PUBLIC ACCOUNTS REPORT.

Taranaki Daily News, Volume LV, Issue 147, 8 November 1912, Page 6

PUBLIC ACCOUNTS REPORT.

CHANGE IN ADVANCES BOARD RECOMMENDED. AN ALL-NIGHT SITTING. THE REPORT ADOPTED. Wellington, Thursday. In the House of Representatives last night the Public Accounts Committee's report was presented as follows: The Public Accounts Committee, which was directed to enquire fully into all loans paid, or applied for, or provisionally or finally approved, for local authorities under the New Zealand State Guaranteed Advances Act since its inception, and to report on losses made (if any) since the Act came into operation, commitments and available means and unexhausted loan authorities as at March 31, 1012, and September 10, 1912; also to report on the letter of the Superintendent of the New Zealand State Guaranteed Advances Department of September 30, 1012, to the Minister of Finance has the honor to report as follows : (1) The loss sustained by the local authorities' branch of the New Zealand State Guaranteed Advances Department since its inception up to August 31, 1012, was between £22,000 and £23,000, and was incurred owing (a) to the Board finding difficulty in finding immediate investments for funds at the credit of loans to local authorities' account; and (b) to the remission of 10s per cent, allowed to the Department being insufficient to cover the expenses and loss of interest whilst the moneys remained uninvested. (2) Commitments on March 31, 1912, were £820,320 and commitments on September 16, 1912, were £051,310. (3) Available means and unexhausted loans authorities at March 31, 1912, were as follows: Credits in bank, etc., £163,043, unexhausted loan authorities, £778,(4) The available means and unexhausted loan authorities on September 10, 1912, were as follows: Credits at bank, etc., £27,550; ' debits, £30,000; ! debits exceeding credits, £2450; unex-

hausted loan authorities, £825,000. The Committee's finding was, in regan to the Superintendent's letter written or behalf"of tlie Advances Board, alleging

that statements were made in the House of Representatives on September 28, 1912, to the effect that loans had been granted by the Board to authori- ' ties under political inlluence and with a view to influencing the general elections of last December, that no evidence , Tfaa submitted substantiating the Super- ■ intendent's written statement, and the Committee consider that the members , of the Board were ill-advised in accepting the headlines in the press reports as sufficient grounds for writing to the Minister in charge of the Advances Dei partment in the terms used in the letter. The Committee's recommendation was ; that the evidence has led the Committee ' to the conclusion that insufficient control was exercised in administering loans i to local authorities, especially in committing the Department to advances three years ahead, an action which the Committee is advised was contrary to law. Your committee therefore strongly recommends a change in the personnel of the Advances Board. —J. B. Iline, chairman. In the ensuing discussion, Mr. Hanan moved an amendment to the report—"That the findings and recommendations in the Committee's report be struck out with a view of inserting other words, to the effect that the evidence taken by the committee and the records of the Department examined by it conclusively proved: (1) That the statements in the Board's resolutions, that no political or [ other influence was at time used to influence the Board was true; (2) that members of the Board were justified in asking for an enquiry into the grave reflections on their probity and .administration made in the House and the press of the Dominion, that money wai lout for the purpose of influencing the genoral election of 1911. The enquiry had completely exonerated the Board from having been subject to or moved by political influence in the discharge of its duties; (3) that no discrimination on political grounds had been made in the granting or refusing of a loan to a local body in any electoral district; (4) that no losses had been sustained . through the want of security under the State Guaranteed Advances Act. Losses amounting to £23,000 were incurred due (a) to the Board's difficulty in finding immediate investment for funds at its credit; (b) to remission of 10 per cent. ) allowed to the Department being insufficient to cover expenses and loss of interest whilst moneys remained uninvested; (5) the losses referred in clause i were mere trifles compared with those made under the old loans to local bodies system; (G) that the commitments made for payments of instalments, extending over a period of years, were in accordance with regulations under the Act; the Crown Law officers having now advised that such grants were illegal the Act should be altered to permit- of these instalment advances being made as in the past; (7) that if the Post Office fulfilled its promise made in June last to lend the Government £1.500,000 there would have been more than sufficient to meet all engagements. The recommendations are: (1) Now that moneys may not be obtained from the Post Office, the Act should be altered to make the interest payable to local bodies the same as that at which it is raised, when the moneys are payable to local bodies, plus a reasonable amount for costs of administration; (2) preference should be given to local bodies whose financial position and difficulty of carrying on their works entitle them to preferential treatment, and the Act should be amended in the direction of classifying local authorities accordingly. Mr. Hanan, speaking to the amendment moved by him, said that if the Committee had desired to be fair they should have specifically stated that there had been no political influence in connection with, the operations of the Advances Board. The report ought also to have stated that there had been no losses through the lending operations of the Board. Mr. Isitt said the report was absolutely the outcome of party differences. He objected to the Advances Board being made a butt of difference between Sir Joseph Ward and Mr. Allen. The House divided on Mr. Hanan's amendment, which was lost by 39 to 88. Wellington, Thursday. In the House after 2 a.m., discussions on the State-Guaranteed Advances Amendment Bill were continued. Speaking on the motion for the second, reading of the Bill, Sir Joseph Ward said that 75 per cent, of the members who had voted on Mr. Hanan's amendment had not read the evidence taken before l/he committee. They were condemning him unheard. Responsible heads of departments had given evidence that no political inlluence had been exercised in regard to loans to local bodies. The Hon. James Allen said agnin that the Board would be acting illegally in committing the country to a loan two or three years ahead. Mr, G. W. Russell said that the Minister should protect departmental officers. Be wanted to know which member of the Board was to be removed, aceording to the resolution passed by tflie House.

After further discussion, Mr. A. M. Myers appealed to the Minister to consider the purport of the report. Tin carrying out of it must moan the losing of their positions by some members of the Board. Mr. R, W. Smith moved that the question at issue be referred to a judge, before effect be given to the committee's recommendations. The Hon. F. M. B. Fisher contended that the purport of the report was to get rid of the Board, not to embarrass any civil servant. The Hon. James Allen said that he had never imagined or suggested that any political influence had been used by any member of the Board, but he did consider that in the interests of the country the administration of the department should be changed. At 5.30, Mr. Massey rose and said the committee could have brought down no other report. He recognised that the chairman of the Board was a zealous officer. The only intention of the report Was to replace two members of the Board by two business men. Mr. Smith's amendment was lost on a division by 37 to 20. A division was taken at 7.30 a.m. on the committee's report, which was adopted hy 30 to 2G. The House then went into committee on the State Guaranteed Advances Bill. The State Guaranteed Advances Bill was read a third time.