The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, JUNE 27, 1930. LOCAL BODY DEBTS.

Hokitika Guardian, 27 June 1930, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, JUNE 27, 1930. LOCAL BODY DEBTS.

A good deal of concern is being expressed at the growth of local body debts in the Dominion. The subject was referred to in the address by the Chairman of Directors i of the Bank of New Zealand last week, hut more intimate concern, has been expressed by the Auckland Chamber of Commerce. Last week a report was adopted, and it was recommended that it l)e circulated among all Chambers of Commerce in New Zealand. The salient ienturos noted in the report are, first, that the gross indebtedness of local governing bodies in New Zealand has not far short of trebled during the past decade, having been £28,000,0!M) on March 3lst. 1919, and now being £08,000,000. The per capita m•ilebtkednnss has risen from £24 to £4O, while annual loan charges have risen from 2Gs to 595. Per capita taxation by local authorities has risen from £3,100,000 to £6,100,000 annually, or from 54s to 85s per head of population. The second fact is that sinking funds on account of local bodies debentures and stock on March 31st. 1928, were £7,000,000, the gross indebtedness being £59,000,000. Relatively little of the expenditure during HtiS *tv iVf i n defi'uiO.'ely productive works, and some of the “productive” works were not fully productive, such as some of the harbour work 4 *. The non-productive character of the loan expenditure is indicated by the great increase in per capita laxnCTdn. Finally, the gros.s assets of the local authorities are estimated by the local authorities to ho of aggregate value approximately equal to the gross debt. In fact, however, the. assets include such items as reserves, parks, and gardens, which arc not directly productive. A let ter was sent to the Local Bodies Loans Board stating that the

Chamber of Commerce was aware from the recent stand taken by the hoard in refusing to approve of certain proposed than ONp-'iidituros that wore absolutely of an uneconomic character, that the hoard was fully seized cl the desirability of preventing any undue iwastefulness on the part of local authorities. The chamber commended the board for the stand it had

taken in such matters in the past, and urged that, in view of the growing burden of local authority taxation throughout me Dominion, widen was crippling industry, in the future the board should refuse to countenance the taking of polls in all cases where the expenditure was not proved to he, ! beyond all doubt, expenditure which was urgently necessary in the public interests. The secretary of the Local Government Loans Roald replied that the letter would be placed before the board. The Board in question is doing its best to check excessive borrowing, but there is a difficulty in holding Local bodies in check where so much development requires t.o he done. Hydro-elec-tric works, improved highways, special loading and drainage works to provide | employment for those needing it, all these class of woi;.ks aggregate a large sum annually and ii the expenditure were to cease suddenly, the unemployment figures would jump up at once, and fresh difficulties would \present t-lii’niseivos. The borrowing entail); heavy interest payments, and a large amount of money thus goes out of. the country. To provide the interest, rates have to be levied in many cases, for all the works involved are not immediately producing. Thus a fresh burden is saddled on the people, ancl in times like the present with commodity prices down, the extra rating is a serious consideration. Fortunately the Coast, and Westland in particular, is rather free of this irksome burl den. Local borrowing has not. been heavy of late years, and the local bodies appear to be content, generally to live within their means. Higli rating *is a serious problem now in many farming districts where the land is security for Jb.rge loans. There is a very general agitation for derating whereby relief will be afforded, but tins is very difficult because the local body in the .area .affected- entered on its borrowing proposals on the basis of its capital rateable value, and to derate now would upset the security to the lender. Relief is desired as i.n alternative through extra petrol tax, ! whereby in regard to loan moneys 'spent on roads, a higher percentage of the petrol tax should go to. the local I bodies for road upkeep, or a greater tax should be levied, This arrangement would assist to shift the burden in the case of roads from the ratepayers of the district to the users of the roads. At the. best it will only temporise with the matter, and dees not affect the borrowing issue which if made somewhat easier by the relief 1 proposed, might in turn lead to greater local body borrowing, and in the end tho difficulties would be increased . rather than relieved.