THE FINANCIAL STATEMENT.

Gisborne Times, Volume XXV, Issue 2135, 18 July 1907, Page 1

THE FINANCIAL STATEMENT.

REVENUE AND SURPLUS EXCEED £8,000,000. A FREE ! BREAKFAST TABLE.

Following is the Financial Statement delivered in the House on Tuesday evening by tlio Premier:—

I FINANCE. RECEIPTS AND KXJ'iiiNDii Ultii m suo*mi.uiig mo 1‘ uiititviai men u iur Liii' j car ciiucu uiou murci msi, it it. nuo noeußsuiy im mo co give lull UouuitU liguret. us tiio public uccoums have inlonely been puolisnou, unci nonoiublfi members are no doubt laminar with them. The rovenuo lias surpaaso:l that of any previous year, amt notwithstanding' heavy oxpuuuiture wi ciosecl our boons on Hist march last with'tlio substantial credit balance of £/17,826 —a result winch must bo gratifying to both 'Houses and the country. Tho rovenuo for wto year exceeded eiglit millions—the highest on record. Tho actual amount was £6,3U11,0/5, and compared with tho rovenuo of tho previous year (£7,584,3511) shows an increaso of £814,710, or a little over 10 per cent. Tho principal increases were: Railways £287,978, Customs £243,029, stamps £104,404, land and • income, tax £77,037, miscellaneous £31,075, and other receipts £24,822. The territorial revenue was loss by £9889. Roforenco to tile table attached will show how tlie figures are arrived at: 1900-7. 1905-0. Increase. Customs 2,941,040 2,697,141;243,629 -Railways 2,021,390 2,438,409,282,978 Stamps 1,305,727 1,201,203'104,404 Income tax 277,907 261,810 16,061 Land tax 447,347 385,7.50 01,580 Doer duty 107,582 98,135 9,447 Registration and other feos 119,445 108,222 11,223 .Marino 40,891 36,739 4,152 i\liscTaneous226,Bss 195,810 31,075 Territorial 250,900 260,787 Comparing the actual with the estimated revenue there was an, excess miner every head, lho uustonis estimate was exceeded by £241,040, railways by £.121,396 stamps by £122,22/, land and income tax by £58,209, miscellaneous by £20,885, and other heads by £28,3x8, malting a total of £598,015 in excess of the estimate. The following table will give details: uustoms, estimated £2,700,000, actual £2,941,040, increase £24,040. If ail ways, £2,500,000, £2,621,390, £121,390. Stamps, £1,243,500, £1,355,727, £122,227.' Land tax, £395,100, £437,442, £42,342. Incomo tax, £262,000, £277,867, £15,867. Beor duty, £98,500, £107,582, £9082. Registration and other fees, £lxo,000, £119,445, £9445. Marine, £37,000, £40,891,, £3891. Miscellaneous, £200,000, £226,885, £26,885. Territorial revenue, £210,000, £250,900. £5900. Totals. £7,801,000, £8,399,05y, £598,075. A certain amount of this increaso muSf be attributed to tho International Exhibition at Christchurch, particularly that relating to revenue derived from the railways, customs, and stamps, but at the same, time it must not be overlooked that tho general prosperity of the country is mainly responsible for tho result. 'Tlio expenditure for the last year Or so. was necessarily higher, the aero tal sum spent being £7,/v 4,026, oi £062,580 more than the previous year. Of this large increaso t permanent charges wore responsible tor £iUß,9u2, principally causeu by tne payment or interest on new loans and tlie cost ox increased payments co Old age pensioners. Yviili increased revenue increased expenditure may bo looked tor, and tiiereiore it is not surprising to find tfiat tlie .Departmental expenditure was in excess or tnat or tno previous year uy no less a sum than *1484,4/3. Ol tms amount railways were answerauie ror ±1264,63/, education requirements ±108,932, post and telegraph service cost an extra £4459, grant to tne Jtxhibition £49,500, and ;mamteauce or roads not charged to Consolidated Eund £2580. 'Tho new sinking fund established for war and defence loans ataubed nearly £40,000. Comparingijdlo actual expenditure for the year witli the amount appropriated, we are able to show a saving of £161,383. The charges authorised by the permanent appropriations show as compared with the estimates a, saving of £12,828, while the votes for Departmental expenditure show £IBB,- • 505, but as credit has been given tu railways for excess of revenue allowed by law of £121,390 the underspent amount on-departmental votes may be stated as £67,109. After charging £39,950 for the defence and War loan sinking fund account, which .'has a direct saving of £39,987 oil the estimate of expenditure for the year. Tho surplus of £788,795 from the previous year enabled to transfer from revenue in aid of public works the 'sum of £775,000, which if reckoned at 34 per cent, represents a saving to the State of £27,000 per annum for interest. The largest amount previously transferred on this account was £600,000. The receipts for the year from all sources amounted to £8,478,956, the expenditure being £7,774,926, leaving a surplus on the year’s transactions of £704,030, which, added to the amount of £13,795 left from tlio previous year’s balance after transfer to the Public Works Fund of; £775,000, gives a balance on the 31st March last of £717,825. The results of the transactions may be summarised thus: —Receipts Revenue £8,399,075, sinking fund ac - cretions £66,000, other receipts £13,881, total £8,478,956; expenditurepermanent charges £2,998,170, ..annual appropriations £4,736,806, sinking fund war and defence loans £39,950, total £7,774,926. The balance of ‘ receipts over expenditure "as £704.030 balance oil 31st March, 1906. £788,795, transferred to. Public Works Fund £775,000, leaving £13,795 which added to this year s excess of receipts over expenditure gives a balance oil 31st March, IJO7, of £717,825.

Ul cJw I xi TREASURY BILLS. Hon. members will be pleased to know that in accordance withi a. promiso made in last year s Budget £l5O 000 of outstanding Treasuiy Bills have boon paid otf. roducnig tlio floating loan, from £700,000 to £550,000. These Bills have been renewed from year to year, and have practically become a permanent debt. This is the first step takon towards clearing them oil. It is hoped to make further redemptions from time to time until they are all paid ott. SINKING-FUNDS. The proposals made in last yeai s Budget for establishing new sinking funds in respect of certain loans have been given effect to. The sum of £30,950, representing 1 per cent on £3,095,000, the amount of loans raised for war and defonco purposes, and £50,165, a like rate on the amount borrowed for purposes of acquiring lands for closor settlement, have been paid over to the Public . Trustee, and by him invested m securities returning 4 per cent.

CUrivica iouuiu***b' i . * PUBLIC WORKS FUND. Tlie balance brought forward to ; commence the year with was £492,-. 298. Eliminating transactions con . nected with the renewal loans, which appear on both sides of the. account; the fund was angmented receipts consisting of—loan. money, £1,125,686, premiums received on, sales and renewals of debentures£ls 834, transfer from Consolidated, Fund revenue £775,000, other re-: ceipts £1560, total £2,410,3i8. On the other hand the ordinary expenditure was £2,040,319, and charges and expenses in respect of loans ed to £10,659. making a total expenditure of £2,050,978, thus leaving a balance in the fund.at, the, close- of

tlio year of £359,400, which, with the balance of the 1900 loan of £ ,J C' 400 to be received, gave ways and means of £415,800 to start the current year with. THE CONVERSION ACCOUNT v During the year £841,966 of 3, pe- cent stock has been inscribed, of. which £241,700 was solAand the-pro-t ceeds used to redeem the £IOO issued under the Land, for Settle-, ments Consolidation Act, 1300, and £148,500' under the Aid to Public

Works Act, tho balance of £000,260 being issued in exchange for debentures which either foil duo or came in for conversion. £255,300 was con-

verted at pur, £4200 at £lOl, and £305,000 at;£lo3 promium paid, requiring additional stock to tho amount of £9900. Of tlio 3 per cent stock £80,135 was inscribed £75,555 for tho redemption of debentures and £10,590 for the oxponses of conversion. The public debt is, of courso, increased by tho conversion, but on

tlie other hand a considerable saving in annual interest payment is effected, as the Treasury was paying as high as 5 per cent on £OBO,OOO and

4 per cont on £730,100 of debentures dealt with. LAND* FOR SETTLEMENTS ACCOUNT.

During tlio past year debentures amounting to £530,040 were issued foy tho purchase of estates. Premiums received on tlio salo of debentures realised £54-15, and £IO,OOO was received for interest on moneys invested, while rents and other money from estates came into the account to tlio extent of £2o6,iw. On the other side the acquisition of estates cost £188,278, interest on debentures £188.012, first payment for sinking fund established for repayment of debentures £50,105, and other oxponses £3160. The balance of account at the closo of the year was £729,320. THE PUBLIC DEBT.

The gross public debt on tho 31st March last was £64,179,041, against £62,191,040 at tho close of tho previous year, an increase of £I;9BB,UUO for tho year.« Of the million loan authorised last session for public works £943,600 was received during tho year. The balance of £56,400, already placed, will come to credit during the year for the purchase of lands for close settlement. 'Debentures to tho amount of £530,040 were issued under tlio Lands for Settlement Consolidation Act, 1900, and £05,975 under the Maori Land Settlement Act, 1905, for the acquisition of land from Maori owners. To enable grunts to be made to local authorities £IBO,OOO bad been borrowed, £150,000 obtained to moot the requirements of tlio Advances to Settlers Office, and £20,000 to carry out tlio provisions of tho Advances to Workers Act. A further sum of £IO,OOO for scenery preservation was provided, and £66,000, representing debentures for accretions to sinking funds, disposed of the conversion operations responsible for the increase of £210,000. Notwithstanding the disturbed state of the money market no difficulty lias been found in obtaining all the money required, whether for renewal or new loans, on most satisfactory terms. : A premium of 2 per cent has been obtained for many sales, and as high as 1 po • cent received for renewals in several cases. £2.108,766 fell due during the year. Of this large sum £1,648,466 was renewed, £255,300 converted at par, £261,800 paid off, and £3200 remained, outstanding debentures having not been presented. Of tho increase of debt tho following items' may lie stated as of a directly interest-producing character : —For the purcha.se of land for settlement £596,015, for railway construction

and additions to oi>en lines £525,000, fo v loans to local bodies £IBO,OOO, for advances to settlers £150,000, foi

advances to workers £20,000, for New Zealand consols deposit £1384; total £1,482,399.

LOANS TO LOCAL BODIES. Under tins account up to the ,31st March last, the total amount of deueutures credited and issued and earned with tills account wa5£2,743,-

iUO, and the total disbursements nave been : To local bodies £2,194,138, to Lands and Survey Department, towards opening up blocks of land for settlement, £372,733, and to tho Public Works Fund £89,800, in exchange for debentures under the Roads and Bridges Construction Act, 1892. The balance at the credit of

Loans to Local Bodies Account on 31st March, 1906, was £7B-1, Debentures for £IBO,OOO were created and issued during the past year, and refunds of grants amounting to £Ol3 received as payment on account of loans made during tho year to local bodies (£133,628) and towards ing up blocks-of land for settlement (£47,371), leaving at the end of last year a balance of £397 to credit of

tho account. Of the total amount of local bodies debts inscribed to Ist February last the following figures will show the amounts and rates at which loans were granted:—Loans at 2 per cent, £48,890; at 4J per cent, £1,061,157: at 4 per cent, £207,000; at 3* per cent, £976,297; total, £2,287,104. Tliis system of providing cheap money for local bodies in carrying out works is undoubotdly a great benefit to the community, and that advantages are understood and appreciated is shown bv the steady increase ill loans applied for and granted, and I am glad to sav that paj 7 - monts of half-yearly instalments of interest on inscribed debts continue to be nnnctually paid. LOANS MATURING.

On Ist J uno last the million loan authorised by tile Immigration and Public Wonts Loan Act, 1870, fell a no. This loan was guaranteed by tlie Imperial Government, and debentures are commonly known as imperial guaranteed debentures. As non. members aro awaro o illy, £206,000 of these debentures were 'issued to tho public, the balance, £BOO,OOO, being in the hands of the Government. Provision was made for the redemption of the loan by a sinking fund, tlio annual contribution to which was originally fixed at £20,000 per annum but on the representations of tlio Imperial authorities it was raised in 1889 to £24,000. Sinking funds which have been managed by special trustees and invested by them have reached the sum of £165,000, consisting principally of securities. These funds were realised on Juno Ist and handed over to tho Government

in exchange for debentures. The sum of £200,000 was in the hands of tho Public Trustee and been arranged by conversion, and sinking fund will be devoted to tho extinction of £SOO,OOO debentures and the redemption of the debentures issued against accretions iis provided by the Consolidated Stock Act, 1884. In addition to this above there are other loans falling clue during the current year, amounting to £1,532.900. lam keeping tliese obligations well in mind,.and will at the proper time make satisfactory arrangements to meet them, either by way of redemption or otherwise, so that the high position which the credit of New Zealand holds may he maintained.

The receipts from the land tax exceeded the estimate by £42,342, and were £01,580 in excess of the actual amount collected ill tlie previous year. . . , Tho income, tax receipts show an increase on the estimate of £IS,SOG, an increase on the revenue of the previous year of £16,051. The total revenue from taxes produced £SS,2OS more than estimated, and £77.638 more than the previous vear. Tlie substantial increase in 1 the land tax revenue, notwithstanding the purchase of estates. by the Government and the steady increase in tlio income tax revenue, affordgrati tying testiinon.v to the continued prosperity of the colony.

FINANCE OF THE CURRENT YEAR. Returning now to ways and means for tlio current year, after careful ■ousideralion it is estimated that- tlie ordinary revenue will . amount to £8,200,000 or £199,075 less than last year.' I have deemed it prudent to somewhat discount the receipts from railways, Customs and stamps, which benefttted last year by the Exhibition. Moreover account must be taken of the large concession already referred to which I propose _ t o make under various heads. Against these amendTiOllts, however, must' be seen the normal increases’which are warranted by the prosperity of the country and buoyancy of trade. After weighing •Ml these factors 1 set down our reven- , , e to lie derived from Customs as £2.800.000. or £141,040 less than l_a_st rear. Railways should reach £2.255,000, or £71,696 less; stamps should yield £1,340,000, or £25,727 less;

beer duty should return £105,000, £2582 loss; registration hind other fees, less; and miscellaneous be short’of last year by £5885. On tlio other band it is anticipated that with the proposed increases in the new scnlo of land tax will produce £515,000, incomo tax £280,000, a total of £795.,000, £59,791 and £.6971 more tlutn last year. Territorial rovenuo is set down at £256,-

000, £SIOO hotter than tho previous year. Marine is expected to yiold £lO9 more. Honorable members will notice on referring to the estimated revenue table that I have not on this occasion set down any amount to be. derived from tlio issue of debentures against accretions of sinking funds, having decided to forego any fyoni thisi source in future, so that members on tho Opposition side will not be able to say our surplus arose by receipts from such moneys. Expenditure: Tlio estimated expenditure out of tho ordinary revenue for. tho present year upon all services is set down at £7,987,347, or £212,422

more than tlio actual expenditure last year. Of this increase permanent charges are responsible for £40,959, of which interest, and sinking fund absorbs £17,717, old age pensions £22,000. The aniounUj'equirod for departmental appropriations yd £171,463 in excess of last year. Nearly all classes show an iucrcneo compared with last year, but when you take into consideration tho. steady growth of tho population and requirements of tho people it must be expected that the expenditure will increase. The demand for increased postal and telegraph facilities neces sitates- an additional £70,000 being used. For education services we re quire an addition of £50,000; defence €31,000, lands and surveys £20,000 On tlio other hand'there is a reduction. in the amount for the Colonial Secretary’s department, £89,000, the votes for the census and International Exhibition, not being required foi this year, while tlie railway department will ho satisfied with £19,000 less than was expended last year. ESTIMATED RESULTS OF CURRENT YEAR,

Having now placed before member

tlio estimates of revenue ami expenditure I proposed to net forth tlie estimated results oil 31st March next.

Estimated revenue £8,200,000; estimated expenditure £7,987,347, excess of revenue £812,653, add balance from last year £14,523, total £930,178. From tin’s amount 1 propose to traiv for £700,000' to Public Works Fund, set- aside £30,000 for the Civil Service Superannuation Fund, and then leave a balance of £200,478 from which, of course, provision will bt made for the usual supplementary estimates. Public .Works: Due provision must be made Tor carrying on our public works. The balance on 31-st '• March, as already stated, was £359.400. To tins may-lie added £56,400, the balance of the million loan authorised last session. As stated, 1 propose to aid the fund by ensuring from the consolidated fund £900.001) of surplus of last year, thus making tlie total available for ways and means £1,115.800. This mount, however, is insufficient to meet -requirements, and I therefore-propose asking Parliament for a further loan, and as it will he necessary to provide for expenditure after the close of the year till Parliament meets I shall ask for,' one million. It is not my intention to

place this loan on the London market. as I have every reason to believe that .a - great, part of the money required can be obtained in our own country, so keeping the interest amongst our own people.

THE LAND. f GENERAL REMARKS. It has always been one of tlie cardinal doctrines of the Liberal party in Now Zealand that the prosperity of tho community as a whole is directly and' closely connected with tlie prosperity of our farmers. So far from there being any antagonism between town mid country they are interdependent. Neither can flourish alone, and the well-being of the one must re-act for good on the other. Guided by tbis principle the Liberal administrations of the past have striven to benefit both. The town, have been fostered by tariff reforms and industrial and humanistic legislation of various kinds; the country by liberal measures lor the settlement of the land and tin? financial help of tlie settlers, and by innumerable services rendered to all 'kinds of fanners by the Agricultural Department. In addition to this both town and country have shared tlie boon

of liberal railway facilities, cheap postal and telegraph rates ,development of trade routes and foreign markets, and many other advantages with which lion, members are fami-

liar. When the present Government took office they felt that the existing system of land tenure had in many, respects served its day, and no longer met the requirements of the people,' and therefore submitted proposals for a change. These have been discussed during the recess, and detailed proposals in the light of information since obtained will be submitted in due course for the information of lion, members. I may mention that, in order to prevent excessive holdings and at the same time leave scope for enterprise and energy of the settlers' a graduated land tax will bo increased oil estates of £40,000 or upwards in the unimproved value, but in computing the value of business premises ill town ami country and in case of country estates the principal homestead site will not be included.

‘Present holders of leases in perpetuity will be offered the option of the freehold, and instead of having the value fixed as in a case of auction as previously proposed this option will bo given at a price to he fixed by arbitration as on the date on which they give notice of their intention to purchase. Proceeds of sales will he put into the Land for Settlements Account, and be applied in acquiring new estates for settlement. .

Of the existing unsold Crown lands, a'substantial part, say, 9.000,000 acres, will be set iiKde as national endowments, and the residue will he opened on the optional system as at present, save that instead of the. present lease-in-perpetuity there will be a renewable lease, that is, a lease for a term of 65 years, with perpetual renewal for similar terms, the rent for each term being .fixed by valuation of tlie land without improvement as at- the commencement of each successive term. The national endowment lands will be disposed of only on the renewable lease system. The proceeds from endowment lands will bo devoted to education and old age pensions, 70 per cent, to the former and 30 per cent, to the latter.

NATIVE LANDS. . The native land* question, lias given every Ministry for the past quarter of a century anxious consideration. It involves two matters of immense importance to the country. First, the proper settlement of Maori people, so that they may become industrious citizens, and second, the utilisation of the vast areas that are under Maori tenure unused and not likolv to lie used by the Maori people. The Government was of opinion that before bringing in further amendments of the native land laws, laws that have been amended almost every year for half a century, there' shouhl be a complete and impart ini inquiry into the state ol - Maori lands, and also an enquiry as to the Maoris' views and opinions regarding the utilisation of their lands. It was leit that it could best be ascertained by a Commission that would be above criticism, and satisfactory both to the Europeans and Maoris. I asked his Honor the Chief Justice and Mr. A. T. Ngata to undertake the work. They consented to do so, and they have already dealt with half a million of acres of land, and have iorwarded to His Excellency five reports, which will be laid before Parliament The recommendations of the Commission, if given effect to, offer, 1 am glad to say, a hopeful prospect of using these lands for the common benefit of both races, by providing sufficient farms for the Maoris themselves, and opening large unoccupied areas for European settlement. Ol the land they have already dealt with, viz., 526.977 acres, they recommend that 219,115 acres be reserved for Maori occupation and farming, that 30.361 acres he made available for European settlors, and they anticipate that other large areas will he similarly available ip the near future. Maoris in various districts have asked the Commission to visit and confer with them as to the settlement of

their lands, and I anticipate that the labors of the Commission will go far to effect a solution of the land question. which has been almost a nightmare to successive Parliaments and Governments. The .Commission, in order that no delay may take place in carrying out the settlement of the people op tti? unsold lands, have in

their last report naked that their recommendations be submitted to Parliament lor action. 1 feel sure that Parliament will bo only to anxious to have such legislation as may speedily and satisfactorily settle the many iliiliculties that have arisen in Maori land administration. One of the primary causes of tho unsatisfactory condition that has for so long continued in reference to tho disposition and settlement of Maori land, particularly in the North Island, has noon.'duo to the undesirable methods

of private treaty. With the object of insuring that all section of the community may have an opportunity of Competing for all Maori lands offered from time to time, Parliament

will he asked to pass legislation air put into effect- this purpose, mid pro vide that all native lands proposed t bo alienated either under leaseboli or . freehold tenure shall he dispose) of, after full advertisement, by publi competition. LAND ENDOWMENTS.

A considerable 'amount of ilinili seemed to exist in the minds of lion

members last session in reference ti country lands, and the several districts to be set aside for endowineni purposes, and in order that the pro posals may be fully understood I desire to state that nine million acrei proposed to be reserved lor endow incut- purposes are distributed proportionately iu each district as follows: Auckland 900,000 at\es, Maw ke’s Bay 135,000, Taranaki 90,000

Wellington 90,000. Nelson 1,350.000 Marlborough 45,000, Westland 1.035,000, Canterbury 1,800.000, Otag< ‘1,250,000, Southland 900,000; total. 9,000,000. LAND FOJt SETTLEMENT. Under provision of the Land foi Settlement Act frequent, reference to the Compensation Court in order to arrive at a price to be paid for estates acquired for settlement have proved unsatisfactory. An alteration in the present system is. desirable. The Mouse will be ashed to legislate so as m provide that the valuation under the Valuation of Land Act shall be

die basis upon which the price is to be ascertained with 10 per cent added when the estate is valued between £2S,DUO and £50,000, and 2j per cent from £50,00(3 upwards. GRADUATED LAND TAX. In pursuance of the Government’s steady and persistent, endeavor to secure tho closer settlement for the country, proposals will be laid before Parliament providing for increased rates of graduated land tax in cases of very large estates, in order to in cilice their subdivision and to prevent aggregation. To this end I propose, while making no alteration whatever iii the present scale of graduate! land tax payable by owners of- less than £40,000 unimproved value, to substitute a new scale of graduate): I ill ■ tax for the preset ..n- in io- -])'•) t of owners of £4O, !')'.) i.ii- i-pr r. - eil value and over. This new scale (to be called the initial scale) will commence at £40,000 (unimproved value), with a graduated tax of 8s

per cent, and to rise thousand by thousand in successive uniform increments of one-fifth of one shilling per cent, until the maximum rate is reached at £200,000 (unimproved value), when it will lie £2 per cent, of the scale rate. Business premises in town and country will he exempted from the operation of the above-men-tioned additional rate, and in the

ease of country estates, the principal homestead site will be similarly excluded, the reason for this being tluit it is not intended, nor indeed would : t be justifiable, to attempt to have business premises and homesteads cut ill) or reduced or interfered with. They do not stand in the wav of the settlement of out* people on the land, and the graduated land tax is to prevent large areas becoming centred in individuals or companies. The rates of graduated land tax under the

initial scale are higher than the present rates, the new initial rate, £40,9(10, being (as already mentioned) Ss per cent., against the present tax which equals 7s 3jd per cent., whilethe new initial rate at £20,000 is £2 per cent., instead of the present- of 3d in the £, which is £1 5s per cent., while to this initial rate in all cases except those above stated must lie added the additional rate of 25 per cent. The total graduated land tax on a property of £40,000 (other than business premises), town or country (not owned by an absentee, who is liable at present to an addition of -5)1 per cent., on the total graduated land tax payable by him), will therefore be Ids per cent, of the* unimproved value, anil on one of £200,000. unimproved value. £2 10s per cent. These percentages represent taxes of 1 1-5)1 anil 0)1 in the £ unimproved value respectively. I propose to exclude minerals. standing timber, and growing flax , from assessment for land tax, both ordinary and graduated, except in cases where such arc. held for speculative purposes or as a -monopoly, and to assess instead for income tax tlio. profits derived. 1 submit that this will be fairer than the present oni" of dealing with mineral, timber, and flax industries for taxation. The present method lias proved inequable and unsatisfactory. In the past the assessment of minerals for land tax, owing to the great difficulty of estimating the value of mining property, has to far practically resulted in the escape of the owners of mines from land tax while, (unlike the lessee of a

mine, who is liable for income tax on profits), the owner lias hitherto been exempt from inconfo tax. The assessment of standing timber and growing flax for land tax, although practicable, causes hardship in connection with the graduated land tax in cases of the bona fide miller, and as regards timber, is calculated to unnecessarily hasten the destruction of valuable

forests. If all these proposals are given effect to this year, I etimate that the total land tax revenue will exceed the receipts of last year by

about £70,000. I am attaching to the .Budget a table showing graduations from £40.000 upwards, with the old and new rates:

luijiumj. The complexity of the existing Guscoms Tariff lias Ion" been a cause or complaint from niercuants and troiune to the Department. A 13m to simplify it will be introduced, and Hie Government intend to propose readjustment and remissions winch a ill facilitate trading operations, assist industries, and last but not least sensibly lighten the cost of many food articles of general consumption. Details' «ill be submitted bv resolution in the usual May. I liiav add that encouragement Mill be given to some of our important industries in cases nliero foreign coiiijietition ap-

pears to press unfairly on tho capital invested and depress the Mages of the workers. Tile question of the importation of articles of sliodiiv clothing has received very careful consideration. Tho matter is one of an extremely difficult nature to deal with. The* mere imposition of a duty Mill not suffice, aiul in m op«-

nioit legislation will be necessary. Tlie I whole subject has been examined with I a view to submitting proposals > to check a system under which our people are imposed upon bv not knowing the class of articles they are purchasing. i estimate that the total remissions of duty w ill amount to about £370.000, but with the expansion of trade and I lie development of llu* country it mav reasonably be anticipated that as in the case of the postal remissions the revenue will steadily recover. . By an alteration in the weight of the contents of packet tea the intention of Parliament has been evaded and quantities of packet leas, made slightly over the weight, have consequently been admitted free of duly. As packing can be done most satisfactorily in New Zealand the duty will be fixed at 2d per pound upon packets containing up ft) 51b m weight, and this should effectually prevent the evasion that has been practised.-. As a matter of fairness to tiie holders of duty-paid stock/ provision will be made for the proposed exemption or remission of duties | to come into operation oil the Ist i November Jicxt. .This, I am satisfied, will be> recognised as fair treatment to those concerned. Last -year the actual Customs revenue received was £292,040. In the proposals I am submitting I estimate that the reduction in Customs Tariff amount to £375,000. This must he. admitted to be a verr heavy reduction. and it will be found on examination to be chief!v in the direction of reducing the cost of the necessaries of life and upon that class of wearing apparel that is largely used bv the mass of the people. Among the principal items are sugar, currants and raisins, figs, dates, unground spices, and all articles of infant diet, which are made entirely free. Cotton, piece goods, dress prints and cotton tapestry, linseed and olive oil, and various other items are put op the free list. The

duty ou potatoes is altered from an ad valorem 0110 to £1 a ton, fixed so that tho anomaly of the higher the price tho greater tho duty will he removed. To prevent unfair exploitation of New Zealand markets the increases, including general and preferential, amount to £121,000. The difference between the decreases and increases is theroforo £254,000. The increases have been made with the object of assisting local industries and improving trade within the British Umpire. In this connection 1 may sac that the duty on agricultural machines and implements upon which the products of the soil aro so largely dependent is not increased. I propose, however, to renew the provision of “tho Agricultural Implements Manufacture Importation and Sale Act, 1900,” for three years, in order to prevent unfair exploitation of New Zealand markets. 11l boots, an alteration has been made with the object of keeping out tho cheap inferior qualities of boots that have been imported, and with this object a special duty per pair, in addition to an ad valorem rate, is proposed, hut the cost of those boots chiefly used hv the majority of people will not lie greater than at present, as this has been nlet in tho tariff.

Children’s boots 'and shoes remain oil the free list. Flour: I am keenly alive as to the

desirability of enabling our people to get the necessaries of life (and first among these bread) at tile lowest possible price. The question of removing the flour dut- has been given most anxious and lengthy consideration. The removal of tho duty would

practically atop wheat-crowing in Now Zealand, and leave us entirely dependent upon South Australia, or other supplies. Wo now consume in New Zealand not less than 5,580,000 bushels of wheat per annum, and last -ear it is estimated 222,180 acres of wheat were threshed. Our wheat farmers’ interests, therefore, demand the strongest justification before we prevent their growing this cereal. The removal, or a substantial reduction of the flour duty, would, it is believed, cripple every flour mill in New Zealand. Wo would then be exposed to flour importers who could, without difficulty, effect corners, as has frequently been done in America. The Hour-milling industry employs some hundreds of hands. Under the existing tariff, which has been con-

tinually in force for years, vast sums have been expended in establishing and equipping flonr-mills in different parts of tho colony. We cannot lightly make a change which will crush an important local industry like this without direct injury to inanv individuals. The duty on flour is Is per lOOlbs, and its removal would if the whole benefit of the remission were given to the consumer enable him to buy tho 41b loaf Jd cheaper than at present. If it could be secured it would be a great achievement, but experience too often proves that the full benefits of such remissions are not transferred to the customers, mid as the bakers do not deal in farthings' no reduction

in tho price of bread would result unless the bakers gave up the id per loaf, which is the whole benefit of tho remission. That they would is very doubtful, and for this uncertain gain to the community I do not propose that wo should make a change which would virtually extinguish our wheat-growing industry, throw out of employment large lyimbers of men and ruin our flour-millers. There are some indications that the reason of the present price lies in an entirely different direction. If upon file very close and thorough inquiry I am now making I am satisfied that

the present price -of bread is due to any monopolistic rin~ or combination the Government will not hesitate to introduce legislation this year to defeat such a combination, and secure to our consumers this necessary article of diet at a fair competitive price and with the responsibility that, my position entails I would impress uiion the flour-mi Ife rs of tho country that in the best interest they should remove any cause that exists for the -present position continuing. Further details will ho found in the copy of the resolution attached hereto. • »

RAILWAY UUiMsIhUCTION. Full details of the. Government’s railway works and. proposals will he given m the Public Morns {Statement winch will ho submitted by my colteaguo later on, hut 1 may, however, refer briefly to one or two points. .-Steady progress has heeij made in the 'North island with tho JMain Trunk rtanway especially. A large amount of very good work has been done at the railheads at the northern end. J he ends of the line are now within isrf miles or each other, and the intervening gap is bridged by a good coach service, so that the through journey between Auckland and 'Wellington by this' route is already quite practical, and tho travelling public and many honorable members and others have recently undertaken it. During the coming summer tho railways will be laid over the greater part of tho eighty miles’ gap, so that by the end of the financial year th i break between tile railheads should not exceed five or six miles. There is now, therefore, every prospect of the promise of completion of this great national undertaking by the end of 1908 being an accomplished fact. The section of tho Midland Railway between Staircase Gully and Broken River was duly completed, and opened for passenger traffic in time for the commencement of tho Christchurch Exhibition season on Ist November last as promised by my colleague tho Minister for Public Works. The completion of this section of line made it possible to establish a daily service by coach 1 and rail between Christchurch and Greymonth. This has been .much appreciated by the travelling public, and has been very largely availed of. A further section of the line between Broken River and the Pass is now in hand. Tenders for the steel viaduct over Sloven’s Creek have recently been accepted. Tenders for the Arthur’s Pass tunnel contract have been received, and the Government, after full consideration, has accepted the lowest tender, namely, -that of J. McLean and Son, for the sum of £099,794, so that the important work of connecting the east and west coasts by railway should he completed iu five years. The expenditure on railway construction last year amounted to no less than £9I9,GSY, and ill addition to this £308,150 was expended on additions to open lines, and £11(3,915 on railway dedication works. The expansion of tile traffic on railways in all directions calls for much larger expenditure efti rolling stock,' for it will be recognised that where an increase of traffic has taken place it is the business of the Government to make (lie necessary provision to enable the traffic to he properly conducted. The' absence of .such facilities must result not only in inconvenience to users of the railway, but would be detrimental to Hie successful establishment of fresh industries, and to tho carr'-in-r 011 of the work of opening tip and settling our country. To meet this position 1 projiose to' devote £350,099 uni. of the £I,OOO- - loan for additions to opened lines, so that the various programmes of providing rolling stock and other necessary facilities may be carried out without unnecessary delay. I may mention for the information of lion, members that the workshops are now engaged night and dav on special classes of work to insure the speedy turning out of further engine power and rolling stock.

POST AND TELEGRAPH. POSTAL BUILDINGS; _ The expansion of postal business in Auckland and Wellington necessitates further provision for carrying on tbo work of the department in dies© two cities. Competitive designs for the erection of a building upon the land acquired for that purpose in Wellington at an early date will be invited, and I hope to he able ibortlv to arrange for a sito in the city of Auckland to provide tor the requirements there, REDUCTION Oil' RATES. . The success of the reduction m postage and telegram rates during till* last few years warrant further concessions. I therefore propose to make the following reductions in rates: To reduce postage on inlandpostcards from Id to 111, thus bringing the post within tlio reach of the humblest member of the community; to reduce the fee for registered letters from 3d to 2d (at present far too many letters with valuable enclosures are posted unregistered); to

further reduce the inland letter postage, making the rate Id for the first four ounces, and id for each two ounces thereafter, instead of Id for each four ounces us at present; to reduce the postage on magazines to Id per pound, instead of Id for eight ounces. This concession, it is hoped, will ho a great convenience to country residents. I intend.at the same time to materially increase the frequency of the letter-carriers’ deliveries m the business portions oi tho four large centres. On the telegraph side it is intended to abolish at country places the fee of live guineas per annum at present charged for telephoning telegrams to the nearest telegraph office, and i- the principal towns to reduce the same fee to £l. Later on I hope to abolish the charge altogether, and thus in effect make every house fitted witli a telephone a telegraph office. The free delivery of telegrams in larger cities will ho materially extended. The mates of commission on money orders and postal notes will he substantially reduced. It is estimated that these reductions in the whole will mean a concession to the public of about £20,000, but after making duo allowance for the increased business likely to result from them 1 estimate that the loss of the department for the three months from the Ist January to the 01st March next will not. exceed £OBOO. This loss, it must he remembered, will, to judge by tho results of former similar essays rapidly diminish from quarter to quarter. The reduction of the post rate will bo made a few days before Christmas, and tho other concessions will come into force oil the Ist January next.

CONCLUSION. It may be convenient if I focus the chief fiscal and other financial concessions now placed before members. Remissions of taxation are: Customs £376,000, sheep tax £20,000, rates oi interest to local bodies £6OOO, post and telegraph rates £20,000, fees for inspection of dairies £B4OO, totalling £429,000, and increases—Customs £121,000, land and income tax £70,000, total £191,000. I can assure lion, members that I am not losing sight of the necessity of maintaining a strong finance. The concessions are justified by the steady prosperity of New Zealand, a Prosperity which has a broad and solid base in the great natural advantages being developed by our own people. , 1 have now concluded tlnit it is necessary in order

to place before members a fair and accurate statement of the financial position. My endeavor has been to place everything in the shape of an over-estimate. In making estimates for tho current year the Treasury is usually in a difficult position m dealing with the future, which no? is sari tv involves conjecture, but I have taken every care to keep well on the safe side. Hon. members will ag.ee that matters of the greatest importance an contained in +Jie proposals I have submitted. I feel persuaded that if given effect- to they will add to the general comfort of the masses of our people, and will assist in the speedy and satisfactory settlement of the land; it will give relief in every home by the substantial concessions that have been made upon the necessaries of life, as the result of which New Zealand will be in the happy position of having a really free breakfast •table. It is the aim of the Government to promote in every legitimate way the advancement of the country and the happiness of the people; hence these proposals, aiid I submit them in the confident assurance that Parliament will give effect- to them.

The chief of police of Des Moines (U.S.A.) recently received an appeal for protection from Mr. H. J. Higgins, who complained that scores; of women, mostly widows, were making love to him. ' Mr. Higgins is worth

upwards of £20,000, and is unmarried. “They haven’t let me have a minute’s peace for a year,” said he, “They worry me so that I am netting as thin as a rail. I don’t care a snar> for any woman on earth, and if they won’t let me alone I’ll get out injunctions.” The chief of police said he would do his best to protect tlie applicant against the widows.