MAROOCHY RIVER AND NINDERRY MOUNTAIN, NORTH COAST RAILWAY
CHAPTER VI.
PUBLIC FINANCE (1903-1909).
The Morgan-Kidston Ministry.—Economy in Revenue Expenditure.—Great Reduction in Loan Outlay.—Equilibrium Established at the Treasury.—Retrenchment and Taxation.—Improvement of Finances.—A Record Surplus for Queensland.—Land Sales Proceeds Act.—Abstention from Borrowing.—First Loan Floated since 1903.—Sound Position of Queensland.—Value of State Securities.—Reproductiveness of Railways Built out of Loan Money.—Public Estate Improvement Fund.—How Recourse to Money Market has been Avoided.
On the 15th September, 1903, the Speaker's resignation was announced, and on the 17th Mr. (now Sir) Arthur Morgan announced the formation of a new Ministry with himself as Premier, his colleagues including the leader, (the late Mr. W. H. Browne) and another prominent member of the Labour party (Mr. W. Kidston). The new Ministry came in expressly to restore the financial equilibrium, the Treasurer being Mr. Kidston. Retrenchment became the order of the day, although the Estimates of the late Government were adopted, having regard to the fact that the first quarter of the financial year had practically expired. The pruning-knife was applied with vigour, and loan expenditure rapidly lessened, although existing railway contracts had of course to be completed.
On 30th June following, revenue showed an increase of £69,000, while expenditure had been reduced by £110,000, the financial year ending with a deficit of only £12,424. Loan expenditure had been brought down to £603,805, a reduction of no less than £418,600 compared with the previous year. In the middle of the session of 1904 the Premier advised a dissolution, which was granted; and after the general election the Ministry returned in such strength as to warrant Parliament in treating their policy, especially the financial part of it, as practically a mandate from the constituencies.
In 1904-5 the revenue being within £41 of the amount of the preceding year, while the expenditure was about £26,000 less, a surplus, the first for five years, was recorded for the nominal sum of £13,995. Seeing that loan expenditure had been reduced to less than a quarter of a million, that general retrenchment had been carried out, and that a recovery of trade and industry was not yet clearly apparent, the result must be deemed highly satisfactory; also, the Treasurer refused, after his first year of office, to continue the practice of charging to loan fund the amount spent by the Commonwealth Government on new works and buildings. The amount was not large, but even the £20,000 to £30,000 per annum so expended would, if transferred to loan, have improved the appearance of the State revenue account.
In 1904 the obnoxious but necessary Special Retrenchment Act was re-enacted for the nine months of the financial year still remaining, the rate of deduction being diminished by one-half, while provision was made that any surplus revenue for the financial year should be paid to the public servants. The year closed with a surplus of £13,995, which was at once distributed pro rata among the retrenched officers. The continuation of the Act was not popular among public servants, but it was deemed necessary in the interests of the wider community; and, as the net result was that a public officer only lost 7s. 6d. for every £1 deducted from his salary during the two previous years, it can hardly be considered unfair, having regard to the losses sustained by the general public during the same period. Another unpopular measure was the Income Tax Amending Act, which exempted from taxation incomes of £100 and under, but in regard to the larger incomes somewhat increased the taxation then levied. In 1906 a further Income Tax Amending Act was passed, adding to the taxation in some cases, but raising the exemption to £160 and granting an exemption of £120 on incomes between £160 and £200. In 1907 another amendment of the Act increased the exemption to £200 on all incomes, and reduced certain imposts, which had the effect of relinquishing revenue to the extent of £40,000 to £50,000 for the year. But times had then improved, and the Treasurer could afford this grateful relief to the poorer classes of the community.
Early in 1906, owing to the death of Sir Hugh Nelson, Mr. Morgan retired from the Ministry, Mr. Kidston becoming Chief Secretary in his stead, while still retaining the Treasurership. Mr. Morgan then accepted the Presidency of the Legislative Council. In the year 1905-6 the revenue had become buoyant, the increase for the year being £258,124. The expenditure had also increased by over one-half that amount, the year closing with the surplus of £127,811. Loan outlay also showed an increase, totalling nearly £300,000. In 1906-7 there was a revenue jump of £454,389, with an increase in expenditure of £186,085, the record Queensland surplus of £396,115 being realised.[a] For 1907-8 the revenue increase was £180,486, while the expenditure increase was £461,299, and the surplus only £115,302. Loan outlay also advanced to £1,033,676. Including the Commonwealth collections the total revenue for 1907-8 approached 5½ millions, or nearly 1 million in excess of the most fruitful year before federation.