PUBLIC ACCOUNTS

Hokitika Guardian, 18 May 1927, Page 4

PUBLIC ACCOUNTS

DF PA i{ TAIENTAL BOOK-KEEPING

TWO YEARS BEHIND

(Ymtributcd.)

In the reports of his very admirable speech at Feilding on Alonday , week, the Minister of Finance is represented as saying that the expenditure upon departmental services during the financial year just closed the twelve months, that is, between April Ist, 1926, and March 31st, 1927—showed a decrease of £431,000 compared with the amount appropriated for the year, and an increase of only £IIO.OOO over the actual expenditure for the year 1925-1926. The figures, so far as they go, are satisfactory enough. They suggest that reasonable economy lias been exercised by the various departments, and that the increase in expenditure has been kept within moderate bounds

by the Minister himself. They are not suilieiently dear and comprehensive however, to give the taxpayers any adequate idea of how the money has been spent. “ Details of the expenditure have not yet been finalised,” Air

Stewart told his Feilding audience, “ but they will be available when the annual accounts arc published.’’ These are the very details with which the public should he made acquainted, but probably the Minister was referring only to the official figures attached to the Budget which are about as illnmiiu

alive to the average taxpayer as are the stilted phrases put into the Gover-nor-General’s speech at the opening of Parliament by Mis Excellency's advisers. A SUM'LUS. An illustration of what is missing from the official statements of the public accounts is provided by the announcement made by the PostmasterGeneral a week or two ago to the effect that the figures of the Post and Telegraph Department for the year ended .March .'list last “showed a surplus of £874,302.” Had the department really earned this amount over and above its expenditure and charges it would have been in a position to make a substantial reduction on its rates or even to accede to the demand of its employees for a restitution of the bonus of which they were deprived three or four years ago. As a matter of fact the Minister's announcement already has set the employees rcdiscussing the question of increased salaries. Hut the “ surplus, ’’ the -Minister proclaimed with such obvious satisfaction was of the light and airy order and diminished almost to vanishing point when probed by exacting actuary. Unfortunately the Post and Telegraph Department is among the departments that have fallen two years behind in the issue of too annual balance sheets Air Massey demanded from the various branches ot the Public Service, and it is necessary to go back to its balance sheet of 1921-23 to ascertain approximately what amounts should he deducted from the Minister’s “surplus” to make it a true index of the real position.

THE It E A LIT V. It may he taken for granted that file Minister’s statement that the receipts for the year exceeded the expenditure by £874,392 is correct. Then the balance sheet for 1924-25 shows that the interest charges on the capital invested in buildings and so forth, estimated at £8,049,429, amounted to £287.0,79, and the depreciation charges to £320,689, making a total of £607,788. To-day, two years later, the capital invested must amount to nearly £9,000,000. and the interest on this sum at 4J per cent, the low rate piescribed for the railways, would amount to £382,222 which, assuming the depreciation charge to bo no larger than that of two years ago. £320,689, would give a total of £702,911 to he deducted from the gross surplus of £874,392, and thus leave a net surplus, of £171,481. This surplus represents a return of 1.9 per cent upon the capital employed, a margin far too slender, with interest charged at 4’ per cent., to justify either a reduction in rates or an Jncroa.se in salaries. Of course the Post-master-General Was following a practice of long standing in describing the

difference between the gross receipts and the direct expenditure of his department as a “surplus”; but the practice always has been a fallacious one an d in the past lias been responsible for much loose book-keeping and

extravagance. TARDY OFFICIALISM. ' It was his recognition of this fact, put to him by the New Zealand Taxpayers’ Federation, that induced -Mr .Massey live years ago to call for annual commercial balance sheets irom all the .State departments. The demand was warmly supported by the Aiiditor-Oeneral and the Secretary of the Treasury and many of the beads »f departments applied themselves assiduously to the preparation of the required information. Again and again .Air .Massey expressed his appreciation of the value of the balance sheets and his determination to have them made universal throughout the service. Fnfortunntely the reform has not been pressed with the same zeal by bis successors. There are no fewer than thirty departments that have not yet supplied their balance sheets for the financial year 19125-2(5. The “ defaulters list ’’ includes the Department of Agriculture, Cook Islands. Defence. Education, Health, Housing, Immigration. Labour, Land and Income 'Tax, Lands for Settlement, Native. Affairs, Pensions, Post and Telegraphs, Tourists, Repatriation and a dozen others of less importance. Forty-five others have acceded to the Ministerial demand and so shown not merely respect for constituted authority, hut also understanding and enterprise enough to appreciate the value of business methods to themselves and to the Dominion.