Chapter XII. Revenue—Public Debt.

The total annual revenue under the administration of the general government is about 3½ millions sterling. The following statement was submitted to parliament in August last as the estimated revenue of the Consolidated Fund for the year 1879-80:

Ordinary Revenue.

Customs	£1,250,000
Stamps	190,000
Land-tax	150,000

Receipts for Services Rendered.

Railways	950,000
Postal	135,000
Telegraphic	90,000
Judicial	45,000
Land Transfer	36,000
Registration and other fees	33,000
Marine	23,000
Miscellaneous	50,000
Total ordinary revenue	£2,952,000

Territorial Revenue.

Land sales	£321,000
Land sales on deferred payments	47,000
Depasturing licenses, assessments, rents, &c	132,000
Total territorial revenue	£500,000
Grand total	£3,452,000

This estimate is exclusive of revenue derived from license fees, gold duty, &c., payable to local bodies.

The largest item of expenditure is the interest of the public debt, amounting to a million sterling. The net public page 87 indebtedness on 30th June 1879 was 21 ½ millions. There is in addition to the interest (£1,083,941) paid from the revenue yearly, the sum of £116,176 paid towards a sinking fund. It has been the fashion among some detractors of the colony to disparage it, by pointing out the large sum per head of the population which the debt amounts to, exceeding, they say, even the national debt of Great Britain in proportion to its population. This is altogether a fallacy, and the comparison is untrue. The consolidated debt of Britain is the accumulation of expenditure on war and non-productive purposes. The greater part of the colonial debt has been spent on public works, a most profitable investment, adding to the material prosperity of the people, increasing the revenue, developing the resources of the country, and forming a valuable asset in the general balance-sheet. The application of the various loans was explained by the Colonial Treasurer in the session at the end of 1877 in the following words, the accuracy of which his political opponents were not able to dispute:

'It may, perhaps, be interesting to state the purposes for which the several loans, general and provincial, which constitute our national debt, have been raised, and the amount applied to each. I have ascertained, by an examination of the several Loan Acts, that those purposes and amounts may be classified thus: About £8,300,000 have been spent upon railways, £3,500,000 on immigration, £4,400,000 on harbours, lighthouses, public buildings, roads, bridges, and other public works for opening up the country; £1,300,000 in the purchase of native lands, including the payment of the debt to the New Zealand Company; £2,000,000 in the suppression of the native outbreak, and the remaining £500,000 on miscellaneous purposes.'

Out of the whole it may fairly be said not more than four millions is unproductive, chiefly connected with Maori wars. The outlay incurred for immigration cannot be classed as unproductive. Every labourer imported repays in less than three years, by his contribution to the customs, the entire expense of his passage. If his productive labour be taken into account, the colony is recouped for its expense within a twelvemonth. Labour is the great key, the chief factor, of all progress. What would our genial climate, our productive soil, or our mines and minerals do for us, without hands to turn our capabilities to profitable account? It may be averred, without fear of contradiction, that three-fourths of our debt is a profitable investment, producing threefold and more to page 88 the colony, and to the commonwealth of mankind, than the interest which has to be paid for the use of the money. It must also be kept in view that where money is spent advantageously, its profits go on increasing in a compound ratio, adding continually to the capital of the country.

Before a just comparison can be made between the debt of the mother-country and the colony, it is requisite to add to the consolidated debt of the former, the whole cost of the construction of railways, docks, harbours, lighthouses, streets, turnpike roads, and bridges, which has been paid by private companies and local governing bodies in Britain, but in New Zealand has been defrayed by the state. The expending of eight millions on our railway system is not only proved to be a judicious and remunerative investment in itself, but the value of the unsold waste lands of the crown has been thereby doubled, which increase is alone sufficient to wipe out our whole national debt. The New Zealand railways have been cheaply made, land and law expenses having been trifling in amount. They would be a decided bargain to a syndicate of capitalists at twelve millions sterling. The unsold lands of the crown, thirty-five millions of acres, would pay the whole debt twice over.

If a proper balance-sheet were prepared, shewing the public liabilities of the colony on the one side, and its assets on the other, taken at their realisable value, the debt would disappear, and an enormous sum remain at the credit of the. colony, with numerous permanent improvements, such as roads, bridges, and harbours, not taken credit for. In the face of this statement, the accuracy of which cannot be impugned, there is not the slightest weakness in the financial position of the colony, and not the remotest cause for distrust in the amount of its public debt. It would be good for the capitalists of England were their investments, their Turkish and Egyptian bonds, their Russian loans and American securities, half as secure as every shilling advanced to this thriving colony undoubtedly is. Pouring a stream of capital upon a country which can be made thereby infinitely more productive, protected as the transaction is by English law and government, enriches all. The British lender receives his interest regularly, and the indirect advantage of an increased trade with his own people, and homes made for his superabundant population; and the colonist, by the application of the money to productive purposes, and not for personal extravagance, obtains such a lucrative return that he is able to meet all his obligations, and page 89 increase his capital by the quickening of the dormant resources of the country.

A colony or nation may be viewed in the same light as an individual or a joint-stock company. If borrowed capital can be profitably used so as to yield the interest due and something more, whoever heard of the operation being an improper or a dangerous one? On the contrary, it is economically considered highly beneficial. It is of the quality of mercy, not strained, but twice blessed, blessed to him that receives and to him that gives. It lies at the foundation of the whole success of our banking institutions. They are esteemed by economists as the most prosperous of all undertakings, because the profits of their shareholders are derived from the use of other people's money. Their position is relatively valued according to the amount of their borrowed millions. Debt in such cases, instead of being a burden, is the most important factor in the prosperity of the undertaking. The Lancaster and Carlisle Railway was the first in England to pay a ten per cent, dividend, for the reason that with a good traffic the company had a very small capital and a large amount of debenture debt.

The question therefore, as regards the debt of New Zealand, is not its amount, but whether it can be put to profitable account. That it has been so in the past is shewn in the remarkable progress the colony has made; and that it will still be so in the future is evident when the millions of acres yet to be improved, the forests to be cleared, the towns to be built, the mines worked, are all considered. We are only yet in the beginning of our enterprise. Our lands will carry by improvement double and treble the amount of stock; they can maintain in comfort ten times the present population. Our extensive coal-fields, our beds of iron, our silver, galena, antimony, and other valuable metals are almost untouched. In the Tuapeka district the gold-miner finds the wash-dirt filled with small water-worn nodules of cinnabar, the ore of quicksilver, indicating rich veins of that valuable metal yet to be discovered. Quarries of the purest white marble have been found on the west coast. In countless directions there are channels for the right use of the most abundant supply of English capital and English enterprise.

On 12th December 1879 a new 5 per cent, loan, amounting to five millions, was successfully floated at the Bank of England. The money is to be applied in the prosecution of public works and immigration, and the redemption of £800,000 page 90 debenture debt. More than twice the amount required was applied for. It will be for the colonial parliament to take care the money is judiciously expended. The railway system in England was dragged down at first by profitless branches, and our present bright prospects may be easily darkened by the government of the day yielding to local importunity for the construction of lines which cannot be profitably worked for years to come.