Local Body Finance.

Press, Volume LXVIII, Issue 20490, 8 March 1932, Page 8

Local Body Finance.

It was reported in yesterday's Press that the Minister for Public Works has informed County Councils in the Auckland district that, owing to the Government's financial position, all road authorities held by local bodies are cancelled until further notice. This decision applies to the grants made by Parliament out. of the Public Works Fund for approved construction and maintenance work on roads and bridges, and does not, apparently, affect authorities granted" under the Main Highways Act. It is to be hoped that the Minister will without delay issue a statement explaining more fully what his action involves and what policy the Government intends to pursue in future in regard to these grants. In particular, it would be interesting to know why Auckland local bodies are the only ones to receive the notification, and' why it has been necessary to take this step only a few weeks before the end of the financial year for local bodies. There can be no doubt that considerable inconvenience will be caused to County Councils in Auckland, Otago, and Southland, which lean heavily on the Public Works Fund, but the Minister will readily be forgiven his abruptness if he has in mind a drastic reform of this department of local body finance. The increase in these special grants since the War is in itself enough to warrant a thorough overhaul of the system, for while in 1919 their total was only-£156,354, by 1929 they had risen to £1,515,128, and last year, despite economies, the total was £1,075,000. It is hard to see what has happened in ten years to justify this startling increase, which goes a long way towards explaining why local body expenditure has nearly doubled itself over the same period. The system is in itself an incitement to extravagance, for local bodies are in effect invited to get what they can from Parliament, either as a straight grant or on a subsidy basis varying from £1 for £1 to as much as £4 for £L The applications for grants must, it is true, be sifted by the engineers of the Public Works Department, but the final word as to what grants are put on the Estimates to go before Parliament is with the Minister. The system is bad for two reasons, the first being that Parliament's consent to the building of a road in the hinterland of North Auckland or the West Coast is no more than an absurd formality, and the second being that such a large proportion of local government revenue ought not to take the form of special grants. The direct financial dependence of local bodies on Parliament is most undesirable, and it can only be eliminated by stabilising their sources of income.