ROTORUA'S EARNINGS

Rotorua Morning Post, Volume 2, Issue 347, 7 October 1932, Page 4

ROTORUA'S EARNINGS

The annual report of the Tourist Department released this week. places a new complexion upon the discouraging picture of Government operations in Rotorua conveyed by the report of the National Expenditure Commission. The latter report, recording the commission's inquisition into Government operations in Rotorua, assessed the loss upon the Tourist Department's activities during 1930-31 at £25,000 less £5831 profit upon the electricity department — a total loss of £19,169. The report did not indicate the methods of computation or the figures making up the total but it is obvious that practically the whole of the loss is made up in interest charges upon the capital investment. This is borne out by the fact that for the same year, 1930-31, the loss recorded by the department on a profit and loss basis, was £963 — a figure which does not take interest charges into account. We have already pointed out that the interest charges are largely appreciated by the fact that buildings and works construetion have been carried out on Government lines and by methods which have inflated their capital value. The same buildings and the same construetion carried out on more economical lines, would represent a much smaller investment and correspondingly smaller interest charges. -The figure quoted by the commission, therefore, for practicai business purposes, may be substantially reduced; the fact that extravagant Government methods have increased the. charges is something for which the Government must accept responsibility and which should not be placed against the earning power of the resort. The report of the department .for the present year, however, takes the matter a stage further and substantiates the argument already raised that if it is given the opportunity, Rotorua will more than justify the national investment which it represents. The report shows that for the year 1931-32, expenditure totalled £31,642 and revenue £35,475, an excess of receipts over expenditure of £3,833. Taking into account the loss of £963 shown the previous year, it is apparent that in two years Rotorua has recovered its financial position to the extent of £4796 and has turned a deficit into a surplus during an admittedly difficult tourist period. This fact abund-antly-demonstrates the fact that ecohpmical, ahd at the same time progressive admi'nistration, will transform the resort into an asset in.stead of a liability and discounts the recommendations "of the commission that very many of the tourist fa'cilities should be curtailed. We have already expressed the opinion that the findings of the commission so f ar' as Rotorua is concerned are shortsighted apd based on false prepaises, and the repovery shown by the department in its report goes further to substantiate that opinion. It is possible for the Government tp. ecpnomjse withoiit definitely endan'gerihg future 4evelopment by penny wise and pound foolish reductions. Given- the opportunity Rotorua-' will continue' son the upward trend shown for the past year but sweeping recommendations of economy at ariy price, such as those made by the commission, wili sha^ter opportunity forever.