Govt. Thinks Building Trade Over-committed

Press, Volume C, Issue 29504, 4 May 1961, Page 14

Govt. Thinks Building Trade Over-committed

(From Our Oum Reporter)

WELLINGTON, May 3. The Minister of Finance (Mr Lake) said today that the • Government considered the building and construction industry was over-committed, and, he added, “Some slowing down may be necessary in order to restore balance in the country’s economy.” Mr Lake gave this answer when he was asked: “Will it not be calamitous to the development of Christchurch if the Drainage Board is compelled to lay off contractors, who are hard to get anyway, because of a shortage of loan money?”

In reply to other questions asked by a reporter of “The Press” Mr Lake gave the following replies. Do you think Hie present margin between terms for Government and local body loans is sufficient? “I think there should be a slight margin between the terms offered for local body and Government loans." Do you propose to do anything to improve local bodies’ prospects on the market? “I would not like to be committed on that. The problem of local body loans has been under very close scrutiny,” Before Mr Nordmeyer's last Budget upset it, the Christchurch Drainage Board had an arrangement with underwriters which freed it for three years from worries about sufficient loan money. Do you intend to restore to local

bodies the power to pay placement fees and underwriters’ commissions as before? “I have had applications from underwriters asking for the restoration of the underwriting fee. This is being considered by the June meeting of the Local Government Loans Board.” When loan money is short, do you agree that there should be priority among local body loans? “These priorities are determined, of course, by the Local Government Loans Board. I agree that drainage has a pretty high priority. I am very sympathetic with the Christchurch Drainage Board and its problems, for example." Do you believe that any local body has higher claims to priority than a drainage authority, which is required to provide sewerage without which it

is futile to promote building schemes? ‘‘lt seems unquestioned that drainage schemes should have the highest priority.” Informed sources predict an increase in the margin between terms for Government and local body loans will probably be announced soon. It is understood that the Government is concerned about the drain on available .finances, particularly in view of large reconversions which are becoming due and a way is being sought to assist local bodies without impairing the Government’s chances of obtaining needed capital.