PUBLIC ACCOUNTS

Southland Times, Issue 19366, 25 October 1921, Page 5

PUBLIC ACCOUNTS

THE POSITION OF NATIONAL DEBT. YEAR’S INCREASE £5,153,564. Much interesting information is contained in Part Two of the report on the Public Accounts for the financial year 1920-21, presented to Parliament. The report states that during the past year the transactions in connection with the Public Debt have been numerous. The total amount of securities outstanding at March 31, 1921 (including State Advances debt) was £206,324,319, an increase during the year of £5,153,564. New loans amounting to £17,149,789 were issued during the year, but against this must be placed the amount of £11,996,250, debentures under section 3 of the Discharged Soldiers’ Settlement Loans Act, 1919, paid off by transfer from the ordinary revenue account under section 8 of the Discharged Soldiers Settlement Loans Act, 1920, thus giving a net increase of £5,153,539 in the debt during the year. To this must be added an amount of £25 issued for redemption of debentures which fell due during the year but was unpaid at March 31, which gives the increase in securities outstanding as stated above. Securities to the amount of £6,766,210 are held by the various funds and accounts which together form the Public Account, and are included in the amount of Public Debt shown as outstanding on March 31, 1921, but such debt is merely interdepartmental, and is therefore distinguished in the general balance-sheet and summary of transactions by being shown under debenture sales account (£6,137,780) and inscribed stock sales account (£628,430), instead of under Public Debt Account. During the year it was found necessary to take advantage for the first time of the provisions of the Public Revenue Act, 1910, allowing the issue of Treasury bills in aid of the Public Works Fund. Treasury bills amounting to £670,000 were so issued, but were paid off during the year out of loan moneys received to the credit of the fund.

Speaking of the loans redemption account, the report states that debentures amounting to £1,736,460 were paid off during the period under review, the requisite funds being provided by the issue of fresh securities of an equal amount, of which £1,474,700 was in debentures and £261,760 in inscribed stock. Loans amounting to £8,358,457 were renewed by the issue to the holders of fresh securities of an equal amount, and inscribed stock to the amount of £571,340 was issued in conversion or replacement of other securities. Inquiry has been made by the Audit Office as to the position of the various special sinking funds established by law for the repayment of particular loans. As a result of this action an effort is being made to ensure that, so far as statutory provisions permit, all such sinking funds shall be represented by assets, so earmarked or set aside that an actual fund may be built up available for the repayment of each loan. All loans not provided with such special sinking funds will come within the provisions of the Public Debt Extinction Act, 1910, and will eventually be repayable out of the sinking fund established by that Act. A feature of the year’s transactions has been the large number of investments made by the various funds and accounts in securities issued in respect of other accounts. By this means moneys raised and received have been made temporarily available where most needed, and a considerable saving of interest has thus been effected, which would not have been possible if the statutory provisions for temporary investments of public funds had not been in operation. In this connection, however, it must be pointed out that section 28 of the Finance Act, 1920. which provides for the charging of such investments against the “Public Account Cash Balance Investment Account,” instead of against one or more of the funds and accounts which form part of the Public Account, destroys to somp extent the control of the cash accounts which the Audit Office is expected to exercise, as it makes it possible to actually iasue moneys out of the Public Account without charging any of the accounts of which the Public Account is made up, and which must therefore be afffldt.pd hv any issues made therefrom.