HIGHWAYS FUNDS

Hokitika Guardian, 25 November 1932, Page 6

HIGHWAYS FUNDS

LOST REVENUE,

BOARD RECORDS WARNING

WELLINGTON, November 24.

In the light of the special knowledge it possesses the Alain Highways Board, states, in its annual report presented to Parliament yesterday, that, it does not concur with the whole of the financial divisions affecting its iunds imposed by the Government in 1931 and 1932. It is shown that £693,330 or the board’s funds have been devoted to purposes other than highway construction or maintenance, and the board says this is not wise from a foading standpoint for several reasons. “A substantial portion of the accumulated must be ascribed to the non-replacement of wear, and tear on the highways during the past two years, but this replacement must inevitably be made and finance will be necessary,” the report says. “A year ago the thickness of the metal foundation on the average highway was 33 per cent, less than the thickness to which the reads were originally built, and the position is now worse. “The board has been of the opinion that as much construction as possible should be financed from revenue, particularly in the ease of bridge construction, which in most instances is largely in. the nature of renewals. On account of the diversion of its funds in 1931, the lioard was forced to finance. the . whole of . its construction work in 1931-32 from borrowed money. This is the first occasion since 1927 when the construction fund was not reinforced by a transfer from the revenue fund.

“The Board has ‘ consistently adhered to a policy during the past eight years of having a fairly substantial reserve in its Revenue Fund to meet emergencies, such as floods and earthquakes. As a result of that policy, practically the whole cost of the Murchison and Hawke’s Bay earthquakes has been met from v revenue. There are now no reserves whatever to meet such emergencies in the. future. “The board has been of the opinion for some years that the time would arrive when the supply of borrowed money would case, but it has" als° realised that although loan funds might not be available, nevertheless, the reconstruction of a large number of bridges would have to be raced annually. It was hoped that the balance of the accumulated fund, together with possible transfers from the revenue fund, would enable these vital links in tile country’s arterial and feeder-road system to be maintained without dependence on borrowed money. By March 31, 1933, bridge reconstruction oi.) the highways Will be behind the necessary progiamine by about £250,000. : ’. • -A-:.,.--

“On account of the diversion to the Consolidated Fund of up to £509,000, authorised by the Finance Act, 1932, the provision for highway maintenance is insuiiicient to maintain the assets to their original standard, and therefore some borrowed capital invested therein be irretrievably lest.

Tlie continuance for two more years of the policy of reduced maintenance which has been in operation for the past eighteen ’ months will bring about the drastic physical collapse of manjt sections of the most important roads in the country. • “Stated briefly, the board’s opinion is simply that expenditure temporarily avoided by neglecting maintenance and bridge renewals does not constitute savings. Another result of the diversions has been that paving in dustless and durable materials has had to he pastponed practically indefinitely The board, however, considers broadly that in view of the general financial situation in the Dominion this postponement is not unreasonable, but there are certain cases in which postponement is uneconomical.”