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I.—-11D

MINUTES OF EVIDENCE.

Tuesday, 10th October, 1905. J. K. Warbukton, Controller and Auditor-General, examined. (No. 1.) 1. The Chairman.] Will you explain the position, Mr. Warburton, with regard to this matter contained in Paper 8.-19, for the information of the Committee ?—-Item 13 of Vote 43, for "Customs Miscellaneous Services" of last financial year, provided, as shown by paper No. 1 of this correspondence, for a refund of duty under "The Preferential and Eeciprocal Trade Act, 1903," on artificial limbs imported, £11; and the Audit Office declined to pass an expenditure of more than £11 in repaying to claimants the amount of such duty paid by them. 2. Mr. W. Fraser.] What was the amount claimed?— Nine pounds. 3. The Chairman.] Was it not a further claim of £9 that brought the previous claims in excess of the £11 voted?— Yes. 4. Mr. W. Fraser.] Then it was £20—£11 and £9?— The claims would have made the payment exceed £11 In 1898 I pointed out that a general item for the refund of revenue gave the Audit Office no legal power to pass a claim under it. I said, "It does not appear to me that the item of £50 carries a power sufficient to authorise the Audit Office legally to pass claims in general to the repayment of Customs duty not repayable under the Customs laws." Then, on page 6, in paper No. 11, I stated generally that an item for the refund of stamp duty on the estates of deceased members of contingents, £100, was not sufficient to authorise any payment whatever if the item was general in its terms. On page 2, paper 4, of this correspondence, in answer to the Customs Department's minute that item 13 was general in its terms, I remarked, " The repayment of Customs duty not repayable under the Customs laws is not, by an item on the estimates, authorised to an amount beyond that of such item. The item is either specific or not specific If specific, it authorises expenditure not exceeding its amount. If not specific, it authorises nothing." In paper No. 7, the Attorney-General states that " this is a general and not a ' specific' item. . . . There is nothing in the item to show that it was intended to be confined to any particular artificial limbs," &c. Now, after 1898, when I stated that an item of £50 for the refund of revenue in general would not authorise the Audit Office to pass claims for refunds under that item, the Public Eevenues Act of 1900 was passed, section 3 of which provides, " In any case where any payment of an item is provided for in the estimates as passed by the House of Eepresentatives and is included in the total of a vote in the Appropriation Act, such payment of the said item may be lawfully made, anything in any Act to the contrary notwithstanding, and the said payment shall be deemed to be irrespective of any appropriation or limit contained in any such last-mentioned Act: Provided that in no case shall the amount so paid exceed the total sum of the item voted: Provided further that this section shall apply only to payments which could not lawfully be made if this section were not in operation." " The Preferential and Eeciprocal Trade Act, 1903," provides in section 3, " From and after the passing of this Act there shall be leviable," &c. There is no authority in that Act or in the Customs Laws Act to refund the duty so leviable. To refund Customs duty so leviable is thus to contravene the provisions of that Act, and special statutory authority is therefore necessary in the opinion of the Audit Office. The only statutory authority for a general refund of Customs duty not authorised to be refunded by the Customs Laws Act is section 3 of the Public Eevenues Act of 1900, and that section limits the payments under such an item to the amount of the item. In the last sentence or two of paper No. 13, on page 15 of this correspondence, I summarise the position : " 'By The Preferential and Eeciprocal Trade Act, 1903,' duty is imposed on artificial limbs imported into the colony. To admit them free of that duty by refunding it requires statutory authority. An item which appears only on the estimates is not statutory authority, unless it is an item authorised by section 3 of the Public Eevenues Act of 1900; and an item under such section is not an authority to expend more than the amount of it." 5. Mr. W. Fraser.] The position you take up then, Mr. Warburton, is that the £11 which was voted for a refund of duty under the Preferential and Eeciprocal Trade Act on artificial limbs imported was a specific sum ?—Yes. 6. And could not be exceeded ?—Yes. 7. That the amount could only be paid under section 3 of the Public Eevenues Act ?—Yes. 8. And that that section distinctly states that such items cannot be exceeded ?—Yes. 9. That is your contention?— That is my contention. 10. Can you suggest any method by which, if it were found necessary to pay more than the £11, that sum could be paid?— Only by an alteration of the statute—only by a provision to that effect. 11. It could not be paid out of " Unauthorised " ?—No. 12. Will you state why ?—Because the refund is prohibited by the Customs Laws Act. 13. It is contrary to the statute ?—Yes. The only statute that authorises it is the Public Eevenues Act, and the provision there does not allow of an excess. 14. Mr. Wood.] What do you mean by " an excess"?—A payment in excess of the amount of the item voted. 15. Mr. W. Fraser.] Would the effect not be, if the contention of the Treasury that the amount is not specific were sustained, that it would be competent then to expend any sum in excess of the