A VICIOUS CIRCLE

Waipukurau Press, Volume XXVIII, Issue 128, 25 May 1932, Page 2

A VICIOUS CIRCLE

PUBLIC WORKS SYSTEM CONTRACTS THE SOLUTION There is a solid backing of facts to the charge against our present State policy of public works of great L extravagance and fundamental unsoundness (writes the Associated Chambers of Commerce). These facts can be briefly stated. ' The Public Works Department, expanding beyond the purely supervisory function originally designed for it, has through 62 years assumed greater and greatei - constructional powers, developing into a huge employing machine and causing works to be undertaken which were not so necessary for the proper development of the Dominion as they were for keping the department employed—a vicious circle, ever growing. Parallel with this development, if not preceding it, political and local pressure on the Government in power has resulted in the prosecution in different districts of public works which were commercially unsound, and which represented an expenditure out of all proportion to the financial capacity of the country.

Absence Of Competition

As a State department, the Public Works Department is now directed to report authoritatively as to whether a project, local or national, should or should not be undertaken; it is directed to carry out work regardless of whether that work will prove to be properly productive or not. The department is subject to no competition and so it enjoys an absolute monopoly of public works, all of which are handed over to it by the Government to execute or cause to be executed. The department is subject to no expert check or supervision, other than its own, and the accuracy of its estimates (which have repeatedly proved gravely at fault) cannot be authoritatively challenged by the Minister of Public York, who is not an engineer, or by the Government at all.

In the comparatively few cases where the department decides to call tenders for public works, the Government makes it clear that it declines to accept responsibility for the accuracy of the department’s plans and specifications. By denying liability for any errors by its engineers, the Government thereby creates conditions condusive to error. Further than this, the standard conditions of contract imposed by the department on every private contractor undertaking work for it, contain so many harsh and unreasonable provisions that reputable contractors are strongly relunctant to assume the risks and responsibilities entailed. Add to this the fact that the department is guaranteed by the State —which means that even the biggest bills will always be met —and there is completed a combfhation of conditions which is totally foreign to economy. It is clear that the Public Works Department, and not the Government, is the real master of expenditure on public works. The whole system has proved itself to be fundamentally wrong, uneconomic and undesirable.

Remedial Measures

What are the remedial measures? They are simple. Future public works should be undertaken only after most definite and convincing proof of their necessity and productiveness, and only under the most rigid conditions as to extent and cost that commercial experience can dictate. These conditions should include the thorough examination by Parliament of the necessity for the spending of the nation’s money on any project at all. If, however, a project is decided on as being necessary to the national economic welfare, it should be carried out under contract made with private enterprise by the Government on the same terms as commercial contracts are usually made in the interests of both efficiency and economy the world over.

The necessary reform can be summed up as follows: — (1) All public works should be submitted to public tender and carried out by private contract; (2) the Public Works Deportment should be confined to the function originally intended for it when the Immigration and Public Works Act of 1870 was passed, namely that of a supervisory authority without constructional powers; (3) the jilant and equipment of the department should be sold. 1 The State system of public works has failed and the Government can do no better than to revert to private enterprise.