LOCAL BODY LOANS

Hokitika Guardian, 3 November 1925, Page 1

LOCAL BODY LOANS

MAIK INTERESTING FIGURES

AUCKLAND, Oct. 31. The proposal ot the Government to set up a hoard to deal with applications from local bodies to proceed villi the raising of loan moneys has been the subject of protest Irom the Christchurch City Council, which has circularised local authorities of the Dominion on the question, and is seeking their support. The Christchurch Council lias. o', the same time, advocated a board for funding local bodies’ loan requirements. At a meeting of the Auckland City Council the town clerk submitted a report, in which he said that the tv.o issues raised by the Christchurch City Council were in conflict to seme extent. It was obvious said Air Brigham that approval by tin- Government ol ill,- purpose for which loan moneys might hi- required by local bullies would In- a condition ptecedeiil to an advance from funded moneys that bad been or would be raised by the Government, This approval would naturally be withheld until the merits of the application for loan moneys had been investi gated and established, and in his opinion this could most appropriately be carried out by a board of tho nature indicated. The Cmernme-nt's proposal was. without doubt, the outcome oT the alarming rate at which local bodies had borrowed during the hist decade. I'igures in this respect were instructive. Tin, gross of debt of all the local aiithoril ies of the Dominion in 190-1 was £10.750,002, the annual charges at that time being 12s 7 11 per head. 'I ho debt had increased lo LIT. 120.130 ni March 31st. 1921. with an annual charge of £2 Is Od per head. I n the five rears' interval from 1918-1019 to 1023-1021. the annual charge had increased from £1 os 3d to £2 Is Gd per head., equivalent to an increase of over 10 per cent. That was a. very much greater rate of increase than at any other period in the Dominion’s history, and it was conceivable that unchecked loan expenditure might easily burden the community for many years to come with a still heavier annual charge for interest and sinking fund. Indeed, the whole trend of statistical data available pointed in that direction.

As to the funding of local authorities’ loan requirements, the town clerk said he had previously advocated this, and was of opinion that the Government could borrow generally on better terms than indiviual local authorities, particularly the smaller bodies, who would reap the principal benefit.

Tho council decided to inform tho C hristchurch City Council that, having no definite information of tho Government’s intentions, it was not in a position to come in a final conclusion on the matter.