STATE ACCOUNTS.

Auckland Star, Volume LII, Issue 306, 24 December 1921, Page 4

STATE ACCOUNTS.

I The first fruits of tho overdue reform in the keeping and presentation of State accounts wore furnished to Parliament this week in the shape of balance-sheets prepared by forty-eight Government departments. In an important memorandum attached the Secretary of the Treasury explains, the changes made, and underlines the criticism of the old sj - stem that has so often been put forward in the Press. "A true perspective of departments from a financial standpoint cannot be shown," he says, "unless proper provision is made for depreciation and interest charges, outstanding revenue and expenditure, inter-departmental services, etc., and although this fact has long been recognised by tho Treasury, it has hitherto been found necessarily impossible to include any rei'erence to such items in the Statement of Public Accounts. . . It is hoped that the preparation of an annual breach department will, besides preserving to the State a valuable, record of Stateowned assets, lead to economical working of State services and also stimulate a greater public interest in the very important Department of Finance, which really dominates all the many and varied activities of the State." Glancing down the items from the accounts selected by the "Dominion," we notice that depreciation is allowed for in the balance-sheets of the Department of Health, to the extent of five per cent in furniture, fittings, equipment, and ten per cent on motor cars. But I when we arrive at the Railway Depart- | ments accounts, which will have the I moat interest for the public, we do not find any mention of depreciation in the Dominion's figures. The first of this ] Department's accounts to be presented in commercial form are very interesting. ' It sots down £37,235,854 as the capital expenditure on open lines, which coin- i cides with recently gazetted figures. Among the assets, however, the value of the plant is put down as £37,075,115, and . the difference is not •explained. Tho dc- ' partment reckons interest on loans at ■ the average rate paid on the national, , debt, and on this basis there was a dc- : licit on the working for the last finanrial year of £124,375. Since then the rate of loss has become much higher. ' The loss last year, however, was really . greater, for the department considers 'only the capital sunk in opened line?, whereas at the end of the year another £4,190,000 had been spent on unopened ■ lines. It has been repeatedly urged that' this non-revenue earning expenditure ! should be reduced. An official state- i tnent on the subject of depreciation would be welcome. Wo notice that the secretary of the Treasury states that the capital assets have been based on the ascertained capital expenditure to March j 31st last. Wo also notice that the Lake Wakatipu steamer service is valued at j ' £43,708, which is surely much higher | than the figure at which the business j would stand in the books of a private firm. It may be replied that the main-, tenanee expenditure on the railways is ' so high that no depreciation accoifnt is 1 required, but this is a point on which an I official statement might be made. Tho Government may be congratulated on bringing business methods to bear to this extent in the work of the departments. l>ut it would ar.ncar that more re- ; mains to be done before the accounts are presented in a completely satisfactory form.