DOMINION’S ACCOUNTS

Wanganui Chronicle, Volume LXXXIII, Issue 19718, 8 December 1926, Page 11

DOMINION’S ACCOUNTS

BOOK-KEEPING METHODS INCOMPLETE AND CONFUSING. (By 'Taxpayer.) It is now four or five years since the : New Zealand Taxpayers’ Federation j first urged upon the Government the importance of each Department of I State keeping its accounts on a sound • business system and submitting them • each year to Parliament for the ini spection of members and the public, i The proposal was warmly supported by = the Secretary of the Treasury, and ac- | claimed by the newspapers of the Do- ' minion, almost without exception, and ■ endorsed by many lefeding politicians, I including the late Mr Massey, then | Prime Minister, who promptly gave ; directions that it should be put into i operation by the various departments at the earliest possible moment. The departments, speaking generally, were not enthusiastic in their reception of the edict. A few of them prepared bal ance sheets which were intelligble and illuminative, and a larger number sub- ; mitted masses of figures which probi ably a skilled accountant could have ; put into shape; but the majority of them either displayed not the slightest i notion of what was required or refrained from making any return at all. Mr Massey up to the time of his last illness persisted in his demand for the r preparation of proper acounts, but with j one excuse and another the redalcitrant i departments have managed so far to i defeat both the letter and the spirit of I the demand. In this respect the Railway Department, whose figures would : be of particular interest to the public • is one of the chief delinquents.

A Horrid Example. Just to ascertain what need there is for more effective bookkeeping in the Railway Department if is necessary only to turn to its annual statements for 1924, 1925 and 1926, in which all the information vouchsafed to Parliament and the public in regard to its activities'is embodied. On page 3of the statement for 1925 the house factory and sawmill at Frankton, one of the State enterprises of doubtful value upon which the Department has embarked, is capitalised as at March 31 at £114,978 17s 9d, while in the corresponding statement for 1926 the amount is brought forward as £146,323, an unaccountable increase of £31,344 5s 9d. A few thousands more or less may seem a mere trifle to an accountant toying with millions in the course of his day’s work, but the taxpayer obviously is entitled to know why this extra capital expenditure was omitted from the accounts of 1925 and then surreptitiously introduced into the accounts of the following year. The Department has a reserve account covering its sawmills, stock, timber and so forth, which in the general statement for 1924 showed a balance of £24,681 2s 3d. In 1925 the sum of £3,516 18s 5d was added to this account, making the total, as it seemed, £28198, and yet on its next appearance it was down to £16,649 14s 9d, between £ll,OOO and £12,000 having disappeared without leaving in the customary returns any trace of its whereabouts.

Juggling With Figuies. As the account keeping of the Railway Department as already stated, is of particular interest and consequence to the public, it may not be unprofitable to pursue its vagaries a little further. In the Railway Statement submittee to Parliament towards the end of 1923 it was announced that the house factory and sawmill at Frankton both had been completed and members who had been perturbed by the lavish expenditure upon those experimental undertakings took to themselves the consolation that at last it was at an end and that no further additions would be made to capital account. But notwithstanding the assurances given on this point, in 1924 £7020 was expended; in 1925, £78,509, and in 1926, £27,972. These figures added to the undisclosed addition to capital account in 1925 give the total of £144,845. Possibly there is some sufficient explanation of this apparent juggling with words and figures, but it cannot be discovered in such light as is thrown upon the position by the Department’s statement and returns. The need for clear and definite information on the whole matter made all the more urgent by the fact that the Railway Department has entered into active competition with private enterprise in supplying timber and buliding accessories, while paying neither land nor income tax, neither interest on capital employed nor local rates, neither the cost of sidings nor the ordinary expenses of distribution. This opens up a very big question of public policy, which there may be an opportunity to discuss later on.

Economists Speak. Meanwhile it will not be irrelevant to the subject on bland to quote a passage or two from a recent bulletin dealing with the national accounts prepared by the Department of Economics of Canterbury College. “In New Zealand, as in other countries, the Budget has grown rather thnn been planned,’’ is the pronouncement of this impartial authority. In the selection, arrangement and presentation of the matter there are at present, despite last year’s improvements, defects both of omission and commission. The arrtangement is still confusing and in places illogical. It is overloaded at almost every stage with digressions on policy w’here facts and opinions tend to become confused. No estimates arc given of either revenue or expenditure on capital laccount, and altogether the relation of the trading departments to the Consolidated Fund is unsatisfactory. Each Department should stand clearly on its own feet, subsidiary to the consolidated revenue and expenditure. The final statement should be built up from the net entries transferred from these departmental accounts. An incidental result of such a change would be that the true position of the public, debt would be much clearer ... It is necessary that the utmost care and economy should be exercised. The first necessary steps towards that desirable end are a simplification land clarifying of the national accounts and more, effective, because better informed, criticism of these accounts when they are presented.” The Minister or the Government that will give effect to these recommendations will deserve political immortality.