TRANSFERS BETWEEN ESTIMATE SUBHEADS (Sessional Paper No. Cmd. 29 of 1957) (Statement by the Financial Secretary)

10.22 a.m.

The Financial Secretary (Mr T. M. Hart): Sir, I beg leave to refer to Sessional Paper No. Cmd. 29 of 1957 which has been tabled today and to make some remarks in explanation of it.

The annual estimates which form an appendix to the Appropriation Ordinance indicate in detail how the funds made available each year should be spent. These estimates, however, have been drawn up in the year previous to that to which they refer. It is not always possible to say with complete accuracy how much will have to be spent in the following year on the services for which provision is made or what new needs will arise.

As hon. Members are aware, when the need to provide for some new service arises, an application is made for a supplementary vote. Similarly, where there has been some radical change in a service for which provision has already been made and additional funds are required, an application for supplementary vote is made. These applications are incorporated in messages which are presented to the Assembly from time to time.

There are, however, a number of occasions when the need arises to supplement a service for which provision has already been made but where the additional sum required is small; for example, a rise in the price of printing machines due to circumstances in the supplying country may necessitate a supplement; freight rates may be increased as a result of an international crisis and prices may rise generally on goods ordered from overseas; and so on. In no case is any new principle involved, nor has there been any material change in the service for which provision has been made in the estimates.

It is an established principle in financial procedure of the United Kingdom that the Executive should have power to transfer funds from one service to another provided no new or novel principia is involved and the sum voted under a particular head of expenditure is not exceeded. This power of virement, as it is called, has been incorporated to a limited degree in the financial procedure of this Colony, and General Orders of the Government prescribe - General Order 662(b) -

"When the provision under one sub-head appears to be likely to be exceeded in any year, savings from another sub-head within the same sub-division of expenditure may be transferred with the approval of the Financial Secretary, except under the Head - 'Public Works, Non-Recurrent'."

These transfers approved by the Financial Secretary under General Order 662 (b) are recorded in the Treasury and in the Vote Books of the Departments concerned, and are notified to the Deputy Director of Audit as they are made.

Recently, when studying the accounts for 1954, the Public Accounts Committee of this Assembly drew attention to the fact that, while they had a record of applications for supplementary provision which had been approved, neither they nor the Legislature had any record of transfers approved under General Order 662 (b), and that the information required to reconcile the sums voted in the annual estimates and the expenditure shown in the accounts was to that extent incomplete. It was therefore suggested by the Committee that a quarterly return of transfers under General Order 662 (b) should be made to the Legislature for information. The first return was tabled as Sessional Paper No. Cmd. 16 of 1957 and the second, for the second quarter of the year, is tabled today.