STATE LENDING.

Dominion, Volume 6, Issue 1558, 30 September 1912, Page 6

STATE LENDING.

_—>__ — ■ WHERE THE MONEY HAS GONE V THE COUNTIES STARVED. rV ',;A LEGACY OF LIABILITIES. .•" There has been no more striking episode ■in the House of-Representatives this ses- , eion. than that which electrified the minority of members who were in their places in the early hours of Saturday morning., The brief but heated discussion which then arose upon tlxe administration of-the State LendiDg Department was precipitated by Mr. G. WMlussell, one of the leaders of. the Opposition, but the feature of the discussion which dominated all others was a scathing indictment by the Hon. James Allen, (llinister. for Finance) of the administration'of the Advances Office by past Governments. • ■ - • ■ It was after midnight when the annual vote for the State' Guaranteed AdvancesOffice, camo up for review in Committee ■ of Supply. The ' duty of- "keeping a House", had been almost abandoned by the. Opposition to Government members. ■ The- only Opposition members in tho House when Mr. Russell moved to reduce . the administrative voto of the Advances to Local Authorities branch ns an indication that the limitation of JBSOOO imposed on the borrowing of .counties should be 'removed, were: Messrs. Hnnan, Macdonald, M'.Callum, and Te Riingi'Mroa. Nearly an hour later the Hon. R. M'Kenzie, Sir James Carroll, and the Hon. A. "T. Ngata came in. . Mr. Russell said that the Government should borrow more money to assist local bodies, in the work of colonisation and developing 'the. back-blocks. , ", An Indignant, Minister. The, Hon.' James Allen took up the ,gauntlet,eagerly. Ho.said that lie.wanted division, and hoped .the hon. member would call for it. The Minister's voice rang, with scorn as he told Mr. Eussell that his'sblicitudo for the back-blocks was of, very, recent-birth. He went on. to describe the position in which the finances, .of ~,the: Advances Department .'had been.left, by the previous.Government, and'to quote from a return. showing how the -funds-available had.been allocated among the town.and country local bodies. Tho . principal--features in the Minister's dc- .. tailed statement were reported in ...(The.Dominion on Saturday. He said that. ': -he. could I not abolish the .£SOOO limit, because out'of tho amount' to hs' borrowed this year, which had been already reduced . from..£'l,ooo)ooo'to ,£825,000, liabilities left by tho. previous Government would have to' be met to the amount of ,£653,700. 80. .- ~fore., he camo into office and since this • State Guaranteed Advances Act had been '/passed, the previous Government had for Joans to local bodies committed the coun- - -try to expenditure of ,£2,152,195, and when ,he came.into office the Government had paid to them Of the .£2,152,000 the-sum of .£1,011,700 had gone to boroughs, and .£658,000 to counties. Harbour , -(wards-find got• .£122,000. -One borough— TimarU—got .£116,000. This and other large loans to boroughs.were granted during. an election, year (lfltlL Government members listened with the keenest-attention to .the-Minister's Te- ' cital, and as one loan after another was •mentioned . their chorused interjections showed how deep was their disapproval of the manner- in' which,the previous Governments: had administered the funds of .;,..the Advances Office. The- discussion ~•'•' which followed was animated, but no new facts'of importance were brought to light after Mr. Allen had concluded. The whole matter will be discussed in detail at .an early date with.Mr. Speaker in the '.chair.'■ Looking forward 'to this event, Mr. .'J.' Bi-Hine threw across the'Houso an assurance that when-the subjecfj nest ' ;' nroso there would be "a ding-dong go." At one stage in the discussion Mr. Russell plaintively mentioned that not a singlo member of the Ward Government was • present, and said that the Government - might have waited until these ex-Minis-ters' were'in their places. To this a Government member retorted: "Why are they not here?" ■ . . i Some portions of the discussion, not reported, in The ■ Dominion on Saturday, ore summarised below. .' Wardists in Defence, Mr. W. D. S. Macdonald (Bay of Plenty) denied that there had been any favouritism, and stated that until tho limit was imposed every application by a county council was granted. He protested a»ainst the implication that the snper- ' intondent of the State Advances -Office had abused his position, and said it was absurd to suggest that a loan could be applied for and secured three (lays before an election. If the Ward Government had'lent only one-fourth of the money tho present Government would be in no better position. ; "The'Pr'imo Minister: Yes, it woull 7 "Mr. Macdonald said it was absurd to . suggest that the operations of the hrancn , had raised the rate" of interest on the London money market, and that was the .only thing that prevented .the Government from obtaining moro money. Mr.-Allen: I am raising money every month, and raising.it as fast 'as. I can gD Mr. ; Macdonald said that there . were boroughs as needy as many counties. GisI tome had applied for £135,000, and had not received a penny. It had been forced to rai=e a loan -itself in London. An hon. member: The proper thing to •" 'do- '■' A Period of Squandering. The Prime Minitser said that Mr. Mac donald had not improved the position in tho slightest. The facts which had been . disclosed by the. Minister for Finaneo ■'■'■. were too strong for him. Iso doubt the member for Avon was sorry ho had spoken. ' . .-■-., Mr. Russell: I will bowlorou over! ' ... Mr. Massey said that his only regret was that' this disclosure .'had not been made before a full House. It showed a period of squandering such as tho country had never witnessed before—the Vojjel Government was nothing compared with it. Mr. Massey said, lie knew .of one local x • ' body which received advances qf .£BO,OOO last year, and now had "£IO,OOO or £5VS!tt in tho bank, while there were local bodies starving for money. • A Loan. Fiasco. The loan'.raised'.b.v; the Mackenzie Government was one of the greatest fiascos that this,'country had. ever, witnessed. That Government had 1 raised a twoTj-ear. loan on the London money market at a » cost of over 5 per cent., and although it ■returned. investors over 4 per cent.. 83 per cent, pf it was left in the hands of ; the underwriters. It was a subject about which a patriotic man cared to say very little, but it was on account of that fiasco that the Government dare not go. .on;to tho market for rnoney. There was no doubt that'the money was used for purposes for 'which it was not intended. The first duty of any Government was to find 'money for .'the small'local bodies, in tho back-blocks. When they were satisfied, it was time to speak of leridinar rnoney'to the richer, local bodies. Fortunately, prospects for the coming season were mod; the country heeded it all,, and he believed ' it was our only hope. It came with a. very '" ill grace from a member of tho party which had by its extravagance placed the Government in its present position to propose by way of amendment that the Government should go on the London market at an inopportune time. Soma Warm Words, Mr. "G. W. "Russell (Avon) asked what the charge was implied in the reading out of all the amounts paid to tho boroughs. It was that «ome of the monoy hid eon? to the .boroughs. The HoA. the Minister had forgotten in his figures the amounts paid to the outside local ■ fc-die? by way of grants. Mr. Giithrie: AVhat counties? Mr. Ruwell did: not reply, but said the Minister for Finaneo had misrepre-p-ntod the position, and ought to be »--haiiied of himself. Ho would ram down the throat of the Minister for Finance tln'figu'cs of his own Budget. Referrinj f/i the Budget, it had been, he said, the luetics to.grnnt moneysprovifionally beIci- moneys were actually paid, and much -f the money in the amounts quoted <■ have to lie paid for some years. "i, u'as all very well to complain about win of the. moneys going to boroughs, hi', di'l not tho Minister know that more than half the people, in this country vr.i—.' in the cities and boroughs? 'I'he Hon: J. .A'len said he won'd »*i/nv the honourable member to ram the J.--...W down hi-i tin-oat. He Kid r'«t ctiotcd the loans which were dig visional! j

approved, but only those finally approved —those to which tho country was definitely committed. Ho had a right to feel aggrieved that he found things in such a state that ho could not increase the' limit of £5,000.' He f.aid the country had made Av hugo mistake when it put the legislation on tho Statuto Book or in such form ns \to allow tho big boroughs to come in and scoop up the lot. The country could not afford .to go on with this policy of lending big suras >to big boroughs. The law would hatvo to be altered. Promise of a "Ding-dong' Go," Mr. J. B. Hine . (Stratford) said tho House had been treated to -a siflrry spectacle. Nono of tho Ministers of the late Liberal party were there to defend- their own policy, and Mr. Russell had hud the impudence to come forward and defend his Government, when as n. matter of fact they i hod spent their ijmc when they .should have been in Wellington, going about hoaxing the country. The matter would come up again, and they would have a "ding-dong go" on the subject. Mr. W. D. S. Macdonald said that the bombastic statements of the member for Stratford were contrary to fact and were worth nothing:. Mr. Russell's amendment was rejected on the voices, in a House in which only six Oppositionists were present, although, the Government benches were full.