B.—2a,

6

for the future. Our unproductive expenditure must be kept strictly within our ordinary income, and the several sources of our revenue must each be made to bear its own legitimate burden. The Consolidated Fund should be liable for the cost of those services which minister to the " peace, order, and good government" of the community, and the Land Fund should be responsible for those charges which provide for the acquisition, settlement, and development of our real estate. PROPOSALS. I wish, Mr. O'Uorke, I could inform the Committee that it was unnecessary to ask for further borrowing power this year, but that, I regret to say, is practically impossible. It would be so manifestly unwise to stop at this juncture the important works now approaching completion that I do not hesitate to ask for further funds to continue them. Our proposals are, to ask authority to raise £1,000,000 for the following purposes :—£350,000 additional Ways and Means required for Public "Works to June next; £250,000 to provide for probable contract and other liabilities of the Provinces requiring to be met between December and June next, the actual amount of which I have no means at present of ascertaining, and which I hope I may have over-estimated; and £400,000 for such expenditure as the House may direct between the close of the present year and the date at which funds for the continuance of our Public Works can be provided. I do not intend, as was proposed by the late Government, to borrow moneys to make good the large sum, amounting to over £500,000, due by the Provinces to the colonial revenue and to the Public Works Account, but shall hold that indebtedness as a direct liability of the Provinces concerned to the colony. We have reason to believe that all the funds we shall require can be obtained without having recourse to the open market. If our expectations on this point are realized, we shall not attempt to place the loan before next session, unless it should be found advisable, for other reasons, to adopt that course. I shall next session submit for the consideration of the House a scheme based upon carefully prepared professional estimates, showing definitely and in detail what works are required to complete our railway system, and the cost of such completion; and shall then ask the House to consider the arrangements necessary for completing the scheme. I shall propose to spread over a series of years the raising and expenditure of the moneys required, and thus to keep the annual charge for interest on the debt, within the compass of our growing income. In conclusion, Mr. O'Rorke, there is much on which I can congratulate the country. In the social and moral condition of our population we have reason for contentment. Notwithstanding the serious fall in the price of wool, our material prosperity is steadily advancing, and I am convinced that our commercial operations were never conducted on a sounder basis. We have passed the most trying period of the year without difficulty, employment being plentiful th rough out the winter, and at good wages. The gold fields, not only on the West Coast, but in Otago and Auckland also, show the most satisfactory signs of an increasing productiveness. No one now can reasonably doubt the success of the Immigration and Public Works scheme; but in order to reap the full benefit of that scheme, now within our reach, we must exercise a moderate self-restraint in our future operations. I trust the Committee will approve of the proposals which I have now submitted, for while the Government are deeply impressed with the necessity of steadily continuing our Public Works and Immigration, they are not the less convinced of the necessity of a prudent and careful finance, and I hope that our endeavours to reconcile these objects will have the support of the House and of the country.