In November, 1906, a brief but important Act was passed providing that all moneys received in payment for auction sales of town, suburban, and country lands, or of such lands if subsequently purchased by selection, should hereafter be paid into the Loan Fund Account. But proceeds of the land sold under the Special Sales of Land Act of 1901 were not included, those moneys having been already appropriated to the repayment of sums borrowed upon certain Treasury bills issued in aid of revenue in former years. It is the policy of the Kidston Government, however, not to alienate lands under the Special Sales Act; therefore the deficits of former years which had been liquidated with the proceeds of Treasury bills, and practically formed a floating debt, are being gradually compensated for by the transfer of annual surpluses to the Public Debt Reduction Fund, the total amount of stock thus cancelled having on 30th June, 1908, reached the respectable amount of £942,641 since the inception of the fund.
One of the wise determinations of Mr. Kidston as Treasurer was to keep off the London money market for several years at least after the rebuff received by his predecessor in 1903. Consequently he abstained from making any attempt to float a loan till March, 1909, when £2,000,000 worth of 3½ per cent. stock was disposed of. The net proceeds were equal to £94 9s. 6½d. per cent., a price about equivalent to that obtained by New South Wales a little earlier in the year. This, although dearer money than was obtained by issues of Queensland stock in the closing decade of the last century, compares not unfavourably with the prices obtained earlier in the financial year for other gilt-edged securities on the London market.
The net average rate of interest payable on the public debt of Queensland on 30th June, 1908, was £3 14s. 1d. per cent., but this rather high rate arose from the fact that more than a moiety of the total debt was incurred many years ago, when all Australian stocks bore 4 per cent. interest. The lowest average rate now paid by any Australian State is £3 8s. 9d. by Western Australia, most of whose stock was issued during the closing decade of the 19th century, and bears from 3¼ to 3½ per cent.
Speaking generally, Queensland stands well on the London money market at present, as, according to the "Commonwealth Year Book" quotations from the "Economist" newspaper, the "middle price" of her 3½ per cents. quoted on 'Change on the 25th September of last year was £100, a figure only equalled at the time by Victoria among the Australian States; and in December following £99, which was on a par with New South Wales stock on the same date, and only 10s. per cent. below the quotation for Victorian stock. These prices, however, for comparative purposes seem to need slight adjustment on account of the interest respectively due at date of quotation.
Having regard to the fact that the public debt of Queensland is higher than that of any other Australian State per head of the population, the policy of abstention from further borrowing from 1903 until 1909 has been vindicated in a most gratifying manner. A pregnant fact is that more than one-half the entire public debt has been invested in railways which in 1908-9 returned £883,610[b] in net earnings, all available for the payment of interest on capital, or equal to about £3 7s. 6d. per cent. per annum, which meant that our railway system was almost self-supporting, besides being the source of a large indirect gain to the Treasury by providing facilities for transport over 3,498 miles of line. It is no exaggeration to assert that directly and indirectly the railways assist the Treasury to the amount of the annual interest charge on the entire public debt of the State. Instead of the railways being a burden upon the taxpayer, as in former years, they have undoubtedly now become the backbone of the public credit. Seven years ago the interest charge on railway capital falling on the taxpayer amounted to £513,128. To-day, as shown by official figures, there is practically no such burden, and the existing state of the investment not only forms a complete justification for the railway policy of the past, but also for the vigorous way in which the construction of new lines is being pushed forward. With a continuance of good management it is apparent that the time is within measurable distance when the Railway Commissioner will, unless rates be reduced, hand to the State Treasurer a large annual surplus which will be available for lightening the public burdens.
Among other minor financial reforms for which the Morgan and Kidston Governments have earned credit is the creation of the Public Estate Improvement Trust Account, to which is charged the cost of roads, water supply, and other improvements made to Crown lands about to be thrown open for settlement, such cost being afterwards added to the selling price of those lands. Up to 30th June, 1908, 1½ million acres of Crown land had thus been made available for selection by a total expenditure of £85,784, the value of which has thus been enhanced, it is estimated, by more than half a million sterling. This amount will ultimately find its way into consolidated revenue. And all this with a debtor balance of the account on 30th June, 1908, of only £58,287. Allowing that the profit is shown in figures yet to be realised, the estimated margin is so large that the result cannot be doubtful.
SCENE ON BARCALDINE DOWNS, CENTRAL QUEENSLAND
