DOMINION’S ACCOUNT KEEPING

Manawatu Standard, Volume XLVII, Issue 6, 4 December 1926, Page 2

DOMINION’S ACCOUNT KEEPING

INCOMPLETE AND CONFUSING. (By Taxpayer.) It is now four or five years since the New Zealand Taxpayers’ Federation first urged upon tho Government the importance of each Department of State keeping its accounts on a sound business system and submitting them each year to Parliament for tho inspection of members and the public. The proposal by the Auditor-General, warmly supported by the Secretary of the Treasury, acclaimed by the news-, papers of the Dominion, almost without exception, and endorsed by many leading politicians, including the late Mr Massey, then Prime Minister, who promptly gave directions taht it should bo put into 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 balance-sheets, which were intelligible and illuminative, and a larger number submitted masses of figures which probably a skilled accountant could have put into shape; bub the majority of them either displayed not the slightest notion of what was required or refrained from making any return at all. Mr Massey up to tho timo of his last illness persisted in his demand for the preparation of proper accounts, but with one excuse and another the recalcitrant departments have managed so far to defeat both the letter and the spirit of 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, it is necessary only to turn to its annual statements for 1924, 1925 and 192 G, 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 taxpayers obviously is entitled to know why this extra capital expenditure was omitted from the accountants of 1925 and then surreptitiously introduced into the accounts of the following year. Then again the department has a reserve account covering its sawmills, stock, timber and so forth which in tho general statement for 1924 showed a balance of £24,681 2s 3d. In 1895 tho sum of £3516 18s fld was added to this account, making the total, as it seemed, £28,198- and yet on its next appearance it was down to £18,694 14s 9d, between £II,OOO and £12,000 having disappeared without leaving in tho customary returns any trace of its whereabouts. JUGGLING WITH FIGURES.

A.s the account keeping of the Railway Department, as already stated, is of particular interest and consequence to tho public, it may not be unprofitable to pursue its vagaries a little further. In the Railway Statement submitted to Parlinnent toward/, 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 tho consolation that at last it was 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 tho undisclose 1 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 bo discovered in such light as is thrown upon the position by the Department’s statement and returns. Tho teed for clear and definite information on the whole matter is made all the more urgent by the fact that the Railway Department has entered into active competition with private enterprise in suplying timber and building accessories, while paying neither land nor incomo tax. neither interest on capital employed nor local rates, neither tho 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 bo irrelevant to tho subject on hand to quote a passage or two from a recent bulletin dealing with tho national accounts prepared by the Department of Economics of Canterbury College. “In New Zealand, as in other countries, tho Budget lias grown rather than 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 improvement, defects both of omission and commission. The arrangement is still confusing an din places illogical. It is overloaded at almost every stage with digressions on policy wliore facts and opinions tend to become confused. No estimates are given of either revenue or expenditure on capital account, 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 conssolidated revenue and expenditure. The final statement should be built up from the net enterprissessssss ? 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 bo much clearer. . . It is necessary steps towards that desirable end are asimplification and clarifying of the national accounts and more effective, because better informed, criticism of these accountt when they are presented.” The Minister of the Government that will give effect to these recomendations will deserve political immortality.