DOMINION'S FINANCES.

New Zealand Herald, Volume LXVI, Issue 20234, 19 April 1929, Page 13

DOMINION'S FINANCES.

PRIME MINISTER'S REVIEW.;

HOPES FOR CURRENT YEAR.

SURPLUS INSTEAD OF DEFICIT.

A statement regarding the financial position of the Dominion as at the end of the past financial year was made by the Prime Minister and Minister of Finance, Sir Joseph Ward, at the annual, dinner of the Wellington Chamber of Commerce on Tuesday evening. After ti reference to the anticipated deficit of approximately £550,000, the Prime Minister said:—"We must face the position with courage. I do not feel in any way dispirited about the deficit, and I hope to submit proposals to Parliament next session that will have the effect of

turning the deficit into a surplus for the coming year. We must take the position a3 we find it, realising that the resources of the country are such that the equilibrium between revenue and expenditure will be restored, as it has been restored in the past. "The preparation of estimates for the present year will obviously call for careful consideration, and the closest scrutiny. In the course of my investigations into the position of the various public works and railways under construction I

have observed that the cost of exceeds the original estimated cost on which the particular works were authorised. In fact, in some- cases that camo under my notice the cost was more than double the original estimate. That ought not to be. Afc least we ought to know what we are doing.

"As things are at present, amounts are placed on the Estimates* each year on account of various works under construction, and whcu the cost exceeds the. original estimate no explanations appear, and so far as the members of the House and the public are concerned the fact that the total estimate has been exceeded is quite overlooked. There is no fault to be found with the departmental officers. It is the system which is wrong, and it is the system which requires alteration. Proposed Safeguards.

'The Public Works Department is responsible for carrying out the bulk of

these works, and I think it will be gener- ■ ally agreed that their construction work is sound and carried out in an efficient manner. From the point of view of financial control, however, the present system is undoubtedly weak. The detailed estimates of expenditure are prepared by the Public Works Department each year in accordance with the requirements of the engineers, and are presented to the House without the various proposals being subject to any expert review from the financial aspect. There can only be one control of the finances and {hat control must be by the financial department. T'uless the financial department comes into it, you do not get the independent examination which is desirable."

The Prime Minister went on to say:—

"These remarks also apply to other accounts, such as railway improvement authorisation, education loans, land drainage, etc Another difficulty is that often a comparatively small amount is placed on the Estimates one year to start a large

undertaking without any definite consideration as to the effect ou the finances in succeeding years when expenditure becomes heavier. Thus the loan budget each year is tied to huge commitments which practically preclude anything in the nature of effective financial control. The expenditure of loan moneys should obviously be most carefully controlled and the results systematically reviewed from the financial viewpoint." Sir Joseph said he intended to bring proposals in the direction indicated before Parliament this year. It was remarked bv the Prime Minister

that there was one particular work up to the present had cost the £2,000,000, and the highest estimate had been able to discover for it was cme of £1,500.000. He would bring the posp« tion before Parliament, with a view joi securing an expert check on loan expenditure.

Trade and Unemployment. Sir Joseph said he was inclined to think that the business people were not taking full advantage of the opportunities of increasing trade. There was certainly something wrong with the country at present. The wool, dairy and meat men were all doing well, but in spite of thjit they had to contend with the problem of unemployment, which was very difficult to understand. He could not understand it There were larger sums available at present for advance to settlers than they had had for some time past, and yet they had the spectre of unemployment. There .were many men in New Zealand who were unable to find regular or permanent employment. Personally, he believed that one avenue through which they might open up greater oppotunities for employment was a policy of less interference with trade. If trade was increased they should be able to permanently employ many more men than they were now employing. The Government was anxious to do everything it possibly could do to improve trade and to encourage the investment of money. What they \\anted was co-operation between the vario is sections of the community.

Improvement in Trade Returns. After referring fo the improvement in the trade returns Sir Joseph said that the Government was engaged in a careful survey of administrative costs, and the country's recent economic .experiences suggested that they should not readily forget the lesson of caution imposed. While welcoming increased enterprise on the part of the people, they should be careful that their efforts should be applied on a sound and prudent basis. They had a country richly endowed in resources and they should be careful not to "over-run the constable," but with due care in set- . ting their house in order safeguard t heir future prosperity.