Seanad Éireann - Volume 3 - 10 July, 1924
SEANAD IN COMMITTEE. - TELEPHONE CAPITAL BILL, 1924—SECOND STAGE.
AN CATHAOIRLEACH AN CATHAOIRLEACH
AN CATHAOIRLEACH: The Telephone Capital Bill is a Bill certified as a Money Bill.
Sir JOHN KEANE Sir JOHN KEANE
Sir JOHN KEANE: I should like to ask why the telephones have got a capital account that no other Government service apparently enjoys. I take this opportunity to raise the question of the whole method of scientific Government accounting. There is no reason why the telephone service alone should have a capital account. The argument probably is that telephone expenditure is reproductive and as such justifies borrowing, but it is not the only expenditure that could be called reproductive. Any expenditure on machinery or plant of a labour-saving character which would enable working expenses to be reduced would be also reproductive. Similarly any expenditure of a non-recurrent character, the benefit of which will be felt for a long period of years, would be also reproductive and should be in a capital account.
That was one of the recommendations of the Samuels Committee which dealt with this whole question of public accounting—a recommendation that a clear distinction should be made in Government accounting between recurrent and non-recurrent expenditure, and that the Government was justified in borrowing for non-recurrent expenditure. I do suggest to the Government, that with the heavy taxation we have now placed on us, it would be sound finance to separate their accounts  into recurrent and non-recurrent expenditure, to borrow for non-recurrent expenditure and, according to the nature of the expenditure, obtain a loan for a longer or shorter period. I am afraid the Seanad is getting rather tired of this subject because I brought it before them on a previous occasion and they passed a resolution that the whole question of Government accounting should be inquired into. I take this opportunity of pressing upon the Government, and I hope the Seanad will support me, the vital necessity of placing their accounts on a scientific basis so that we can examine administration from a businesslike point of view and get finance more or less analogous to a commercial enterprise.
The PRESIDENT The PRESIDENT
The PRESIDENT: I will have a better opportunity on the Appropriation Bill of entering into this matter, but the facts are that this particular Telephone Capital Account is one of our inheritances. It was a system that must have been in operation when the British Government had control of the Post Office; I am not quite sure and I make that statement subject to correction. In any case it really comes to this now, that the alternative method would be to place the whole of the cost of extensions on the Post Office Vote for a particular year. If Senator Sir John Keane had been a member of the Dublin Corporation as long as I was he would appreciate to some extent the financial difficulty of this particular method of dealing with Post Office extension as far as telephones are concerned. Once you placed telephones in a sort of hotch-potch with telegraphs and postal facilities, the Minister for Posts and Telegraphs would have innumerable applications from all parts of the country for the extension of the telephone with the usual commendation that “it is bound to improve business.”
In the present instance he is not in a position to justify the expenditure of capital unless he can get a certain income from the extensions which will enable him to pay for whatever capital moneys have to be expended in order to justify that particular sphere  of expenditure. Bearing in mind that the Post Office is not a remunerative business proposition, that it entails costs on the State, it would be very much better that any extensions of the telephone system should be self-supporting. If the capital system be withdrawn, then it goes entirely on a different basis. It is nobody's business as it were, but whereas I have heard the Minister for Posts and Telegraphs say in the Dáil he would give an extension if it were found to be an economic proposition, in such circumstances I am prepared to consider it.
Sir JOHN KEANE Sir JOHN KEANE
Sir JOHN KEANE: I do not think the President appreciated the tenour of my remarks; I was not suggesting that this Bill was not proceeding on sound lines. The point is that the principle involved in capital accounting should be extended right through all Government accounts; that is the point I wish to make.
Question— “That this Bill be now read a Second Time” —put and agreed to.
Seanad Éireann 3 SEANAD IN COMMITTEE. TELEPHONE CAPITAL BILL, 1924—SECOND STAGE.