PUBLIC FINANCE (1898-1903).
The Philp Ministry.--Large Surplus.--Loan Acts for Seven and
a-half Millions Sterling.--Drought Disasters and Sacrifices
for Federation.--Accumulated Revenue Deficits of over
L1,000,000.--Rebuff on London Stock Exchange.--Resignation of
Philp Ministry.
When Mr. Philp took charge of the Treasury in March, 1898, the credit
of the colony appeared to have been fully restored. True, the funded
public debt had grown to 331/2 millions, but the population had also
increased to 484,700, so that the public debt proper was slightly more
than L69 per head. The year 1897-8 closed with the small surplus of
L20,724 at the Treasury, and revenue was steadily improving. In June,
1899, Mr. Philp had the largest surplus realised for seventeen years,
nearly L150,000, but then an era of drought began. Still revenue
continued to advance until the establishment of federation in 1901,
when financial trouble was accentuated. The year 1899-1900 had shown a
small surplus of L47,789, to be followed by three successive deficits
aggregating L1,151,469. Mr. Philp, an old colonist, an experienced
business man, and with a full knowledge of its varied resources, had
unbounded confidence in the future of the State. Soon after he became
Premier at the close of 1899, he essayed a bold public works policy,
and during his first three years of office he induced Parliament to
sanction the borrowing of nearly 71/2 millions sterling. But he did not
issue the whole of the last 21/4 millions. Owing principally to the
South African war, colonial stocks were not high in favour in 1900,
and the Queensland Government, acting on the best advice, decided to
call for tenders for the L1,400,000 of 3 per cent. stock placed on
the English money market in July of that year. The loan only realised
L91 5s. 11/2d. per cent., about the same price that was obtained by New
South Wales and West Australia in the same year. Of the balance of
the loan, L900,000 was taken up in Queensland by the trustees of the
Government Savings Bank at L97 per cent., and L46,600, sold locally
and bearing 31/2 per cent. interest, realised L99 10s. 81/4d. net, the
local market not being affected by the adverse influences and the
choice of investments which operated in London. In October, 1901,
for L1,374,213 offered in London at 3 per cent., the extremely low
price of L88 12s. 4d. was obtained; and in 1903, when the then
Treasurer (Mr. T. B. Cribb) again sought to enter the London market
with 31/2 per cent. stock, he could only place L750,000 worth at the
low rate of L92 19s. 113/4d. Times had indeed changed, and for the
moment the State was practically excluded from the London money
market. The balance of the loan has been, and is being, issued in
Queensland, about L456,000 being still unsold.
The year 1899-1900, from the revenue standpoint, was the record year
of the century. Wool brought extremely high prices in London, and loan
expenditure had been maintained during the previous two years at an
average of a little over L1,000,000 per annum. For the next year,
one-half of which was subsequent to the proclamation of the
Commonwealth, revenue showed a decline of nearly half a million
sterling, although loan outlay had been increased rather than
lessened. Two reasons could be assigned for this shrinkage--a bad
season in the West, and the dislocation of accounts resulting from
federation. Still, in 1899-1900, the expenditure from revenue was
fully maintained, with the result that on 30th June, 1901, the deficit
exceeded half a million.
In the next year, 1901-2, there was a further decline of about half a
million in revenue, arising (1) from one-fourth of the State's Customs
revenue and the whole of its postal revenue being retained by the
Commonwealth, and (2) from the sparse rainfall and the heavy drop in
London wool prices. Thus, although the apparent expenditure showed a
decline of about L650,000 due to the cost of the transferred
departments being defrayed by the Commonwealth, the financial year
ended with a deficit of L431,940. The year 1902 was the most
disastrous with respect to rainfall that Australia ever experienced,
and the drought struck Queensland with cruel intensity. The revenue of
1902-3 was maintained at nearly the level of the previous year, good
rains having fallen early in 1903, while the expenditure was cut down
by about a quarter of a million; yet there was a further deficit of
L191,341, despite the fact that an income tax had been imposed and a
Public Service Special Retrenchment Act passed which resulted in a
saving of L87,000.
The Philp regime practically ended with an accumulated deficit, as
above mentioned, of L1,151,469; for, about two months after the close
of the financial year 1902-3, the Ministry were compelled by a schism
in their party to resign office. They had been long popularly
stigmatised as the "Continuous Government." The work of the coalition
of 1890 having been accomplished, Ministers had exhausted their
popularity; yet the probability is that but for the financial debacle
the end would not have come quite so soon. The drought having by this
time broken, a return of prosperity was naturally expected; but on the
one hand Ministers had made enemies by severe retrenchment, and on the
other hand they were blamed for having failed to balance their budget.
When Parliament met on 21st July, 1903, Mr. Philp appeared still to
command a working majority--though somewhat diminished by the general
election of 1902-3 compared with that which had followed him for three
years previously. But on the 8th of September the Treasurer, Mr. T.
B. Cribb, carried his taxation resolutions in Committee of Ways and
Means, after an acrimonious debate, by a majority of only two votes in
a House of sixty-five, several prominent Government supporters voting
with the Noes. Mr. Philp then moved the adjournment of the House, and
next day announced the resignation of his Ministry.
[Illustration: MAROOCHY RIVER AND NINDERRY MOUNTAIN, NORTH COAST
RAILWAY]