STATE ADYANCES.

Taranaki Daily News, 13 September 1922, Page 5

STATE ADYANCES.

MORE HELP PROMISED. TWO MILLIONS ADDITIONAL. EXTENDING REPATRIATION. CHEAP MONEY FOR PEOPLE. By Telegraph.—Press Association. Wellington, Last Night. In the House to-night, Mr. Massey moved the second reading of the State Advances Amendment Bill, which, he said, though not unimportant, was purely a machinery measure and added no new feature to the policy of the department. Part lof the Bill consolidated a number of financial branches of the Government service, thereby making for economy and efficiency. One of the greatest drawbacks of the country at present, said the Premier, was the paucity of money for mortgage purposes, and he proposed to strengthen the finance of the Advances Department by the addition of £2,000,000 this year. For this money the State would probably have to pay a higher rate of interest than was done» originally, and for that reason he was taking power to charge a higher rate of interest to the borrower, because he could not expect the State to make a loss. He hoped to be able to lend this new money at 5i per cent., and this would not interfere with any old money which would continue to be lent at the old rate. The only method of discrimination employed would be first to come first served. If there was no money available at the old rate, then the borrower would have the option of taking new money at a higher rate. Discussing the position of the Repatriation Department, Mr. Massey said he proposed to widen its scope, so that an industrious man of good character might get a further advance. There would have to he some limit to this, but it would probably be £250. For this further legislation might be necessary. He proposed ultimately to make the Repatriation Department a permanent department. There had been some complaint of late that the Government lending department had not been do* ng sufficient in the way of advances, and in reply to this criticism he quoted from a return showing that during the last 12 months £3,707,801 had been lent to the public by the State under various heads, and this he thought was a very creditable result. Mr. T. K. Sidey (Dunedin South) said the Bill generally was a confession of failure, because it brought a number of departments which failed under the head i.u one department which had been a success. This applied with especial force to the Housing Department, which had got into | a mess. No more houses were to be built, and the State Advances Office was being called in to do the clearing up. Mr. G. Witty (Riccarton) urged the Premier to borrow £5,000,000 instead of £2,000,000, as there was need of it in the country. Sir John Luke (Wellington North) said the Government should use its influen-.i with the banks to reduce the rates of interest, because while the bank rate was 7 per cent, private lenders would look for a similar rate. He was anxious to know when the Premier proposed to get the £2,000,000 new money mentioned by him, as there was a widespread idea that he proposed to seize the sinking funds for loan purposes. Mr. Massey: You can flatly' contradiit that whenever you hear it. Sir John Luke expressed satisfaction at this assurance. He was specially anxious to see cheap money to enable people to build homes for themselves, as this could be better done privately than by the State. I The Hon. J. A. Hanan strongly deprecated the suggestion that the Government should go in for a lavish borrowing policy, thereby increasing the interest burden of the country. The policy of some people seemed to be borrow, boom, or bust. He hoped the moratorium would not be extended beyond next year, as it was prevent- | ing the free circulation of money. He ap- , proved this Bill because it made for unify of control. The Hon. G. J. Anderson contended that 1 under all the circumstances the Housing Department was not a failure, but a success In face of all the difficulties which had to be overcome, they were turning out houses from £2OO to £3OO cheaper than private builders were doing or could be done to-day. The department was closed up simply because they had no money to carry on; the money available was required for more urgent purposes. Up to date the department had.built 340 houses; they were now building 34, and had spent £560,000, which was not a record of failure. Mr. P. Fraser (Wellington Central) said the housing problem was as bad to-day as it was in 1919. In Wellington alone they were 2000 houses short. The Bill was read a second time.