TESTS FOR SOUNDNESS

Taranaki Central Press, Volume IV, Issue 438, 20 May 1937, Page 2

TESTS FOR SOUNDNESS

PUBLIC WORKS PROJECT Precedent Existent Notwithstanding a ten million pounds public works programme launched during 1936-37, the Minister of Public Worke announces a year, plan at further works —apparently. to be out without the country having the benefit of an independent and precautionary testing of the worth of the projects involved (says, a. statehment by the Associated Chambers of Commerce of New Zealand).

The non-political and non-technical board of works which the National Expenditure Commission strongly urged should be set up ag a check on the desirableness, economic soundness and timeliness of national public works, nas a first cousin in existence. The present Local Government Loans Board is somewhat analogous to what the members of the Commission had. in mind. Duration and Utility Factors. Under the Local Government Loans Board Act of 1936, all loan proposal of local authorities (except in regard to money borrowed in anticipation of revenue) require the sanction of the Local Government Loans Board. In no case may the board sanction any application unless provision is made to i.« satisfaction for repay, ment of the loan within such period as it deems reasonable, having re*gard to “the probable duration and continuing utility of the works on which the loan moneys are to be expended.” When the bill providing for the setting-up of this board was brought down in 1926, the then Prime Minister said, inter alia: “We know from

our own experience that a great portion of theee loans ■are not justified. . . The larger 'question of whether the loan is really in the interests of the locality, and is well spread, and the scheme is a well-conceived one, is a point which they lose sight of. . - It is most important to make perfectly certain that money, whether raised by the local authority or by the Government, is applied to a useful purpose, and is administered in a manner that any reasonable man must feel is in the beLt interests of the country. . . I believe it (the bill) will be of great assistance to the local authorities, while at the same time it will be a check against needless expenditure. There are certain harbour works which thould have been put off for 50 years, while others should have been concentrated upon.” What is sauce for the goose is sauce for the gander; if local public authorities need a check placed on their expenditure, the national public authority teems to enjoy no inherent virtue which exempts it from a similar necessity. In fact, the abovequoted words of the Prime Minister in 1926 have a striking application to the implications of the presentday public works policy of the Government. Business Management. There is another aspect to the question. The work of a non-politL cal checking authority need not end there. More than one set of duties for the suggested board of works was prescribed by the Expenditure Commission. With regard to the electric the commis-

sion said it was evident that the future policy should be one of rigid economy and strict business manage, ment on the commercial side. It appeared, said the commission, to be impossible to divorce Government business from the influence of politics, and it was forced to the conclusion that it was essential in the interests of the general taxpayer that some method be devised whereby the business management of such works as hydro.electric works, irrigation works, each should be subject ’o general supervision by an independent tribunal. The duties of the board could include the fixation of of charges for hydro-electric power, water from irrigation schemes, etc. The commission did not advocate that the board should have arbitrary powers, as it was recognised that his would be opposed to the principles of democratic government. It nevertheless considered that if the board reported adversely on any suggested contract for, say. the supply of hyli o-electric power a', a rate not in accordance with tne standard rates for the De;-.-inion the contract rate should not be entered into without legislative authority Then again, the eoium.v'on considered 'that the board of works should be authorised to fix charges in connection with irrigation works', to have a general oversight of the measures necessary to ensure the collection of such charges, to lay down definite rules governing the provision of State subsidies for roading, a.nd generally to exercise business management of national works. There would seem to be a great deal of necessary work, to be done in rationalising the whole public works' system, and putting it on a sound basis, before any new undertakings of doubtful utility and worth are entered into by the State.