SIR JOSEPH WARD'S FINANCE.

New Zealand Herald, Volume XLV, Issue 13673, 14 February 1908, Page 3

SIR JOSEPH WARD'S FINANCE.

HOW SURPLUSES ARE MANUFACTURED. While Sir Joseph Ward (writes a correspondent) is sounding the loud trumpet as to liis surplus and the buoyant finance, it is well to look a little below tho surface of things. Business men who have investigated the public finance from time to time, are far from satisfied at the manner in which these "surpluses" are arrived at. Take the railways, for instance, whose accounts are supposed to he based on sound principles. The rails as first laid down were charged to capital account, i.e., loanc. Now heavier rails are being laid, and these also a.re beingcharged to loan. There is no depreciation fund or writing off the cost of tho first lot of lighter rails, but both lots are charged to capital account. If an engine wears out the first cost of it is not written off, but a new engine bought, which is also charged to capital account, and both remain charged to capital. Same with public buildings*, which are all provided for -jut of loan moneys. If a building wears out, or is burnt down, the Government provides nothing from revenue, for reinstatement, but simply borrows again for a new building. As is well known, side by side with the ordinary revenue and expenditure accounts there is the Public Works Fund financed with borrowed money. This fund disburses about two and one-quarter millions pei annum, and it has been estimated by many business men that fully a million of this should never be charged to this fund at all, but be met from the ordinary revenue. This would have the effect, of absorbing all the make believe " surplus" of three-quarters of a million, and leave a deficit of a-cruarter of a million, which represents nearer the true position of the colony's finance according to the methods of book-keeping adopted by sound business men generally. All the subsidies for roads, bridges, baths, town clocks, etc., cost the Government revenue nothing; every penny of it is from the Public Works' Fund. "The Government are maintaining main roads throughout the Dominion on borrowed money, and are also granting compassionate allowances in connection with public works officials out of borrowed fur-as. Some time.age the Government contributed half towards % improving the footpaths outside their buildings,, all of which was* chi urged to loan. By this method of book-keeping it is quite easy to produce surpluses T-;e long continued Liberal Government has: developed this method of finance to an, extent that will give the people-of this country a rude shock when the fey'of awakening arrives. New Zealand's demands from her Government sound finance, not surpluses built upon manipulation of-figures, such a? I have only touched the fringe of in the examples above quoted.