TUESDAY, AUGUST 7, 1928 THE RATEPAYERS’ BURDEN

Sun (Auckland), Volume II, Issue 426, 7 August 1928, Page 8

TUESDAY, AUGUST 7, 1928 THE RATEPAYERS’ BURDEN

LOCAL governing bodies in New . Zealand now owe over £64,000,000 to money-lenders, and pay rather more than £4,000,000 a year in interest, sinking fund and repayment of principal. Twenty years ago their total gross indebtedness was only close on £14,000,000. In addition, the Government takes nearly £10,000,000 from the Consolidated Fund to pay annual interest on the State’s colossal debt.

In the past decade the increase in local government borrowing has been rapid and widespread. It might well be said that an epidemical itch of progress developed a fever of expenditure. Almost every local body in a country that is grotesquely overridden by governmental bodies has spent money with an infectious prodigality, not always counting the cost exactly in proportion to progressive achievement, serenely confident in the optimism that flourishes well on other people’s money, content to bequeath" to posterity a fine record of great works and a huge load of indebtedness. ' \ Administrators, of course, would have no difficulty in proving to their own elastic satisfaction that every penny of the £50,000,000 increase in local government debt within a score of years has been spent in strict accordance with the principles and needs of national economy, and spent also to the best possible advantage. Even the prodigal members of the Auckland City Council can look with the utmost complacency upon a huddle of old buses parked in idleness and convince themselves that the enforced expenditure on the ramshackle things in an exercise of transport acquisitiveness was a master stroke of constructive policy. The administrative argument that everything has been and is as right as can be may be irrefutable, but it is well that the ratepayers should know the weight of the financial burden that spendthrift administrations everywhere have thrust upon them: — There are now 690 local bodies in the Dominion, while the tendency toward the establishment of many more is “swellin’ wisibly.” The existing total comprises 124 county councils and 119 borough councils; the remainder consists of all sorts of boards. In many districts the functions of these bodies overlap in extravagant ways. Each body represents a complete administrative organisation, modelled on expensive lines. The system provides steady employment for thousands of workers who never need to take their coats off to get things done, but here, there and everywhere much of their work could be just as well done by half the number of employees. But this, unfortunately, is not the time for a much-needed retrenchment. As the glib politicians say, the Dominion must advance along broad national lines, and the broader the lines are the heavier the debt and the higher the rates and taxes. Meanwhile, the actual work of State and local government engages the arduous attention of 82,000 employees at an annual wages cost of £18,500,000. And some simple folks wonder why taxation and municipal rates are high, and why their wages are continually meeting obligations! In attempting to explain difficulties many commentators seek to put all the blame on the importation of motor-cars and other luxuries, mostly silken, together with ready expenditure on cinemas and other alluring entertainments. All these delights contribute toward the hard cost of high living, but behind them stands the amazing price of State and local government. With the formidable growth of local body indebtedness the average rate of interest has grown, too—from 4.64 per cent, in 1917 to 5.31 last year. But the steady hardening of the interest rate has not checked the zeal of administrators for borrowing. Since 1900 the annual charge for interest on local government debt has risen from £lO 4s Id a head of the population to £44 10s 4d a head. In view of these arresting facts ratepayers should keep an alert eye on those local bodies who seek the unfettered delight of raising loans without the ratepayers’ authority. This power should be withheld, in spite of all plausible arguments and importunities.