PUBLIC WORKS

Hawke's Bay Herald-Tribune, Issue 100, 14 May 1937, Page 5

PUBLIC WORKS

Is New Zealand Programme Economic? VIEWS OF COMMISSION The taxpayers have reason to feel some concern as to the economic valuo and timeliness of the projects compnising the Government 's public works programme, says a statement by the Associated Chambers of Commerce of New Zealand. In a recent statement, the Minister of Public Works denied that the works were uneconomic, and said the projects "were reviewed in the minutest detail by men of wiide experience and proved ability." On the other hand, little heed appears to have been given by the Government to the very definite opinions expressed, and the gujding principles laid down, by the National Expenditure Commission of 1932, which went very thoroughly into almost every aspect of Government expenditure. The following is how the Government 's programme of expenditure on public works in 1936-37 is made up: —

4 Eaxlways 2,350,000 Public buildings 1,300,000 Roads and highways .... • 3,760,000 Land development 1,550,000 Hydro-electnic supply .... 510,000 Other .works 980,000 £10,450,000 Of this total, £5,940,000 represents borrowed money. The Expenditure Gommission said that "the financial position of the country was in no small measure the result of extravagant expenditure out of loan money on schexnes which, from a national point' of view, had not justdfied the expenditure which had been incurred on them, " The Minister of Public Works has stated with regard to uncompleted Tailway . lines that it would be. better to complete them and get the benefit of whatever developmental value they possess, than to allow the expenditure previously incurred to continue to be a dea.d loss. There is reasoning in this, but would it not have been possible to have made financial provision in 1936-37 merely for the maintenance of such uncompleted railway lines as can be completed with advantage, without entering anto further construction, whiich could have been delayed as a desirable work for the next inevitable depresslon? ^The mistake made i,n the past of borrowing and spending too freely in prosperous . times iis only being xepeatod., Eailway Work. -r Apart from railway construction, the public works programme includes provision for £790,400 to be spent on railways improvements and additions to open lines. How much of this is represented by accrue.d deprecdation which is being spent on new capital works, instead of being set aside to provide a fund for the replacement of assets as required in the future? The item for public buildings will bring the total already spent by the State on public buildings in New Zealand to approximately £20,000,000. ThA Expenditure Commission, iu expressi/g the opinion that the expenditure of large sums of loan moneys each year on such buildings should cease, said the period within which the public debt was being funded was 60 years, and it was obvious there woxxld be charges on taxation 'for many years after assets which were being created out of loan money were worn out and had *themselves been replaced also out of loan money. Tho result, it said, must be an dncreasxng burden on posterity and an inereasingly pressing burden on general taxation for interest and amortisation charges. In the matter of expenditure on roads and highways, the Commission stressed its opinion that the Donxindon had reached a etage in its development far ahead of the population requirements, and said it was this rapid development, coupled. with a consequential .dependence on loan moneys, which was partly responsible for the unemployment evil, It considered that road construction should be the first to etop. Land Improvement. • The item "land development," listed above, includes irrigation, water-supply and drainage, swamp land drainage, xiative land settlement, and settlemeut of unemployed workers. In regard to lands improvement, the Commision says "the. history of State enterprdse in land development projects generally is such that it appears to be certaiu losses will accrue therefrom, and it is questionable whether the national benefit by way of increased production will compensate for the additional charges which wiill be throwxx'on taxation. , , , Tlxe experience of the State in connection with land drainage and river improvement schemes has been disastrous . . . . We are iorced to the conclusion that these schemes eannot be justified by tho x;esults obtainod. ... It is certain that the xiatiQual benefit accruiing in no way compensates for the large suius of public money which have beeix suxxk in these ventures. ... If Jand is worth developing, private enterprise will be attraeted." Finally, in coqixectxon with hydroolectric supply, the Commission saiid it was definitely of ppinion that the present stage of deveiopmeut in the matter of hydro-electric power was sufficient for the needs of the Dpnxinion for many years to eoiue, aud that, in view of the uncertainty as to what would prove to be the cheapest form of power cieveloped in the future, any niQve for th© comnxencement of further works, whether ^ by the State or by loeal authoxiities, should be strenuously on, posed. Tlxe National Hxpenditux'e Comnxis, sion which had powers and privileges giving it access to information not available to the general public/ has therefore expressed no uncertain opdnions on the iypes of undertakings which broadly comprise tlie Government 's present ten miilion pounds public works programme.^ The nature of these opinions is suclx that taxpayers will feel more is jieeded than^just the Minister 's demal that tlxe present programme is unoeonomic.