The Dominion. TUESDAY, AUGUST 29, 1911. STATE “DEVELOPMENT " GRANTS.

Dominion, Volume 4, Issue 1218, 29 August 1911, Page 4

The Dominion. TUESDAY, AUGUST 29, 1911. STATE “DEVELOPMENT " GRANTS.

One of the least sensational—and 'in consequence one of tho most generally overlooked—proposals of the famous British Budget of 1909 was the establishment of a Development Fund. There was little contention over the proposal, which contemplated the expenditure of a sum of £2,500,000, spread over five years, for the purpose of national development. Wo noted at the time that, as introduced, the scheme was the embryo of an ultimate English equivalent of .the Public Works Fund of_ this country, with all its possibilities of intrigue and extravagance, of political dishonesty and waste. Before- the Bill establishing the Fund became law attention was forturiately directed to the encouragement that the scheme would give to tho breeding of "roads and bridges" members of Parliament, and, as our readers have probably not forgotten, Mr. Lloyd-George immediately met this criticism, the force of which he recognised, by providing that the Fund should be placed under the control of a non-political permanent Commission. Tho Commissioners have just presented their report on the working of the Act for the nine months ended March 31 last, and this is mainly interesting to us here for its general observations upon the principles upon which the State should go about spending money for "developmental" purposes. To us "development" means chiefly the construction of railways, roads, and bridges, but of course Great Britain completed this side of its "development" very many years ago, and "development," there, within the meaning of the Act, is a process of much smaller dimensions and much greater refinement. . The Commission, *\vhich is not an executive, but only a recommending body—but without whose recommendation expenditure under the Act cannot be made—recommended a total expenditure of £165,000 per annum, and £100,000 in non-recurring advances. The monoy was allotted partly to the Board of Agriculture and partly to _ universities and private institutions, chiefly for agricultural research and education and the encouragement of light-horse breeding. The procedure is worth noting. Applications for advances are never made directly to the Commissioners, They are made to the Treasury, which submits each application—unless it eomos from a Government Department, in which case it is sent direct to the Commissioners—to the Government Department concerned with tho subject matter. The Department concerned sends on the application, accompanied by a report, to tho Commissioners, who then recommend the expenditure or not as they decide. The Treasury finally decides whether or not it shall endorse the recommendation. In their report tho Commissioners insist strongly upon the importance of working on a comprehensive policy. If applications were taken one by •one as they arrived and' advances made to those institutions which made out a good case for themselves, irrespective of other cases, "there would inevitably be waste of money and energy":

It is impossible to deal with individual applications as quickly as if they were taken ono by one, without reference to general considerations. To recommend even a large number of disconnected advances is obviously a very different: thing from working out or examining in detail a coherent and organised scheme which is meant to bo applicable, to (ho whole country or a large part of it—a scheme in which existing bodies and institutions would each find a place consistent with its possible contribution to tlio general advancement. The former would be far the easier and quicker course, and perhaps more immediately popular; but in the Commissioners' view if. would lead to a haphazard distribution nf public money which would be contrary to the first principles of economical ami business-like administration. Those people in New Zealand— and they are an increasing majority—who have realised or are beginning to realise the vices of the existing system of public works expenditure, will readily perceive in

the passage \vc have quoted a strong indictment of that system. We all know how the Public Works Estimates arc framed. Private persons, local bodies and members of Parliament deluge the Minister with applications for grants. Neither the Minister nor his Department, in a largo proportion of cases, knows or has the, means of knowing, cares or has any impulse to care, even whether the application is meritorious. Still less is there any consideration given to tho relative merit of any application as part of a ■ coherent national plan of development. The outstanding feature of our public works system is its character of a gteat engine of bribery, retaliations, and rewards. But apart from this it is enormously wasteful. There is no ordered plan of a wise and beneficent kind underlying the expenditure. It is most strictly a system of spending money which, to quote tho words of the Commissioners, is "contrary to the first principles of economical and business-like administration.'' No doubt the British scheme will grow to very large dimensions in time, and Britain will then realise how wisely Mr. LloydGeorgk acted in agreeing to Lord Kobert Cecil's proposal that instead of leaving the allocation of the moneys to the Executive they should start off with a non-political commission without whose sanction no money should bo expended.