McCulloch Malfeasance

The Argus (Melbourne, Vic. : 1848 – 1957)
Monday 16 July 1866
On page 6

For some years past it has been the custom to present with the quarterly returns a table showing the estimated revenue and the

revenue actually received. This was done in March last, but has been altogether omitted in the returns just issued. This omission we

have to some extent supplied, by giving in another column the estimated revenue for the six months, and the actual receipts for the former period. From this it will be seen that the Treasurer estimated to receive £1,693,132,

and that he has received only £1,270,398, leaving a deficiency on the half-year of £322,734. While this statement of estimated

and actual revenue is omitted, the ordinary comparison with the amounts received in the same period of last year la made to do duty in its place. And the reason for this substitution will be obvious when it is noticed that by the latter method of comparison the deficiency on the half-year is reduced to £16,271.
But a very slight examination will shoe how utterly deceptive the result obtained by this process is. In the first six months of 1865

the receipts for waler supply did not come into the accounts, and this item did not appear at all; but the half-year’s receipts of 1866 are swollen by the inclusion of £26,742

from this source. Then there was not any large amount due in the first half of 1865 for rents under the Amending Land Act, scarcely

any selections having taken place; how much became due during the same period of the present year is not stated, but the amount

received was, in 1865, £38,845; and in 1866, £63,565-by this the accounts for the latter period are improved by £14,720. Again, the

comparison with 1865 ia unfair as far as the item rents and selections under the Duffy Act is concerned ; for, as no areas were open for selection under certificates until May of that year, the amount

received in the first six months was but £27,156, while in the same period of 1865 no less than £72,979 was obtained from this

source. If, then, a comparison is to be instituted with the first half of 1865, we must add, to the deficiency of £16,271 these amounts:

Water supply .£26,742

Excess of rents under Amending

Land Act .£14,723

Excess of Tenta and selections

under Duffy Act . £45,823


We this find that as far as the revenues of the two periods are comparable, £103,566 less was obtained in the present than In the past year.

Now, of these two deficiencies of £322,731 and £103,556 the one obtained by comparison with the estimates, the other by comparison with the receipts of the first half of last year we regard the latter, although the smaller of the two, as the most serious. The first half of the year is seldom as productive

to the Treasury as the second half, and in previous years the receipts have frequently fallen short of the Estimates by as large or even a larger sum. In the first six months of 1863, for instance, the deficiency calculated in this way was £332,695 ; in the same period,

of 1864 it was £212,868; and in 1865, £261,030.
But in none of these years was there any such alarming deficiency in the Customs as the returns now before us present. On the

contrary, for years past the Customs receipts for the first half of the year have nearly always exceeded the estimate in 1863 by

£25,570, in 1864 by £20,213, and even last year, in spite of the tinkering of the Government, the deficiency was only £9,341. A careful examination of the accounts for some years past lead us to this conclusion: that

a large deficiency in the first half-year’s receipts is not of much consequence, if it be confined to the “territorial” revenue and that from “public works” for, although the rents of runs are payable half-yearly, the far larger proportion never appears in the accounts until the close of the year, and, for some unexplained reason, the railway revenue for the last quarter of the year is always greatly in excess of that for any of the previous quarters. These two items, in fact,

account for all and more than all of the deficiencies in the first six months for many years past. Last year, for that period, the revenue fell short of the estimate £201,030,

and the two items we are speaking of showed a deficiency of £362,264, thus accounting for

more than the entire amount received less than the estimate. This year it Is quite possible, although we have grave doubts as far as the land revenue is concerned, that the amount of £236,136, by which these heads of revenue have fallen short of the Estimates, may be recovered before the end of the year. But what reason is there to believe that the amount of £100,365, by which the customs revenue has fallen short both of the estimate and of the receipts of last your, will be compensated by increased receipts during the next six

months? We can conceive none.
Nay, whether we argue from the existing state of things, or lrom the analogy of previous years, we are forced to the conclusion that the larger half of the customs revenue bus been already received. There are unmistakable indications throughout the colony that enhanced prices have produced their inevitable effects, viz., lessened consumption ; and lessened consumption must insure a smaller revenue.
And what we may expect, judging from the experience of previous years, may be seen by

a glance at these figures :

Customs Revenue . First Six months.

1863. £522,820

1864 £687,213

1ECB.I 018,609





Now as from this source for the first half of this year we have received £551,300, the results of the years mentioned will not warrant us in expecting so much In the second half year: but assuming that the Customs revenue for 1866 will bear the same relation to the

receipts for the first six months as It bore in 1803-4-6, we can only calculate on this source^

yielding £1,077,000 for the year. 
Now, on turning to the Estimates we find that the Treasurer expected £1,303,450; there is every prospect, therefore, of a deficiency on Customs of £226,450, which we venture to predict will be increased by diminished consumption to

fully a quarter of a million. It will be

remembered that the Treasurer did not make his financial statement until the end of February; that he then calculated on £200,000 for new duties in the remaining ten

months of the year, and that less than two months elapsed before those duties were legally in force. And what was the amount

collected and returned in the interval between the submission of the budget and the tLitd iejection of the tariff? But £4,0001
On page 7

Yet it is said that the delay of eight

.week« in the enforcement of ;thoso duties

Is sufficient to account for £60,000 of

the deficiency. But, we would ask, who

“anticipated” a largo deficiency in the

Cubtoms? Cortainly not Mr. “Verdon ; for, as

.we have shown, EO late as the end of February

he reckoned on gotting £1,303,450 from that

source, althongh two months of the year had

nearly cone, and although he only obtained

£1,386,978 in 1805.

Thero are two features of these returns

over which the Ministerial journal especially

rejoices-the lucreaeo of duties on “spirits

diulüled in Vlctoriu,” and the Increase of

tonnage and harbour dues. Now, as to tho

.firnt, wo would remark that there are two

sides to the question, or two ways of tailing

tho btory. To UB these figures convey tho

very unsatisfactory information that to keep,

we balieve, only ona distillery in exUt

-3nce, the TreaBUiy sacrificed in the first half

“)f 1865, £4,986; and in the Bama period of

(8G0 no less thun £9,420 ; that Is to say, had

Who Kpiiits so distilled been imported, tho

Treasury would huva received £9,426 more ia

tho first six months of this year than it has

actually received, the duty being, on im

»ported spirits, 10a. pt-r gallon, and on homo

made Cs. Thus we are actually paying out of

the public revenue u eum of something like

£20,000 a year to keep a distillery in existence).

JVB to the other point, the tonnage, wharf-

age, and harbour rates have increased.

J3ut what doeB this indicate ?-that largo

.quantities of gooda have arrived which,inatoud

of being opened out, giving emnloymont to

labourers and clerks, and profits to mor

cbantp, and leaving fully twenty per cent, on

their value behind them, have been tran-

shipped out of bond to the neighbouring

colonies at a very small profit, or, as in mauy

casca, at a positive loss.

The expenditure does not demand much

.comment, but there are two items whioh wo

connot pasB over without notice, The luxury

of keeping a conscientious, lawlesB, and Uti

.gious Attorney-General appears to be some-

what expensive. In the first half of this year

we have paid no less than £14,746 for judg-

ments and costa in actlouBi This of course

-does not include anything for the cased of

Cornish and Bruco, and Young, which aro

still pending. Our lawyers’ bill for the

year will be a very respectable one, and wo

shall expect to seo a testimonial to Mr. Hlgin

botham, got up by Temple-court and Chan

eery-lane ; for certainly no Attorney-General

has ever done BO much, directly and iu

tlhectly, to ewell the profits of the profession

to which be belongs as the “ablelawyor by

whom the Crown in this colony itf at present”

misled. The other item to which wa must

refer is that of ”Immigration.” Not long

ago, the Legislative Council presented an

address to General Carey on this subject. In

reply, His Excellency stated that he was “in-

formed” that ‘ all moneys available for Im-

migration purpoBPB under tho provlsiOQS of

the Land Act, 1802, and as directed by the

¿regulations, have been fully expended,

without restriction, for those purposes.”

Sow cun this Btutemont ba reconciled

with the fuct which theBe returns ba-

tt ny-tbut during the past six months bat

.,£11,442 WOB applied to this purpose, und ia

the j ear ending 30th June last, only £31,046?

The expenditure for the year is, according

to the Appropriation Act, £2,370,673 : to this

has to be udded the special appropriations,

which amount to £1,120,000; the entire

expenditure for the year I860 is therefore

estimated at £3,490,673. Towards this, the

revenue for the first six months has yielded

-£1,270,398; what prospect is there of the

bBluuce of £2,220,276 being realised in

tho other hulf of the year? Lase year,

with only a trifling deficiency in th» Cas

tonie, the second half-year yielded £773,000

more than the first; in 1864 the increase

on the second half-year was £537,030;

and in 1865, £460,000. This year we have to

allow for a large fulling off in the Customs,

Buch as has never taken place before-a falling

off which we estimate on the year at £250,000.

“What possible ground, thon, cun there ba for

expecting that the secoud quarter of tho year

will yield BO laige an increase as £949,000?

Yet this most be the increase on the re-

mainder of the year to provide the amount

which, according to Mr. Verdon, is required

for tlie public service. We aro forced to tho

?conclusion, for .the reasons we have already

etat’d, that the iucreusa on the second half

of the current year will be less than in

last year-that it is not likely to ex-

ceed £500,000. The revonuo will then

amount to £3,041,000, against an expendi-

ture of £3,490,083, having a deficiency of

nearly half a million. Wo dare Bay this will ha

got over in the usual wny. The Ministry will

either ruBh largo quantities of land into the

market, as they did in 1803 (indeed they have

begun this already, for have they not seized

upon the E-istern-hill corporation reserve

and advertised it for sale, and have they not

put up some other of the most valuable Bites

about Melbourne?), or else they will effect

-some more of Mr. Verdon’s “savings”-that

is to Buy, will not execute many of the public

works which appear upon the Estimates, A3

however, these latter, including roads and

bridges, amount to only £473,450, if they

Were entirely neglected, the amount BO

‘” saved” would not cover the deficiency that

3s likely to accrue. Wo think that Mr.

M’Culloch and bia colleagues will find that

iarr-pering with the financeB of the colony

will yet prove their ruin, and that by their

fall will be vindicated the old truth, that

“every immoral act bears within it the seeds

of ita own dissolution.”


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