THE FINANCIAL STATEMENT.

Wanganui Chronicle, 17 August 1901, Page 2

THE FINANCIAL STATEMENT.

DELIVERED LAST NIGHT.

(Abridged.)

(Per Press Association.) WELLINGTON, August 16. The Right Hon. R. J. Seddon, Colonial Treasurer, delivered the Financial Statement in the House of Representatives this evening. MR GUJNNESS, The people, and especially hon. members, are naturally anxious at any time to have the Financial Statement, and this, my sixth Budget, is, owing to various causes, awaited ■with more than passing interest than any other preceding Statement. I will without reservation endeavour to place the finances of the colony before members in such a way that ail may understand the national account. The revenue received last year exceeded my most sanguine expectations. Notwithstanding the remissions granted in Customs -duties, railway freights, - passenger fares, and reduction of postal rates by giving penny postage, there was a pleasant surprise in store, for after meeting all current obligations there was" a balance on the credit side amounting to £532,564. It has been stated by several newspapers that it is proposed to meet the estimated deficiency partly by additional land tax and some slight re-arrangement of the Customs. It was further alleged that some stringency has occurred in the finances through the claims, of the old age pensions being much more numerous than anticipated, and our detractors have even gone the length of cabling this nonsense to London journals. ■ The -credence given to the imagination of the "penny-a-liner" should not be found fault with by me, for, with a patriotism that does them infinite credit, which as Colonial Treasurer I very much appreciate, merchants have risen to the occasion and cleared kei-osene, sugar and tea, with the result that the Customs revenue this month is buoyant in the extreme, and contrasts very favourably with the same month last year. The only possible foundation that could give rise to what appeared in certain paipers was a statement made, by me warning a deputation of members and other gentlemen against pressing for excessive public works expenditure, thereby entailing borrowing and squandering. Incidentally I stated that the revenue returns, as furnished by the Departments, did not warrant the. suggested expenditure, and that this caused me some anxiety. Again, in respect tc the increase of the graduated land tax, ] • stated in the House some weeks ago thai if the Government was to keep the pledg< given last year in granting a reduction o: |d in the £ on mortgage tax the graduated tax on land would require to be increase* so as to yield an amount equal to thai conceded by way of the reduced mortgagi tax, and after carefully reviewing the posi tion I find that the views exprassed havi been verified,.for a reduction in revenue ti the extent of £25,000 coUld not prudently be granted unless otherwise recouped. Tb< announcement that revenue cannot be give] away without a necessary recoupment wil very naturally and properly lead to- th conclusion that the revenue and expendi ture are fairly evenly balanced. This con elusion is correct, but it is • owing to th inclusion of nearly £120,000 of abnorma and non-recurring expenditure this yea and the increase in the education and tech nical. education vote* (which are in exces of those of last year by no less thai £67,000), also to an increase in the vot for the Colonial Secretary's Departmen (which exceeds the vote of last-year b; £69,300, caused by extraordinary services) and the vote for defence (which .to a num ber of Volunteer corps has been more tha; doubled). Even with these exceptions demands upon our resources, there will b sufficient, to meet.-every requirement, aiii at the risk of disappointing pessimist! alarmists, I am able to announce that ther will be no deficit, but a reasonable sui plus. It ia well, however, that I should in respect to expenditure, urge the abso lute necessity for prudence and economy for, although the revenue is buoyant am increasing, yet, owing to reduction of Gus toms tariff, the concession of penny post age, remissions in railway charges, am other concessions, there is this year, a compared with last year, a decrease c £9500. Correspondingly there should b a jealously-guarded expenditure, for a re stricted population can only bear a limitej and reasonable impost of taxation. Thi year the more prudent course is. to defe any further .reduction in revenue to a moi favourable opportunity, and the nations expenditure-should be cut down to th lowest limit consistent with efficiency afte providing for necessary requirements. The eager cind pressing desire for th rapid construction of public works and cor yeniences has forced borrowing up to limit beyond which it would not be saf to go. There need be no curtailment c expenditure with respect to obtaining land for settlement or for roading the bac blocks and Crown Land, which so material ly assists in furthering the settlement c the people on the land, or in respect o advancing monies, to settlers, or pushin on the North Island Main Trunk and othe railways and otherwise developing withii reasonable limits the resources of the col ony, for this means increasing the outpu of products and exports and tends to pre mote an increased population, which th colony badly needs. In respect to expel diture, several classes of public worksdistrict railways, and especially building and works which are more a matter o convenience than necessity—prudence de mands that there should be a reduction i: expenditure thereon, especially seeing tha the population is so slowly increasing, fo it should be borne in mind that the ir creased ratio of population is much beloi that of the increase of ordinary expendi ture. For every 1 million borrowed and ci •pend'ed >on non-revenue-producing work and objects, an annual charge of abou lOd a head is entailed upon every Euro pean man, woman and child in the colonj In the Budget last year I stated tha thereafter the Aid to Public Works Fun< from the surplus in the Consolidated Fun< would have been -partially, if not wholly abandoned. Tho public works'requirement this year are, however, so large that I ar compelled to use £500,000 of the surplus and that amount will be transferred ac cordingly. I regret to again have to state that from various causes well known to mem bers, the money market in London con tinues to be unfavourable for floating loans and we have had (recourse to raising th sum of £500,000 locally on short-dated de bentures bearing 4 per cent, interest. R« cently a, paragraph appeared in the Pres something ta this effect: "The needs « the Treasury were so urgent that £100,00 was borrowed from a leading life assui ance society at 4 per cent., with the condi tion that the 'interest would be paid a the head office in Sydney." The facts ar that the prospectus of the £500,000 loca loan raised in April last provided for in ■ terest being made payable in New Zea land, Australia and London. . Some tim after this loan had been -closed the societ; in question askod the Government- if i would accept an investment of £100,000 and, seeing that at the time we were sell ing debentures openly over the counter oi . terms as to interest similar to those abovi referred to, we naturally obliged the so ciety and accepted their money. Othe: institutions and private individuals -havi also been led to avail themselves of thii further opportunity to invest their monej in short-currency security carrying a fall rate of interest. The war in South Africa still continues and large Imperial loans and other demands upon the London money market leac me to the conclusion that it will be some j little time ere any loan could with advantage be floated in the Mother Country. It becomes necessaiy, therefore, that a large proportion of the amount required and authorised should be raised locally, and. this being the case, there should be a careful public works expenditure until a favourable opportunity for raising money in London arrives. In accordance with the provisions of the Public Revenues Act, statements have already been published in the "N.Z. Gazette" showing the receij)te and expenditure in the consolidated revenue and Public Works and othei' accounts. As upon former occasions, tables will be attached to my Budget giving a variety of information concerning the transactions of the last financial year. Having given a general summary of the situation (which, viewed in the light of the elasticity of our resources, is, if anything, on the side of caution), I will now proceed to give the details of receipts and expenditure for last year. FINANCES OF 1900-1901.

Eevenue.—The actual revenue for the past financial year reached £5,852,705, to which hag to bo added £52,800 derived from the proceeds of the sale of debentijresi for Sinking Fund accretions and the smalli sum of £1411 recovered in connection < with the expenditure of the previous year. These amounts reach the large total of £5,906,916, or not very far short of six millions of money, and represent the largest volume of receipts into the colonial exchequer since its foundation. Compared with the revenue proper of the previous year (1899-1900), which amounted to the sum of £5,580,385, there is an excess of £272,320, of which £73,295 was derived from Customs, £43,036. from, Stamps,,

£45,936 from Land and Income Tax, and £99,028 from Railways. Other items of revenue produced a net increase of £11,025. Turning now to the comparison of results between the estimated and the actual revenue for the year ended 31st March last, I find that my estimate has been exceeded by the sum of £429,516. Under all heads of revenue except one the Estimates have been exceeded. Th following are the figures—Under Customs £157,871, .Stamps £48,935, Land and Income Tax £43,393, Beer Duty £2170, Railways £146,241, Marine £3353, Miscellaneous £2411, Territorial £30,203, and Recoveries £1411. Under the head of registration and other fees the revenue was £6462 less than was expected. . Expenditure.—The actual expenditure during 1900-1901 was £5,479,703. Similar expenditure during the preceding year totalled £5,140,127, showing an increased cost of nearly £50,000, of which the old age pensions contributed an extra cost of £39,500 and subsidies to local bodies £7500. With increased revenue, increased exx)enditure may be expected, and it is therefore not surprising to find that the Departmental expenditure was in excess of that of the previous year by £289,672. Under annual appropriations the increased expenditure on railways amounted to £105,500, on defence £64,400, the post and telegraph services cost an extra £27,700, and the miscellaneous vote of the Colonial Secretary's Department is mainly answerable for an increased expenditure of £18,500. In Class 11. (Colonial Secretary) it may, I think, be broadly stated.that in other, departments of the State the ■ expenditure, has been increased so as to keep in line with the increased requirements of I colonists and provide for expenditure which liberal legislation sanctions for the good of the people, be they rich or poor. Comparing the actual expenditure of the year with the Estimates, members will find from the table appended to my Budget that the expenditure was less than estimated in some directions to the extent) of £206,940, while in others it exceeded the estimate by £113,350. Of the latter amount railways were answerable for the sum of £75,500, and services not provided for £25,500. The net saving in expenditure ais compared twith estimates was £93,590. ' The revenue for the year was £5,906,916, and the. ordinary expenditure £5,479,703, leaving a balance of £427,213. Out of the balance brought forward from the previous year (1899-1900) of £605,351, a transfer of £500,000 was made to the Public Works Fund, leaving £105,351 to be added to the results of the year's transactions, and producing at the close of the year a balance amounting to £532,564. I feel sure honourable members will joiri with me in congratulating the colony on the successful result. The Public Works Fund.—The transactions oh both sides of account of the Public Works Fund were largely increased last year. The ordinary expenditure exceeded that of the previous year by the sum of £315,000, and necessarily extra funds had to be found to provide for the expenditure. The total figures, as shown in the accounts which are appended, are—• Receipts £1,901,787, and expenditure £1,809,021. The balance brought forward was £139,749, and the balance at the end of the year amounted to £232,515. Loans to Local Bodies Account.—The balance to credit of the Loans to Local Bodies Account on 31st March, 1900, was £20,593. Debentures, for £176,000 were created and issued during the past year, and refunds of unspent balances of grants, together with a payment made in reduction of inscribed debt, were received, amounting in all to £7766. Payments on account of loans were made during the year to local bodies £138,956, and towards opening up blocks of land for settlement £37,390, leaving at the end of last year a balance of £27,973 to the credit of the account. Up to 31st March last the total amount of debentures created and issued and carried into this account was £1,530,900, and the total disbursements have been: To local bodies £1,138,497, to Lands and Survey Department towards openiug up blocks of land for settlement £282,356, and to Public Works Fund' £898,800, in. exchange for debentures' under "The Roadg and Bridges Construction Act, 1882." The business connected with the granting of loans to local bodies still continues to considerably increase, the payments during last year being more than double those of-the preceding year, and the largest amount that has been advanced since the commencement of the Act. This :s no doubt attributable to the fact that late legislation has granted greater facilities whereby local bodies can obtain as-

sistance. Land Tax and Income Tax.—The proceeds of the Land Tax only exceeded those of the preceding year by abont £1000, the Department having been unable, from a defect in the Valuation Act, to place the increased valuations upon the rolls for last year. The Income Tax receipts, however, brought up the revenue from direct taxation to an amount which it has never b-fore reached. A careful revision of the land values of the colony is now in progress, but it will take some time yet to complets this work. The result so far is a net increase of the capital value of £8,390,000, and of, the unimproved value of £6,375,000. The gain to the Land Tax revenue this year I estimate at £10,000, and I see no reason, notwithstanding the unfortunately low price of wool, why the Land Tax should not increase year by year in sympathy with other heads of revenue until, at all events, the whole revision of the valuations ihas been completed. The Land for Settlements Account.— The balance brought forward amounted to £53,389, and by the sale of debentures under "The Land for Settlement Consolidation Act, 1900," funds were obtained to the amount of £219,000. Rents and other moneys came into the account to the extent of £72,796. On the other side the purchase money for .the acquirement of estates totalled £186,621, interest on debentures amounted to £50,910, and expenses to £14,305. The balance of the account/ at the close of the year waa £93,349. The purchase of land for elbse settlement is being vigorously pushed forward. During the last year approximately 177 farms were provided and about 17*0 workmen's homes. THE PUBLIC DEBT. The gross public debt on the 31st March, 1900, was £47,874,452. On the 31st March, 1901,' it was £49,591,245, or an increase of £1,716,793 for the year. The net public debt on the 3lst March last was £48,557,751, showing £1,627,675 of a net increase for the"d-ebt during the year. Analysing the above stated increase, I find that, as I have before mentioned, £900,000 of new loan money has been raised for the Public Works: Fund, consisting of £700,000 under "The Aid to Public Works and Land Settlement 1899," and £200,000 under a similar Loan Act of last session. The requirements of the Advances to Settlers Office necessitated our raising £380,000, and for the purchase of estates for close settlement we obtained £219,000. To enable grants to be made to local authorities £liu,ooo had to ba borrowed and further sums of £1781 and £2000 for the dairy industries. and Government Accident Insurance respectively. £17,902 was deposited in new Zealand consols and £52,000, representing debentures for accretions of sinking funds, were disposed of, as also £180,000 of 3 per cent, inscribed .stock. On the other hand, £50,400 5 per cent debentures were paid off under '"The Consolidated Loan Act, 1867," and £290 under "fheNaval and Military Settlers and Volunteers Land Act, 1892"

With respect to the interest upon nearly £800,000 of moneys raised last year, it is right to mention that; no burden will be imposed upon the taxpayers, such interest being recouped according to the conditions under which the loans have been applied, so that these loans are virtually self-sup-porting. With regard to the balance, ifc is impossible to assist our settlers in developing our country without providing them with roads and bridges, and to provide for such expenditure it is essential

that money shall be found out of the loan. By the same means only can our railway system be extended and effect given to the wishes of lion, members and the people with regard, to a vigorous prosecution towardis the completion of main lines.

During the year £509,500 of debentures under "The Government Loans to Local Bodies Act, 1886" fell due, and renewed under the provisions of "The Consolidated Stock Act, 1884." The Bank of NewZealand having paid £500,000, the value of its preferred shares, that amount was handed over to the Public Trustee, and by him invested in a like amount of debentures under "The Aid to Public Works and Land Settlement Act, 1899," held at the time by the Bank of New Zealand as security for advances made under the said loan. I observe that only two parcels of 1 debentures will (have to be' provided for during the current year—namely, £250,----000, under "The Aid to Public Works and Land Settlement Act, 1896," and £300,FOO9, under "Land for Settlement Acts, 0.894 and 1897." The former parcel is held by the Post Office, and can be renewed', and the latter was a London issue, convertible into 3 per cent, inscribed stock.

OUR RECENT £500.000 LOAN FLOTATION. • Our financial.advisers in London having reported unfavourably of the state of the money market, and that a very low figure would be obtained for a. 3 per cent, loan, it was determined to tap our own resoxirces. I am pleased tp *say thas the re»

suit more than justified the action, as tha recent flotation proved a' complete success. The amount to be subscribed was £500.-------000, authorised by "Tlia Aid to Public Works and Land 'Settlement Act, 1900." It was decided to make the issue at 4 per cent., with the price fixed at par. The loan was freely advertised throughout the colony and also in Melbourne and Sydney. Tenders were opened on the 23rd April last, and it was found that the amount

applied for was £861,300, represented by - 126 tenders. The average price was £100 _/ Is 6d, tho highest tender being at £102, and the lowest £100 0s 6d. One hundred and twelve tenders received an allotment 1 of 62 over par and 50 at par. The average price over par yielded £100 6s 7d. Th?. allotment was made so as to embrace the largest number of small tenders, and to encourage bona-fidie investors. No fees for brokerage were paid, and the expenses 'have been very light, rather less than three^eighths per cent., consisting only of advertising and commission to the Bank for .transmission of money from Australia to Wellington. An allowance at the rate of 1£ "er cent per annum was made to tenderers who chose to pay their final instalment before due date.. The local venture has proved a very great success, and although the rate is high in comparison ■with late issues, expenses have been so small that I think we may consider we have got our money nearly, if not quite, I as cheaply as under present conditions a Z per cent, loan could have been obtained. The currency is short, running only until the Ist of April, 1904.

COMPARATIVE STATEMENT (1890-91 TO 1900-1801.)

Thero has been considerable adverse criticism, and assertions have been made to tho effect that there has been an tin■due increase in expenditure during the * last year. It is quite true that there has been a. largely increased expenditure, and that necessarily so, for we have largely increased population, and also greatly inGreased our revenue. We have now also in existence departments of State which ■were in 1891 unknown, asd many of them unthoughfc of at tine time. Total expenditure and revenue, 1830----91 tar-Total expenditure £4,091,215, total revenue £4.158,774; 1900-01, total expenditure £5.479,703, total revenue £5,852,----506; total increased expenditure £1,188,----488, total increased revenue £1,693,932. Turning to the. revenue earning departments of the State, it will be seen from the following table, compiled from returns furnished by the several departments concerned, that whilst there has been an increased expenditure, there have also been increased earnings and increased profits. (Here follows the details of the expenditure and earnings of the several departments). POPULATION—ARRIVALS, DEPAR- , TURES, BIRTHS AND DEATHS. In my introductory remarks I expressed the opinion that the colony was in need of increased population. The latest census of people proved that during the last five years our population had been, relatively to the previous five years (tihat is from 1891 to 1826} actually decreased in number by 7366 persons. The opinion of the late Hon.. John Ballance, as express■ed in his Budget in 1891, may not be out of place, snowing as it do.es the bearing an increased or decreased population has upon the prosperity of the colony. (Her*j follows Mr1. Balance's summary of the census then under notice, drawing attention'to the excess of departures over. arrivals, and concluding ivith .the words : "Now here is a loss of wealth and wealthproducing power in the departure of so many people from our stores to seek employment in other colonies which demands the serious consideration of Parliament.' 1 A table was here given to show that bstween 1891 and 1896 there-was an increase of 76,751, and between 1896 and 1901 an increase1 only of 67,385 (the Chatham and Kermadeo Islands not included).

OUR WORKING RAILWAYS,

Rapid and continued growth of the business of our railways and the principal highways and means' of communication batween the various parts of the colony is one of the best indications of the continued healthy and prosperous conditions of the colony. Ths traffic for the year ending 31si March, 1901, showed an increase over that for the year ending 31st March, 1895 when the Government took over the lines) of 1,b99,351 train miles, 2,338,015 passengers,. 54,298 season tickets, 188,789 parcels, 586 carriages, 861 drays, 31,987 cattle, 892,270 sheep, 7767 pigs, 1,291,296 tons of goods traffic 'of various classes, £576,385 in revenue, and 2836 in the number of men employed. The actual profit for the year ending 31st March, 1901, was £599,389, as against £571,533 for the previous year. The capital cost of the railways open for traffic is £17,207,328. The profit on working gives £3 9.? Bd, :.s compared with £3 8s 5d for last year. Taking into consideration the large reductions of passenger and other rates, increased cost of materials, coal, iron, etc., and increased wages, this result is eminently satisfactory, and figures are, I venture to think, an eloquent testimony of the success of State administration of tlte railways. There is every indication that the business for the present financial year will be fully equal to that of the preceding year. NORTH ISLAND MAIN TRUNK

RAILWAY. j The Central route having been finally determined upon for the North Island Main Trunk Railway, immediate steps were taken to put further work in hand. •Tho formation is now well advanced between Kawakawa and Taumaranui, while bush-felling, etc., etc., is in hand south of Wanganui River. From the south end works extend nearly to Turangarere, all important works on the section being fully manned. The erection of Makohine viaduct will bo completed during'the coming summer, and simultaneously the railway • will be opened to Mangaweka. The amount voted last session was sufficient to -cover requirements for the year, but an increased amount will be necessary for the coming year. MIDLAND RAILWAY.

In accordance with a resolution passed, by the Public Accounts Committee last session, a Royal Commission was appointed and after exhaustive inquiry has reported practically- that the Company and deben-tUTe-holders have been very well treated. The findings of the Commission are reviewed, and it is indicated that the petitions of debenture-holders and of the C'pmpany, presented last session, should be dealt with this session. . '

POST AND TELEGRAPHS. Last year the expenditure for this department was £416,363, and the receipts £503,181J' This year the expenditure is estimated at £441,214, and the revenue is anticipated to reach £485,800. EDUCATION. A lengthy reference is made to the edcation system, and the financial inequalities existing thereunder, particularly in reference to salaries. The recommendations 'of the Teachers' Salaries Commission are xeviewed, and it is stated that last .year _>fthe appropriation for capitation was d 8098---,-000. This year £416,200 is required to be voted, which is £18,200 in excess of the amount voted last year. This year, the finances of the colony permitting, as I believe they will, wo hope to be able to provide for tho payment of teachers on the second scale recommended. MANUAL (AND TECHNICAL INSTRUCTION. The expenditure under the head of technical instruction, exclusive of grants for building, for the year ending 31st March, 1901, was £2690. The expenditure this year may be estimated at £14,000, or £15,090. exclusive of building grants, which last year amounted to £2178. This rear we anticipate an expenditure of between £10,000 or £12.00u upon buildings and apparatus. GOLD MINING. The gold mining industry is reported as steadily progressing. STATE COAL MINE. It is stated that the time has arrived when the colony should supply itself with coal, and it is* indicated that Parliament I will be asked1 to give its authority for the establishment of such a. mine.. MORTGAGE TAX. 1 have not altered my opinion, and still consider that the mortgage tax is too, high, and that some relief should be given, provided the finances of the colony permit. Whilst desiring to keep good faitli with Parliament, to do so this session would be imprudent, unless the loss of revenue occasioned thereby is recouped. FINANCE OF 1901-1902—EXPENDI-TURE.

As I have already mentioned, the suggestions for departmental expenditure > caused me no little anxiety, for I was confronted with estimates involving what appeared to be at first sjght extraordinarily large expenditure. After careful examination and pruning, I am able to submit estimates of expenditure which, although •undoubtedly large in tihe aggregate, have been kept down to the lowest limit. The estimates for 1901-1902 are set down at £5,763,814. The actual, expenditure of last year amounted to £5,479,703. There is therefore a proposed increase over last years expenditure of £284,111. Loans recently raised cau.se an addition of some £70,000 for interest, while the old age

pensions is answerable for £18,000, which is most of the excess in expenditure under permanent Acts. In tho Colonial Secretary's department the visit of their Royal Highnesses has necessitated provision for £50,000. and £18,000 is required for tha census. The increased volume of the business of the Postal and Telegraph Departments has necessitated additional clerical assistance, and with the ordinary increases arising from the classification, has added some £15,000 to the Postal and Telegraph estimates, in addition to a loss of some £7000 aa contributions to the San Francisco service.

ESTIMATED EXPENDITURE OF THE CONSOLIDATED FUND (Revenue Account) for 1901-2, compared ■with actual expenditure of 1900-1. Revenue Account—Civil List—Estimte for 1901-2 £33,100, actual of 1900-1 £29,----173, increase £3927; interest and sinking fund, £1,819,225 and £1,745,616, increase £73,609; under special Acts, £582,155 and £560,434, increase £21,721 - x totals—estimate £2,434,480, actual £2,335,223, increase £99,257. Animal Appropriations.—Legislative Departments—Estimate, 1901-2, £29,887; actual, 1900-1, £25,265, decrease £5378. niaili ■ Seer£|tary's Department—£lßs,----438 and £116,138, increase £69,300. Colciniail Treasurer's Department.—£44,424 and £39,148, increase £5276. Justice Departomeintl— £129,961 ajnd '£126,436, increase £3525. Postal and Telegraph Department.—£44l,2l4 and £416,364, increase £24,850. Oustoms and Marine Department.—£B9,o7l and £87,033, increase £2033. Stamps amd Deeds Department. —£26.879 and £26,256, increase £623. Education Department—£sl2,sl9 an>l £445,294, increase £67,225. Lunacy and Charitable Department.—£69,l7o and £63,242, increase £5928. Department of Labour.—£779o sirnd £7978, decrease £188. JWr.es Department.—£23,32l and £17,----488, increase £5833. Department of Agriculture.—£9l,Bßl and £74,586, increase £17,005. Working Railways Department. —£1,152,000 and £1,144,832, increase £7168. Public and School Buildings and Domains.—£46,7so and £46,851, decrease £101. Defend^ Department.—£2l3,2so and £206,565, increase £6685. Police Department.—£l22,2sß and £117,522, increase £4736. Lands and Survey Department.—£l27,l3o and £133,557, decrease £6427. Valuation Department.—£2s,s9l and £23,580, increase £2011. Rates on Crown lands, £800 ,and £531, increase £269. T0ta15—£3,329,334 and £3,118,----961. Services not provided for actually of IsUj-jl, £25,519. Grand totals—.l9ol-2. £5,763,814; 1900-1, £5,479,703. Nett increase, £284,111.

REVENUE

Ib is now necessary to review the estimates of revenue, which I have set down at £5,839,000, together with £57,000 receipts to be -derived from the sale of debentures for Sinking fund accretions. These two sums total to £5,896,000. Last year the actual receipts amounted to £5,905,506, showing'that there is an estimated falling .off of revenue to the amount of £9506 during this current year. % hra,ve no desire to be pessimistic, but one cannot be too cautious while framing the estimates for the year. The different estimates of revenue are reviewed, concluding with the following detailied statement: ■— :

Statement of the Estimated Revenue of the Consolidated Fund (Revenue Account) for 1901-2, compared with the actual revenue of 1900-1.

Bieyenue Aocdunt.—Customs-^Estimate for 1901-2 £2,110,000, actual of 1900-1 £2,— ,862, differences, decrease £70,862. Railways—£l,76o,ooo and £1,720,641, increase £39,359. Stamps—£9o3,soo and £90,5,935, decrease £455. Land Tax Department—£3os,ooo and £294,584, in- • crease £10.416. Income Tax—£l7s,ooo and £173,809, increase £1191. Beer Dufcv—-£86,000 • and £85,171, increase £829. Registration and other fees— £76,000 and ,£67,537, increase £8463. Marine—£26,2oo and £29,553, deerea.-je £335. Miscellaneous—£l27,3oo and £126,----411, increase £889. Territorial revenue— £270,000 and £270,203, decrease £203. Totals," £5,839,000 and £5,852,706, increases £61,147, decreases £74,853. Add debentures for sinking fund increases, £57,000 and £52,800, increase £4200. Grand total, £5,896,000 and £5,905,506. nett decrease £9506.

Estimated Results at the Close of 1902. —'The revenue being estimated at £5,896,----000 and the expenditure at £5,763,814, there remains a balance of £132,186, to .which may be added the balance, £32,664 (of the surplus brought forwrad from last year after all owing for £500,000), to be transferred to the Bublrio Works Fund. These figures produce a balance of £164,----750, out of which, provision for the. supplementary lestimates has to be made. .

GROWN TENANTS REBATE OF • . RENTS. ...-- Last session the Rebate of Crown Tenants Act was passed. Its satisfactory working has not been satisfactory or equitable in its incidence. An amendment of the Act is necessary. OLD AGE PENSIONS. Seeing that the cost of old age pensions in alleged to havebeen. a factor creating the recent unnecessary alarm concerning the financial position of the colony, it is well to set the matter at rest, in order to remove the erroneous impressions wMeh have been formed. Last year tne amount ipaid for old age pensions was £197,292. This year it is estimated that £215,000 ■will bo sufficient to meet all claims, an increase therefore of £17,708, but with a surplus'of over half a million last year, and so" far -a buoyant revenue this year, that amount is not likely to materially affect the finances of the colony. Increased expenditure for pensions must, however, aiot be treated lightly,- and careful supervision is necessary. In view of the large amount now paid it will not be pniden.t to press for old age pensions being" made universal and aai increase .in the scale.

HELP TO FARMERS AND PRODUCERS. In dealing with this-subject, and in reference to opening up a direct trade route with South Africa, it is intimated that fhiß authority of the House will be asked to provide the necessary subsidy to authorise a contract being entered into for :i period of not less than three years, a<nd invite public offers therefor. OUR BOYS- iAT, THE 'FRONT—RE TURNED TROOPERS. It will be seen on reference to Defence Estimates that there is a largo reduction this year compared with the amount voted last year under the head of "Contingents." rihe statement, that prompt payment had not been made to returned troopers is emphatically contradicted. BRITISH MAIL SERVICES AND THE PACIFIC CABLE. References are made to the conditions of the over-sea mail services and' matters relating to the. Pacific cable ADDITIONAL FUNDS. The minds of hon. members have been relieved with respect to the Consolidated Fund Account. The next important matter demanding attention and consideration is the public works expenditure, the amount of money to be expended and the amount of money proposed to bo raised. It is,estimated that there will be an expenditure, of about £1,950,000, the expenditure on railways and roads being approximately about the same as last year. The balance on 31st March last, £232,----515, may be added to the £800,000' balance iof the million loan of last session. We propose to transfer to the Public Works Fund £500,000 of the surplus of the past year, making the total assets £1,532,515, with estimated expenditure of £1,950,000. It will -therefore be necessary to ask authority for a further loan. In endeavouring to bring our borrowing within reasonable limits-, considerable difficulty !has been encountered, owing to the heavy expenditure and liabilities which have been incurred during the last four months. Certainly the greatest care and economy will require to be exercised by myself and colleagues to keep, the public works expenditure within the ways and means. We shall be aided in this endeavour if hon. members will restrict their demands in respect to requirements in their districts. The time is most inopportune for extensive borrowing. The prolonged disturbed conditions in the Mother Country, caused by circumstances well within tho knowledge of hon. members, has had an effect on the financial world of an abnormal character to such an extent as to render it unwise to ask for more than a million. A larger sum might prove at this juncture injurious to the credit of the colony.

PUBLIC WORKS FUND—WAYS AND 'MEANS.1 '■' Balance brought forward, £232,515; balance of lo.in of last session, £800,000; transfer from Consolidated Fund £500,000 ; new loan, 1 million; estimated expenditure, £2,532,515 — £1,950,000; balance. £582,515, V GREATER NEW ZEALAND. The action of the Imperial Government in agreeing to the extension of the boundary of the colony so as to include the Cook and other islands has given general satisfaction.

SUMMARY AND CONCLUSION. In dealing with the many questions necessarily involved in placing the public

accounts before honourable members, I have endeavoured to be clear and explicit. The Budget proves that the financial position of the colony is sound and prosperous, that the operations of last year were satisfactory, and that at the close there was a credit'balance of £532,000, that this year there will be a surplus, and that additional taxation is not required provided the present laws remain unaltered. I trust that I have clearly demonstrated that with regard to the current year's finances there was nothing to warrant the alarm - and pessimistic views which some persons have taken regarding them, and that with care and economy, notwithstanding the very heavy and-exceptional expenses already incurred, it is reasonable to expect that there will be a fair surplus on 31sb March next. Presuming, as we do, that the public works expenditure will be fairly up to the estimate, the balance left on the''Public Works Fund is likely to be less on the 31st March next than it has been for some years past. It is better that this should be so, and that there should be a tapering off rather than an increased borrowing as compared with last year. The difficulty in raising money in London has not been without its advantages, for it has taught us that we may with success float loans locally. From what I can gather after, making careful inquiries, it is my opinion that next year financial matters will have reached a normal condition in the Mother Country and that there -will be a plethora of money easily obtainable at 3 per cent. It must be pleasing to honourable members to know that the elasticity of finance for which our colony is noted still continues and that notwithstanding the concessions granted last year our Customs revenue is buoyant and more than realises expectations. . . . . I have now detained

honourable members a considerable time, and let me say, in conclusion, that I am sensible of their great and continual confidence. I hope that, although there may. be differences of opinion respecting the Budget i;ow submitted, at all events they will do me the credit of believing that the conclusions have not been arrived at has- j tily, that the position has been accurately j gauged, and that time will prove the finan- j ceg of this colony to be' sound and secure. | I advise in good faith that at the present time the good steamer "Finance" should be steadied, and that "slow" and not "full speed ahead" should be the" order on the. dial. Reasonable care will insure the good ship riding buoyantly and safely in calm and placid waters.