STATE CONCERNS

Southland Times, Issue 19395, 8 November 1924, Page 8

STATE CONCERNS

BUSINESS FIRMS COMPARED. FACTORS OF ADMINISTRATION (Our Parliamentary Reporter),, WELLINGTON, November 6. The age-old question of how State concerns compare with business firms, and the factors covering the administration of either, with their relative effect in the sphere of public efficiency, are reviewed by the Public Service Commissioner in his annual report, presented to Parliament this afternoon. “There is an impression,” says Mr Verschaffelt, “that there is a wide dissimilarity between the conduct of Government affairs and private business. This idea is usually founded on premises only partially true. It is assumed that a private business is invariably efficiently managed, and free from interference and changes of policy, but that Government departments axe overstaffed with incompetent officers, are subject to continual political interference, and that if only a business man had charge of affairs, many savings could be effected. DISTINCTION IN PRINCIPLE. “While it is obvious that in any large organisation there is always scope for economical readjustment, what the critics overlook is that in the nature of things there is a wide distinction in principle between State enterprise and private business, in that the maiij purpose of the one is the public well-being, and the other individual gain. It is a fallacy to believe that, because a man has been successful in amassing a great personal fortune, he is therefore the best qualified to lay down principles of the public administration of finance. COMPETITION v. CO-ORDINATION. The chief function of profit-making in the world of business is astute competition, whereas the chief function of public administration is wise co-ordination. Although there is a wide distinction in principle, in method the difference is not so evident and this the critics fail to take into consideration. A comparison of the methods adopted would disclose that there is a greater dissimilarity between a large business and a small one than between the organisation of a large Government department and a private concern of comparable size. Indeed, it can be claimed that in many departments modern methods are in vogue which compare favourably with outside business firms and it may safely be asserted that of the faults which are ascribed at times to the administration of Government departments, all of them, and in some cases worse, could be found in the administration of many successful business concerns. The fact that public activities are more open to public review tends to magnify any deficiency in public administration, thereby making it appear to contrast unfavourably with the conduct of private enterprise.