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The Pamphlet Collection of Sir Robert Stout: Volume 24

Chapter I. New Zealand Deficit

Chapter I. New Zealand Deficit.

Two years have passed since the public were told on the hustings (Nov., 1875) that a deficit was coming upon New Zealand. The papers, being owned by politicians, who had their own purposes—dishonest purposes—to serve, suppressed the speech, but, thanks to the kindness of an independent proprietor, certain portions were detailed piecemeal through the columns of the Globe, and then the astonished public learnt a few faint outlines of a reform needful in the highest degree in every part of the Government machinery in New Zealand. The Government adopted same of the most trivial reforms, but totally neglected the most useful, namely, the monetary and taxation reforms; arguments, facts, biting satire, were thrown away upon them, and we have been plunged by the great K.C.M.G. and his ignorant followers into a very serious mess. "What else could be expected? That a gallant Major, untrained but to war, should plunge into hot financial war—that an ex-policeman (now the Hon. C. C. Bowen), untrained in commerce, venturing his rash hand on the helm of State, ignorant of financial starboard! or port! should steer our gallant ship on to the wild rocks of deficits! twenty-three million loans! false taxation! and national insolvency!

What else could be expected from a Parliament mainly composed of a medley of fill trades and professions, skilled in talk, unskilled in finance, openly complaining that "they cannot understand the accounts;" or, as the Hon. E. W. Stafford so pitifully says, "the accounts are only intelligible to experts."

The following figures are taken from the Financial Statement given to the House, and are only corrected so as to exclude the loans that cover from view the real deficit. The public, by a little patient examination, will understand them, and will see that instead of a surplus there is a deficiency:— page 6
Year's Receipts to 30th June, 1877.
£. s. d.
Customs Duties, &c. 1,199,378 15 0
Customs Bonded Stores 5,536 19 2
Customs Fees, Light dues 15,806 3 10
Pilotage, Harbour dues 4,940 2 0
Stamps 122,670 18 9
Post 86,547 14 0
Telegraph 63,983 13 1
Law 41,982 13 3
Registration Land 13,646 15 5
Registration Deeds 16,482 12 6
Registration Births 4,757 3 9
Registration Crown Grants 4,053 14 9
Sheep Fees and Fines 3,548 8 6
Miscellaneous Fees 3,694 15 3
Incidental Receipts 27,552 0 3
Total (8, B2) £1,614,582 10 3
Deficiency carried to Deficit Account 145,302 19 5
£1,759,885 9 8

Note.—The £1,220,000 Customs and £122,000 Stamps are collected from the workers (that is, Servants, Labourers, Mechanics, Traders, Clerks, and Professionals); so are the bulk of all the other imposts, for when merchants or others pay stamps, harbour dues, &c., they charge all such in the price of the goods to the customers, that is, the workers or consumers.

I class the Colony as 230,000 useful workers; 20,000 rich; 150,000 babies, paupers, idiots, dummies, loafers, &c. Total colonists, 400,000, Maoris—10,000 useful and 40,000 useless.

page 7
£ s. d. Civil List (5, B2) 27,573 7 9 Interest and Sinking Fund £603,062 0 2 Interest five months, due but not paid 37,500 0 0 £700,562 0 2 Less charged to Railways 415,000 0 0

Year's Payments to 30th June, 1877.

285,562 0 2
Under Acts 34,858 16 9
Class I. Public Departments 88,929 1 0
Class II. Law and Justice 145,230 10 0
Class III. Postal and Telegraph 217,472 12 6
Class IV. Customs 61,383 16 5
Class V. Miscellaneous 66,832 0 4
Class VI. Native 37,417 0 6
Class VII. Defence 66,315 2 7
Class VIII. Public Domains and Building 24,727 3 6
Class X. Subsidies to Boroughs 53,157 13 0
Capitation and Special Allowances 148,811 3 6
Half Stamp Duties 28,612 12 2
Services not provided for 12,931 17 9
Refunds of Revenue 4,368 0 0
£1,304,182 17 11

Class IX. Rails—paid £220,722 15 7 Interest on cost— £8,300,000 at 5 per cent. 415,000 0 0 Renewal Fund— 860milesat£120 permil 103,200 0 0 Paid £738,922 15 7 Received 288,220 3 10 455,702 11 2 Total paid £1,759,885 9 8

page 8
Deficiencies Tabulated.
£ s. d.
Consolidated Fund—Per account 145,302 19 5
Bank Overdraft to pay Liabilities 237,500 0 0
Promissory Notes to make up Land Fund 150,000 0 0
Loan used for Defence 30,000 0 0
Loan to Land Fund out of Taxes 53,005 19 9
£615,808 19 2
Take off Surplus, 1875-76 51,928 17 6
Paid Deficit, 30th June, 1877 £563,885 1 8
Unpaid Deficit (16, B2) 259,556 0 0
Total Deficit, 30th June £823,431 1 8

The manner adopted by the Prime Minister to conceal this deficit is highly objectionable. First, he says, we terminate the year on 30th Tune, and so we must not count outstanding accounts, though at page 16, B2, he says the outstanding liabilities of the Province are £259,556, and at page 4 he states the Bank overdraft of four provinces is £106,268. But worse, he gets money on Bank overdraft, uses up the whole of our Reserve of £800,000 Imperial Guarantee, issues Treasury Bills, puts all these down as Receipts, when he knows very well he has only staved off the evil day for a few months, and says, I have a surplus; the Bank Ledger is proof." The House failed to see that blunder. How can two Bank Ledgers, showing over a million overdraft, due in 1878 and 1879, show a surplus. That was childish. His own confession contradicts himself, when he tells the House (page 16) that we must raise more money to release the Imperial Debentures.

The real outlook is £1,500,000 Bank Overdraft, 1878
  • £260,000 Treasury Bills
  • £259,556 Provincial Liabilities
  • £800,000 to release Imperial Debentures
  • £50,000 to re-fund to Taxes

And a balance to be placed to Rail renewals.

The Ministry perhaps think that the London Stock Exchange has no more perception of the real state of things than they have themselves; but to candid men I say the Stock Exchange did right to refuse your 4,000,000 loan, which a Jew broker took up; they did right to refuse the 1876 loan, which the Bank did at 5 per cent.; it is a real kindness to New Zealand, an endeavour to open your eyes, to show that, however false the conclusions given to you, however corrupt your minds may be, however ignorant you are as a nation, they at least will not aid page 9 and abet your wrongful wishes. To them, as to me, the actual position of the Ministry is £823,431—deficit covered by bills and overdrafts; no talk, no ocean of babbling lawyers' tongues will alter the awful fact. To them, as to me, it is a solid fact that your Railways last year were a dead loss of £455,702, and that you took it out of the poor and let the rich, who got the Railways, pay nothing at all. To them, as to me, it will be plain that the Government whip put up Mr. Woolcock to sound the House about Taxation, and tricked the unwary members into a declaration against present Taxes, that their rich friends might feast on the poor for another year. To them, as to me, it is plain that the whole Parliament made a gross blunder, that the true amendment was—"That the question of Taxation shall be considered when the Committee are considering Ways and Means." Had I been there I should have moved that.

The Government propose to borrow two millious more! Where? London is deaf! What will you do? Bankruptcy! Sale of Railways! What will you do? Stop all works! Seize Land Fund! Stop all the subsidies! Pray to Sir Julius, who is the real author of your troubles! Anything, I suppose, except the good old plan—"Trust in God, and keep your powder dry;" or, to say the very same thing in other words,—"Work out your own salvation while God works it for you."