THE GOVERNMENT'S BOOKKEEPING.

Press, Volume LXIII, Issue 12964, 18 November 1907, Page 6

THE GOVERNMENT'S BOOKKEEPING.

"The cost of ordinary roads, telegraph, " public buildings, lighthouses, and " other less important works hitherto " charged to loan, must in future be " charged to the Consolidated Fund. I "should also add another item which "does not appear separately in the "table, namely, 'Improvements to

"open lines of railways.'" This extract from the Public Works Statement of seventeen years ago reads today, in the light of modern Government book-keeping methods, like a counsel of perfection, but it w*s the policy of the Atkinson Government, it is the policy of the Governments of at least two Australian States and of Canada, snd it should be the policy of any Government that desires to preserve a reputation for sound finance. How faf w© in New Zealand have drifted from such a course is shown in an illuminating article contributed to the Wellington "Post" by one who describes himself as "a business man wholly unconnected " with politics." With the amount 6f the appropriations of public'works, £2,106,951, he doe? not concern himself, nor does he attempt to criticise the manner in which the sum is allocated among the various districts. He confines himself solely to dealing with tho character of the expenditure, and he emphasises, in doing so, tho assertion so often made by members of th© Opposition, that many of the amounts charged against tho Public Works Fund, which is largely made up of loan money, are items of ordinary expenditure that should bo met ont of revenue. By charging such items against tho Publio Works Fund the ordinary Departmental expenditure is decreased, the effect being to swell th© "surplus." All sound business men and sound Governments, as the contributor claims, act on the rule that legitimate expenditure of borrowed money is confined to reproductive works, and applying this rule to the Public Works Fund Estimates ho finds that more than half tho total amount is expended illegitimately. One may not go all tho way with him in his criticism of the Government's book-keeping methods but ho cites many instances to which the strongest objection may justifiably be taken. Ho passes tho item "Railway construction £776,000," as an investment in a national asset, but the item, "Additions to open lines £350,000," is another matter altogether. It is notorious that much ot this vote is applied to make good the heavy depreciation in rolling stook, etc., for which no provision is made from revenue. There are also very grave doubts *s to how much of the -£105,000 allotted to telegraph extension really represents new mileage, and as to whether the larger part of the amount is not intended to replace the depreciation caused by wear and tear, which should be paid out of revenue. There have been some astounding instances oof wrongful charging in years gone by. We have seen waterproof sheets for volunteers, the painting of a railway station, and similar items of purely current expenditure, charged to the Dominion's capital, instead of to its revenue, account. This year we are devoting borrowed money to pay such v items as

the paving of footpaths in connection •with -departmental buildings in. "Wellington £286, a compassionate allowance of £200, postage and telegrams £750, and a similar item for £1600, an exhibit it the International Exhibition £250 4 flood damage £350. Not only is the practico of charging such items againsT'tho capital account essentially unbusiness-like, but it is dangerously misleading, for it gives our finances a fictitious appearance of prosperity, whereby the publio are hoodwinked as to the real position of affairs. Thero is indeed much need for tho adoption by the Government of a system of bookkeeping that is less open to critioism by business men.