TRANSPORT FINANCES

Sun (Auckland), Volume III, Issue 656, 7 May 1929, Page 7

TRANSPORT FINANCES

CRITIC OF THE BOARD MR. TIARKS V. THE CHAIRMAN A further letter from Mr. Herbert Tiarks, of Remuera, crit.cising the Auckland Transport Board's statement of its financial position in a circular to householders has been forwarded to The Mr. J. A. C. Allum, chairman of the board, was shown the objections and replies briefly. Mr. Tiarks writes as follows: Sir, —• . , . I have read with great interest Mr. Allum’s reply to my criticism of the transport finance and in order that I may make myself perfectly clear I must emphatically contradict him. Neither the Government auditor, the City Council’s auditor nor any other auditor in New Zealand would confirm his statement that the Auckland transport undertaking has paid all its own expenses out of revenue. Had such been the case, the money would have been in existence, i.e„ specifically set aside for the purpose and there would obviously have been no necessity to resort to the raising of any loan to make good a loss already incurred at the time the loan was raised. •• •

We must realise that, day by day, wear and tear is going on and that adequate provision must be made to meet, this expense of running the undertaking. As it is. we are not only burdened with the current expenses of which this is one. but as a result of bad accounting in the past we have in addition to make good the losses of the past on what might be called the time- payment system. Mr. Allum puts forward the argument that all is well because the Government sanctioned the allocation of capital sums to meet revenue losses. The fact of the Government acquiescing in an act which in principle is bad, does not make it good, even if it makes it legal. Doubtless the Government agreed in order to help the transport undertaking out of a hole. I fail to see that the necessity for the relief of unemployment alters any of these principles. Mr. Allum states that I omitted to draw attention to the existenec of a sinking fund to meet the obligations. Again I submit: What has this to do with my contentions? Of course, a sinking fund has to be created whether the capital sum raised be properly or improperly used. A great virtue is made of the necessity

for the transport undertaking having to pay interest on its capital borrowed. What business can borrow money for nothing? My attention is further drawn to what is described as the remarkable recovery of the undertaking. If such is really a fact it is to be sincerely hoped that complete and permanent restoration to financial health will not be long de-

layed, but meanwhile I am more convinced than ever that the ratepayers will study their interests best if they wait until a Transport Board can be formed more suited to have the handling of another £500,000. Finally, may I remind Mr. Allum that the meeting I attended in Blockhouse Bay, held a few days before I left the district, was more than half over before I arrived there. THREE POINTS Mr. Allum replies:—“The position is this,” says Mr. Allum. “First, all expenses have definitely been met out of revenue: secondly, the accounts of the undertaking as published show the true position of the department; thirdly, the Audit Department approves the accounts, and no Government has ever interfered. “Lastly, members of the board fully understand the accounts and need no assistance from Mr. Tiarks.”