Sessional_Paper_1893 — Page 301

"As regards the coming year I should state in the first instance that the revenue, which has been put at $1,906,396, has been estimated with great caution in view of the fact that the Colony was about to contract a loan. It was obviously my duty in the face of that fact to be very careful that my estimate of revenue should be moderate, cautious, and practically certain of realisation. I have every con- fidence that it will be realised, and I shall be disappointed if it is not exceeded. But moderate as it is, that estimate of revenue shows a surplus over thees timated. ordinary expenditure. And this estimate of ordinary expenditure, be it observed, is far larger than that of any previous year. As I stated in moving the first read- ing of the Bill, it provides for loss on exchange a sum of $77,651 in excess of the provision made in the Supply Bill for 1892. It also includes an entirely new item of $40,000 to meet charges in 1893 in connection with the proposed loan, a larger provision for pension by $5,400, and a more liberal provision for Hospital expenses by $7,623,-and yet the estimate of revenue, as compared with this unusually large estimate of ordinary expenditure, shews a surplus which there is every reason to hope may be more than realised. Really, sir, I can see here no ground for alarm and foreboding: rather I see reason for congratulation and satisfaction."

Sub-paragraph (j) mentions the increase in the ordinary expenditure. I have dealt with that subject in the preceding sub-paragraph, and I have only to add my concurrence in the views expressed by the Colonial Secretary in the appended passage from his speech on the Loan Bill.

"Attention has more than once lately been drawn by Unofficial Members to the fact that the ordinary expenditure has increased in recent years and it was argued the other day in Finance Committee by the honourable member, Mr. BELILIOS, who has indeed followed the same line of argument to-day, that if a certain reduction were effected in that expenditure it would not be necessary to raise the loan. Well, sir, the complaint of increasing expenditure is one with which Chancellors of Exchequer in growing communities are unfortunately only too generally familiar. The expenditure of growing communities has an awkward knack of increasing, and in most countries so circumstanced it is generally considered to be matter for congratulation if the revenue also simultaneously increases and it is found possible to confine the former within the latter. We, Sir, are in that fortunate position. In spite of a very severe and protracted fall in the value of silver which has necessarily increased our expenditure in various directions, the revenue for the last two years has more than sufficed to meet the ordinary expenditure, and I have no manner of doubt that it will similarly suffice during the current year also. It will not suffice to cover the cost of public works extraordinary in addition, it has not done so in the past, such cost having been largely defrayed from balances arising from the special fund derived from sources of income which are no longer available and from our previous loan; and it will not do so in the future. Nor is there any reason to regret that it is not practicable to cast the whole cost of great public works, which will endure for generations and largely benefit posterity, on current revenue, that is to say, on the existing body of taxpayers. I will go further and say that even if practicable it would still be wrong to do so. If the revenue sufficed to cover the cost of the public works extraordinary in addition to the ordinary expenditure the proper course would be to readjust the revenue so as to cover only the latter and provide a reserve fund for emergencies, such as extensive damages by typhoons and floods, and when that had been secured, and provision made for the public works extraordinary by a loan, to reduce taxation to whatever extent it might then be found practicable to reduce it. To expect or require the current revenue to cover the cost of relatively vast public works extraordinary in addition to the ordinary expenditure would be as mistaken in principle and policy as it is erroneous in fact to represent the revenue as inadequate for the ordinary expenditure. That the ordinary expenditure admits of reduction has already been stated by Your Excellency, and you have indicated the directions in which you consider that it may properly be reduced; but that any feasible reduction would suffice to provide the requisite funds for the public works ex- traordinary during the next 3 or 5 years as suggested by the honourable member opposite, is a wholly chimerical imagination. And even if it were otherwise, that would afford no valid argument against raising the loan, though it might furnish an argument in favour of reducing taxation when the loan had been raised."

Sub-paragraph (k) refers to the fall in house rents. The Senior Unofficial Member in a proposal which he very recently made to the Government (and in which he was entirely supported by another Unofficial Member, Mr. WHITEHEAD)