POST AND TELEGRAPHS.

New Zealand Herald, Volume LXIV, Issue 19778, 27 October 1927, Page 10

POST AND TELEGRAPHS.

The Government's policy of reforming the administration of State departments according to commercial principles will be substantially advanced' by making the Post and Telegraph Department independent of the Treasury, as a bill now before Parliament proposes. The effect will be to give this great national institution which, at least on the postal side, is universally recognised as peculiarly a function of the State, the same status as the Railway Department. From the telegraphed summary of the bill and the Ministerial explanations, it seems that the measures to give effect to the proposal have not yet been worked out in full detail, but the general intention appears to be that a revaluation of the capital assets of the department shall be made, and that it will be required to pay to the Consolidated Fund a specific rate of interest on the liability. The Treasury will also continue to receive the profits of the savings bank though, in that event, it would only be fairto credit tho department with rent for the accommodation it provides for the bank. There are two convincing arguments for such independent accountancy. The greater is that it reveals the actual condition of the department's operations. lor instance, in 1925-26, the Consolidated Fund account showed post and telegraph receipts to have been greater by £671,000 than expenses. But the department's own accounts revealed a net loss of £6622 on its whole operations, exclusive of the savings bank. With a capital of nearly £10,000,000, it calculated interest and depreciation at £731,000. The loss on tho telegraph service was estimated at £119,000; that on the postal branch, which performs so large a public service, at less than £12,000. Nearly the whole burden of these losses was borne by the telephone and toll branches, with net profits totalling £125,500. The secondary point in favour of the new proposal is that it disposes of the possibility of using the post and telegraph services as an instrument of taxation : with independent accountancy, their charges may be adjusted without reference to the effect upon the general finance of the Government, the only external consideration being the necessity for meeting the interest liability. Placed in such a position, the department should feel greater encouragement to develop and improve and cheapen its services to the public^