SUPPLEMENT TO THE “EVENING ECHO.”

ASHBURTON, AUGUST 7, 1878.

THE FINANCIAL STATEMENT.

Wellington, August 6. INTRODUCTORY. At she evening sitting the Colonial Trea surer (the Hon. Mr Ballance) delivered the Financial Statement in the following report. The first part is only a brief abstract, and shillings and pence are omitted from all the sums siated. The portions of the Statement having reference to the progress of the Colony and taxation, the tariff, &c., are given in full. The Colonial Treasurer first ex plained the steps taken during the recess to simplify the public accounts. In stating the ordinary expenditure and income for the past year, he excluded the Provincial liabilities, which were afterwards explained separately. EXPENDITURE POR THE PAST YEAR. The total ordinary expenditure for 1877-8 was £3,030,241, against an estimated expendi ture of £3,200,188, so that upon the voles of last session there was an unexpected power of expenditure to the amount of £175,946. There was a small excess under the heads of Law and Justice and Native Departments, while under the head of Education there was an excess of £29,261 arising from various causes some, of them being exceptional. But the total stated did not include all the disbursements of the year. Taking the land revenue paid to local bodies under the Financial Arrangements Act, together with £465,093 of surplus land revenue paid to counties, and other items, there was an amount of £725,307, which brought the year’s expenditure up to £3,755 540. Adding the gold duty, license fees, &c., paid over to local bodies, there was a total disbursement from the consolidated fund during 1877-8, of £3,069,240. As to the retention of certain sums out of the surplus land revenue of the Provincial Dis tricts of Hawkes Bay and Canterbury, the Colon’al Treasurer said “an estimate has been formed in the Surveyor-General’s De nartmenb that the cost of bringing up the arrears ef survey outstanding on the Ist January in the Provineiel Districts of Hawke’s Bay and Canterbury will be about £50,700 and £127,000 respectively. These arrears had nob been provided for among the Provincial liabilities, and as the surplus land fund was the actual proceeds of the land to be sur veyed, it appeared to the Government that that fund was the proper source from whence to defray the charge. The sums of £4512 Is LOd (being all that was available) in the case of Hawke’s Bay, and of £127,114 15s 3d in the case,of Canterbury, were accordingly retained for the purpose of meeting the charges referred to, and we propose that a <um shall be appropriated each year, accord ing to the estimate required for arrears of survey within the year within the Provincial Districts until either the money be exhausted or the surveys completed. The estimate of the work to be done this year will require £34,512 Is lOd, and this has been placed on the estimates for appropriation. We propose that the amount in excess of this sum should be placed in the Bank as a fixed deposit, the iccruing interest tb be handed over to the Counties interested, together with any balance of the piincipal not required for the work.” EEYENUE FOR 1877-8.

The surplus brought forward from the previous year was estimated by the then treasurer at £148,220. Of the sum so istimated only £123,110 had proved to be •ealisable, being £25,110 0s fid less than the estimate. The revenue of the current year was estimated by the late Government at @3,153,685, consisting of ordinary revenue 62,263,160, and territorial revenue £890,525. Ehe net revenue actually collected amounted o £3,915,315, consisting of ordinary revenue 62,328,752, and territorial £1,586,562, show ing an excess on the estimate of £761,630. [t would be interesting to the Committee to enow that the benefit the Exchequer had re reived from the colonisation of theland revenue was £91,740. The Customs revenue reached 61,271,961, or an excess of £72,961 over the sstimate. On Stamps there wa? an excess of 627,068, chiefly due to legacy duties, though she largest amount yet accruing from a single rstate was nob paid within the year, a echnical difficulty having caused delay. The ither excesses over the estimates were : ?cstal, £6358: Telegraphs, £2361 ; Land Transfer, £7078, and Miscellaneous, £15,074. Che income from Bailways was estimated at 6600,450, but had reached only £546,458, •bowing a deficiency of £53,991 ; this resulted rom certain lines not having been opened luring the year, as they were intended to rave been, and the expenditure had been pro* >ortionately less than the estimate. The irofifc for the year on railways was £145,151, igainst £84,182 during 1876-7. The land erenue had far exceeded the different esti nates formed last session, and was the largest amount yet collected in any one year. Com

paring last year’s revenue with that of the preceding year, the result was equally favor able. 'l'ha net increase on ordinary revenue was £423,919, and on territorial revenue £580,707. This showed an increase of £1,034,626, or, adding the increase in the revenues of local bodies, which amounted to £75,781, there was an increase in all re venues collected by Government last year of £1,080,411 over tho previous year. SUMMARY OF THE FINANCE. Summing up the results of 1877-8, the hon. gentleman said : “ The receipts for the year, os already stated, amounted to £4,445,560 5b 6d, the expenditure was £3,969,240 17s Id, the excess of receipts over expenditure being £176,319 8s sd. The actual balance in the consolidated fund on the 30th June was £529,705 6s sd, but this was re ducable by a sum of £5733 9s brought from the loan in aid of Provincial liabilities, by the balauce of the deposit account £93,069 17s 2d, and by sums held to the credit of several Counties £51,582 11s lOd. Deducting these sums from the total just re ferred to there remains £476,319 8d sd, agreeing with tho excess of receipts over expenditure. To this we add the assets realisable £11,453 3s 9d, making £520,772 12s 2d. The liabilities to be pro vided for out of this sum consist of 20 per cent land fund end other monies payable to Counties or available for special services, £279,134 17s 2d, and the ordinary depart mental services £121,169 2s lOd. These sums amount to £130,303 19s, and deducting them from the balance of £520,722 12s 2d there remains £120,438 13s 2d, which is the the surplus of the year 1877-8. Considering that the effect of the financial changes at the close of last session was to produce a large estimated deficiency, this surplus is as unex pected as it is gratifying. The question then arises, how should we dispose of it ? The Go vernment believe that if the railway system is to be extended, and carried on without inter ruption until it connects every part of each Island, public loans must be largely aided from some other source. I refer here only to railways which should be undertaken by the colony. ‘ For several years a moiety of the stamp duties was set aside for the purpose, but, as I think, rightly, the policy was dis continued. A surplus seems to be exactly one of the eourcci from which aid ought to flow, and we propose to place £100,030 of the surplus of the past year to the credit of the public works account, leaving a balance of £20,463 133 2d to be brought forward to the credit of the ordinary account for the present year. If the Committee approve of this mode of applying a surplus, any extraordinary in crease in the estimate of land revenue will in the future be applied to supplement the fund available for the prosecution of public works.”

THE NEW LOAN. After explaining the position of the Pro vincial Liabilities Account, the Colonial Treasurer described the raising of the £3,500,000. The Bank of England under took to issue the loan for a commission of £ per cent, The price adopted was par with a 5 per cent, rate of interest, and the total amount subscribed for was eight millions and three-quarters. The £3,500,000 raised in cluded one million under the Act of 1876, to meet the advance on short dated debentures falling due at the end of this and the begin ning of next year, and £2,500,000 under the Act of last session. £300,000 out of the lean was appropriated to provincial liabilities, leaving £2,200,000 available for public works. Tho guaranteed debentures realised, were still to remain available as a security on which to obtain advances in London. EXPENDITURE ON PUBLIC WORKS.

Out of the appropriations last year for public works. £1,167,583 had been expended and £1,126,157 remained unexpended. The total amount of loans yet raised tor immigra tion and public works sines the Public Works Account was created in 1870, was £13,700,000. This amount had been supple mented by a moiety of stamp duties £264,657 and contributions and transfers amounting to £75,963 showing a total of £14,040,620. The exp<nditure up to to the end of the financial year was £12,038,472 reducable by a sum of £54,791 repayable to the account and leaving a balance of £2,056,940 available for appro priation.

INDEBTEDNESS OF THE COLONY. The gross debt of the colony on the 30th of June, including the loan just raised, but ex clusive of the guaranteed debentures, was £22,491,111; the sinking fund accrued amounted to £1,584,992, and deducting this from the gross debt, there was a net indebted ness of £20,906,118; the annual charge on the 30th June for interest and sinking fund being £1,195,318. The issue of Treasury Bills was next explained, and the instructions sent Home as to operations unler the Consolidated

Stock Act of last session were stated. The hon. gentleman added, that to avoid the ob jectionable system of carrying qn expenditure for a considerable portion of the year by means of Imprest Supply Bills, it would be proposed to follow the practice of the House of Commons, and to go on with the Estimates in Committee of Supply at the earliest poss ; ble moment.

TOTAL ESTIMATED EXPENDITURE 1878-9. Dividing the expenditure under two. heads, viz,, permanent appropriation and annual charges, it was estimated that the expendi ture during the current year, under the former head, would be, £1,809,767, and under the latter £2,183,741. Adding £200,000 to re present fees, etc., payable to local bodies, there would be shown a total estimated ex penditure for the year of £4,193,509. It was intended that a number of charges hitherto made against the loan should be in future met out of the revenue, and it would be pro posed to charge against the revenue a sum of £44,000 for heavy guns for the defence of the principal ports. TOTAL ESTIMATED REVENUE FOR 1878-9.

In estimating the revenue for the present year, the results of alterations that might be proposed in the tariff would not be taken into account, but he would deal with revenue to be raised under the existing law. From taxation £1,490,000 was expected, £1,320,000 of that sum being from Customs and £170,000 from Stamps. Under the head of receipts for services rendered £1,112,145 was anticipated. These items would make altogeth r a total of ordinary revenue amounting to £2,602,145. Included in this was £710,000 from railways, or £148,000 in excess of the receipts under that head during 1877-8, making what was believed to be a moderate estimate. £1,220,677 was set down as territorial revenue. From receipts specially applicable £230,215 was estimated as receivable. These showed an estimated revenue of £4,062,037, or including the fees payable to local bodies estimated at £200,000, a total of £4,262,037- Add the balance of the surplus of last year, £20,468, and the whole estimated receipts for the year were £4,282,505, and deducting the esti mated expenditure, £1,193,509, there would be a surplus of £88,096 available to meet supplementary votes or contingent expendi ture.

PROGRESS OF THE COLONY. The public works account and the public trusts were next briefly referred to, aud the Treasurer then spoke about the progress of the colony. “ The most gratifying feature,” he said, “is the remarkable increase of exports for the year ending December 1877, which stand at £6,327,472, against £5,673,465 in the previous year, an increase of £654,007. The imports, unnaturally inflated in 1874 to upwards of £8,00,000, have fallen to £6,973,418, in dicating probably a more healthy condition. The quantity of wool exported in the calendar year of 1877 exceeded that of the preceding year by about 4.5C9,0001bs weight, the value showing an increase of £263,122. The value of gold exported in the the past financial year was £1,475,669, against £1,407,247 in the previous year, the increase being £60,422. The export of grain has slightly declined in year ending December, 1877, the returns being £290,415, as against £344,142.in 1876.” The hon. gentleman then proceeded as follows : REFORM OF THE CU3TOM3 TARIFF.

I have now to state the proposals we intend to make respecting the. tariff. Sir, every ob servation of the (fleet of the system of ad valorem duties which was applied to a multitude of articles in 1873 has led to its condemnation. It is a remarkable fact that the revenue derived from these duties has shown no increase, the re turns of lar.t year standing at the amount de rived in the year when the change took place, allowing for the portion of the year during which the measurement systems prevailed. I have had returns compiled to enable the Com mittee to see at a glance the non-progressive character, notwithstanding the unprecedented prosperity of thecolony,of the revenue collected under the ad valorem system. A few com parisons will demonstrate the position. In the year ending June, 1875, during the whole of winch the ten per cent ad valorem duties were in force, the revenue derived from this source was £364,558. For the year ending June, 1878, the revenue] from the same duties was only £330,770, a falling off of £33,788. During the same period all the other great items of revenue showed a large increase, presenting a remarkable contrast to those subject to the ad valorem system. The duty on tea, for instance, in creased in the same time from, in round numbers, £68,000 to £BO,OOO ; on sugar from £114,000 to £131,000 and on goods by weight from £63,000 to £77,000. We may

or may not accept the theory that these dif ferent results are to be only accounted for by a large proportion of fraudulent entries at the Custom House, for which tho ad valorem system gives superior facility, but the figures I have stated of themselves point to the ne cessity for reform, and justify the Government in proposing a change, even though necessarily incomplete, in the present session. The object we have in view is to change the ad valorem into specific duties, but we cannot, with the data and time at command, do more than make a beginning this year. It is no part of our proposals to increase the total revenue, but to make the specific duty yield as near as possible the amount derived under the ad valorem duties. The following are the articles on which the chauges will take place : Wool packs, corn-sacks, flour'bags, carbonate of soda, cream of tartar, tartaric acid, fish (potted aDd preserved) jams, &c., bottled fruits, mustard, pickles, sauces, starch and blue, lead piping, naptha, nails, wrapping paper and paper bags. Naptha was formerly on the free list but we have included it because of its relation to other, dutiable articles. The total revenue received from these artiijleß last year was £23,291 and we anticipate about the same amount under specific duties. To com plete the list we propose to include boots and shoes the revenue from which last year was £18,295 and the specific duties on which, are fixed on a scale well understood in the trade. Papers showing the proposed duties will be laid on the table. The effect of these changes is calculated to relieve trade of some of the opprobrium it was certain to incur under a system which has been condemned in nearly all commercial countries, while care has been taken that the young and growing industries of tho colony are not injured, but rather fostered. The tariff at present comprises two hundred and fifty specified headings, of which ninety-one are fixed rates, and one hundred and fifty-nine ad valorem. If our proposals are adopted, twenty headings will be taken from the ad valorem list, and added to the fixed, and.if the remission of duties be carried out, thirty-eight headings will be alto gether removed from the tariff.

TAXATION. “ I now approach the question of taxation. The house has decided, and. the country has endorsed the decision that our taxation bears with unequal pressure on dif ferent classes of the community, and that the time has arrived when we should address ourselves to the task of readjusting the burden which the colony is called upon to sustain. In one respect the time for accomplishing this object could hardly be more favorable than it is at this moment. It is in periods of prosperity we are freest to consider what in questions of taxations is just, as well as what is expedient, and when changes can bo effected with least apprehension of un favorable results. The colonisation of the land revenue has placed in the hands of the Government and the House a powerful reserve force, capable of immediate expansion in emergencies, but we must also recognise that it is a force which may be easily abused. Tho Government accept the position that, this great source of income should not possess entirely the character of ordinary revenue, to be dealt with as if it were a fountain never to be ex hausted. Attached to the revenue /rom land sales there are obligations which we cannot overlook. In the changes which we intend to propose, it might be comparatively easy to remit a number of taxes which are either oppressive or irksome, making good the loss to the Exchequer by increasing the land Bales, but the folly of thus dissipating our capital without regarding the primary interest of beneficial occupation would bo at once apparent.. We assume then, Sir, that the land fund was not colonised in order to supply the deficiencies in the ordinary re venue or to prevent a reconsideration of the question of taxation. If this view of the character of the land revenue be generally entertained we shall be able to approach the question of a change in the incidence of taxation, with our minds free from con siderations about the probable amount likely to be derived from that source in the future. Exceptionally favorable years in respect to land sales will mean simply that a large auxiliary aid to the prosecution of public works will be forthcoming.



Land Sales. —At the sittings of the Waste Lands Board on Monday, the sales amounted to 4327 acres 1 rood 8 perches, as follows : Ashley, 1764 acres; Selwyn, 1677 acres 1 rood 8 perches; Akaroa, 200 acres; Ash burton, 359 acre's ; Geraldine, 239 acres ; Waimate, 88 acres; realising £8654 12s.