Wellington Notes.

Feilding Star, Volume XVIII, Issue 41, 17 August 1896, Page 2

Wellington Notes.

I o fFBOM OUR OWN CORRESPONDENT.] THE SINKING FUND. | There has been more discussion | regarding the seizure of the sinking funds than on any other matter this session and it is doubtful if many in Parliament know really what it all means. Many years ago — in Vogel's days — Government found it impossible to pay local bodies their subsidies and reduced them by half and put the cost of hospitals and charitable aid on the rates. As a set off to this, Government said "We have treated you very badly, but we cannot afford to pay you more than this, but we will make it, up to you in another way ; we will borrow money for you at the lowest rate and let you have it at cost price." That seemed fair enough, and Government went on to explain " We can borrow at 3^ per cent aud it will cost per cent for keeping tlie accounts and so on, and we will charge you 5 per cent" And the local bodies naturally said " But that is only 4, why charge us 51" "Because,'' said Yogel, "we will put the 1 per cent away as sinking fund and in 26 years the loan will be paid off." The parties :ij;;ppcl, mifl xb*'. contract was explicit and fair and faithfully kept by Yogel, Atkinson, and Ballance. Then the Hon. J. G. Ward appeared on the scene with all sorts of new wrinkles in finance. He found this stored-up one per cent had accumulated into a very respectable nest egg, and he wanted to show a surplus. The law held them' sacred, but ho found a quibbling clause that might be strained to mean that it was legal to take the money. Morality did not trouble in this or other matters, so he took it, and — behold the surplus ! What it really means is that the Government has charged the local bodies 5 per cent for mouey it pays 3J per cent for and, deducting thn £ per cent for administration costs, it takes 1 per cent for commission. It is a swindle pure and simple. Government charges £A out of every £5 paid for interest as a procuration fee, and then sets to work to pass a law to prohibit usury. Mr v\ ard and Mr Seddori offer as an excuse " We put the money into a sinking fund all the same " This is quite true, but they immediately take it out again. The 1 per cent the local bodies are juggled out of comes in handy for spending in favored districts.