HIGHWAYS BOARD

Press, Volume LXIII, Issue 19138, 22 October 1927, Page 14

HIGHWAYS BOARD

TRANSFER OF FUNDS. POSITION EXPLAINED. STATEMENT BY MR C. J. TALBOT. "These points should be understood very clearly: That none of the South Islnnd money has been, or is being used in the North Island, mid that the North Island and the South Island moneys are kept separate in the Board's RevenueAccount."

Mr C. J. Talbot, one of the members of the Main Highways Board representing the counties o_f the Dominion, exp- -1 himself as set out above, in the course of a statement, relative to the temporary transfer of £350,000 from the Board's Revenue Account to the Board's construction fund, made to a. representative of The Press last night. Asked for the reason "ir the transfer of the amount mentioned, Mr Talbot explained that the moneys in the Revenue Account were intended for the payment of subsidy on maintenance, and ' tcrest on loans, etc. The Government has power to borrow £300,000 per annum for construction purposes. This year the Minister for Finance wished to reduce his borrowings, and after consultation with the Board, decided to exclude from his borrowing proposals, the £300,000 to be wised this financial year for the Board. The Minister suggested that as the Board had a "nest egg" it.should be temporarily transferred from the Revenue Account to the Construction Fund. , ■ • ■

Objection by the Board. The Board objected very strongly to the suggestion because its members saw difficulties in the way—one being the entanglement that might occur between the Nor.th and South Island funds. "The North and South Island Funds are kept religiously distinct in the Revenue Account," Mr Talbot asserted, "and the approximate allocation, based on the number of cars, is 60 per cent, to the North, and 40 per cent, to the South — these percentages being approximations. '' The Board would have preferred the Minister to follow the customary practice, but the Minister pressed his point and the Board reluctantly consented, on the understanding that the money was to be paid back to the Revenue Acr count as required. An undertaking to that effect was made in this way: That an amendment would be made to the Highways Act . this session, distinctly giving that power to the Minister for Finance in consultation with the Highways Board. The draft amendments to the Act have been seen by the Board and that provision is included."

Not All South Island. Money. The statement had been made, said Mr Talbot, that the £350,000 transferred had been taken from the South Island part'of the "nest egg." That was not the case. Up to the present £200,000 had been transferred from the Revenue Account to the Construction Fund; and£lso,ooo would be transferred before ! March 31st next. Of the £200,000 transferred to ■ date approximately £160,000 was North Island money, and £40,000 South Island money; and of the £150,000 remaining to be transferred it was estimated that £120,000 would be required in the North, and £30,000 .in the South. Those sums had to be taken from »the amounts to the credit of each in the Revenue Account, and .would, leave the South Island amount to credit in the Revenue Account approximately £200,000. Regarding the wording of the amendment, Mr Talbot said • that it was so that the repayment was made .permissive and not mandatory, but the Board understands that such is the customary phraseology in matters of this kind, where the Crown is concerned. ■ ; The Board has no doubt that the arrange-, ment mac!e between it and the Minister will be- carried out. How the Nest Egg Grew.

As to the assertion that the Board allowed the; "nest egg" to accumulate till it became a temptation'to the Government, Mr Talbot said that in the first instance the Board's income was problematical and;, consequently, it went cautiously in fixing the subsidy payable on maintenance—starting with 10s to every £l. Ab the funds accumulated it incieaseci the subsidy to £ for £, then to 30s to £l. The increase in the subsidy had the effect of reducing the nest-egg materially—in fact it was estimated that the expenditure on maintenance would exceed this year's revenue by. between £170,000 and £200,000,. which meant drawing' substantially on the nest-egg. At one time it '-as hoped to offer £2 to £1 on expenditure on maintenance, but the greater claims made by local bodies, added to the increase previously made in the amount of subsidy, made.it impossible to raise the subsidy to £2 to £l. In fact, the present subsidy—3os to £l—could not be maintained for any length of time unless there was an iin:?ease in the .Board's revenue.