The Pamphlet Collection of Sir Robert Stout: Volume 29
Services Of Year 1870-71
Services Of Year 1870-71.
|Consolidated Loan Act, 1867—Interest at 5 per cent., six months, to 15th July, 1870||823||15||0|
|Three months to 15th October, 1870||52,387||10||0|
|Do 15th January, 1871||53,710||0||0|
|Do 15th April, 1871||55,107||6||9|
These figures speak for themselves. It will be observed that in the former year there were four quarterly payments for interest of about £52,000 each; but in the latter we find only three quarterly payments—the one due on the 15th July being excluded, so that the total amount set down for interest was £52,000 less than really had to be paid. In excuse for this omission, it may perhaps be pleaded that the money was not absolutely due till 15th July, 1871, whereas the financial year terminated on 30th June. But if we admitted this reasoning, we should expect to find the account commencing with the payment on 15th July, 1870, because that would then fall within the financial year. We know very well there are four quarters in every year, and that if money is to be paid by quarterly instalments, there must be four of them.
In estimating, therefore, the amount of interest really chargeable to the year under consideration, we must add £52,000 to the sum put down in the published account. When this is done, the seeming saving is converted into a loss, and the interest account for 1871, like the rest, turns out to exceed that of 1870.page 11
To complete our review of disbursements we Have still to consider the items of Native and Military Expenditure.
The former shows an increase of £13,282, being only £21,496 in 1870, as contrasted with £34,778 in 1871; but, as this enhanced expenditure might possibly have been occasioned by the adoption of the so-called "Sugar and Blanket Policy," I was willing to suspend my judgment as to whether it was excusable until I had ascertained the amount of Military Expenditure, which, as a matter of course, we should expect to see reduced in a corresponding proportion.
On referring to the account of disbursements from the Consolidated Fund, I found that, in 1869-70, we spent on defence £244,615, whilst in the succeeding year only £83,993 was put down under that head, giving an apparent saving of £160,622.
It can hardly be necessary to dilate upon the favourable comparison ostensibly shown by these figures. Notwithstanding every other department showing an increased expenditure, the saving here indicated would more than counterbalance them all, and although the deficit for 1871 would still exceed that of 1870, yet seeing that part of it was occasioned by falling off in revenue (which might be attributed to misfortune), it would only be fair cordially to recognise the fact of a considerable saving in expenditure. In this seeming reduction, therefore, I thought we had legitimate ground for congratulation. It was the single bright spot in the dreary prospect of our affairs, the one green oasis in the desert of deficits But when I reflected on the matter, and remembered that every other item of expense had increased—some of them enormously—when I recalled to mind the very significant omission of £52,000 from one account, my mind rather misgave mo, and I resolved to investigate a little further before accepting the apparent saving as an actual fact. It happened that something caused me just then to look into what is called the Special Fund Account. This fund is maintained exclusively by loans. Nothing goes into it from the general revenue. It is supplied entirely by borrowing. The expenditure from it during the same period was of the most heterogeneous character, but we are at present concerned with one item alone. It is that of Military Expenditure, which is set down here as £171,134, in addition to the £83,993 charged against the Consolidated Fund. The entire Military Expenditure, therefore, instead of being £83,993, as anyone would infer from looking at the tabular statement of disbursements from the Consolidated Fund, is in reality £255,127, or £10,512 more than it amounted to in the year before.
When these entries have been rectified, we find, with one insignificant exception, that the table of disbursements is very brother to that of receipts—that as every source of revenue diminished, so every individual item of expenditure increased during the year under consideration.
I subjoin a comparative statement of the expenditure for the two years, indicating by a * the insertions necessary to correct the account.page 12
|Interest & Sinking Fund||411,711||8||7||361,315||6||5|
|Do do do||*52,000||0||0|
|Public Domains and Buildings||2,797||10||11||9,300||14||3|
|Law and Justice||54,926||7||6||63,753||9||11|
|Post Office & Telegraph||145,712||16||9||147,765||12||7|
Having thus reviewed the accounts of the Consolidated Fund, we have now to consider those of the Special Fund. The entries we find on the receipt sideare those of sums raised by sale of Debentures, Hypothecation of debentures, Proceeds of Treasury Bills, Loans, &c. The amount of money so raised for the year under consideration was £602,587. There is £20,000 put down for Treasury Bills renewed. £15,000 as raised by Sale of Debentures, and then again another sum of £14,600 raised by Sale of Debentures. There is £214,900 put down for "Debentures issued in Conversion and Consolidation of Loans" and £273,500 as raised by "Hypothecation of Debentures."
The entries in this account are somewhat confusing for we find the same amount figuring on both sides. Thus, in addition to the above, we have £204,000 set down as "raised to defray amount advanced under Temporary Loan Act" and we have it again appearing on the credit side as applied in "part" repayment. Such items, however, we will pass over, merely remarking that they appear to indicate that the accumulating floating debt when it had assumed sufficient dimensions had to be consolidated or converted into a portion of the permanent indebtedness of the colony.
There is however one item of peculiar interest appearing on both sides of the account. Among the receipts we have £1,709 as Proceeds of Confiscated Lands, and on the other side, to set against this, we have £6,122 put down as paid for "Management and Survey of Confiscated Lauds," or rather more than three times what the lands realised. Going to make up this sum we have £2,839 for salaries, £688 for extra clerical assistance, £1074 for surveys, £566 for purchase and compensatien, £238 for office rent, and £131 for the inevitable travelling expenses.page 13
|For a payment to be made by the Province of Auckland to Jas. Busby, Esq.||19,898||12||6|
|Balance due by the Province, under the "Loan Allocation Act Repeal Act 1867"||27,873||5||0|
|Balance due by the Province, under the "Loan Allocation Act Repeal Act 1867"||5,796||14||6|
|Balance due by the Province under the "Loan Allocation Act Repeal Act 1867"||1,180||19||5|
|Amount advanced for the erection of the Wanganni Bridge||15,000||0||0|
|Amount due by the late Province of Southland to to the New Zealand Government,||21,323||8||4|
|Other debts due by that Province||27,500||0||0|
As regards the £19,898 paid to Mr Busby, why was it paid? What did the Colony get in exchange for it? It is possible that this is in settlement of some antiquated land claim, but even if good value were got for the money in the shape of broad acres, it does not follow that they should be paid for with borrowed money. When a Province sells its land it deals with the proceeds as permanent income like that arising from rents or pastoral assessments, and if such receipts are credited to the current revenue it would be natural to expect payments for the purchase of land to be similarly debited against ordinary expenditure.
Then in regard to the £27,873 put down among the disbursements as "Balance due by the Province of Auckland," we can only suppose that it represents a bad debt owing by Auckland to the General Government, and instead of being defrayed out of income was met out of capital. A page 14 similar remark may perhaps apply to Taranaki and Wellington, but in the latter instance it would seem that at the very time it was necessary to write off £1180 as a bad debt, we made our bankrupt debtor a fresh advance of £15,000. Finally we have £48,823 to represent a part of what we have had to pay for the misdeeds of Southland.
|Interest on loan of 1867 omitted||52,000|
|Military Expenditure charged against Special Fund||171,134|
|Miscellaneous Expenditure as above||118,572|
|Probable real deficit||£463,706|
The next items claiming attention are £255,392 for Provincial Loans taken over by the General Governments, £810 for interest accrued on them, and £2,760 for charges and expenses attending their conversion. Then there is £6,000 handed over to Wellington to extinguish a loan raised under the "Harbour Reserves Amendment Act" and £250 to redeem debentures of the everlasting Wanganui Bridge.
|Lithographing Debenture Forms||£26||15||0|
|Proportion of Salary of Agent||187||10||0|
|Commission to England:—|
|Travelling Allowances and Expenses||3,082||10||2|
|Rent and Attendance, Telegrams, Stationery, Printing, and Contingencies||838||2||0|
£500 of the above is charged to the Consolidated Fund, £2895 to Immigration and Public Works; but with the exception of £500 every penny is defrayed out of the loan itself.page 15
The reader will observe that a good many of the items appearing in the disbursements of the Special Fund, we have not included in the £463,706, representing the probable deficit for the year. The omission, however, is of little consequence, for when the annual deficiency gets well into six figures a few thousand pounds more or less are not of much consequence. I mean that whatever course of action might be proper with a deficit of £500,000, would be equally advisable with a deficit of only £450,000. If it behooves us to bestir ourselves in the one case it does in the other, and if we make up our minds to look on with lazy acquiesence whatever may be our plight, we might as well spare ourselves the trouble of inquiring into the exact circumstances of our position.
The complete accounts for the succeeding year—that ending 30th June, 1872—have not yet been published, for, as a rule, it occupies fourteen or fifteen months from the termination of each financial year before the full particulars are made public. The reader will no doubt remember that, in speaking of the transactions of this year, one of our Colonial Treasurers fixed the deficit at only £33,345, whilst the other declared there was a surplus of £10,500. Until the detailed accounts make their appearance, it is of course impossible to determine by what process our enormous real deficit has in appearance been explained away; but it is obvious that neither of these gentlemen can have considered military expenditure, provided for by loan, as affecting the deficiency. Here is one item of £186,813 paid out of borrowed money—