WAS IT SQUANDERED?

Taranaki Daily News, Volume LV, Issue 114, 30 September 1912, Page 5

WAS IT SQUANDERED?

MONEY FOR LOCAL BODIES. ' THE POSITION OF THE GOVERNMENT. THE LOANS DISCUSSED. {By Telegraph.—Own Correspondent). Wellington, Last Night. Loans to local bodies and State-guar-anteed debentures formed the subject of an interesting debate in the House of Representatives during the early hours of this morning. The Minister in charge of that part of the Estimates (the Hon. J. Allen) said that the Government would satisfy the requirements of the local authorities as far as possible. The Government had an unexhausted borrowing authority of £825,000, but there were commitments against that of £053,700. The balance between those two amounts represented what was available for local bodies for the rest of the year, and the Government was providing for loans up to an £BOO limit to the furthest possible extent.

Mr. G. W. Russell asked if it was not a fact that the State-Guaranteed Advances Department was receiving every year, by way of repayments, a million pounds, which was largely available for re-lending. The Minister said that he was sorry to have to reply that that was not the fact. There was a considerable loss made each year on the loans to local authorities. The estimated amount available after March 31 next was nothing at all. On the contrary, the loss made in connection with loans to local authorities since IfllO was £22.557, and he had to make provision for it. Mr. G. W. Russell moved to reduce the vote by £5, as an indication that the Government should borrow further sums of money, in order that it-might assist the local bodies in the work of colonisation. The Government, he said, desired to assist the development of the baekbloeks, and if the borrowing policy of the Government did not allow it to, lend money to local bodies, more money should be borrowed, so as to enable it to assist in the work of development. It was as easy for the Government to borrow a quarter of a million or more for advances to settlers as it was to do the ordinary work of the Government, If the Minister laid it down that ain local body that had received £SOOO should have the door closed against it, the position would be made very difficult.

"I did not make the limit of £5000," retorted the Minister.

"Why was it made?" asked a member. "Where has the money gone?" Because they had to, said the Minister. What, he went on to ask, had been done with regard to those loans to local bodies? Parliament had given the Government authority to raise a million pounds. He had to shoulder the responsibility left bv the previous Government, and meet liabilities amounting to £OBI.OOO. Where had it all gone? / lie wanted to let the country know where it had gone. Why, he asked, did not Mr. Russell look after the backblock settlers when he was supporting the late Government? They were going to hring down an amendment to the Act, making provision for backblock settlers, and he hoped that Cabinet would agree .to the proposals by which the local bodies would pay the interest and the country would find the sinking fund. He added that he had only available for new applications the difference between £825,000 and £653,800. He was only sorry that he could not raise more. 'Mr. G. W. Russell: Ask for authority. The Hon. J. Allen: A Loan Bill? No; 1 am not prepared to bring down a Loan Bill for loans to local authorities. Before ho came into office, he .continued, the previous Government had committed the Government to the payment of £2,152,195 to local bodies, and when he took over the administration of the Department he found he had only £184,000 left. How much of the total did the county councils get? £685,000. How much did the boroughs get?—£l,oll,790. A member: Shame! ■ The Minister: How much has gone to harbor 'boards?—£l22,ooo. Why should the State find money for those wealthy institutions when the backblocks settlers are wanting it? What boroughs got it? This is the legacy left to me—a very nice heritage. One borough .alone had had granted to it £116,000. A member: Name.

The Minister: A large portion of it w«as granted between June and July, 1911. The borough was Timaru. That was not a needy borough. The sum of £OO,OOO was granted to the borough of Wanganui between January and August, 1911, and before November, 1911— a month before the general election Wanganui received £23,500. The Minister gave further details of the sums paid to local bodies about the same time, including Onehunga £45,950, Newmarket £35,935, Mount Albert £30,000, Miramar £48,000, Hastings £78,000, Greymouth £20,020, Blenheim £70,150, and Remuera £87.365 (three days before the elections), lie wanted the country to know why it could not do more for the local bodies.

THE SUPERINTENDENT'S POSITION. Mr. W, D. S. McDonald asked whether the Minister could point to any local authority that had been refused a loan in 1911. When he suggested that certain authorities received a loan before the general election, did he maintain that the Superintendent of the State-Guaran-teed Advances Department was the political agent for the Government? That was the suggestion the Minister was making, and if the Superintendent was a person of that character they ought to dismiss him to-morrow. Could anyone suggest that an application could be forwarded to the Department three days before the election and have it granted? The necessary preliminaries had to be gone through, and to suggest malpractice in this respect against the Ward Government and the Superintendent of Advances to Settlers Department was—well, he did not like to say what lie thought about it. While money was plentiful the Government advanced money, but he urged that the raising of the million of money for the purpose had not raised the rate of interest, either locally or generally. The borough of Gisborne had asked for £IOO,OOO, and had not got a single penny. The Prime Minister said that he was afraid that the facts that had been disclosed by til? Minister of Finance were too much for the lion, gentleman. He knew of one local body which had got a huge loan, and which had £40,000 or £50,000 in the bank to-day. The disclosures which the Finance Minister had made showed a record of squandering such as this country had never known. Not long ago this country had gone for a two million loan to the London money market. It had to pay 5 per cent, and 84 per cent, .gi the loan was left on the hands of the underwriters. The first duty of any Government that happened to be on the Treasury Ranches was to provide money for the development of the backblocks. The Government would provide money for such purposes, and lie believed that* the country was entering upon a record season. This was required. The amendment of the hon. gentleman came with a very bad grace today.

THE KIGTIT TO GET CHEAP MONEY. Mr. G. W. Russell said that the Government had to go to the London money market ior £1,750,000, so where was the difficulty about the extra money 1 When the Mackenzie Government wen* on the London money market it had secured infinitely better terms tha* Queensland had at the same time, tim Minister of Finance ought to be ashamed of himself. He quoted from the Minister's own.Btfdget to show that he had misrepresented the position in regard to loans. Was the Government prepared to abolish the limit of £3000? The Minister said "No." The answer then was that the Government was unable to raise money for boroughs. Had not the people of the boroughs the right to get cheap money just the same as any other section of the community? THE MINISTER'S POSITION. The Minister of Finance said that he had quoted the loan finally approved in the return he had presented. He had a right to feel aggrieved when he found, on coming into office, that three-quarters of a million of money was due under approval. He believed that the country made a huge mistake when it passed legislation and allowed these strong local bodies to come down and secure large sums to the exclusion of county councils. Within sixteen months £119,00$ had been granted to the borough of Timaru. The country could not spend that.

Mr. J. B. Hine said that this was one of the sorriest spectacles he had ever witnessed. The attitude of the Opposition was the very essence of political hypocrisy. lie trusted that the great Liberal Party which put the great Guaranteed Advances Act on the Statute Book would face the music. A DENIAL.

Mr. W. D. S. McDonald said that it had been charged against the late Government that the Ministers had gone round the country promising £1 for £1 subsidies. He denied that he had done anything of the kind. It was the duty of any Public Works Minister to examine the works which were being provided for by the State. How could any Minister come into the House and defend his estimates unless'lie .knew what he was talking about? The. amounts fol the Timaru borough < were voted at a time when there was no difficulty about money, and at a time when no count;} council had been refused money. He would challenge the member for Stratford to go into the whole history of the State lending departments in New Zealand. The}' had returned to the. State, a profit of £1,500,000. The Ward Government had laid down a restriction in regard to loans to boroughs, that money would be advanced only for the purposes of sewerage. Although he was a country representative, he believed that it was the duty of the Government to proVide money in order that sanitation might be secured.

GENERAL DISCUSSION. Mr. Payne rose, in his own words, "as an outsider listening to two parties squabbling." Mr. Hine's remarks he characterised as grossly unfair. Did he think that the towns should get nothing at all, and that the country should get everything! Mr. Young (Waikato) protested against a restriction of £SOOO- being placed upon counties while boroughs could borrow huge amounts. Mr. J. A. Hanan said that when the amounts in question were borrowed money was plentiful, and no country local body had suffered. What did cheap money for a town like Wellington mean? Were the workers of the town entitled tq. nothing? Were they not entitled to sanitation?

Mr. C. K. Wilson: Wellington did not borrow under this Act. Mr. Hanan: I am simply using it as an illustration. He went on to say that •the loans complained of were made after thorough investigation, and on the report of a responsible officer in charge of the Department. A most unwarrantable attack had been made on the Ward Government and on the late Minister of Public Works, Mr. R. McKenzie. Mr. McKenzie: Never mind. I ca» stand it. The Prime Minister said that the time of the House was being wasted. He did not suggest that any local body concerned would not be able to pay interest, but the State was losing money on everyone of them. No matter how powerful any local authority might be the State lost money by the - transaction, country districts deserved assistance, but the other and larger local bodies could go on the market at any time, just the same as the State.

The Hon. R. McKenize denied that the Government was losing money on it* loans to local bodies. He - knew of tiN local body to which any money had foeßß advanced where the investment had not ■been a good one. The Prime Minister quoted a return to show that over a period of two years, the advances to local authorities had resulted in a loss of £'2'2,000. Mr. G. W. Russell contended that the Ward Government had only borrowed up to the limit allowed by the authority that had been conferred upon it. The Government, he added, recognised that it was short of money. It was open to the Government to raise sufficient money to satisfy the demands of <the local bodies, even if it lost ten or twelve thousand pounds a year on the transaction, providing that it helped towards the development of the backblocks. The Hon. R. McKenzie said that the Government would not be long in office before they would discover the necessity of assisting local bodies by way of loan.

The motion to reduce the item waa lost oil the voices. :