PUBLIC SERVICE WAR BONUS

Dominion, Volume 10, Issue 3129, 6 July 1917, Page 5

PUBLIC SERVICE WAR BONUS

UNAUTHORISED PAYMENTS AUDITOR-GENERAL REQUIRES - VALIDATION The fact that the war bonus paid' to members of the Public Service last year was not properly authorised by' Parliament was revealed in the Houso of Representatives yesterday, when the Speaker read the following letter from the Auditor-General:— "The Controller and Auditor-General has the honour to report for the information of Parliament that owing to exceptional circumstances it -was necessary for the Audit Office to sanction tho payment of certain moneys out of the public account on the undertaking of tho Government to introduce legislation validating the payment and indemnifying the Audit Office in respect of such issues. The particulars thereof are as follow !—

"(1) War bonus to officers of the Public Service amounting to i;35G,184 18s. 5d., no appropriation for this expenditure having been made by Parliament.

The estimated lamount, .£400,000, appeared in the Estimates under the heading of 'permanent charges,' but as all such charges are provided for in respect of authorising Acts, they do not come up for consideration or for voting when the Estimates are being dealt with by Parliament, consequently the £100,000 had not been voted nor was any appropriation for the amount made. Section 19, Appropriation Act, 191G, authorised the payment subject "to appropriation." The Controller ■ and Auditor-General also makes reference to the payment of interest .£18,833 2s. 5d.,t0 the various banks doing business in New Zealand on their investments in the war loan, which amounted to .£1,000,000 from the date stipulated in the loan prospectus instead of from the date of lodgment to the public account, notwithstanding the fact that the banks' contributions were not actually paid into the public account on the date specified in the prospectus. >■ This was necessary in order to carry out the agreement - made between the Government and the banks. The Controller and Au-ditor-General also reports that he passed an, issue'of • 18s. debentures 'in London under the Public licvenues Act, 1914 (Section 8 war expenses), whereas the Act only provided for the issue of Treasury Bills., This operation was also the i subject of an undertaking of the Government to validate such issue, as the Act quoted did not provide for the security being issued in debenture form. The Minister of Finance (Sir Joseph Ward) said that the payment of the war bonus had been provided for in the Appropriation Act, 1916. The point raised by tho Auditor-General was that in the Estimates passed by Parliament the amount of the war bonus had been placed among permanent appropriations. The Audita? held that the amount' should havo appeared in tho body of the Estimates;' Tho matter had been brought under the Minister's attention shortly before his departure for England, and he had then given an assurance that Parliament would be asked to put the matter right. . i

Mr. Wilford: As a matter of fact, the payment was made without tho authority of .Parliament. ,

Sir Joseph Ward: "No. The money was voted by Parliament, but the vote appeared in the wrong part of the Estimates. It is a fine legal distinction." Tho Minister added that tho payment of interest to tanks in connection with the War Loan was required to cover periods when the banks' held subscriptions at the disposal of the Government. The issue of debentures in London had been made in connection with the conversion of Treasury Bills into a longdated loan.

Mr. Wilford expressed a wish to speak on the subject, but the Speaker ruled that no debate would take placo on that occasion. The Minister's statement had been made by indulgence of the House. . Mr. AVilford protested against the manner in ' which the matter had been brought forward. The payment had been made without tho authority of Parliament. The Ministers could not deny that assertion.- ■ • . The Speaker repeated his ruling.