LOCAL BODIES’ FINANCE.

Taranaki Daily News, 8 November 1921, Page 5

LOCAL BODIES’ FINANCE.

THE PROPOSED NEW ACT. RECEIVING MONEY ON DEPOSIT. A resolution expressing opposition to the provisions of the Local Bodies’ Finance Act, now before Parliament, was carried by the New Plymouth Borough Council last night. On the advice of the finance committee it was decided to express the opinion that all that is necessary is legislation repealing the authority of local bodies to receive moneys on deposit, providing machinery for them to repay deposits already received, and making provision for extraordinary circumstances. The proposals of the Act were dealt with in detail by a report from the general manager (Mr. F. T. Bellringer). He stated, inter alia:— Personally, I think that an unfortunate time has been selected for the introduction of the Bill, and that it is inadvisable that it should be passed at the present time. The Bill had many good points and it would have been of great benefit to the Dominion if its principal provisions, with modifications, had been brought into operation ten years ago. When the financial stringency has considerably eased it will still be of advantage to bring these provisions into operation. All that is desirable at the present time, in my opinion, is legislation repealing the authority of local bodies to receive money on deposit and to provide machinery to enable local bodies to repay deposits already received. In submitting the proposed Bill to the municipal conference for consideration, Sir Francis Bell (acting-Minister of In-, ternal Affairs) stated that it was the fact that municipal councils had held so much money upon deposit that had first induced the Government to undertake the moratorium legislation introduced during the short session in the early part of this year. There is no doubt that this system of receiving money upon deposit is the cause of the grave difficulties which have befallen many local bodies during the past twelve months.

Fortunately the New Plymouth Borough has not been faced with these difficulties, as in the past we have consistently refused to receive money upon deposit. The wisdom of this policy was not always apparent when times were good but when the sudden financial stringency overtook the Dominion we had cause to lie very thankful that such a policy had been so rigidly adhered to. Those local bodies who have adopted the method of financing themselves by receiving deposits at call must by this time realise its grave disadvantages, and I do not think there would be much opposition to the authority being repealed provided, of course, machinery is provided to enable them to pay off deposits already received. Copies of the resolution and the report are to be forwarded to Mr. S. G. Smith, M.P., and to the Municipal Association and the Invercargill Borough Council in reply to correspondence received from them respectively.