The Colonial Treasurer delivered his Financial iStatement last night, in the House of Representatives, from which we make the following extracts regarding the Government’s new SCHEME FOR LOCAL FINANCE and proposals for the ordinary services of the current year. I said last session that the Government would this year re commend the discontinuance of subsidies. To propose the abolition of grants in aid of local bodies • without substituting a workable scheme in their place, would be trifling /with the subject in a manner which, I venture to think, would not meet with the approval of Parliament. Our aim is twofold—our duty being first to place our general finance upon a sound footing, and second, to put our local bodies in such a position as will enable them to do the work which rightly de volves upon them, and which must be done by them if the country is to be prosperously settled. I do not think it convenient to trouble the Committee to night with many reasons for discon tinuing the subsidies. That question can be better discussed when considering the Bills which will be introduced to give effect to our proposals. I may, however, point out to hon. members that the system of subsidies has operated unequally. It has largely helped the rich and populous districts, while giving little assistance to those which are poor and thinly peopled. It must also be remembered that they were proposed as part of a scheme to which full effect has never been given, for the land fund has been so generalised instead of localised in provincial districts, and the expenditure upon public works instead of being limited in account and confined to arteral undertakings, has been lavish and extended to works of all descriptions. The magnitude of this ex penditure will be evident when I say that we have increased our debt for public works within the last three years and a half (the time during which subsidies have been paid) by L 9,000,000, which means an annual mortgage of L 450,000. 