STATE SPENDING

Hokitika Guardian, 4 August 1930, Page 5

STATE SPENDING

IMPERFECT CONTROL BY PARLIAMENT.

AUDITOR-GENERAL OFFERS SUGGESTIONS.

WELLINGTON, August 1

Pisaproval of the system of providing lor expenditure by permanent appropriations rather than by annual votes was expressed by the Controller and Auditor-General, Colonel G. F. C. Campbell, in his annual report, present, ed to Parliament to-day. He said that tne liuaheial legislation was now beconv ii!g so complex that it was a matter of serious difficulty at times for tlie Audit Department to ensure that the statutory financial provisions are properly complied with. “In my last report, attention was drawn to the fact that a large proportion of the annual expenditure was governed by. permanent appropriations and was thus freed 'from the annual control of Parliament,” the report said. "It is noted tha tby Section 0 of the Finance Act, 1929, the law has since been amended us from April Ist, 1930, so as to bring within the annual appropriations the expenditure .hitherto made without further appropriation under the Native Land Act, 1909, the Railways Improvement Authorisation Act, 1914, the Swamp Drainage Act, 1915, the Education Purposes Loans Act, 1919, and the Hauraki Plains Act, 1826, This amendment will have the effect of bringing expenditure amounting to .several millions within the direct control of Parliament, and remedies the more important instances in which such control had not previously been provided. There will, however, still remain a large amount of . expenditure not subject to annual appropriation and though it may not be considered desirable to bring the whole of such expenditure into the Annual Appropriation, Act, it would appear advisable in the interests of proper control that an estimate of all expenditure to be made from the various separate accounts under permanent appropriations should be submitted to Parliament in order that the full programme of Government expendi ture for the year may be brought under review, instead of portion only of such expenditure. Such an estimate is at present submitted in the case of expenditure under permanent appropria* tions from the ordinary revenue account, but not in the case of such expenditure from other countries. COMPLEX LEGISLATION.

"Apart from the question of obtaining effective control of expenditure, the system of providing for expenditure by permanent appropriations rather than by annual votes has serious disadvantages. The statutory provisions'regulating the expenditure require to be of a very detailed nature if control Is to be' effective, and as a eonsequehce the amount of detailed financial legislation, in. New Zealand is probably without parallel in any other British country. There is always the possibility that in the course of administration. of an Act unforseeh changes in the circumstances governing expenditure or slight variations of Government policy relating to receipts and expenditure, may involve conflict with the permanent appropriation- provisions of the Act. The financial legislation is now becoming so complex that it is a matter of serious difficulty at times for the audit to ensure that the statutory financial provisions are properly complied with. The position is , rightly viewed with disfavour by those responsible for drafting the financial legislation, and also by ■ those whose duty it is to carry it into effect. The position should not however,, be remedied by omitting or abrogating the regulative provisions in the financial statutes without providing other measures to take their place, as the result of such omission, would be to weaken if not nullify, Parliamentary control of the public finance. The remedy suggested to provide for the detailed control of the expenditure of each separate account by means of the annual appropriations (which are embodied in the annual Appropriation Act, and thus given statutory force) instead of by permanent detailed financial provisions in the Statutes themselves. "If the system followed in other parts of the Empire were adopted, and the functions of each separate account were regulated in the governing Act by comparatively broad statutory provisions, the details of expenditure from each account being regulated by means of the annual appropriations, the necessity for detailed regulating provisions in the statutes'would be to a large extent obviated, and the financial legislation would be much simplified, while at the same time the effective Parliamentary control over expenditure would not be in any way impaired, but, on the contrary, would be strengthened.”’