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Under Schedule A, the ordinary income apart from balances on hand, and including profits on Railways, amounts to £60,126 3s. 10d., and while there is no probability of this income being diminished, there is on the whole a fair prospect of its being increased with the increase of population.

The ordinary expenditure on the other hand is slightly in excess of this amount. I entertain no doubt that on the whole, either by an increase of revenue, or by economising of items of expenditure, the equilibrium between revenue and expenditure will be maintained.

It will be borne in mind that a sum of about £20,000 should be in hand on the 30th of September, 1870, to carry on the expenses of the Government from that date until the receipt of the Pasturage Rents in the month of May 1871, and the estimate has accordingly been framed with this view.

Divested of what is in fact principally a balance of the Loan Account, the accounts show that nothing but the strictest economy will enable us to live within our means, and to effect this object we must abstain from indulging in any expenditure in excess of the amount provided for in the estimates. Any additional expenditure will be so much diverted from the amount I hope to see expended in reproductive public works.

The correctness of the estimate of last year’s revenue, with the exception of that from sales of waste lands, has generally been fully verified by the actual results during the period of the year which has elapsed. The moiety of the consolidated revenue falling to the Province, which was estimated at £60,000 for the year, has proved for the six months ending June 30 to be at a rate slightly in excess of that amount, the actual receipts being £32,629 6s. 4d., or at the rate of £65,253 12s. 8d. per annum; and the General Government services, Provincially charged, which were estimated to reach £88,500 in the year have for the half year been brought to charge to the amount of £15,760 7s. 9d, or at the rate of £31,520 15s. 6d. per annum. The Westland contribution to the 30th of May was at the rate of £20,000 per annum. Another cause of savings under the head of ordinary revenue is that at the beginning of the year, when it was uncertain what our full liabilities would be in respect to the payment on loans, it was thought prudent to make provision for the utmost limit of what would be required on this account, and a considerable balance will remain unspent under this head.

The receipts from the railway have also been larger than was expected, the excess of receipts over expenditure having amounted in nine months to £12,263 16s. 7d, or £3560 0s. 11d more than the estimated nett returns for the whole period of a year.

To the excess of actual income over what was estimated in the above, and in some other particulars, and to the savings which have been effected in a number of items of expenditure, is owing the fact that there is now to the credit of the Ordinary Revenue a sum of £30,000 more than is required to meet the charges upon it, and leave in hand a sum of £20,000 at the end of the financial year in September next.

I may mention that among the items making up this amount is the sum of £18,040, the proceeds of debentures redeemed from the railway contractors under the Great Southern Railway Contract, and brought to account under the head of Ordinary Revenue.

Under the loan account, Schedule C, there has been a saving in respect of expenditure on rolling stock and other matters, which leaves a sum of £5000 available for appropriation.