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Frisky Finance.

Mr. Vogel, in the middle of his financial statement, treated his hearers to what he called "some interesting statistics, comparing New Zealand with other countries." My opinion of Mr. Vogel's capacities was never very high, and since reading these statistics it has not improved. His object was very evident—to prove how great were the Colony's resources for taxation, and how right and proper its present terrific expenditure and downward credit-destroying course, and to do this by assertions of nonsense no matter how utter. The key to success in New Zealand's political life may be summed up in one word—borrow. A prolonged borrow-bawl is the soul of her politics, and any notions which may get abroad that are likely to page 46 startle the money-lenders would be disastrous indeed. Had he been addressing a skilled audience, the insult he offered to their common sense would have been resented in some way; and the fact that no one seems to have thought himself insulted does not weaken the disgust and alarm which all who know better, and have any stake in the country, must feel.

To enter very minutely into these "interesting statistics" would require more space, and more of the patience and attention of the public, than I can well count upon, but the following remarks may tend to modify any influence which such fallacies may anywhere exert.

1.—The people of a country can pay taxes in money according to the abundance with them of that money; hence their taxpaying power is regulated by the amount of their average net income and capital. What that average per head is, these statistics give not the remotest idea.

2.—The amount of the exports and imports of a country give no index to its wealth. A country without any foreign trade, as China, may possess very considerable wealth; and another, with such trade, may, as to the bulk of its population, be very poor. Many circumstances, moral and material, may beguile the superficial observer; for the extent and the page 47 profits of a business are two very different things. Wool is the chief export of New Zealand, for instance. A gentleman well acquainted with pastoral matters stated lately, on oath, that for years back there had not been a station in the country, with few exceptions, which paid working expenses. The same may be said of agriculture. This is true still. Since the rabbit plague, pastoral matters have been in most ruinous form.

3.—In the Colony one very obvious question may be put: To whom do these exports belong? When ancient Rome conquered a territory, it became her property and the inhabitants her tenants. The exports, say, of ancient Egypt were no doubt great, but then they did not belong to Egypt. In the same way it may be suspected that, were the amount of interest paid on foreign capital, and the amount of property owned by non-residents known, some damaging admissions would have to be made. I may add that the capital of old and wealthy States acts on new ones not always very unlike the doings of ancient Rome. Its domination is more polished, yet the day may be near when its action, both on land and labour, will be curbed—though in a less downright fashion than the French Communist would have.

4.—The high amount per head of the exports page 48 and imports of a new country like this show, if they show anything, the sameness of the employments of the people, and particularly the absence of manufactures and of fixed and accumulated capital. The older the colony grows, the amount must fall. An advanced state of society will permit the supply of many of its wants by its own members. Hence these exports represent far more of our present and comparative wealth than do those of an older country. Our circumstances compel us, so to speak, to put nearly our all in the window. The absence of fixed and accumulated capital chiefly stands in the way of an income and property tax.

5.—But public indebtedness must be taken into account. In every land whatsoever a public debt is a burden and a nuisance. When the creditor abides in the indebted country the payment of interest is but an exchange from one to another, and does not detract from the resources of the country. But where, as in the case of New Zealand, he does not so abide, the payment of interest does manifestly and very greatly cripple us.

6.—I believe, however, that, after a sense, the people of New Zealand are wealthier than those of Britain. The Britain of the South ought to clothe and feed 500,000 people a little better than the Britain of the North does 30,000,000. But wealth page 49 may be rude plenty or exchangeable. I have known many tons of excellent potatoes flung into the Clutha River to get them out of the way, and Mr. Vogel's acumen would not have taken them as payment of a very small tax. I also think that wealth increases faster here (though some doubt if it does), and that it is better distributed. Yet all this does not warrant the belief that the present taxation of New Zealand is not excessive, since the accumulated capital of England is reached by an income and property tax. Possibly we are now making money faster than in England; but that is manifestly no reason for supposing that her past savings have been destroyed.

7.—The best indices to the progress of national wealth are the net returns from labour, the net income and interest procurable from capital, and from the post-office revenue. The post-office revenue in the United Kingdom was 2s. 11d. per head of the population, as against 3s. 4d. in New Zealand. When the difference in the charges are noted, this does not say much for us, save that the internal trade between the town and country is here a very slight one indeed. Probably the telegraph revenue will shew a like result. The wages of the labourer are clearly greater here, and interest on money is higher, which shews only that there is more room for enterprise (not that enterprise has achieved great tax-bearing resources), page 50 and that the extra risk and trouble in prosecuting the same in these distant waters should be remunerated. Stamp duties, which are highly indicative of wealth, amount to 6s. a head in Britain, or nearly 50 per cent, more than here.

8.—But though it be true that we can bear the taxation of Britain, or more, that can be no reason why we should. Why should not a diminished instead of a greater taxation be the property of the colonist? Did a hungry bureaucracy and wildest public extravagance always gripe the throat of the settler? Those who would learn something of this should consult Dr. Adam Smith's chapter on colonies in his celebrated work. He there speaks in the highest terms of the cheapness and efficacy of the government of the North American colonies, and mentions the "moderation of their taxes" as one of the four chief reasons which have contributed to their progress. "The expense of the civil establishments of Massachusetts Bay, before the commencement of the present disturbance, used to be about £18,000 a year; that of New Hampshire and Rhode Island, £3500 each; that of Connecticut £4000; that of New York and Pennsylvania, £4500 each; that of New Jersey, £1200; that of Virginia and South Carolina, £8000 each. The civil establishments of Nova Scotia and Georgia are partly supported by an annual grant of page 51 parliament, but Nova Scotia pays besides about £7000 a year towards the public expense of the colony, and Georgia about £2500 a year. All the different civil establishments in North America, in short, exclusive of those of Maryland and North Carolina, of which no exact amount has been got, did not cost the inhabitants above £64,700 a year—an ever memorable example at how small an expense three millions of people may not only be governed but well governed." He then compares this frugality with the expensive ostentation of the Spanish and Portuguese in the same hemisphere, where "the sums spent upon the reception of a new Viceroy of Peru, for example, have frequently been enormous." These latter colonies are at this day in a state of chronic bankruptcy and disorder, without morals or religion; those former are perhaps the strongest nation on earth. I consider the financial position and the resulting taxation of this colony should be deplored by every thinking man, and I cannot conceive of any more pernicious counsel than that which would preach contentment and satisfaction with them. While people recognise their faults they may improve, but when they don't know them they cannot. The fact that in our short career of self-government we have a taxation of nearly £4. a head, as against 43s. in Britain, saps the foundations of that liberty our page 52 ancestors laid, and wrongs our posterity. What can we advance for ourselves in the face of such a truth? What kingdoms conquered, what victories won? Will the hardships we have endured, softened as they are by natural circumstances and modern art, compare with those of many other colonists? Mr. Vogel, however, is very well satisfied, for he says—"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." He gives also further evidence and reasons for happiness and contentment when he compares our position with that of the United Kingdom.

9.—Those comparative statistics show that we have a higher proportion of able-bodied and young men in the colony than in most other countries; but they show that if they can earn more in consequence, they do not always spend their wages on the most proper commodities—the consumption of spirits and tobacco being great indeed. [The consumption is now, I am glad to say, much less than it was 12 years ago.] Indeed the want of old men in a state seems no unmitigated good. They should give a steadier motion to things political and social; and had we more of them, perhaps some of the capers which the "Friskies" have cut among us might have page 53 been wanting. Age, even when ignorant, is cautious; youth, though educated, is apt to be passionate and reckless.

10.—The local taxation, according to Mr. Vogel, is not nearly so heavy here as in the United Kingdom. But local taxation is very heavy. We have road rates in New Zealand in abundance, and land reserves for education and religion which count up to millions of acres. These enormous reserves will, by being withdrawn from taxation, cause its incidence to fall the heavier on the general land and labour of the country, thus producing an indirect taxation, and one of the worst sort.

In the financial statement there are of course many things to be found suggestive enough. I have seen a 'Hansard,' and find that Mr. Vogel admits in one place that comparative statistics, such as his I suppose, are practically useless, and "create in different minds widely varying impressions." As if talking against time, he goes on to give them, however, and hopes before concluding "that they will be suggestive to honourable members of many and valuable conclusions." We hope so too.

1872.