GROWTH OF PUBLIC ENTERPRISE

Hokitika Guardian, 18 June 1929, Page 8

GROWTH OF PUBLIC ENTERPRISE

WHITHEB LEADING. a (Taxpayer.) ft is scarcely necessary to remind Sir Joseph Ward that there has been a great growth in the volume of public expenditure since the time “before the war”. No one has kept a closei eye upon the finances of the Dominion in their practical application to th ■ affairs off the country during the lasi three or four decades than has the Prime Minister himself. It would he well for the public at large to understand, however, that such portions of the increased expenditure as are not immediately remunerative become, automatically as it were, a burden upon the taxpayers, a body, it is well to remember, that embraces, directly or indirectly or both ways, practically every adult member rtf the community. The Budget each year shows tin* expenditure under two leadings, per manont appropriations and annual expenditure, the former dealing mainly with interest, sinking funds and pensions, and the latter covering the expenditure of the whole of the departments of State. The following figures taken 'from this source, show the increase in the public expenditure over a series of years between 1913-14 and 1927-28 and its relation to the population of the ’Dominion. Year. Expend i- Mean Per tore. population. head. £ ' £ s. d. ! 913-1.4- ’ 11,885,863 1,125,628 10 10 1 MWS-17 M. 058,770 1,140,2 :, 5 12 4 8 1 D 'O-21 28.178,730 1,252,206 22 ]() 1 IP2 :-2f» 29,60:1.(580 1,392,073- 21 (5 7 1927-28 31,145,368 1,443,323 21 11 7 Since 1925 the accounts of the Hailwav Department have not been included in these figures, except to pass on to the Consolidated Fund the “losses on isolated sections and branch lines” as the Government Statistician explains; hut for the purpose rtf comparison and analysis it is necessary to retain the old system of presenting the accounts.

HAILWAY PROBLEM. Thus we find that the gross revenue from the railways in 1913-14 was £4,013,328 and the total expenditure 02,880,322, leaving a net revenue of £1,163,005 or a return rtf £3 12s 3d per cent, upon the capital cost of the lines. The gross revenue from the railways in 1927-28 was £8,434,654, the expenditure £6,685,123 and the net revenue £1,839,415 or a return of £3 3s upon the capital cost. In 1914 when money was cheaper than it is to-day £3 12s 3d was not regarded as an inadequate return, the rate having exceeded that figure only on three occasions in twenty years. But times and conditions have changed and now the authorities demand a return o' only £3 3s 7d, leaving a deficit approxi mately of £550,000. Whether or not the railways can he made to sustain the prescribed return of £4. os per cent remains to he seen. In 1916, 1917, 1918, 1919, 1920 and 1926 this feat was achieved, but not with sufficient margin to cover the deficits of the intervening years. Then there are the losses on the “isolated sections and branch lines,” amounting to approximately £1,757,493 during the last four years, which must he taken into account if the country is going to lace frankly its railway problem.

AND TELEGRAPH HEVELINE

The only other department than the Railways that can claim to he a measure self-supporting is the Post and Telegraph. In 1913-14 this department's receipts amounted the £1.269,921 and its expenditure to £1,143,314, thus showing a surplus of £96,607, or 8.23 per cent upon its. earnings, without of course, taking into account its capital cost in the shape oT buildings, telegraph lines and so forth, in 1921 its receipts reached £2.478,532, hut its expenditure rose to £2,588,360 leaving it with a deficit of £109,828 or 4.4 per cent. Last year, thanks largely t the telephone boom that had begun for or five years belore, its revenue rose to £3,323,260, while its expenditure amounted to no more than £2,297, 058 ,enabling it to record a surplus rt. £1,076,202, or 4 1.(5 per cent over and above its outgoings. The announcement of this handsome return for the department’s activities already has drawn applications from the staff lo; a restoration of the “salaries cut” ami from the public demands for a reduction Ut charges; hut a closer examination of the figures probably would show that the increased revenue, would no more than cover one yeui’s payment towards a sinking fund designed to extinguish the cost ol the department s buildings, and other properties that have helped to build up the Dominion s public debt. NEED FOB ECONOMY. Other departments of State, with operations appearing only on the expenditure side of the Consolidate! Fund, are Education, Public Debt Ser i ices i meaning interest on loans) am. “Other Items”, all of which, even when traced hack no further than 1919 the year after the conclusion ol the Groat War, show some astounding increases in the burdens of the taxpayers. During these ten years the annual charges if or Education increased from £1,736,888 to £3,101,901; for the

Pnble Debt from £6,086,769, to £9,757,602 and for “Other Items” made up mainly by the cost of minor departments of State, from £5,734,640, to £5),303,682. Upon these impressive figures the Government Statistician makes a significant comment. “Alter allowing for recoveries from trading and other accounts,” lie says, “public debt charges ahsorded 42.44 per cent, of the net revenue of the Dominion in 15.27-28, as compared with 28.52 per cent, m 1917-18. if, however, the receipts from the Working Railways Account in respect of-interest on .Railway capital liability, £2,130,807, be treated similarly to other interest recoveries. the proportion Tor 11)27-28 reduces to 26.5(5 per cent.” “In addition to lilt; amount shown as having been expended upon education out ol ihe Consolidated Fund during the last live years,” Mr Fraser further observes, “ 70 per cent of the net revenue (.if the National Endowment Fund has also been applied for education purposes. ’ The total amount of this operation extending over five years was £431,109. Taking all the circumstances that have been hut merely indicated here into account surely there is material enough to impress upon the new Parliament the need lor the utmost economy in handling the finances rtf the Dominion during the approaching session.