An Analysis of Government Revenue and Expenditure in ... - TARA

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CONCLUSIONS
(1) The preparation and publication of consolidated government
accounts on the lines of those discussed in this paper is essential
for national income analysis and the international comparability
of government financial transactions. Such accounts should also
prove useful in relation to the formation of future policy and will
enable those whose task it is to discuss and formulate this policy
to have a comprehensive picture of the inter-relationship between
figures in the government accounts and the transactions of other
sectors of the economy.
(2) "While the present accounting structure is essential and the
re-arrangement of the accounts for national income analysis is not
intended to replace it, there is scope for improvement in the
methods adopted for accounting. To enable the reclassification
adopted in this paper to be carried out easily and expeditiously,
it is desirable to record separately every transaction between
departments and extra-budgetary funds or local authorities, even
when the amounts involved are small. At present certain items
of this nature are amalgamated with other items of revenue and
expenditure. Of greater importance, however, is to identify
separately transactions of different economic significance. This is
particularly so in relation to local authorities. "Wages and salaries
should be distinguished from other expenditure on goods and services
in all cases and an attempt should be made to distinguish
capital from current expenditure in relation to the type of assets
produced by the expenditure rather than by the method of financing
adopted.
(3) During the course of this paper reference has been made to
public corporations. The importance of these public corporations
in the national economy is evident and it seems highly desirable
to prepare a consolidated series of accounts in respect of their
transactions in order to consider their impact on the economy and
their relationship with other sectors. A large number of government
transactions are with the public corporations and these can
easily be segregated in the government accounts. If the government
sector and the public corporations are combined the aggregate
might be called the l ' public sector " and it would be of interest to
consider the public sector in relation to similar concepts in other
countries. This is something which might be done in the future.
(4) At present, with the exception of the Post Office, depreciation
estimates are not available in government accounts. As the
stocks of capital assets of the government sector covers such assets
as government buildings, hospitals, schools, houses, etc., it is evident
that the annual depreciation of assets is considerable. Reliable
estimates of such depreciation would be of considerable value and
would enable reliable estimates of net capital formation to be
derived. As indicated earlier only conjectural estimates of the
depreciation of some of these assets have been entered in Table 7.
Reliable estimates of government depreciation should be compiled
and are most necessary in connection with future economic
planning.
(5) One of the tables in this paper forms the basis of what can