PUBLIC WORKS BY CONTRACT

New Zealand Herald, Volume LXX, Issue 21449, 24 March 1933, Page 8

PUBLIC WORKS BY CONTRACT

The president of the Federated Builders and Contractors' Association was on sound ground when he argued the case for a return to the contract system of carrying out public works. A certain degree of self-interest may be active in this quarter, but public interest supports the contention. The National Expenditure Commission was particularly emphatic on the subject. "We feel so confident," ran the report, "that a reversion to the contract system is the only satisfactory basis upon which true economy can be obtained that we have not considered it necessary to inquire into the possibilities of effecting economy, assuming the present policy is to be continued." Under the present system the overhead is unduly heavy. A large permanent staff is maintained year in and year out, though expenditure may vary very considerably. The last report of the Public Service Commissioner shows that there has been little diminution of the staff, notwithstanding the fact that the expenditure of loan money lias entirely ceased. Another most important consideration is that of controlling expenditure. As was stated by the commission, works started on a small scale, perhaps as a means of relieving. unemployment, may grow under local pressure to very large dimensions, in which case the country may find itself committed to a debt far beyond the value of the asset croated. Again, the present system has been most seriously at fault in the estimation of costs, which often have been vastly exceeded. The commission quotes a number of undertakings which cost

£6.9-10,000, although the original estimates totalled only £2,951,000. Under the contract system such a disparity would be quite impossible, the experience of Otira and Arapuni notwithstanding. A further factor is that of the efficiency of labour. It is notorious that since the war the standard "output" has been absurdly low, particularly during the period of high wages.' Relief workers on many rural roads have shown a much better average. As a direct employer of labour the State can never hope to obtain the results of a private contractor, whose financial stability would be undermined if his employees did not give a fair return for their wages. To that end he selects his men for their zeal and efficiency. This is impossible for the Public Works Department if for no other reason —and there are other reasons—than that of the magnitude of the numbers involved. A return to the contract system has everything to commend it.