PUBLIC ACCOUNTS

Press, Volume XCIV, Issue 28080, 22 September 1956, Page 3

PUBLIC ACCOUNTS

ECONOMIST REFERS TO “MIX-UP”

Forms of accounting must be different according to the business for which they were prepared, but all good accounting must be clear, said Mr W. Rosenberg, lecturer in economics at Canterbury University College, when he spoke on the Public Accounts to the Canterbury branch of the New Zealand Society of Accountants.

The Government accounts of New Zealand, like the Government accounts of most other countries, were kept on a cash basis, he said. There was nothing wrong in that, for cash accounting was the ideal form for showing what had been collected and what had been spent. From the Public Accounts people wanted to know how much the Government had taken from the country, and what was available in taxation and other forms of revenue. People wanted to know how much of the purchasing power was taken from them and how much the Government had used. The Public Accounts did not make clear what excess of expenditure there was over revenue, nor did they make clear what was the exact form of revenue. Mr Rosenberg said. “We want to know how much has been spent on current expenditure, and how much on capital expenditure.” Recently further confusion had been introduced because simple cash accounting was not observed, he continued. There was a complete mixup of cash accounting and accrual accounting. In addition to the Public Accounts, he considered that the Government should give some much clearer statement to the public. Certain accounts, like the National Roads Fund, had hived off from the Public Accounts, and the result was that the true position was obscured. Mr Rosenberg listed the percentage of Government taxation of national income for the last three years as shown in the 1956 Economic Survey at:—l9s4. 28.1; 1955, 27.4; 1956, 26.9. Those percentages, he said, did nol take account of motor taxation. When that was included, the real percentages were 28.1, 29.7, and 29.1 respectively.

The apparent balance in the Consolidated Account for 1955-56 was a loss of £2.7 million, but that included internal transfers. If they were deducted the corrected surplus was £46.1 million. Mr Rosenberg said.