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moneys. This Education Loans Account has now been abolished, and the expenditure is provided out of the Public Works Fund. The cost of new buildings is still being met from loan-money, and, in view of the fact that many of the buildings erected from time to time are in replacement of existing schools which have either outlived their usefulness or for other reasons have become unsuitable, we are of opinion that a continuation of the policy of meeting the cost of such buildings and of many alterations and additions, which are carried out from loan-money, is wrong in principle. The time has arrived when the cost should be met from revenue, and we recommend that in future provision be made by way of vote on the Consolidated Fund. There would be other advantages accruing from the adoption of this course, as it would be difficult to finance from revenue many of the more or less extravagant building schemes, the cost of which has been too easily met from loan-money. 1165. We are impressed with the excessive cost of hostel accommodation, which has been provided on too lavish a scale. The following table will show that in some cases the capital cost per boarder is well over £1,000. Taking the average in the four cases quoted hereunder, the capital cost per boarder has been sufficient to provide for the erection of a moderate dwelling.

1166. It seems to be obvious from the figures given that there has been undue extravagance in the erection of these hostel buildings, and were the same standard applied to other institutions in the Dominion the cost would be staggering. 1167. The total amount of capital provided from loan funds for the erection of school buildings of all descriptions now exceeds £7,000,000 and we consider that a definite halt niust be called in expenditure for erection of new buildings and additions, &c. The present accommodation should be made to suffice for some years, and if further building is absolutely unavoidable the cost should be met from revenue. 1168. In considering education expenditure the fact that interest and amortization charges have to be met on more than £7,000,000 of loan-money must not be overlooked, and this in itself is responsible for an additional annual cost in excess of £350,000. 1169. The following table will show the expenditure which has been incurred on school buildings and equipment since 1914-15. The savings which would result from our recommendation for the cessation of expenditure from loan funds on school buildings would not benefit the budgetary position, except in so far as interest and amortization payments are concerned. £ £ 1914-15 .. •• 122,940 1923-24 .. .. .. 295,681 1915-16 .. •• 97,972 1924r-25 .. .. .. 462,212 1916-17 .. ■■ 70,367 1925-26 .. .. .. 564,946 1917-18 .. •• 63,082 1926-27 .. .. .. 550,954 1918-19 .. .. •• 115,656 1927-28 .. .. .. 369,134 1919-20 .. •• 195,500 1928-29 .. .. .. 375,423 1920-21 .. 459,293 1929-30 .. .. .. 428,764 1921-22 .. .. .. 565,880 1930-31 .. .. .. 491,974 1922-23 .. .. 361,976 1170. In our interim report we gave a table showing the progressive rise in the cost of education. Lest that table be taken as showing the total cost of education services to the Dominion, we draw attention to the fact that no charge has been included for interest on capital raised for expenditure on school buildings or for depreciation thereon. The gross cost for 1930-31, including interest, depreciation, and Head Office administration, was as follows^ Primary education .. .. • • •• •• 2,584,514 Secondary Education .. .. •• •• •• 439,217 Higher education .. .. •. •• •• 156,731 Technical education .. .. .. •• •• 263,182 Training of teachers .. .. .. •• 172,532 Native education .. .. •• •• •• 102,481 Physical training .. .. . • • • • • 9 > 251 Examinations .. .. •• •• •• •• .2,817 Miscellaneous .. .. •• •• •• •• 50,405 .'Special schools and Child Welfare Branch .. .. .. 184,113 £3,965,243

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Present Approximate Cost. Capacity. Number of Capital Cost Boarders, per Boarder. £ Wellington Boys'College Hostel .. .. 50,000 100 44 1,140 New Plymouth Girls'Hostel .. .. •• 25,105 84 41 610 Napier Boys'Hostel (approximate) .. •• 31,000 100 21 1,475 Wanganui Technical School Hostel .. 33,813 80 29 1,165