not sufficient provision will have to bo made for the expenditure of the yoar. The Government propose, pending further consideration of this subject, to take the whole cost of hospitals upon the Consolidated Fund, and for this purpose I shall havo to ask for a vote of £50,000 for their maintenance. Should this be granted, we shall ask the continued assistance of the local Boards, or the local Committees, as tho oase may be, in their management, for without careful local supervision abuses of a serious nature are sure to creep in. With regard to charitable aid, now ooßting about £40,000 a year, I shall ask for a vote of £20,000, and propose that thia relief should be given as far &b practicable through local institutions, tho Government granting pound for pound. If thia proposal should meet with the approval of the Committee, I shall have to increase the £40,000 for hospitals and charitable aid, which I mentioned aB included in my estimated expenditure, to £70,000, thus diapoßing of £30,000 of the surplus. The balauce, then, of £118,544, which I said would probably be to our credit on March 31, 1883, will be reduced by this means to £88,544.

I will now turn, Mr Hamlin, to the con-> Bideration of the question, what relief, if any, can be givon to the taxpayers of the Oolony ? We have now only a surplus of £88,544 aa a margin after making tho temporary provisions I have juat proposed for the services of the year, whioh are not of a permanent character, amounting to about £100,000. With such a surplus wo might, if we did not intend aB we do, to go upon the London money market early next year for a further loan to continue our Public Works scheme, Bafely reduce taxation by at least £50,000 ; but taking all the circumstances of the case into consideration, I do not think it would be prudent to reduce taxation at present. If it be determined to borrow more money to enable us to complete our main lines of railway, it will obviously be necessary to continue taxation at such a rate aa will ensure an ample margin of revenue to pay interest on money borrowed. Taxation must, as a matter of course, remain at a high rate until the works now being constructed out of loan are completed and have had time to become productive. Sir, we feel assured that what the House desires and what the country demands is steady progreas with our public works, that we ahould pay our way from year to year, and not again fall into debt for current expenditure ; and although we are apparently raising leas revenue this year than will cover our expenditure, it must be borne in mind that the temporary and extraordinary services which are this year being charged against revenue amount to more than the difference between expenditure and revenue, and that the uso of a sui plus for suoh a purpose is quite legitimate finance, when there ia no reasonable doubt that next year the revenue will be ample to provide for the service of the year. ESTIMATED EXPENDITURE AND BEVENUE FBOM LAND SALES, 1882---1883. The estimated expenditure chargeable against the land sales fund is as follows : — For ohargeß fixed by Acts of the General Assembly, £41,500 ; for the Crown land survey and Mines Departments, £153,810. The receipts from land sales are estimated to reaoh £354,000 for tho current year. Adding to this sum the balance at the beginning of the year, £11,360, and deducting the estimated expenditure, £195,310, we have a balanoe remaining of £170,050. 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 government bodies. Tho proposals of the Government in reference thereto will be submitted when I introduce the Bills which have been prepared for dealing with this subject. LOOAL INSOBIBED STOOK. It will be in the recollection of some members that lae.t year I intimated to the House the intention of tho Governmont to submit for its consideration a Bill authorising the issue at par of a loan of £250,000, the principal and interest of which would be payable in New Zealand only. Circumstances prevented tho Government from giving effect to that intention during the last session of Parliament, but steps are now being taken to prepare a Bill, which will be sub mitled for tho consideration of tho Houso in the ourrent session. I havo drawn the attention of the Committee, in a previous part of this Statement, to tho vory large accamulations of money in the Savings Banks in the Colony, and the Government think, as I remarked in tbe Statement I had tho honour to make last year, that many of the depositors of this money as well as the public gonerally might bo glad of a moro permanent form of investment if ono can bo providod, which is at the same timo secure and easily convcr • ible into cash. I proposo, as before, that the loan shall bear interest at a rate not exceeding 5 per cent, and that the proceeds shall be paid into tho Public Works Fund, to bo oppropriated by Parliament. I also propose that tho loan shall be issued in tho form of inscribed stock, with tho right to tho subscriber to obtain at any time when desired, bonds payable to bearer of £10 and upward**. Tbo Government bolievo that securities such as thoso I have described, will find favour with tho public so Boon as thoir naturo iB generally understood. _ho loan will bo disposed of equally aa it comeß into favour, tho object of tho Government not being to obtain funds for expenditure, but to provide a olass of security for tho investment of aavinga which soems gonerally to bo desired, and is likely to havo a very beneficul operation. INCIDENCE OF TAXATION. I Bbould no 7/ like, Mr HamliD, with tho pcrmieoion of tho Or mmittoo, to say a fow words about a quostion which I think well worthy our attention at the present namely,

the incidence of our taxation ; does our present taxation press unfairly upon a particular olais, and especially upon that class which ib tho hast able to bear it. Because, if so, although we might not be able to reduce the total amount, wo might be called upon to Bhift the burden from the weak to othor and stronger shoulders. I have, Mr Hamliu, been looking into this question of the incidence of taxation in order to ascertain the amount borne by the different classes, so that relief might be given if necessary 'to thoae upon whom tho taxes appeared to press the most heavily. 1 shall stato broadly, for the information of the Committee, the results of my inquiries, re- ! forcing hon member*- for particulars to the table published with this -tarement. The results of my enquiries seem to mo to show that taxation ie, upon tbe whole, fairly distributed over the community, although what is fair in such a caso ia a proper subject for discussion, and a question upon which there may bo a great diversity of opinion. For the purposo of comparison, I have divided the population into three classes, which, for the object I have in view, may be cousidei ed natural divisions :— l. The "wages earning class, which I shall hereafter, for convenience, call the industrial class, consisting of 312,436 souls, exclusive of 11,903 domeßtio fem-.le servants. 2. The intermediate class, numbering 96,260 souls. This chW'is composed of all those who are known by the census aa not j belonging to tho industrial class, and who do not pay Property tax. 3. The class which pays Proporty tux, consisting of 68,445 eoula. Tho total taxation upon which my calculation are based for what we term taxation | proper, aa distinguished from what ia paid for services rendored, is £1,717,748. Thia waß made up as follows : — Custor.es, £1,276,199 ; stamps (not inoluding postage stamps), £126,148; Property tix, £257,600. From the Customs' dutiea deduct the duties paid on winea, spirits, fortign beer and tobacco, sugar used in brewing (£3493), ahd the amount (£5512) estimated to bo paid by tho Maoris on general Customs, and also the duty paid on cotton pioco goods, which are now free. TheßO amount in all to £683,794. I make these deductions because, with the present information at my disposal, it is impossible to apportion to each class the expenditure und'r the head of winea, spirits, and tobacco, with any accuracy, and because the other articles enumerated do not come within the scopo of the inquiry ; but I havo no doubt that if we could make now a true distribution of tho amount paid under the heada of wines, spirits, and tobacco, we should find that the intermediate and property classes pay a large share, and that tho relative proportion between the three classes which I am about to give would bo but littlo, if at all changed. I assume, of course, a moderate use of these articles. If used in excess, it is impossible to say which class may pay most, but I think it will be generally admitted, or, at any rate, ought to be admitted, that those who use spirits or tobacco, or any other articlo in excess, to whatever class they belong, are fair subjects for heavy taxation. Now, I have received from Bixteen of the chief towns in the Colony trustworthy information as to the actual expenditure of a large number of mechanics and labourers. I have compared the expenditure so obtained with tbe expenditure of the same classes in England, and find only such differences as the change of circumstances would lead one to expect. I think, therefore, we may take these returns as approximately accurate for practical purposes. I befievo that further information whioh I am collecting will generally boar out the results now given, and that any errors which may be found in my estimates will be in the direction of a slight overestimate of the amount paid by the industrial class. The returns to which I have alluded Bhow that the average amount paid to the Bta f e by families of the industrial class averages 16s 6d per member ; or, a total of £214,522 for the various families. This estimate is made from the actual expenditure of fifty-six typioal families resident in all parts of the Oolony; but to this amount, we ' must add the duty £51,246, paid by 49,355 singlo men, equal to £1 Os 9i per head, and the duty £3983, paid by single women over 18 having occupations, equal to 19s lid per head. Tho aggregate of theßO amounts is £269,751, thus giving an average over the whole class of 17a 3d per head. But to thiß amount we must add £10,311, being the duty paid by the 11,903 domestic female servants for drapery at 17a 3d, equal to 9d per head, thua giving a sum of £280,062 as the total taxation paid by the industrial class, exclusive, of course, of the duties on spirits, wines, &c, tobacco, and Colonial beer. 1 have included all the domestic male servant s and the married couples at service as paying in the industrial class, although probably the chief part of their consumption ought to be credited to the intermediate and property classes. This, I need hardly remark, makes no difference as to the average rates per head, but only in the total paid by the class. I have, following the beßt authorities on this subject, included tbe duty payable upon articles consumed by domestic female servants, except wearing apparel, in the amount paid by the intermediate and property classes. I have said that the total amount paid by the industrial class is £280,062, and that this amount is ascertained by means of the actual expenditure mado by fifty-six familiea in various pa-*ts of the Colony, and that theae returns have been carefully ohecked by comparison with the expenditure of the same class in England, proper allowance being made for the difference in circumstances of the two populations, and also by due consideration of what it is possible for this olass to spend on dutiable goods after providing from their earnings for the other neceßsarios of life and for house rent. If we now deduct £280,062, the amount paid by the industrial class, from the total duties which wo are now considering, we get £312,34?, as the Customs' duties paid by the intermediate and property olasses. fhia amount, after careful consideration, I have divided at an equal rate per head between the two classes last named. This will give per head for eaoh of the classes, £1 17s lid. The total revenue collected for stamps, exclusive of postage stamps, is £126,148. This I have also divided at an equal rate per head between the intermediate and proporty classes. It gives for each member of the intermediate and property classes 15s 4d per head. I think there can bo no doubt that the stamp duties aro paid by these classes. It ia possible that a small amount may be paid by tho industrial olasses, but it ia so small that it could not appreciably affect tho results as botween the various classes. We find, then, that the stamp duties paid per head by the intermediate class is 153 4*l, and the Customs' - dutiea £1 17s lid. This gives £2 13s 3d aa the total Bum per head paid by the intermediate class, and a total for the olass of £56,272. The propertied class, I have assumed, pay an equal amount per head with tho intermediate class for stamps and Customs. They however paid, with the Property tax at Id in the £, which it waa at the time to which my calculations relato, £3 15s 3d por hrad, for that tax, making a total per head of £6 9s 6d, or a total for this clasa of £439,819. With the Proporty tax however at -jd in the £, tho amount paid per head by the property claas would only bo £4 10a 10|d, or a total for tho clasa of £310,719. To aummarise then, we find that tho industrial class, consisting of 312,436 souls, exclusive of 11,903 domestic fomalo sorvanta, payß £269,751, being at the rato of 17a 3d per head, or inoluding the drapery duties paid by theso domestio servants £280.062. The intermediate class, consisting of 36,260 souls, pays £256,272, or £2 13b 3d per head ; and the property class, consisting of 68,445 souls, pays £439,819, boing at tho rato of £6 8s 6d per head, that is with the Property tax at Id ; but if we take that tax at ono half-penny, they pay £310,719, or at tho rato of £4 10a 10-Vd per head. These amounts are, as I have already eaid, exclusive of tho duties upon spirits, wine, tobacco, Colonial beer, and do not include, for obvious reasons, that part of our so-called taxation which is paid for by each claßa in proportion to übo lor services rendered by the Stato — such aa poat office, telegraph, Court foes, &o. Honorable mcmbera will, I hope, understand that in speaking of the expenditure at per hoad, I only use a form of expression so far as tho intermediate and property classea aro concornod, individual expenditure being widely different, according to means and habits. But with tho industrial class tho difforenco is not bo wide. With taxation it is, of courso, impossiblo to meet individual cases ; in apportioning the taxation of tho community wo must toko a wider view and deal with classes, considering their circumstances and nurabora. It is difficult to exaggerate tho importance of this subject, for badly adjusted taxation moans unduo exaction from Bomo class or classes which cannot foil to bo detrimental to tho community aB a wholo, whilo on tho other hand fairly adjusted taxation means that tho

publio burdens are borne with as muoh eaee aB their extent will admit, and I will express tho hopo that this subject will receive the careful attention of hon members and of all interested in the publio welfare throughout the Colony, so that whon our financial position permits wo may deal with the subject on broad and intelligible principles. PBOPOSED LOAN. I have now, Mr Hamlin, only one more subject to deal with, but although laßt, it is by no means least in importance— l refer, of courso, to tho question of a now loan. We have first to consider whether a new loan ia advisable this year, and secondly, if tho first question is answered in the affirmativo, how much will it bo desirable to borrow ? Now, with regard to the firßt quostion, wo must, in order to arrive at a seasonable conclusion, considor the , state of the Publio Works Fund and the amount wo can prudently expend per annum. I havo already said the balance in the Publio Works Fund on March 31 last was £924,865. with out-standing liabilities at that date of £541,400, exclusive of liabilities on the Land Purchase Account, for which we mußt add at least £100,000, so that in addition to the £541,400 which ia in course of expenditure under existing contracts and authorities there only remained in hand at the beginning of the financial year about £283,465 for continuation of the works already begun and for new works for which liabilities have not beon incurred or appropriations made. We thuß see that if no authority for another loan is granted this year our spending power on public worka for one year and three quarters, after paying for the outßtanding contracts and engagements to which I have referred, wili only amount to £283,465, because if a Loan Bill were passed next session the money could not be raised before about Dec, 1883, and the Government are quito determined not to enter into engagements in anticipation of raising money at a particular dato. Tho question then narrows itself down to thia : Is it prudent at this present timo and under tho present oircumßtancea of the Colony, to borrow again, or ought we to be satisfied with a total expenditure of £924,865 in the twenty- one months commencing with the current financial year? Sir, tho Government aro fully aware of tho responsibility they incur in placing beforo the Oommittee their answer to thia question. They recognise clearly the principle that before the public debt is increased, the gain to the Oolony shall be seen to be mere than commensurate with the increased liability, and they believe that a case within this rule has now risen. They think that our ordinary finance being restored to a satisfactory condition, and our main trunk lines of railway being still incomplete, it is now prudent to raise a fresh loan for the purpose of completing these railways, or carrying them a stage nearer completion, and for certain other definite and important publio works. In this opinion the Government are strengthened by the fact that the railways already made are now paying practically 4 per cent annually on the amount expended in their construction, and tbat they are stoadily improving in this respect. The Government therefore, Sir, recomrrend that a loan should be raised, but only if the monoy can be borrowed at a reasonable rate of interest, and the authority of Parliament will be asked to empower the Government, if necessary, by postponing works, co to arrange the expenditure as to enable them to wait for a favourable market. We have now to consider what amount should be raised, and thiß must be decided by two considerations : — (1) The amount which can be profitably expended on necessary or directly reproductive public works ; (2) the amount upon which we can afford to pay interest without placing undue burdens upon the people of the Oolony. No w I sm afraid that there are so many necessary or directly re-productive publio works only waiting to be done for the want of cash to do them, that we shall find no practioal limit in that direction, and in this fact is no doubt the cause of our far too lavish expenditure in the past. From the past we should take warning, and proceed at a very much more moderate pace than we have been doing upon the average for the last ten years. We mutt confine ourselves for the future in the expenditure of borrowed money to works of neceseity, or to works which are directly re-productive, and strictly limit the amount spent yearly upon such works by our capacity to pay the intereat with tolerable ease. It ia, in tbe opinion of the Government, of great importance that the Colony should steadily puraue a progressive polioy, and that our main trunk lines should be pushed on as vigorously as ia compatible with the meana at our disposal. The Government, then, taking into consideration all the circumstances of the Colony, and acting upon tho principles which I have just laid down, have determined, Sir, to propose to Parliament a loan of £3,000,000, to be raieed and expended at a rate not exceeding £1,000,000 per annum. My honorable colleague, the Minister for Public Works, when he makes the Public Works Statement, will inform the Committee in detail of the items of the proposed expenditure, and of the mode by which wo hope to confine the expenditure to specific works determined upon by Parliament before the monoy ia borrowed. The Government attach great importance to thia provision of the proposal. It is, I think, clear, looking at the experience of the past, that if in future our borrowing is to be governed by tho prudence which is essential, we must carefully consider what works we are justified in constructing, at what rate of speed they should be constructed, and at what cost to the State. When we have determined these conditions, we are then in a position to decide upon the amount to bo borrowed. Upon theae rules of conduct ia this matter, which I am sure will meet with the hearty approval of the Committee the Government have actod in arriving at the amount which they propose Bhall be borrowed. CONCLUSION. And now, Mr Hamlin, I have done. The Committee, I am sure, will not be disappointed at the shortness of my Statement, when it remembera that thiß is tbe natural and appropriate result of the simplicity in keeping the Colonial accounts which we have been enabled to adopt. I will only add one word. In 1879, 1 Btated to the Committee fully and fairly the position of the Colony, neither concealing nor exaggerating tho grave difficulties which had then to be met, and I pointed out the obvious remedies. That Statement haa often beon characterised, especially by those who hod taken the least trouble to mester it, as too darkly-shaded, aB giving too gloomy a view of things. Though it has boen attempted to disprove the facts and tho figures which I then adduced, Sir, I venture to say that oxcept so far as the gloom wa3 in the facta themselves, ib never had any existence ; it certainly was not of my importing. It wbb prudence, not folly, to look our difficulties fully in the faco. It would have been folly, and not prudence, to doubt that we could overcome them. The Government and thia Houso had full confidence not only in the abounding vitality and vast resources of tho Colony, but (which was no less important) in the willingness of the colonists to make the necessary sacrifices, and that confidence haa beon amply justified by the facts I havo just had tho honour to lay before the Committee ; and as prudence and economy, and cautious and well considered advance in public workß as funds became availablo, waa our rulo thon and haa been since, so it should bo now and in tho future. I have full confidence. Sir, that following that rulo faithfully, wo sholl not only maintain, but as tho resources of the oountry become developed we shall steadily increase the presont satisfactory condition of our finance. The ratß and mice aro a source of great trouble to tho butchers in tho Paris abattoirs, and to Buch an oxtent that the municipal authorities are obliged every year to mako a contract wish eomo enterprising individual for tho wholesale destruction of the rodents. In March the usual slaughter took place, at tho contract price of one cent per head for defunct rata. TuAM-S Btb___ Ind-cbtbibß, by Porcy P.iusell. Thia Illustrated tamphlot on Perfumery, kc, published at 6d, may bo had gratia from auy Ohemist in tho World, or John GoaxBLL & Co., London.— [Advt.] Ho__owat'_ Ointment and Pills.— Glandular awollinga about tho throat, nouralgio, tic doloreux, rheumatiam, gout, lumbago, and other disoasea affeoting the glands, musclcß, and nerves aro permanently eradicated by this healing auti- febrile and soothing unguent. It is also a perfect remedy for all ] akin discusos, and euperficia cr deep-seated sores soon loso their angry and painful character under its cooling bonoficont action. Tho Pills have never been administered eithor by hospital or privato practitioner in dyßpopsia or liver complaint without produoing tho deoired result.-— [A dyt.] * '-^.^