LOCAL BODIES’ DEBTS

Sun (Auckland), Volume IV, Issue 1011, 30 June 1930, Page 10

LOCAL BODIES’ DEBTS

IMPROVED SERVICES CAUSE INCREASE MR. S. GRAY’S ANSWER Asserting that he had not contended that members of the Chamber of Conit local body indebtedness, but that the chamber's criticism was mistaken in this instance. Mr. S. Gray, of Mount Kderi, has written a further letter on the subject to the secretary, Dr. E. P. Neale. “On the right to criticise, T think it would be a good thing if the chamber made a. practice of doing so.” writes Mr. Gray. The letter continues: “You refer to my statement that it is better to put down a good road from loan money and save maintenance, and say this would lead logically to concreting all roads. Concrete is not the only form of permanent reading, and no one would put it down in side roads. It is, however, possible to pur down a surface that will reduce maintenance to a minimum and satisfy the drivers of vheieles. “The original subject of discussion was the rate of increase in local body indebtedness. I pointed out the directions in which money had been spent, and that the great percentage of increase was due to the further functions imposed by the public on local bodies, transport, electric power and gas account for a large part of the increase, but do not normally increase the rates, as the services earn their own interest. I do not defend the system, but wish to point out the effect which it has on the total of local body indebtedness. The Chamber of Commerce would deserve well of the community if it would point out that by leaving the risks and profits of such services to private enterprise, capital would earn a little more and the public would pay a little less. ‘WASTEFUL EXPENDITURE” “I note that your committee is convinced that many instances of wasteful expenditure of loan money have taken place. I am not concerned to dispute this, which is not the subject under discussion. Local bodies, being human, are not immune from errors. Even Government departments have been known to make mistakes. Your committee is convinced that there has been much uneconomic capital expenditure, because of the general increase of rates. It should take into consideration the Remands of the past live or six years for roading of a totally different nature, \ which has thrown great expense on all local bodies.” Mr. Gray says his authority for his contention is a quotation from Professor Cassel, in the report of the Research Committee of the Economic Society. “With respect to loan charges,” he says, “the position is that the Loans Board demands short periods for loans, which means a large sinking funtl. The longest term granted to any local body is 36 h years, and this is exceptional, the usual period being 15 or 20 years. Tlie Government’s provision is for redemption of debt in 60 years.”