THE COLONIAL TREASURER BEFORE HIS CONSTITUENTS. [BY ELECTRIC TELEGRAPH.] (PRESS ASSOCIATIOH.) PATEA, Last Night. A crowded meeting met Major Atkinson

Waikato Times, Volume XVI, Issue 1361, 22 March 1881, Page 3

THE COLONIAL TREASURER BEFORE HIS CONSTITUENTS. [BY ELECTRIC TELEGRAPH.] (PRESS ASSOCIATIOH.) PATEA, Last Night. A crowded meeting met Major Atkinson

at the Public Hall this evening. By an .amendment on the original pro- j position, Mi* Sherwood (Chairman of the Harbor Board) wa3 placed in the chair. Major Atkinson commenced by explain, ing the cause of his not appearing before his constituents during the last recess, j attributing it to want of time and to the non necessity of his so appearing, seeing that the general election had been so recent. Before entering upon a discussion and explanation of the action of the Government since he last met his constituents, it was necessary that they should understand that when the Govern- ! ment took office the position of the Colonial finances was utterly unknown, j as there had been no statement from the j late Government for fifteen or sixteen months, and the state of native affairs was most unsatisfactory, because nothing practical had been done, except in the way of stirring up the natives throughout the colony, and excepting also that the head of the Defence Department had undoubtedly put the Constabulary upon a satisfactory basis. In addition to this, there was general depression prevailing, the commercial crises being such as had never been previously experienced in the colony. That was the position then, and when the Government in October came to enquire into the finances, they found that a deficit of £900,000 (or nearer a million, as it turned out) had to be made up by March. This was chiefly owing to the system of relying upon the land fund as general revenue. The Government had to make up the deficit in spite of the depression and scarcity of work, and in spite of the five million loan being anticipated, and advices from the home agents that the Bank of England would not advance £25,000 upon some millions' worth of debentures. The first thing to do was to retrench, but it was difficult to suddenly stop the spending machine. Seeing that the weekly expenditure during the last two years of the Grey administration was £110,000, a sudden stoppage would have caused intense distress. The Government saw the necessity of stopping expenditure to some extent, and the result of theirefforts was that the weekly expenditure now was down to £60,000 or £70,000 ; but retrenchment was not sufficient. There were so many cehtres that it was impossible to govern the colony cheaply, and fresh taxation became necessary. In order to do that, every man in the colony would think it desirable to maintain the colony's credit and pay its debts. An initial step in the rectification of the finances was to eliminate the land fund from the ordinary revenue, and this involved the withdrawal of 20 per cent, from Counties. That was an unpopular act for which ho had been blamed in his own district, but it was necessary for the reat>on that, like the colony, counties had been treating the land fund us ordinary revenue to maintain and make roads, instead of applying it to the opening up of laud. Still, there was a large deficiency, and it was decided to impose fresh Custom duties, a beer tax and property tax in defence, and these necessaries he would call attention to the first principles of taxation. He should do so because this question of taxation must have great attention in the immediate future, as the taxation of the country must be moderately heavy. The points to be considered m taxing were that every subject should contribute towards the support of the Government in proportion to his means ; secondly, that every taxpayer should pay his quota in the best way, and at the most convenient time to himself ; thirdly, that every ti>.x should be certain and unarbitrary, and that each man should know how much he had to pay ; and fourth, that taxation should take as little as possible out of the pockets of the people. Practically these rules were impossible of attainment by any tax which could be devised. The income tax certainly would not secure those ends, and then comes the question which tax went neaiest to the result. Taxes must be levied to catch different classes in different ways, and he claimed that the property tax possessed that merit ; that it caught classes which could not be otherwise reached, while that class which received the benefit of exemption was amply taxed by the customs Ho regretted to say the only effect of increase of duties had been that the total yield was no more now, than it had been 2\ years before ; that showed that much more economy was observed in the colony, and some might agree that it indicated decreased spending power, but from examination of statistics, ho was convinced that the spending power of the people of New Zealand, was higher than that of people in any other part of the world. Then there was the beer tax. There were various objections to that impost, but the only question which weighed with him was the inadvisability of commencing excise duties. However, an increased basis of taxation was absolutely necessary, and the tax was unavoidable. The property tax he would have to speak at length upon, because of the possibilities of the future in regard to it. The Government had to choose between an income tax and a property tax, and they rejected the former because they believed that already as large an income tax was practically being levied through the Customs in New Zealand as was levied in any other country in the world. Political economists might say thero should be a tax on income, because you taxed expenditure; and he held that, as the Cus* toras duties were already bo heavy, that condition was not wanting. For that and other reasons, it did not seem desirable to the Government to levy an income tax. The property tax seemed to be much the fairer, because it was right and just that property, as property, should contribute directly to the burden of the State, and that if a man possessed property requiring protection, he should, whether that property was productive or unproductive, whether he used it well or ill, contribute to the cost of the Government in respect of the amount of property he held. There had been a great many objections to the tax, and it was characterised inquisatorial, but that was not a fault from which any other direct tax was tree. If direct taxation was necessary, and no one seemed to doubt that, then before the Government could tax a man, they must know what he had to be taxed upon. Therefore that argument as against the tax must be dismissed. Then it was said tbat it discouraged improvements j but he held a reverse opinion that if a man kept his money in the bank he had to pay upon the full amount ; but if he laid it out in improvements, which to liim might be worth the money spent, the tax fell on «, less

amount than was actually spent, because there would be a considerable margin between the value to sell, which was taken at the actual cost to the investor. A man with £100 in the bank would have to pay one hundred pence, but if he laid out his £100 1 the tax would be on about £80. That it discouraged thrift was another fallacy, since the man paid the tax immediately he accumulated. It was just this, whether a man receiving £1000 a year spent it all, or saved £500. It did* not affect the question of revenue. The man who saved £500 paid direct taxation on the amount he saved, but if he spent the money in the indirect taxation upon the £500 spent it more than equalled the direct taxation. He estimated that the taxation on the £500 in a given year by j customs duties, would amount to £60, and 5 per cent on that would more than cover the total amount that the saving man paid to the property tax. It had been said that absentees would escape ; that was not so, there were tw© classes of absentees — those who had property in the colony, and those who had but money. Clearly the former could not possibly escape ; and as to the other class, it was a matter of great difficulty, and should be carefully considered by the House as an interesting question, involving the desirableness of taxing foreign capital. There was a great deal to be said on both sides of the question ; but no one could fairly say that absentees were not caught under the tax, while they would escape in an income tax. He referred to the case of an absentee who had voluntarily paid a large sum when there was a doubt as to whether he could have been made to pay anything. He' remarked that, to have got this sum by an income tax, the rate would have had to be Cd, not 3d in the £. It. was said it was monstrous to tax unproductive property, houses untenanted, or land unoccupied ; he differed entirely, and here came in the question of property. If a man held property, he should pay ; if it were unproductive, that was his look out. If unproductive property had a marked value, and the holder sold it at that value, it must be assumed he continued to hold it forfuture gains. Heshouldnotbeexempted, but was productive of capital in the opinion of the holder to the extent that he expected to gain by it in the future, and on the productiveness he should pay. One great virtue of the tax, was that if it discouraged speculation, the purchaser of land which was intended to be enhanced in value by the expenditure and labour of the adjoining settlers, the income tax would not have this effect, because the* essence of the income tax was that it touched a man according to what he received, m respect of these investments the income tax would not reach them. Another advantage was that a man was taxed upon what he himself possessed, and not upon what was owed by others. The land tax was very unfair in that reßpect, because the man who was thrifty and energetic made good use of his capital, had to pay more than the lazy one that was not worth the property tax. A man was not taxed because he was industrious, but because ho had amassed property which required protection. Ho objected to tbe income tax because it was already paid through the Customs, and because it was necessary to get at something besides income to maintain the finances in a sound state. This was really a practical question which would come before tbe electors for decision at the ensuing election. It was proposed by some to impose a Land Act and an income tax ; but he confessed himself unable to find out what they wanted, unless it was to double the taxation upon the farmers and land-holders. Income from land was just the same as income from any other source, and he could not see where the line was to be drawn ; but perhaps they would come forward and [explain what the proposals really meant. The colony wanted no more property tax, a tax which simply meaut confiscation to present holders. It was clear that that was so, because anyone could at once see that if a person went to buy land, he would capitalize the tax at the valuatiou for the time being, and give so much less for the land, thus the present owner would suffer the entire loss. He thought on the whole if the tests he had given as to the fairness of taxation were applied to the p.operty tax it would be found to answer them all fairly. Well, certainly, this first year it had been costly, but if, during the coming session the House would determine that the general valuation might be used by the local bodies for the purpose of taxation, the property tax would in future be collected cheaply, say at a cost of not more than three pei- cent. He very much regretted the necessity for additional taxation, especially if direct taxation was bad for a new country. However, we were bound to provide for our liabilities, and the imposition of the taxation had done immense good in creating a more lively interest in political affairs — in drawing the attention of the people to the expenditure, and in promoting economy. The general results of the year promise to bo satisfactoryj He hoped the revenue would quite cover the expenditure — no small achievement, seeing that twelve or eighteen months ago there was a deficit of £900,000. He believed he could assure the colony that the Government had retrenched to the extent of £252,000. Last session might be thought by some people to have been barren ; but it was a great mistake to judge of the value of a session by the number of the Acts passed, he wished there would be even more practical discussion. He meant less talk and less legislation in future. There were several most important Ac*s passed ; and if nothing else had been done other than putting the finances in a better condition, the time would not have been wasted. As to Public Works, jthe only policy open for the Government, owing to largeJcommitmenfß by their predecessors, was to carry tbe works initiated by them. The Government aay that there was likely to be an immediate return, so that it might be in a position to complete other main lines in the Colony. They had been obliged to stop many, works, which otherwise they would have liked to go on with. But they had endeavored to act fairly to all. The policy for the future would be a steady continuance in this mode of action. The mode of dealing with local bodies was an important question. He explained in detail the proposals of the Government last session, contained in their Local Government Bill. As s to the withdrawal of the subsidies, there'had been no breach of faith in connection with them. When these were proposed there was no idea that in 1878 there would be a new departure — a launch into an enormous and costly scheme of public works. When that step was taken, it altogether altered the position of affairs. It was impossible to pay subsidies, and pay the £500,000 of additional interest on sinking fund involved by the policy of 1878, without special taxation. It was much better to let the local bodies do the taxing themselves. He contended that the proposals contained in the bill of last session were fair, and considered them preferable to grant mileage rates to Counties for the maintenance of roads 'in proportion to their character, whether - main roads through settled districts, , through new districts, or through districts serVed by railways. No doubt there was • a great deal of feeling abroad in respect to the future of local Government, but he thought, on full consideration, that as the ratepayers had full powers under thepre*

sent act to determine what form future local government should be, whether road board at once or should be merged into counties or counties amalgamated, they could do much more than Parliament could. The fact was it was the want of money, not the form of government that crea« ted all the difficulty. If there had been plenty of money, all would have been well. If the .money was wanted, it could only be secured by taxation. As to native affairs, the first thing that occurred to him, and doubtless to his audience, was regret that Mr Bryce should have left the Ministry. He certainly felt strongly indeed in this, for in almost all native matters Mr Bryce and himself had identical opinions; but Mr Bryce differed from the Cabinet as to the way in which they ought to immediately proceed in dealing with Te "Whiti. Mr Bryce was disposed for more vigorous measures than the Cabinet approved of at that time. Ihe statement which had appeared in the papers gave substantially the reason for Mr Bryce's resignation, and there was nothing behind that he (Major Atkinson) knew of. He left simply because he advocated that more vigorous action should be taken. A good deal might be said on both sides of the question. The policy which the Government had laid out for themselves, which they had followed, and which they intended still to follow, was this : They would have no tampering — they would keep a tight hand over the reins ; but they would deal with strict justice towards the natives. They would not be hurried by any man, and nothing would deter them from doing at the right time what they thought necessary. So far, lie claimed that the policy had been successful. As a settler in the district, he confessed he shared in the general feeling of impatience that a few natives should have disturbed the district so long ; but there were great difficulties and dangers in the way of rashly proceeding, and he hoped they agreed in the course the Government pursued, and have confidence that as many difficulties had been overcome, so the future would be satisfactsry. There had not been a moment of hesitation since the crossing of the Waingongoro, and the ■ same firm course would be persevered it. He acknowledged the assistance received by the Government from the Committee ; and as to the rumors being circulated about the work being done by Sir W. Fox, he could assure the settlers after careful examination of the whole matter, that substantial justice was being done to all, and that by the time Sir W. Fpx had finished his work, there would be no grounds tor greviance among the natives, except those who were aggrieved because the whole of the confiscated lands were not returned. As soon as the Commission had got over the division of land among tho different hapus, it would be the duty of the Government, probably by Act of Parliament, to make regulations by which the natives would be able to deal with the land, by selling or leasing, as might be necessary for the settlement of the country. Further, the waste lands administration had been successful since Mr Eolleston had taken the office last October twelve months. He had opened some 240,000 acres, out of which 180,000 acres had been sold upon deferred payments, or under the homestead system, or for cash. This was a most important part of the work. The statement he had made would be regarded as satisfactory. He regretted that stoppage of all immigration had become necessary, and looked forward to the renewal of the nominated system, at any rate they must have population in order to relieve the colony in clearing the present burden. The moat important element in the future was finance with ordinary prudence, and all would be well. The burdens were heavy, but he believed the colony could bear them with tolerable ease. Why the amount per head left after engagement had been met, it was fallacious to say there were so many people in the colony. There is such a debt, they are taxed to such an extent, and then institute comparison on the same basis with other countries. The true method was to ascertain the actual income, and see how it compared with the annual outgo. He had looked into the matter and he found that the annual income for last year was nearly fifteen millions— say fourteen millions. He had been unable to get late statistics but he found that in 1860 the income of England was four hundred millions, and that amount paid for Local and General Government. The expenses was eighty millions ; that was excluding the interest on the debt which, as the debt was subscribed in England, could not be regarded as an outgo. That left three hundred and twenty millions, or £14 per head of the population. The hon. gentleman resumed his seat amid cheers and expressions of dissent throughout the meeting, which had been of a rather noisy character. The speaker was occasionally interrupted to give explanations on local subjects. Major Atkinson answered several important questions. A vote of thanks was moved, and a vote of confidence, as an amendment, was carried amidßt confusion. Mr Taplin took the chair during the latter part of the proceedings.