IS IT SOUND?

Evening Post, Volume LXXIV, Issue 17, 19 July 1907, Page 5

IS IT SOUND?

COLONY'S FINANCIAL SYSTEM. \ ANOTHER WAENINa. REPLY TO A CRITICISM. (By "Nemesis.") My thanks are due to "Senex et Juvenis" for his interesting criticism of my article on finance. It is refreshing to come across a psison with even an intelligent conception of this important matter, and only by public discussion will the people learn the true position of affairs, and of the financial sword of Damocles that is hanging over their heads. When my aiticlo was penned the figi urea of the actual public works expenditure to 31st March last had not leached mo, and my thanks are due to "Senex et Juvenis" for pointing out that while the appropriations chaTgeable to the Public Works Fund for 1906-7 amounted to £2,352,789, the actual expenditure was £2,040,519. Before making my deductions as to tho existence of a deficit, however, I allowed the appropriation figures a wide margin, and notwithstanding the gratifying i eduction in expenditure of £300,000, it will still bo found that not only is there no surplus, but a serious deficit for the year ending 31st March last. A VOICE FROM THE PAST. The Public Works expenditure for the year ending 31st March, 1891 — the last year of the Atkinson Administration — was £335,151. Tho Public Works expenditure for the year ending 31st March last is given by "Senex et JuVenis" as £2,040,319. My indictment chaigcd the Keddon regime -with •"resurrecting," also "practically creating," tho Public Worus Fund. The latter remark my critic describes as iionsensi!. Would that it wore. Let "Senex et Juveuis" listen to the following, and it will be soon seen where the nonsense is situated. H;rc is an oxtract from the last Public Works State- j inent of the Atkinson Government, delivered a few months prior to Mr. Scddon attaining oflico It was delivered by the ! Hon. Thomas Fergus on 2bt'.i July, 1890 : —"As "regards railways, harbour works, j .and h&rboaf defences, these may be confiiderccL works of a specilil character b»- ' yond the ordinary operation of settlement, and which cannot well be cairied out without borrowing capital, and the purchase of native lands and the construction of icads in connection there- J with are fair charges on the land revenue, but the cost of ordinary roads, telegraphs, public buildings, lighthouses, cind other lees important works hitherto charged to loan must in future be charged to the Consolidated Fund. I should also , «dd another item, which does not appear separately it» the table, namely, "improveihent3 on open lines ofrailyrny." This is tho stindaid of public bookkeeping that alone cub place the country on a. pound I loolinr. And if this position was nttainible in 1891, what is thp matter with the colony to-day that Vie can only creep back to it by degrees, as advised' by my critic? Tt is not the veriest claptrap to talk of buoyant finance and record surpluses under such ciTcumstancos What would be the position to-day if tba Atkinron Government had remained in office and chrried out its declaied policy? There j would be no need for "Senex et Juvonis" to ,<isk me lo schedule the c'oubtful items hi tho Public Works Fund. SOUND FINANCE WANTED. The Hon. Thomas ' Fergus shared the view of sound business men that (with the exception of the uuirtportaat pubhu oxpsliditurc on harbour works and harbour defences)* railway construction alone was the only serious item for which bor- v rowing is legitimate and proper Judged by the financhl standard &ct by the Atkinson Administration, and given out as •iheir declirred policy, nnd quote-! above, how much of the " 1906-/ expenditure charged to the Public Works Fund would have been paid out of the Conßoliditrd Fund? A total that not only wipes the alleged surplus light out, but leaves a serious deficit to be faced. Borrowing for public buildings is like • a man thnt starts life by borrowing for his hossehula furniture, and never payiiig off, but each .year borrowing more— tho method alone of the spendthrift and hopelessly improvident—yet this fairly illustrates the morals of our public finance to-day. When the Government requires to buy land for. public buildings, etc., how is tho money found? It is borrowed. When ! the Government sells Grown laeds, what becomes of tlte > money? Is it- placed to capital account"? No j it is added to current year's revenue and spent. It is true that a proportion is handed to local bodies,..but why should not land bought for public uses be paid for from the proceeds of the • sale or leasing of Cio.irn lands ? TIME RIPE FOR AX ENQUIRY. Now for a few words as to "additions io open lines." Assuming and allowing that more mileago nnd increased business involves more rolling (stock, where ia tho provision for tho rolling stock thnt is wearing out each year and becoming useless? For instance, "Webtinghouse brake" is down on the appropiiations for £26,000. This tfp-to-datc contrivance replaces old-fashioned brakes, but where ii> the cost of the old brake* written off? Then my critic alleges that new 701b rails leplace 401b rail*. Mo\V much of the first cost of mying the lighter rails is written off? Whore is the'deprecation allo wanes for machinery and rolling stock that is wearing out and becoming obsolete? I &o;irch in Vain for the de- | preciation fund. While legilimute tup*, tal expenditure on increase of plant in a growing business may appear on one side, a full .depreciation fund chould be j provided out , of lovenuo on the other. If there is no. such fund there is a grave irregularity of book-keeping that needs a searching investigation. Tho cntirs item "addition to open lines" is regarded with suspicion and there is a feeling, that the c&pit-il account of the railways has buen inflated enormously by the absence of proper provision from lovejiuo for depreciation which may o'oeily amount to a quarter of a million numutl. ly. The time in iipe for a full enquiry into this matter by men of expert experience." This alone will satisfy the public mind.' DISASTER AHEAD. As to the amount of debt per head, because it was £61 per head in 1892 ih a ridiculous reason way £69 per head of indebtedness i? justifiable to-any. My critic omits in his comparisons to state thau charges to tho Public Works Fund amounted to approximately 11s per head for yo; r ending March 1891, us agiunst 15 per head for year ending March last. "Senex et JuvenisV standard of financial ethics are not mine, but from his ptandjiuint his able and moilcrato pitiMHitntion of Hie oilier cide of the question Mill enable, the public to form their own conclusion*. Unfortunately a generation han j^roWn up, who look on the present condition of things us lr.ituial. Xo sound man of business, however, can possibly cxtminc the condition of tha public fii»ncc without lealising thnt if present method* vie continuod a diisastious day oi" reckoning auone'r or later is as inevitable as night following day..