POWER BOARDS’ RESERVE FUNDS

Sun (Auckland), Volume 1, Issue 102, 21 July 1927, Page 16

POWER BOARDS’ RESERVE FUNDS

PROPOSED LEGISLATION PROVIDING FOR DEPRECIATION (THE SUN’S Parliamentary Reporter.) WELLINGTON, Wednesday. Proposed amendments to power board legislation, which it is hoped will be introduced this session, were referred to by the Hon. K. S. Williams, Minister of Public Works, who said that such large sums of money are now invested in electrical undertakings in the country that it is felt it should be quite certain that the finances of various boards are being controlled in the best way, having regard both to present expediency and future needs. One proposed amendment deals with the compulsory provision of depreciation or reserve fund, to be available for the replacement of any assets of a board which may be destroyed or depreciated before the period of the loan has expired. It is recognised that with power boards it is necessary, in the early years of operation, to incur heavy capital expenditure in anticipation of revenue to be received at a later date, and provision has been made from time to time allowing boards to carry forward their losses for a period not over seven years. It is not proposed to interfere with this provision, but boards shall be required to establish a depreciation or renewal account, which shall be credited with a definite amount each year, and after the seventh year actual payments will be made each year into a fund for this purpose, sufficient to provide a reasonable fund for depreciation or renewal purposes.