B — No. 2.

have not been of a more serious nature than might have been anticipated. At the commencement of the last financial year, there was a considerable deficiency. It was agreed that the charge of the deficiency should be divided over three years. Last year redeemed the share allotted to it. I have proposed that ample provision should be made to redeem the portion belonging to this year, so that in effect two-thirds of the deficiency may be said to be provided for; and I feel sanguine that the third year will duly complete the arrangement. It is true that, besides this deficiency, there are Treasury Bills out for services which, more or less, according to the principles which different persons may choose to lay down, might be considered as belonging to current expenditure. Eor example, some decline to consider the Defence expenditure abnormal; whilst others, with equal strength of conviction, consider that to make the whole Defence expenditure a drain upon the annual resources of the people, would be to entail on them an unnecessary burden, one which would not even be favourable to posterity, since it would prevent the existing generation from advancing the country as much as it might be advanced. But, putting aside all those conflicts of opinion upon the peculiar condition of New Zealand, I find, when I turn to a neighbouring Colony, New South Wales, that, without any very exceptional circumstances, the deficit of that Colony, inclusive of £381,000 Treasury Bills, amounts.to £825,000. No alarm exists on account of this fact. Every one clearly understands what it means. There is no wealthier community in the world than that of New South Wales, and, if it was thought necessary, the whole amount might be cleared off by immediate taxation. But they purposely leave it to float for a while, so that they may take time to consider whether they shall repay the whole or part of it out of excesses of current revenue, or whether they shall constitute the whole or part of it a permanent debt. There are several ways in which it is interesting to compare the conditions prevailing in New Zealand to those in other countries. I will state to the Committee the result of some investigations I have had made, leaving it to honorable Members to form their own conclusions. It is to be noticed, that comparative statistics create in different minds widely varying impressions. A comparison of the taxation of the United Kingdom with that of New Zealand is instructive. Owing to the want of the necessary returns, there has been great difficulty in compiling the results up to the exact dates desired. The particulars to which I will first ask the attention of the Committee, are taken from the Report of the Commissioners of Inland Revenue, dated February, 1870, and from the 11th Report of the Commissioners of Her Majesty's Customs. The period to which the figures relate is the English financial year, ending 31st March, 1869. The population of the United Kingdom is for the middle of 1869, according to the estimate furnished by the RegistrarGeneral. The returns of revenue for New Zealand, for purposes of comparison, have been compiled for the same period as those of the United Kingdom ; and the population of the Colony has in like manner been estimated from the RegistrarGeneral's returns for the middle of that period. The Native population —estimated by the Native Office at 36,000 —has been included, because the Natives probably contribute as much per head as the Europeans do to the Customs Revenue. For the year ending 31st March, 1869, there was collected in the United Kingdom — Rate per head on Population of 30,403,000. £ £ s. d. Customs ... ... ... ... ... 23,921,716 ... 0 15 7* Excise ... ... ... ... ... ... 20,450,386 ... 0 13 <H Stamps... ... ... ... ... ... 9,227,906 ... 0 6 0* Land and Assessed Taxes* ... ... ... 3,484,166 ... 0 2 SiIncome Tax ... ... ... ... ... 8,623,507 ... 0 5 7^£65,707,681 ... £2 2 10* * Those Taxes were as follow:— £ £ Land Tax ... ... ... ... 1,117,590 Horse Dealers ... ... ... ... 16,133 Inhabited Houses... ... ... ... 1,131,349 Hair Powder ... ... ... ... 975 Servants ... ... ... ... 1133,533 Armorial Bearings ... ... ... 68,787 Carriages ... ... ... ... 408,604 Additional 10 per cent., per Act 3 Vict. cap. 17 ... 1,613 Horses ... ... ... ... 435,574 Dogs ... ... ... ... ... 70,008 £3,484,166

Deficiency from 1870-71 being cleared off as proposed last Session.

New South Wales Deficit.

Taxation of the United Kingdom and New Zealand compared.

Great Britain, £2 20, 10jd. per head of population.

11

FINANCIAL STATEMENT.