Asset sales not used for Govt spending

Press, 27 July 1988, Page 8

Asset sales not used for Govt spending

By

BRENDON BURNS

political reporter

The Government was not using asset sales to fund current spending, said the Controller and Auditor-General, Mr Brian Tyler, in the Audit Department’s report on the Public Accounts tabled in Parliament yesterday.

The Government - has been accused of "selling off the. family silver to buy the groceries,” during public debate on asset But, in fact, Mr Tyler said the Government was using current income to retire debt. No proceeds from selling assets such as New Zealand Steel or Petrocorp were used to fund spending, said Mr Tyler. Net proceeds from asset sales totalled $1096.5 million, while net repayment of public debt was 51556 M in the year to March 31, 1988. Public debt (Government and departmental) decreased during the year from $42,479 million to $39,112M or 8 per cent.

This comprised actual debt repayment of $2667M and $lBll million from foreign exchange gains. Mr Tyler, who has been harshly critical of the Public Accounts in the past, said they were improving. But anyone who believed reading them would be given a full picture of the Government’s financial position was in “airy, fairy land,” he .said. Government initiatives to establish the efficient management of departments were laudable, said Mr Tyler. But they had to be matched by an equal commitment to improve the accountability of Government departments to

Parliament and the people. All New Zealandeis had, on average, about $lO,OOO collected from them by the Government, and had a similar sum spent on their behalf by the State. Accountability for the huge sums involved required information that was not being provided. “This situation is totally unsatisfactory,” said Mr Tyler. The Public Accounts did not reflect the total activity or position of the Government. Mr Tyler said $3360 million of Government spending was made through trust accounts that were not adequately reported.

Fisheries management was given as another example of poor financial administration. Under the individual transferable quota (1.T.Q.) system, about $l2 million of fisheries revenue was outstanding at March 31, 1988. This included $4.1 million in outstanding debts for which there was little incentive for prompt payment because of the absence of penalties. Mr Tyler said legislative amendments are now being drafted. The Ministry of Energy was unlawfully collecting a levy for coal research. The rate of the levy had been increased without any regulation being passed, he said.