B.—No. 2.

Provinces, including recoveries on account of purchases of land and for water supply to the gold fields, and repayments from Immigrants, shall be paid to the Public Works and Immigration Eund Account. We hope that no consideration of present difficulties will interfere with the determination arrived at last year, that one-half the amount yielded by the Stamp Duties shall be made available for Public Works. It is part of our proposals that that amount shall be paid to the Public Works and Immigration Fund Account. On the other hand, we propose that all payments on account of Public Works, and for interest and sinking fund on the loan, shall be made out of the fund named. Let it not be supposed that we make the provision in respect to the payment of interest and sinking fund for the purpose of reducing the charge upon the ordinary revenue. The contribution from the Stamp Duties to the Public Works Fund, together with the receipts for interest on the money unexpended, will more than cover the year's charge for interest and .sinking fund. If, when any railway is completed, it be found that the revenues derivable from it are not sufficient to pay the interest on its cost, our proposal is that, after taking into account the receipts arising from the special contributions made in its behalf, any deficiency, whatever its amount, shall be recovered from the Province within which the railway is situated ; or, if necessary, that a special rate shall be levied upon the persons in the vicinity of the railway, who derive benefit from its construction. We shall propose a plan by which the Board will be able to construct feeder-branches for the railways, under a system of partial guarantee from the persons benefited by their construction. On the petition of a certain majority of residents owning a certain majority in value of the land in a district contiguous to a main railway, the Board should decide to construct a cheap branch line, and to recover by means of a rate, if necessary, a stated portion of the annual charge which the construction entails. The Middle Island Railway Fund, we, of course, still propose shall be devoted to the Provinces to which it belongs; and as a matter of account, when determining the amount due by the different Provinces, credit will be given them for their share of the Stamp Duty contributions. EXPENDITURE POE THE YEAE 1871-72. If honorable Members will bear in mind the statements I have already made, they will have no difficulty in following me whilst I explain the proposed

One-half Stamp Duties to be paid to the fund. All payments for works, interest, &c. to be made out of the fund.

Deficiency of interest, &c, to be recovered from Province; Or a special rate levied upon persons benefited. Feeder branches may be constructed by Hoard, on guarantees from those interested; to bo recovered by special rates.

expenditure of the year 1871-72. It will be as follows :— £ s. d. £ s. d. Civil List ... ... ... ... ... 27,500 0 0 Permanent Charges ... ... ... ... 321,269 14. 2 Do. Provincial ... ... ... ... 182, CG2 0 0 Class I.—Public Domains and Buildings ... ... 2,550 0 0 Class II.—Public Departments ... ... ... 62,115 12 8 Class III.—Law and Justice ... ... ... 40,303 16 0 Class IV.—Postal &a. Services ... ... ... 110,631 0 0 Do. Provincial ... ... ... 24,200 0 0 Class V. —Customs Department ... ... ... 48,130 7 0 Class VI—Native ... ... ... ... 24,233 5 0 Class VII. —Miscellaneous, Special, and Temporary ... 27,208 17 8 Class VIII.—Militia and Volunteers ... ... ... 28,393 13 0 Totals ... ... ... ... 698,342 (5 6 200,262 0 0 Colonial Charges ... ... ... ... ... 698,342 6 6 Capitation Allowance ... ... ... ... 192,195 0 0 Special Allowances — Westland ... ... ... ... 1,919 12 6 Auckland ... ... ... ... 1,500 0 0 Taranaki ... ... ... ... 250 0 0 ■Wellington ... ... ... ... 750 0 0 Hawke'sBay ... ... ... ... 1,500 0 0 198,114 12 6 £890,456 19 0 Moiety of Stamp Duty to be paid to Public Works Account of Provinces ... 40, 000 0 0 On account of deficiency of past year ... ... ... ... 46,000 0 0 £982,456 19 0

Estimated Expenditure 1871-72, £982,466 19s.

15

FINANCIAL STATEMENT.