Making- State Finance Intelligible

Press, Volume LXXXVII, Issue 26398, 17 April 1951, Page 6

Making- State Finance Intelligible

The ordinary person who finds himself bewildered by the national accounts and by the average company balance-sheet will be heartened to learn, on the authority of Professor D. C. Marsh and Mr W. G. Rodger, of the staff of ■ Victoria University College, that the cause is not his own dulness, but the form in which the accounts are presented. All must agree with the comment by Professor Marsh, in a recent address to the Wellington branch of the Society of Accountants, that Government departments have a responsibility to give the taxpayers a clear picture of how their money is spent, and how wisely it is being spent. It is vital to an informed public opinion that the full facts about any policy or major piece of administration should be generally and clearly understood, both for the maintenance of the people’s interest in their own business and for their enlightenment. It was possibly easy enough to understand the public accounts when the State was primarily concerned with such things as law enforcement, defence, education, public works, and so on. Since those days the State has entered business on a big scale, adding to its' railway and postal services such trading undertakings as banks, lend - 1 ing institutions, coal mines, shipping ■ and air services, a marketing I agency, a trustee agency, and insurance organisations, and has substan- I

tial capital investments in such things as a textile factory and an oil company. Up to a point, patient study will uncover a good deal of information in the annual accounts, in the balance-sheets published by various departments, and in annual i eports, though, as Professor Marsh noted, the use of a few “over-all covering phrases covers a multi- *' tude of sins ”, But there are not even the over-all phrases about the Government’s oil company investment, for example. And all this information, spread through many documents, is nowhere simply summarised. What the taxpayers want is, first, a general summary of national revenue and expenditure, showing the actual returns from, or losses on, all major State undertakings, and, second, a statement of accounts for each department and undertaking giving a clear picture of its financial position, where the money comes from, and where it goes to. Because of the complexity of government in New Zealand, this is obviously not easy to do in the concise form that will be read by the public. This same complexity makes it more than ever necessary that accountants should work out some way of achieving simplicity in the accounts. In a smaller and simpler field, the model accounts of co-operative dairy companies are an example of what can be done. For their part, politicians and taxpayers should not lose any opportunity of working for a reform that is certainly important, and probably in- i dispensable, to truly democratic j government. I