The Hastings Standard Published Daily. TUESDAY, JULY 21, 1896. LOCAL BODIES' SINKING FUNDS.

Hastings Standard, Issue 73, 21 July 1896, Page 2

The Hastings Standard Published Daily.

TUESDAY, JULY 21, 1896. LOCAL BODIES' SINKING FUNDS.

For the cause that lacks assistance, For the wrongs that need resistance, For the future in the distance, And the good that we can do.

The policy of running the sinking fund accretions under the Loans to Local Bodies Act began last year, and, as stated by Mr Seddon, the practice is to be continue i this year, which means that for the future these sinking funds will form part of the colony's revenue. Nb doubt the appropriation of these funds is strictly in accordance ■with law, but nevertheless there has been a straining of the law to make it so. The policy is, to say the least of it, an unfortunate one; it has been described as " the most reckless and profligate policy which any New

Zealand Government has ever propounded." The money that is lent to the local bodies by the Government costs the colony per cent per annum, while the local authorities borrowing pay to the Government 5 per cent. The difference of per cent, together with \ per cent taken from the Land Transfer Assurance Fund, is by law directed to be accumulated to pay off the loans at maturity. This means that the loans to local bodies cost the Government not a farthing, and if the sinking funds were allowed to accumulate and not be tampered with, the loans would be discharged at maturity. In its inception the Loans to Local Bodies Act was intended to benefit those bodies whose borrowings were on a small scale, and which if obtained from the public would necessitate the payment of a higher rate of interest than is now paid to the Government. The local bodies have felt the full benefit of this measure, but it was was never intended that the loans made to local authorities was to become part of the permanent debt of the colony. The appropriation of the local bodies' sinking funds is defended in the Financial Statement, in which it is asserted that there is no distinction between loans obtained for the purpose of making grants to local authorities and the loans obtained and spent first-hand by the Government, provided the expenditure is made for the same purpose—namely, for constructing roads and bridges, so as to procure the settlement of the country. If this view/ is to be admitted correct, then it might be fairly asked why should not the Government itself undertake the public works of local authorities, and add the money borrowed for the purpose to the public debt of the colony, instead of taking the present roundabout course in arriving at the same end. To do this, however, would endanger the existence of any Government, and the roundabout course is therefore preferable. Although it is permitted by law, the practice of appropriating the local bodies' sinking funds is opposed to sound financing and common sense. This policy will in all probability be further extended, and we shall see the sinking fund accumulation under the Advances to Settlers Act similarly treated. If it is right in one case it is right in the other, for it cannot be denied that the establishment of the Advances to Settlers office is to help in the settlement of the country by advancing money to settlers who unvariably spend the money so advanced in the improvement of their holdings. The filching of the local bodies sinking funds should be put a stop to at once and before much money is taken. It is wrong from every point of view, and no question of party should enter into the decision. The mode of financing of the present Government will be adopted in its entirety, and with possible extensions by the Government that succeeds it, and so the mischief will be continued. .