THE FINANCIAL STATEMENT.

Star (Christchurch), Issue 6553, 2 August 1899, Page 4

THE FINANCIAL STATEMENT.

In the House of Representatives last evening the Financial Statement was submitted by the Colonial Treasurer, the Right Hon K. J. Seddou, as follows : — I oiu iii the h»pj>y position of being able to reiterate the announcement I have, made „ toch year since I have had the honour of being Colonial Ti'easurer, namely, that the past year closed with a surplus or credit balance (call it which you will) of a very siibstantirl amount, in the present instance of £495,861. The statement of the receipts and expenditure o£ ,the ;xarious accounts .' forming the public accounts of the colony having been gazetted, honourable members Lave, of conrse, made themselves acquaint- , ed with the figures, and it only remains for nif to make some comments upon them for the information of members and the public at large. The ordinary revenue exceeds my . estimate to the extent of £217,428, of ■which, in round figures, Customs contribut- : ed 530,000, hind and income tax £23,500, railways £95,500, and ■ territorial revenue £h6,800. Other heads of revenue contributed nearly £22,000. The on]y item which feli short was " Registration and other fees," which did not reach the estimate by £178. Adverse criticism has occurred because my e>tiraate of revenue was not much larger, and it is seriously asserted that the balance at' the end of the year has been increased (relatively, I suppose) by reason of the un- ' d£i-c,stimate. How this could be possible I leave tha quidnuncs ' to explain. So far as 'concerns tire estimate of Customs revenue I'was content to adopt the figures representing the actual receipts of the previous year. These figures have been exceeded by £30,000, largely owing Ito the increased spending power of the people and the gen-ei-al prosperity we continue to enjoy. To : get at an absolutely accurate forecast of the ■'•v receipts under the land and income tax is •,.'. 'almost impossible. The income tax came • .."■'into an.- a mount similar to that of the pre- :,'-'. ceding year; but the land tax produced- a • ' larger revenue than was anticaputed.- The largest increase in the revenue items took ■ place ib. the railway receipts, and, as I have already stated, these exceeded the estimate ' by £95,000. An extraordinary expansion in" the -goods and passenger traffic accounts , for most of this-; also sheep, cattle, chaff, . minerals, etc., were carried largely in excess ;' of the business done in the preceding year, \ • the only decreases being in wool,, grain, timber and pigs. It is necessary to explain '„' that the falling-off in grain may be account- >; ed for by the lateness of the season and the ". low 'prices ruling since the end of the finan- ,( cial year. There has been a large increase over and above what we carried during the . ' corresponding period of last year. The last • revenue item showing a substantial increase is'.uuder the head of "Territorial," and ;. arises from the fact that settlers witih perpetual leases (having a right of purchase) . . converted their properties into freeholds and thus enlarged the amount of cash land sales ■'' to an extent which was not anticipated .••■"when the estimate was prepared. The item - £17,500, " Advances repaid," representing ' 'the net transactions -with, the Advances to .;■ . Settlers Office, is, I am informed, not likely ,'■ to recur, as the office anticipates being able 'to repay the Treasury duri»g\ the current ,- . year the whole amount required for inter- ; est on the loans (±52,000,000) which have -been raised for the purpose of making ad- •;,!-' vances. Table No. 2, accompanying this K -Statement, -will sho\r honourable members P. -the exact figures. Comparing, the actual re- £■■.,':■ ceipts with the Estimates, compared with ¥ the result of the preceding year, the revenue ■ ; '.vfor 1898-99 shows an increase of £198,799, .■"'indicating a' most gratifying expansion in i-. the- resources of the colony. • • £'■•;■■ Referring to the expenditure side of our ';'.. accounts, the following remarks may help to explain the difference between the actual expenditure and the estimate. In. the case of ' the permanent appropriations, my estimate -was ; for £2,174,700, while the actual expen- ■ diture has been £2,162,106, or £9594 less than the estimates. Interest and Sinking ':', " Fund charges did not reach the estimated '■■■ amount by £27,544, arising chiefly from rev. cpveries for interest on the Cheviot Estate v debentures, and by an over-estimate of in- •;. Jterest payable in respect of debentures to the • ,. issue for land purchases and loans to local v bodies. On the other hand, several of the ;Vieinaining .permanent accounts show an ex- ; .cess of expenaiture, but, individually, the amounts are not large. - The actual expendi- \ tiu-e on permanent charges during 1898-99, : ■ compared with 1897-98, shows an increase of . £49,889, of which £26,055 belongs to interest and Sinking Fund. An unf orseen refund of £15,250 legacy duty, in respect of the estates of Dilv/orth and Carter, had to be made. These items, and increased endow- . meuts of local mithorities, and the new item ,; for Old Ago Pensions, account for the in- ■?" ..crease. The annual appropriations show a v net increase of £15,093 over the estimate. ;■■ In ten classes there has been an under expen- ;.. diture of £51,628, and in seven cases an -• :•! over expenditure of £66,721, and an addi- [, tional sum of £3182 for services not provided V; for. In connection with the under expendi- ;. ture, the class for trade and customs shows V -that £5564; was under-spent, arising chiefly ; .from items provided for miscellaneous ser- %■ vices which were not paid during. the year. /;/ in the class for education, asylums and other Wi services, there had been, an under-expendi- !£ ]. lure of £12,038. The Defence Department j^-'ahows an 'apparent saving of £12,061, caused -, partly, by the failure of Volunteers to qualify 2 • '.'for daylight parades, in connection with t ' .' which £3000 was saved. There was, also |:' /..practically no expenditure incurred on the ■, : item £6200 for camp equippage.and stores, . the war scare having passed over. The imbalance was saved on small services. ?" 'Amongst the departments whose expenditure ;- exceeded the estimate, may be mentioned the •.■■Treasury Department, to the amount^ of £4095, arising from extra charges for ' ex- } change and discount for our remittance busih~ ness. The new issue of stamps, and extra ■•; work in the Land Transfer Office, is respon-"-...gible for £5003 extra expenditure under the •K Commissioner of Stamps. £52,917 is, >, ; amount of excess expenditure over the ?=' s estimate required for the working railways. I, V,'An extra amount of track was relaid, bridges ■■'. have lxjen strengthened, and additions and '}. improvements to the lines and structures ; ; 7;lmve been made, so as to efficiently provide ? ; for the largely increased traffic on the opened ■).; lines. All this costs money, and at least . £30,000 could have been fairly charged to account. The increased ordinary expenditure produced some £95,500 of revenue • ; iv excess of the estimate. As I have already ■ v . stated, taking the net result of the expenditure on permanent and annual services, the .;-. difference amounts to £8681 in excess of the estimates given. Full particulars of the differences will be found in table No. 2. ' The result of the transactions within the ordinary revenue account of the Consolidated Fund, at the close of last financial year may be summarised thus :— : £ £ ;.. Ea'.inco on Mn-cck Ki.. W : 1693 ... . . 521,144 i Out of which transferred t» 4 ; -'FUDlio \YoTkB Fund . 425,000 96,144 ■:: . ' ' » £ '••,.;Reccin!.s, .1895-39 - - 5,258,228 ' v Expenditure, 1«»W . 4.858,511 399,717 : Balanco at Mnich IL 18S9. . £495,861 ;- PUBLIC WORKS FUND. ■..' . • Turning now to the Public Works AcT- count (the particulars of which are given in ''•table No. 1). hon members will find that ,'£^65.000 was received on loan account, c £43,560 from surplus released Sinking Fund

and £425,000 transfers from (the Consolidated Fund, which, with some miscellaneous receipts (£2330), mate a total o£ £935,690, to wkidh >as to he added £he balance at the dose of t3ie preceding year, namely, £51,492. The expenditure on* of these moneys amounted to £916,326, leaving a balance of £70,856 at credit of the account.- The fund has yet to tre credited with £310,000 derived from t!he late loan, less, of conrtse, tihe costs and charges of raising, and, as we onay not -have (&> niuch available money to transfer from the Consolidated Fund, d't follows ttoalt a curtailment of the expenditure for roading, railing and land settlement seiTices will lave to take place if other provision is not made to prevent a stoppage of these most necessary works. The particulars given in table No. 1 concerning tOie transactions in tihe Cheviot Estate Account, the Land for SetltJements Account, the Conversion Account, the New Zealand Consols Account, and the Government Advances to Settlers Office Loan Account, speak for themselves, and do not seem to require any further explanation by me. THE LOANS TO LOCAL BODIES ACCOUNT. The balance in hand to credit of <fchis account at tihe commencement of last year was £21,978, and during the year £73,900 of debentures -were created and issued, and refunds were received amotcnrting to £871. These sums, amounting in all to £96,749, have enabled loans to be made during tihe year to the amount of £75,428 to local bodies and £16,971 towards opening up blocks of land for settlement, leaving a balance of £4360 to the credit of the account. The total amount of debentures created and issued and carried into this account up to March 31 last yras £1,239,400. The total disbursements up to March 31 last have been: — To local authorities £931,648, to Lands and Survey Department towards opening up blocks of land for settlement £213,602, and by transfer to credit of Public Works Fund £89,800. THE "ABSTRACT" FOB, 1898-99. Upon making nis annual examination of the Public Accounts, as required by Section 4 of the Public Revenues Accounts Amendment Act, 1896, tihe Controller and Auditor-General has thought it necessary to repeat his objection to the two matters mentioned last year, and he has also referred to- three ether subjects. The first is a sort of saving clause concerning receipts which are not examined in his office.; -tfhe second States that lie is unable to satisfactorily verify the receipts of gold revenue, because the Mines Department does not supply a certified 'statement of the amounts collectible. The Public Accounts Committee last • session went- very erh&ustavely into flhis matter, and the previous law was amended by Section .315 of tie Mning Act, .1898, to meet llhe requirements of the Audit .Office, but it appears 'that ifche Controller and Auditor-General is not yet satisfied, and still insists that the Wardens shall furnish returns, which <the law does not require them to do. Witlh regard to the new "tags," the first one relates to the amount of advances in the hands of officers of the Government in connection "with accounts received at the Treasury before' the close of the financial year. The Audit Oflice acknowledges that these outstandings may be unavoidable, and have been of invariable occurrence. It remains for me to add that, I think, the amount quoted (£2876) is the smallest sum that hasj been left as debit of imprestees for many years past. The Treasury uses every effort to have this class of expenditure 'brought 'into the books 'before .they are finally closed. To show that this is so I may mention that the imprest advances on Dec. 31, 1898, amounted. to no less than £159,451. The next ".tag" relates to the conversion account being overdrawn £2211. This is the bald statement, and is quite obvious to anyone who might look at the balance of the account. . The conversion operations are carried on in London by the stock agents, and it sometimes happens that they inscribe stock without advancing us at the time the charges are entered, or do not inscribe sufficient stock to meet the expenses incurred ■on the conversion operations, or that inscribed stock held by the agents has not been sold in time to meet the charges ; hence .an overdraft in our account, which does not, however, .exist in their books. The last remarks of the Controller relate to the inclusion in the expenditure under Class VDX, Public Works Fund, of the sums paid in .respect of .grants to technical schools, which were not .covered by the appropriations of Parliament. These sums were charged in the accounts in the months pf June and July, /1898, and you miay remember that in November last, when I drew attention to the proposed new clauses in the Technical Education Bill, contained in the supplementary order paper, I distinctly stated that £1500 had been paid to the Wellington Technical School, and £911 to the Dunedin Technical Classes Association. These sums were, of course, charged (against the vote of £25,000 which had been provided on the Estimates, but which were subsequently struck out. On Dee. 16, last, the Audit Office reported to the Treasury that these two sums were not provided for, and requested that they might be transferred to unauthorised expenditure. Their request was referred to the Education Department on Dec. 20 for necessary action, and it wats only on }£ay 10, last, that the Treasury became aware that the audit requirement had not been attended to, and that the Audit' Office had taken the opportunity of affixing a "tag" on the subject to the Public Accounts. The omission to carry out the wish of the Audit Office was certainly unknown to me, and it is not unreasonable for me to state that the Treasury officials should have been afforded further opportunity tp see that the request of the Audit Office, made so far back as the month of December last, was duly complied with. If this had been done the payments mentioned would have been charged to " unauthorised," and there would have been no necessity for a " tag '" in respect thereto. LAND AND INCOME TAX. The revenue derived under the head of land tax was £298,052, being considerably over the estimate, owing to the fact that, although the valuation was finished, the results as they affected the taxpayers were not known at the time the estimate was supplied. The receipt* from income tax were £115,480, being almost the same as in the previous year's Incomes, generally, manifested the same inarease as in former years, but the effect on the revenue in this respect was neutralised chiefly by the falling-off in the receipts fxofii fire

insurance companies, -whose profits were, largely below those of previous years. s THE PUBLIC DEBT. . On March 31, 1898, the gross public -debt; was £44.963,424, while on March 31 last the debt 'had increased to £46,938,006, a*epreSenting an addition of £1,974,582 during tne year. This is a large increase, arising principally from the settlement of very large J&nd purchase transactions (being effected at the game time as _we placed- o-ur new loan upon the market. The reproductive portion of the additional debt may be stated as under : t— Cost- EarnLoan ing per ing per raised, an'um. an'um. £ £ £ For purchase of land for settlements . 499,000 18,337 24,950 For advances to settlers - . - 500,000 15,000 25,000 For loans to local bodies . . . 73,900 3,e95 3,695 For New Zealand consols, deposits . 29,740 1,041 1,307 £1,102,640 Aid to public works and land settlement — • £ £ £ For additions to open lines . . 400,000 13,000 13,168 For roads to open up -new blocks . 180,000 6,675 9,000 For construction of railways . ' . 230,000 For schools . . 50,000' - . £860,000 Sinking Fund debentures .... 54,300 Increase of debt by conversion • • 19,384 Total - - - £933,684 Less debentures redeemed . . - 61,742 . Total net aid to . public works, etc. . 871,942 Total increase during ■ • 1898-99 . . .£1,974,582 £56,748 £77,120 ' With regard to the increase owing to the conversion operations, £2,581,108 of 3 per cent stock was inscribed for the purpose of converting £2,249,524 defoerttures and to provide funds to pay off £312,200 of debentures under various Acts, -and at varying rates of interest. These transactions Jhave added £19,384 to the debt, but have resulted in a material saving of something like £24,000 for interest charges. The net debt at the close .of last year had been increased by £1,999^206. The following is a table showing tihe increase of debt during the Liberal Administration, and tfhe ' cost per annum of the direct ..interest-earning defltrfc, and the amount earned per annum by tfhe outlay of such debt : — DIRECT INTEREST EARNING. Purpose for Cost- Earnwhich ing per ing per debt raised. Amount, an'um. an'um. ££ £ * Land settlement . 1,408,566 51,364 70)428 Advances to settlers 2,000,000 60,000 100,000 Loans to local bodies . . 914,400 42,834 45,720 Land improvement .500,000 17,958 25,000 Bank of New Zea- . ', land preferred shares . . 500,000 17,500 17,500 New Zealand con- : sols . . 385,925 13,507 13,507 District railways . 47,000 13,000 13,168 Totals . . £6,155,891 £218,513 £286,870 NON-DIRECT INTEREST EARNING^ * £ Purchase of Native lands .. . 649,700 Publio works . . . 935,000 Increase by conversion . . . 626,728 Sinking fund accretions . . . 1,304,500 Naval and military settlers . . . 27,226 Total . ... . .£9,699,045 Less redemption, Consolidated Stock Act, 1884, £1,260,420, other debentures £330,969 . . . . 1,591,389 Net increase of the Public Debt £8,107,656 CONCESSION OF BATE OF INTEREST AND REBATE ON RENTS OF . .CROWN TENANTS. In respect of the above excess of earning over the cost per annum of loans, I ougjbtb to mention that it is proposed to reduce by £ per cent per annum the interest carged upon advances to settlers, and also to allow a rebate of the same amount upon rents payable by Crown tenants, if in both cases the instalments are -paid within, a certain number of days of the proper due date. There is also. likely to be a reduction made in tihe interest charged for loans under tihe 'Government Loans to Local Bodies Act, as proposals -will probably be placed before you to. enable local authorities to obtain these loans under , alternative schemes at lower sraltes. These concessions will materially seduce tihe earnings whidb. are .shown above. c 1899-1900/ To these particulars, and those given in the several returns relating to the finance :of tihe past year, which are already in the possession of "honourable members, ;• tfiere is Jititfle further to add, and I think you will 'be more interested in ascertaining what are it-he -prospects of, and what finance we proj>ose for, the year which is now current. The expenditure for the present year is estisnated at £5,059,729, which is £201,218 an of the actual ordinary expenditure of the past year, and £209,899 in excess of *he estimate for that year. I shall only -very briefly refer to the increases, as I have no desire to weary honourable members wHfli the figures, which they w-ill :be able to see for themselves when they examine the tables appended to this Budget, and the details supplied an ,the Estimates, which will presently be laid on tne table. The estimate of tihe charges for "interest and braking. Fund is, practically, tihe same as last years expenditure, arising principally from our probably being able ito recover the amount of interest required for debentures jssued for lihe purchase of estates for land settlements, which about covers tne extra interest payable upon the additional loans, ijnder the permanent Aots, «, large addin??^^ expenditure is shown: caused by £150,000 for Old Age Pensions.and another f 7 of £4000 for compensation for S to< * destroyed. The estimate for Departmental votes is stated at ' £2,761f195. £9n nn^vPf* to these increases, belongs to the Colonial Secretary's ijepartment in connection with the coming election and licensing expenses. The Education Department absorbs an additional sum of about £15,000, and we must expect to provide, for an increased vote so long as settlement keeps increasing and education has to be provided. In the Defence Department the necessity for a high state of efficiency and preparedness has been obvious for some time past. Greater activity amongst the volunteers has led to additions to the numerical strength, and consequently increased capitation grants are applied for. The increase in this class is over £7000. It was determined last year that the Police Force must be strengthened and made more efficient, and an increase of some £5000 has therefore to be faced. In addition to this, the sum of £1500 is required as a first and annual contribution to tne police superannuation fund which the Government considers should be established. The Lands and - Survey. Department shows an increase in the estimate for this year of £17,000, as against the expenditure made last year, but this excess is chiefly owing to the much smaller sum treated as " credits" set down in reduction of the expenditure last year; The amount • received in tfois way was £36,092, including over £26,000 from the North Island Main Trunk Railway loan deposit account, while this year "credits" are not estimated to produce more than £17,000. With the increasing demand for land and roading of the same, it follows that as a natural sequence more surveyors must be employed, ,and exception to the increased expenditure under this head cannot be reasonably taken.