FINANCIAL STATEMENT.

Gisborne Standard and Cook County Gazette, Volume III, Issue 317, 27 June 1889, Page 3

FINANCIAL STATEMENT.

Wellington, yesterday. * The Hon. the Colonial Treasurer delivered hie Financial Statement last night. The following is a condensed report:—• Our trade is reviving, our foreign markets have much improved, and our industries large and small with hardly exception show increased activity and steady progress. The policy of retrenchment and strict economy sanctioned by Parliament in 1887 has produced the result which sooner or later was bound to follow, and I have to-night the pleasure unusual for some years past of announcing a surplus. That surplus is not indeed a very large one, but it is a surplus, and those only who have really entered into onr financial difficulties for the last few years and felt the responsibility of helping to meet them, can appreciate to the full extent the satisfaction of again finding a balance on the right side of the account. The committee, I am sure, will feel as I do this satisfaction, and will at the same time join with me in the caution that we must be doubly careful lest with the return of increased prosperity there should be any return to unwise or unnecessary expenditure. The estimated expenditure for the year 1888 89, including the votes takon upon supplementary estimates and charges under special accounts, amounted to £4,084,054, the actual expenditure was £3,977.265. I may mention that the non-payment of any balance of the subsidy due to local bodies arises entirely from their neglect to make application according to law and that the total liability of £24,677 outstanding on the 31st March last, is not an unusual amount. Hon. members will observe under Education that one vote, public schools, has been exceeded by nearly i £6,000, and that an under issue of nearly U '£7,ooo has occurred on other votes, but chiefly on vote for school buildings, When Government found that it was necessary to exceed vote for carrying on public schools by nearly £6OOO, we thinking it right not to the li'.gv "total voted, £379,093, as the only means of accomplish■gVj this object to proportionately diminish the amount to be spent upon buildings, The actual amount received was £4,055,034. The customs duties yielded lass than the estimate, by about £55,892. The railways also yielded less than the estimate, by £38,865, but this was counterbalanced by a reduction in expenditure of a still greater amount, co that the net revenue received was £360,016. Registration and other fees fell short of the estimate by £8273, but the estimate included £11,588 for rates to be received under the District Bailways Purchasing Act. The only item of revenue in the receipts of the year which Can be considered exceptional, is a sum of £13,000 profit, earned by the Public Trust Office. This, by law, is made revenue, but for some reason the amount has been allowed to accumulate in the Office, and has not been paid into the public account year by year as it should have been. Of this sum, £2567 was earned last year. The estimated expenditure of land fund was £127,423. The actual expenditure proved to be £119,496. Of the expenditure £23,836 was paid to local bodies as contributions in respect of receipts from deferred payment and perpetual lease land, and £15,497 for rates on Crown lands, The estimated revenue of land fund was £119,000 ; the actual receipts were £lOB,OOO, The total amount received for land that has been sold for cash was £ll,OOB more than estimated, while the amount received for deferred payment land was £22,001 under estimate. The deficiency of revenue however rose not from the fact of less land being taken up than was expected, but partly because perpetual lease tenure was preferred to the deferred payment, and chiefly because payment of instalments due was not enforced. There was outstanding on 31st March last a sum of £46,520 due on deferred payr ent instalments and perpetual lease and o.uer rents. Government had all these holdings revalued and steps have now been taken k to recover amounts due npon new valuation, leaving for the decision of Parliament the question as to how the balance are to be dealt with. More settlement by bona fide settlers has taken place upon Crown lands during the past year than during any year since 1881. There have been 55,188 acres of land taken up on the deferred payment system, by 355 Selectors, 205,642 acres on perpetual lease by 765 selectors, and 70,987 acres by 653 cash purchasers. The financial results of the year show a surplus of £77,769, and I have paid off £50,000 of deficiency bills, being part of the bills for £128,600 issued last year. Hon. members will be pleased to learn that this year there is not only enough revenue to meet the whole of the necessary ordinary expenditure, Including a sum of £52,000 for purposes which have hitherto invariably been provided for out of loan, but we have also been able to pay off £50,000 of debt and still have a small surplus in hind. The statement of liabilities shows that the total amount on 31st March last, including those of land fund account, was £152,551, while on the 31st March, 1888, the amount was £144,046, but if we restrict the comparison to the ordinary revenue account, we And that the liabilities on tbe 31st March last exceeded those of previous years by £16,154. The liabilities of 1887-88 were, however, exceptionally low. The comparison should be made with the averages since 1880. That average was £166,600, being about £24,000 more than the amount of liabilities on 31st

March last. Such then are the results of the year, and I venture to think they are results with which the colony may well be satisfied, especially when it is remembered that all this has been accomplished with a large decrease In the public works expenditure, The net public debt is £36,979,661, as against £35,545,610 on the 81st March, 1888. The addition to permanent debt during last financial year was £1,616,613. The expenditure during the year} amounted to £240,258 fc r p works and £28,758 for charges and ■ ses of raising loans, including discount, reaving an unexpended balance of at credit of this account on the 31st March last. The principal items of expenditure were:—Bosds, £104,631; public buildIngs, £34,592; light houses, harbor works, and defences, £52,593 ; and telegraph, "extension £12,04?. lu addition to the balance of £303,891 at credit on the 31st March last, there is an available asset under the Government Loans to Local Bodies Act. The North Island Main Trank Hallway loan Of £1,000,000, authorised in 1882, was raised last year in conjunction with the million loan authorised last session. In anticipation of the raising Of the loan there had been expended up to the 31st March, 1388, £478,000. There was expanded £86,184, including £51,788 for charges and expenses of raisin; ’ the loan, leaving an unexpended balance o ’ £435,818, subject to outstanding liabilities amounting to £28,972. At the 81»t March, 1888, the balance at credit of No. 3 account was £546,244, including £150,000 temporarily raised under the Loan Act of 1887. The amount available for expenditure was £896,244. The expenditnre during the year was, for railways, £241,801, and departmental expenses £12,000 ; the charges and expenses of raising the loan making the total £273,165, leaving »n unexpended balance of £618,078, subject to liabilities outstanding

amounting to £174,394. To summarise, the balance of the public works fund as a whole on the Slat March, 1888, including the loans authorised but unrsieed, amounted to £1,968,635, During the year, this; amount was augmented by £3,000 under District Railways Purchasing Act, 1885-86, and £19,426 recoveries on account of excenditure of previous years, making a total of £1,991,061. The expenditure on public works amounted to £728,543, but including charges and expenses of railing loans, £101,912. The balance left fit credit on the gist March, was £1,445,670, subject to £363,639 of liabilities. The unexpended balance consisted of cash in the public account, £517,090; cash on fixed deposit in London, £280,000; temporary investments, debentures pl the loan of 1870 guaranteed by the Imperial Government, £476,000; debentures under Government Loans to Local Bodies Act, £25,000; Westport harbor loan debentures, £55,000; in the bands of officers of the Government, £56,606; total, £1,357,696; available under section 31 of “ The Government Loans to Local Bodies Act, 1886," £87,974; total, £1,445,670. In last year's Financial Statement I stated that Up to the SlstfMarah, 1888, £135,000 had been borrowed for the purpose of making loans to local bodies under the provisions of “ The Government Loans 10 Local Bodies Art, 1886,” that there bad been paid over to local bodies f 108,841, and that the engagements of the iWaryon MMitet gfloaas aot then tally

taken up, or not at all, but with regard} to which ail the necessary steps under the Act had been taken by the respective borrowers, amounted to £29,224. I also stated that in response to a notice published in the Gazette, applications to tbe amount of £78,330 had come in, nearly all of which had bean provisionally granted. I have now to inform the Committee that during the past year a farther sum of £75,000 was borrowed by the Treasury to make these loans, bringing up the total amount so borrowed to £200,000 on the 31st March, 1889, and that further sum to the amount of £83,475 were handed over to local bodies. During the year, refunds to the Treasury amounting to £940 werr made under section 17 of the Act, wbioh provides for the repayment of money borrowed in excess of the sum required to complete any public work. The balance at credit of the account at the close of the year was therefore £8624. The engagements st the same date in respect of these loans amounted to £25,920, irrespective of applications for £2775 from local authorities who had not completed all the necessary formation. The Treasury in all eases elected to inscribe the debts of local authorities in preference to requiring them to give debentures. The payments made between the Ist February and 31st March carry interest at 4 per cent, until the Ist February, 1890. Debentures to the amount of £110,550 have been converted, and on the 31st of March last the amount of debt inscribed in the register in respect of such debentures stood at £87,974, which, together with the money lent under the Act (£174,381), made a total of £262,355, lu March last applications for further loans were invited, resulting in applications for £63,311 being provisionally granted in April. Local bodies were, however, informed that a Bill would probably be introduced this session to increase the rate of interest payable on loans made during the current financial year, and that the loans provisionally granted would if accepted be subject to such additional rate of interest as Parliament might see fit to impose, not exceeding 6 per cent. I now oome to the consideration of the expenditure and revenue of the current year. Tha estimated ordinary total expenditure Is £4,117,331. Of this £1,613.205 is for interest, of £1,888,40-5 which appears as interest and sinking fund under the permanent Asts, about £275,200, although charged against revenue, is recovered to the consolidated fund by the issue of debentures. Ia the estimates I may call attention to ths increase in the Education vote which is necessitated by the usual annual increase of children of school sge, The estimates also include £25,000 for school buildings. Although we have increased ths salaries of officers receiving less than £2OO a year by a total of £4,522, and of officers of higher ,grades (to rectify inequalities which I last session announced should bo inquired into) by £1,605, and have also increased the expenses of the Native Land Court by £3OOO to enable the court to compote with the large increase of work coming before it, the proposed expenditure is £8938 less than the amount granted last year, provision is also made for the continuation of the subsidies to tbe local bodies at the same rate as was paid last year. The estimated expenditure chargeable against the land fund is £122,000, a small increase upon the expenditure of lest year, The total estimated expenditure is therefore £4,239,331.

Assuming the present taxation to remain unaltered, I estimate that we shall obtain for the year a revenue of £4,187,800. This amount includes the estimated sum of £275,200 which is paid as sinking fund out of revenue and investments of accrued sinking funds and then recouped to the Consolidated Fund by the eale of au equivalent amount of debentures. I have estimated the receipts from the customs at £1,550,000. I have reason to expect they will reach that amount, but trade has not yet become entirely settled, and still there are even yet, I am informed, stocks in hand cleared before the increased duties came into force. With reference to the railway estimates an increase to the revenue is anticipated to the extent of £28,800, but as the expenditure is estimated at £lB,BOO more than last year the net revenue receivable is only increased from £360,000 to £370,000. There is a satisfactory increase of £36,683 under the head of depasturing licenses and rents, arising from an increase in the rate of pastoral rents aud from the large area taken up on the perpetual leasing system, a system which is becoming popular and which gives the lessee the right to purchase within thirty years. The property tax, it is estimated, will yield under the new valuation £16,000 less a year upon the present penny rata than under the valuation of 1886. The land fund is estimated to produce £136,100 for the year. From both sides of the total account we get a revenue of £4,187.800 against an expenditure of £4,117,331, thus showing a balance of £70,469 at the end of the year, but to this amount I add what is left of last year’s surplus after paying off £59,000 of the deficit of the year before, namely £27,769, and get a surplus of £98,238, of which sum about £55,000 will be applied to the further redemption of floating. debt. I can see it is unfortunately impossible at present to deduct any law or even found any satisfactory argument as to the effects upon trade and industry produced by tne tariff. The time has been far too short, and the disturbing elements too large, especially the speculative clearances made ia May, 1888, in anticipation of the increased duties. One thing, however, I may point out is, that the tariff has been successful in

producing the revenue required of it. In regard to the Otago Central railway the Minister for Public Works, the Minister of Defence, several members of the House, the Assistant Engineer in Chief, and mystif visited the Central Otago district shortly before last Christmas. I was very much pleased with the country, and cams to the conclusion, without any doubt, that the railway ought to he continued if it "could he done without Infraction of the policy we all agreed on, that is without recourse to a new loan. We think it can be done and a bill to give effect to our proposal of at once continuing the line will be submitted for the consideration of Parliament. The Midland Railway Company have now raised three quarters of a million as a further instalment of their capital. Thi» s it is estimated, will enable them to make the stipulated expenditure at the Springfield and Nelson ends of the line, and to continue tbe line to Reefton and towards Lake Brunner, on the West Coast- It is a matter for congratulation that this important work, colonial in its character, is now to be pushed forward with vigor. To the colony its success moans not only the completion of the Main Trunk Railway system from and to end of the South Island, including the connection of Important centres now isolated, but also the permanent settlement of a large tract of country which, but for this railway, could only be settled very slowly and with difficulty, The general conclusion to be drawn from dur past experience, ‘is that village settlements supply a want, if formed of a. small number of settlers, in a neighborhood where some work can be conveniently obtained, where the land is of good quality, and most important of all, where the settlers are of the right sort. I Jhla genaral principle we think is clear, but ' its application in particular cases which we ; have had in view needs further consideration.

I may state, however, that in newly settled districts we have kept it In mind and have made suitable reserves. The Minister for Publid Works, iu his Public V s ? orkg Statement, will state what.we propose with regard to the Main Trunk Railway line north of Auckland, and will also make a proposal with regard to utilising the Puhlpuhi kauri forest. During the last two years 9,580 more people left than arrived in New Zealand, Of these 4,476 were males above fourteen years of age, This ia a fact which, esnecMiy" at first, must exolte regret and for it many remedies" have bean suggested, I have given the matter anxious consideration, for the Government reooguisad it as a duty to find a remedy if one was to be found ; but I came to the conclusion that in the aircumstances of this colony and the neighbouring colonies, no remedy was possible that we could consent to apply, for the only effective remedy in my opinion was the continuance of a large public works expenditure, It is evi. dent that during the many years’we have been continuously spending very large sums of money on public works, not the general Government only but the local bodies also, a numerous class has sprung up, who have been relyins on the public expenditure at a means of livelihood, and many 'of whom do not oats to live the lite of an ctain&ry ustlisr. As our expenditure oh public works decvsased so the tide of fntersolqnial turned ajeiast u». Taking taoreiy tue

within the colony itself our expenditure out of loau for work done in the colony during the year 1886-87 was in round numbers £1,140,000 and for th'e year 1888-89 £423,000, so that we have been spending during this last year at the rate of £617,000 per annum less than we were spending two years ago. This I take it would in itself far more than account for the wages c.f'lhe 4,476 males who have left us, but in addition to this there has been considerably decreased expenditure on public works by the local bodies. Of the total number who had been employed on public works some were no doubt absorbed by other industries, but the less versatile or more restless drifted away. There is no doubt that tbe recent exceptional discoveries of gold and, silver in neighboring colonies and the extraordinary prosperity which the colony of Victoria has enjoyed during tbe last two years, the same period during which we have been making the largo redaction in our, public works expenditure, have also ended ia a marked degree to induce many persons (who do not or perhaps cannot afford to look very far ahead) to try their fortunes on the other side. I have therefore come to the conclusion that a loss of a small percentage of our population was inevitable when we began seriously to contract our Urge public works expenditure, and that looking at the circumstances of the case we have passed through the ordeal remarkably wall. To the reduction of Public Works expenditure ia also largely traceable a reduction which has recently taken place in our railway traffic, and it is satisfactory to find that this is so, rather than that it should be due to a falling off of the legitimate internal trade of the country. Now, let "us take the last half of the same period, the last of the same two years of which I have just been speaking, and see what our permanent industrial population has been doing. So far as this is shown by our exports in every article of importance, withone exception, there baa been an increase during the last year, and in many of them a large increase. The export of grain has increased from 3,630,843 bushels to 5,584,488 bushels, grass seed from 161,550 bushels to 274,772 bushels, frozen meat from 40,363,873168 to 63,003,472ib5, and it neade no prophet to say that this important industry will only reach its limit in quantity and in price when coma efficient organisation for its sals and distribution shall have been established In the United Kingdom. Butter has inoreaseil from 2,272,620 lbs to 3,631,376 lbs, cheese from 3,334,616 lbs to 3,731,640 lbs, end sawn timber from 33,791,092 feet to 44,219,840 fast. The flas Indssiry may be said praotieally to have sprung into eslatanca during the last year, the export having Increased during that period froth 1,812 tons to 5,603 tons, and it is still rapidly increasing every month, But besides the iaareaas ei our escorts there has b?ea also in ths main items a marked increase in value. Tha value of the excess of exports, exclusive of wool, last year over those of ths year before may be taken at not less than 1.932,000. Ths one exception to which I just referred is an im. portant one, that is wool, and it aeems probable that there is a falling off ia the quantity exported, but io what extant it is difficult yet to sav, as experience tells us that September is thi only quarter in which an accurate estimate can be made, It is also satisfactory to know that the quantity of wool locally con. siimed in our mills has increased from 2 001,155 lbs in 1887 88 to 4,0(9,06§ lbs in 1888 89, and this increase must be set off against any decrease of exports, Ths total exports for the year 1837-88 were of the yalue of £0,418,845, while those for ths year 188889 were £7,845,1815. It will ba seen from ths figures I have j ust< briefly given, about woollen manufactures to what a magnitude some ci these industries have already grown, while as to the quality of their products we have ample proof that they are steadily and deservedly gaining in public favor, and that a large number of the artistes produced would uo credit io any country in the world.. The mining industry I am happy to say ia ia a more hopeful condition than it has been for some years. The yield of gold for yea? ending on the 31st March last was 208,909 oz, as against 191,961 oz for the previous year. Special machinery and appliances are at present being constructed, some or which arc in operation for working the auriferous beaches of ths Middle Island, and from trials already made are believed to be likely to prove successful, By improved systems of hydraulic sluicing also, low lying ground formerly unproductive and drifts considered valueless arts now worked at a profit, and it is hoped that the improvements which are being made, in machinery and appliances for the reduction and treatment of ores will solve the question of treating successfully the refractory ores of the North Island and bo the means of lodes being worked which hitherto have been considered non payable. Our coal mines are bein’ gradually developed, The output last year was 61-3.805 tons as against 558,620 tons for the previous year. Further extensive works in connection with this industry are contemplated, some of which are in progress, and when completed a large increase in the output of coal may be expected. Beoent discoveries in Stewart Island show that tin prq is distributed over a largo extent of country both in alluvium and lodes, and it ia inferred that rich deposits will be discovered. That portion of the thrift of the colony which is represented by the assets of Friendly Societies is steadily increasing year by year. According to the last Oviupited tables there were at the end of 1887, 24,928 members of registered Friendly Societies, and the value of their

accumulated funds was £383,515. The funds may be stated approximately st £410,0(10 st the end of 1888 and the increase f6B that year £25,000. In addition to these frinfis the assets of other societies registered under the Friendly Societies Act and of societies registered under the Trade Un'.Ous Act are approximately £12,000 and LB,OOO respectively. In the Savings Banks of the oniony On the Slat December, 1880, the amount held, in deposit was L 2,133,780, in 1887 it was L 2,407,775, and in 1388122,601,692. In 1880 the depositors numbered 01,296, in 1887 the number was 07,498, and in 1888 it was 103,046, The average amount at credit of each depositor was in 1886 L2B Bs, in 1887 L 24 fls, and in 1888 L 26 la. Between 1880 and 1888 the amounts of deposits increased by pearly L 565,000, and tha number of depositors by 11,750, Of a total number of 84,488 depositors, 62,831 persona, or nearly three four ha of Whole, had sums aot exceeding LBO at their credit. The number of persons having deposits in the Bank not exceeding L2O have increased from 57,868 in 1886, to 60.043 in 1887, and to 62,831 in 18SS, and thiris irrespective of similar small deposits with the Savings Bank established under tha Savings Bank Aot, The progress of the Government Insurance Department and the position of its policies and business may be viewed as affording farther indication , of the condition of that class of colonists (and it ia a largo one) who exercise prudent care and forethought for themselves and their families. During the past year tbe new assurances amounted to nearly LSO.OOO, showing an increase on the average of rseeht years and approaching the afiiou’ht oi the whole of tue 1 new’business effected by the foreign lire offices having bvaaohea in New Zea land. The average amount of the individual

assurance was larger than in previous years, being close on L 260, which is an increase ef fully L 59 per policy as compared with average of the three years imraeuiately preceding. The ayoraga'affiount of the policies di.cOntinued is smaller than that of any year since the Initiation of the office, while policies surrendered have been smaller- in their total amount than in aay preceding year. The accumulated fund has been augmented by L 123,000 during the year. This fund at the present moment exceeds a qsiiiion and a" half Sterling, having doubled In amount during the last six years,. The population of Now Zealand possess £24 of life Uttiranea per heed/ wiiilst in Australia thia average Is'£l9 per head, in the United States it is £B, in Canada £9, and in the United Kingdom £l2 per head, The number of policies possessed by every thousand of population in New Zealand is 80, in Australia 65, in the United States 15, in Canada'24,. and in the United Kingdom 26. The average amount of policy ill" the United Kingdom ia £487, in Canada £378, in Australia £3OO, in the United States £554, and in New Zealand £295. It is gratifying to note that while the average sum insured by each policy is less in New Zealand than elsewhere, the total number of policy holders in thia Solony 6 jars a a larger proportion to' its total populMion than is the case in any other English speaking community, and that though the individual policies eversga a less sum than elaewhcrs, the number is so mueb greater that the total nun sesured divid«d|*mongBt th® whole pops-

lation gives a larger sum per head than anywhere else. This coupled with the facte I have given, concerning the Savings Bank and Friendly Societies, means that in the means of saving, and the will to save, the people of New Zealand are at least not behind their kin in other parts of the world. The last fact I will mention is an important one—the greatly improved credit of the colony in London. I will give only a single instance. Eighteen months ago our 4 per cent, stock was selling rather heavily at 961; it is now worth from £lO5 to £lO6, with an active market. I venture to to think we shall see a further rise when our true present position comes to be fully known, and a fair and Unprejudiced comparison is made between New Zealand and tha other Australasian colonies. In giving prominence to these encouraging facte I desire again to impress on hon. members that our public expenditure will still require the most watchful care. My object has been whilst drawing attention to many satisfactory evidences of increasing production and improved values, to lead to the conclusion that it is by such means aided by public and private economy rather than by large public expenditure, that the permanent prosperity of the colony will be secured. I have, I believe, laid before the committee all the information needed to enable hon. members clearly to understand the financial position of the colony, and to judgeof its substantial and moat satisfactory progress, especially in the occupation of the land and steady, I might say the rapid, developments of its industrial enterprise. In 1887, in disclosing to the Committee the difficulties which then lay before it and the Government, I ventured to say with the necessary effort and sacrifice those difficulties were within our power to overcome. Parliament and the people took entirely the same view and the facts and figures which I have just laid before you shew, I trust, beyond question, that they were right—right., I say, not only in. the belief that wa coqld overcome our financial difficutties, but in tha deeper underlying belief in which the other reataa, the ucured belief in the vitality and resources of ths colony.