8.—2

24

amount payable will be £217,964 os., or an increase of over £9,000. The proportions will be found stated in Table I. Then comes the moiety of Stamp Duties to be paid into the Public Works Account, £42,500; the total of the Stamp Duties being estimated at £85,000. I have also to include £45,000 for Treasury Bills to be taken up during the year; and the total Colonial Expenditure during 1873-74, may be stated as follows:— £ s. d. Civil List ... ... ... ... ... ... 27,5C0 0 0 Permanent Charges ... ... ... ... ... 410,010 16 9 Class I.—Public Departments... ... ... ... 54,050 5 2 Class ll.—Law and Justice ... ... ... ... 57,103 2 0 Class lll—Postal, &c, Services... ... 141,813 10 0 Class IV. —Customs Departments ... ... ... 47,200 1111 Class V.—Native ... ... ... ... ... 26,532 5 0 Class Vl.—Miscellaneous, Special, and Temporary ... ... 28,280 15 3 Class Vll.—Militia and Volunteers ... ... ... 24,049 17 G Public Domains and Buildings ... ... ... ... 2,783 0 0 Eedemption Treasury Bills ... ... ... ... 45,000 0 0 One-half Stamp Duties ... ... ... ... ... 42,500 0 O Capitation Allowance ... ... ... ... ... 217,904 5 O £1,131,088 8 7 Before leaving the question of Expenditure, I may say that, in addition to the allowance to the Provinces already stated, the Government propose to make an allowance of £50,000 to Road Boards, as was done last year. THE TAEIFF. The Government have very seriously considered the nature of the existing Tariff; and I am about to propose changes, not with a view to increase the revenue, but to introduce a system which we believe will possess fewer disadvantages than the one now in operation. We propose, in short, to substitute ad valorem Duties for Duties based upon measurement. New Zealand stands almost alone amongst Colonies in its adoption of a measurement system. The only companions, I think, to which we can point, are St. Helena and Tasmania. The " sullen isle," as Byron terms it, gave to Tasmania and to New Zealand a Governor who lives, and will continue to live, in the respect and esteem of the people of both Colonies. Through him, the system of measurement duties was introduced here as well as in Tasmania. But other Colonies and countries prefer the system of ad valorem duties, notwithstanding the arguments against them which can undoubtedly be employed. A system of taxation against which no reasonable objection can be urged, is a thing that cannot even be hoped for. Taxation is in itself a very unpleasant thing, but, like many unpleasant things, has its uses. Measurement duties not only afford facilities for fraud ; but they involve the gross unfairness of subjecting coarse and inexpensive articles to heavier taxation than that to which fine and expensive articles are liable. The Government are favourable to the substitution of ad valorem for measurement duties, not alone because public opinion elsewhere supports such a substitution, but because they are themselves convinced that measurement duties operate very unfairly. Two other reasons influence us. First, we cannot fail to see that under that system there are great difficulties in the way of a thoroughly liberal system of drawbacks. Last Session, we provided for drawbacks which, despite the measurement duties, we attempted to make more liberal than those of Victoria. But Victoria is now making her drawback-allowances more liberal; and we cannot keep pace with her, unless, unimpeded by the difficulties of the measurement system, we can make a fresh start. Again, the Committee know that, after a long struggle, in which New Zealand has taken a leading part, the Imperial Government and Parliament have conceded to the Colonial Legislatures power to make provision for the reciprocal interchange of their respective products and manufactures. AVithout entering into details—indeed, to attempt to do so would be impolitic, seeing that negotiations as to reciprocity arrangements have not been commenced —I ask the Committee to agree with me, that an important point will be gained, if we start with a system of duties similar to that which exists on the Australian Continent.

Table I.

Moiety of Stamp Duties, £42,500. £45,000 for Treasury Bills to be taken up.

Total proposed expenditure for 1873-74, £1,131,688 8e. 7d. £50,000 to Eoad Boards.

Changes in Tariff, not proposed for increase of revenue. Ad valorem instead of Measurement Duties.

Change proposed, because — Measurement Duties operate unfairly ;

because the change will enable Drawback system to be made more liberal;

and because it will facilitate Reciprocity arrangements.