NO SAFEGUARDS

Hawke's Bay Herald-Tribune, Issue 98, 12 May 1937, Page 9

NO SAFEGUARDS

Government's Public Works Programme "HIGHLY DANGEROUS" Although the Minxster of Public Works denies that the undertakingscoinprising the Government's extdnsiVc .Public Works programme are uneconomi.c, the taxpayers would foel a groat deal more confidence on the point if this opinion was eupported by an independent invesfcigational body (says a statement by the Associated Chambers of Commerce of New Zealand). The National Expenditure Commission of 1932, after making very definite recommendations as to future poliey that should be followed in respect of different classes of public works — recommendations which have been almost whollyj agnored in the present ten million pounds Public Works programme — put forward concrete proposals relative to an independent board of works, which it considered should be set up. "We believe," said the commission, "that before any Public Works are undertaken in the future, or before any assistance is given by the State to Public Work3 which are to be carried out by local authorities, the ^proposals should first of all be subject to expert examination by an independent board of .works somewhat akin to the Local Government Loans Board. It should be the duty of this board to review all matters connected with • proposed works, and to report thereon to . the Government. This board would require statutory powers, and we suggest that the legislation should provide that in-! any case where an adverse report is submitted by th'e board- of works, the proposals should not be proceeded with, except "with special legislative authority.- With the exception of a Treasury representative, the board should be entirely non-political and non-technical. ..... .. Independent Reports "This board," continued the commission,- "would naturally have advice and reports from the Public Works Department, and should be authorised to call for independent engineering reports on any project. Itas not so much a board of professional men that is called for as a board of business men capable of correctly estimating the finaneial position and prospeets and economic justification of proposed works. ' ' No steps haye apparently been taken to carry out this most important Tecommendation since the time it was made. Actually, "the plan . go.es back to the time the Piiblie Works Department was firet. coristii'tuted— ih 1870 — the Act -of that year providing for the appointment of a boatd of advice to assist the Minister of Public Works in the adminfetration of the' Act. The xdea is, therefore, by no means a new one, and its appl'ication is'more than ever necessary at the present, when enormous expenditure on Public Works has again been entered into. it is a highly dangerous situation for a huge spending department like the Public Works Department to be judge and jury in its own case. The department determines whdeh public works shall- be undertaken, * and when: it

draws up its own designs;; makes its own estimates, and carries out its own construction.. Its position is such that the way is open for political considerations, instead of economic considerations, to influence and .determine its dctivities. A proposed undertaking, whach is desirable in itself, might becter be held , over for some future date. Other proposals may be plainly uneconomic — :and certain of the new projects at present in hand undoubtedly are. What safeguard have the taxpayers against unwise and uneconomlc expenditure, which is going to increase their taxation, and burden-the 'country wuth debt for generations? Under the present system they have no safeguard. All available ovidence proves they need one. Direct Burden on Taxation. The Expenditure Commission, in giving a table of total expenditure out of the Public Works Fund up to 1931 on what mdght be termed "national development," said: "It is worthy of note that, out of • the total expenditure of £34,757,000, the orily ' revenue-produc-ing item is the amount of £1,226,000 which has been utilised for main highways, and upon which interest at 5 per cent. is .being provided out of petroltaxation. Thus the bulk of expenditure out of the Public Works Fund constitr.tes a direct burden on taxation for interest and debt-redemption chaTges amounting to approximately £1,630,000*. If- this- were the total expenditure on works of an unproductive nature, the •position would be less alarming. Tliis is," however, but a small part of the • public-debt burden. ' ' The commission went on to quote a .total railway loss of £39,500,000, aud losses in connection with schemes of river improvement, river protection, land drainage, swamp drainage and land settlement, and said it was evident that insufficient consideration had been given in the past to the economic justification' of many of the works which had been undertaken. It believed that a. proper conception had in many cases not been formed of the manner in which maintenance charges were to be finaneial on the completion of the work. To-day a vast Public Works programme has again been launched, without any check or safeguard such as a non-political board of works would provide, and under a pernieious system against which the gravest objeetions have been recorded.