NO SAFEGUARDS

Evening Post, Volume CXXIII, Issue 112, 13 May 1937, Page 14

NO SAFEGUARDS

PUBLIC WORKS PLAN

"HIGHLY DANGEROUS"

Although the Minister of Public Works denies that the undertakings comprising the Government's extensive public works programme are uneconomic, the taxpayers would feel a great deal more confidence on the point if this opinion was supported by an independent investigational body (says a statement by the Associated Chambers of Commerce of New Zealand).

Tne National Expenditure Commission of 1932, after making very definite recommendations as to future policy that should be followed in respect of different classes of public works—recommendations which have been almost wholly ignored in the present ten million pounds' public works programme—put forward concrete proposals relative to an independent board of works, which it considered should be set up. NON-POLITICAL BOARD. "We believe," said the Commission, "that before any public works are undertaken in the future, or before any assistance is given by the State to public works which are to be carried out by local authorities, the proposals should first of all-be subject to expert examination by an independent board of'works somewhat akin to the Local Government Loans Board. It should be the duty of this board to review all matters connected with proposed works, or Government assistance in respect of proposed works, and to report thereon to the Government. This board would require statutory powers, and we suggest that the legislation should provide that in any case where an adverse report is submitted by the board of works, ■ the proposals should not be proceeded with, except with special legislative authority. With the exception of a Treasury representative, the board should be entirely nonpolitical and non-technical. "This board," continued the Commission, "would naturally have advice and reports from the Public Works Depart-, ment, and should be authorised to call for independent engineering reports on any project. It is not so much a board of professional men that is called for as a board of business men capable of -.'.correctly estimating the financial position and prospects and economic justification of proposed works." No steps have apparently been taken to carry out this most important recommendation since the time it was made. Actually, the' plan goes back to the time the Public Works Department was first constituted—in 1870—the Act of that year providing for the appointment of a board of advice to assist the Minister, of Public Works in the administration of the Act. The idea is, therefore, by no means a new one, and its application is more than ever necessary at the present time, when enormous expenditure on public works has again been entered into. "INSUFFICIENT^ CONSIDERATION."

It is a highly dangerous situation for a huge spending Department like the Public Works Department to be judge and jury in its own case. The Department determines which public works shall be undertaken, ' and when; it dt-aws up its own designs; makes its own estimates, and carries out its own construction. Its position is such that the way is open for political considerations, instead of economic considerations, to influence and determine its activities. A proposed undertaking, which'is desirable in itself, might better be held over for some future date. Other proposals may be plainly uneconomic—and certain of the new projects at present in hand undoubtedly are. What safeguard have the taxpayers against unwise and uneconomic expenditure, which is going to increase their taxation, and burden the country with debt for generations? Under' the present system, they have no safeguard. All available evidence proves they need one.

The Expenditure Commission, in giving a table of total expenditure out of the Public Works Fund up to 1931 on what might be termed "national development," said: "It is worthy of note that, out of the total expenditure of 1 £34,757,000, the only revenue-producing item is the amount of £1,226,000- which has been utilised for main highways, and upon which interest at 5 per cent, is being provided out of petrol taxation. Thus the' bulk of expenditure out' of the Public Works Fund constitutes a direct burden on taxation for interest and debt redemption y charges amounting to approximately £ 1,630,000. If this were the total expenditure on works of an unproductive nature, the position would be less alarming. This is, however, but a small part of the public debt burden." The Commission went ori to quote a total railway loss of £39,500,000, and losses in connection with schemes of river improvement, river protection, land drainage, swamp drainage, and land settlement, and said it was evident that. insufficient consideration had' been given in the past to the, economic justification of many of the. works which had' been undertaken. '' It believed that a proper conception had in many cases not been formed of the manner in which maintenance charges were to be financed on the completion of the work.

Today a vast,-public works1 programme has again b^en,launched, without any check or safeguard such as a non-political board of works would provide, and under a pernicious system against which the gravest-objections have been recorded.