LOCAL BODY DEBTS.

Auckland Star, Volume LVI, Issue 65, 18 March 1925, Page 9

LOCAL BODY DEBTS.

INCREASED BY MILLIONS. SOME STARTLING FIGURES. Some amazing figures concerning the growing debts of the local bodies of the t .Dominion are given by the Government , Statistician in his local government I report for the financial year 1923-1924. j ' Jn 20 years the gross indebtedness of y i local governing bodies on account of outstanding loans has increased from . £8,898,910 to £39,110,000, exclusive of j moneys borrowed from the Government, which represented a further gross in- . dtbtedness of £5,01G,139 at March 31, r 1')24, making a total of £47,126,139. (• I The corresponding net indebtedness was £40,929,513,. but it is on the greater amount, of course, that all interest and kindred charges must be calculated. On the total gross debt there were interest and sinking-fund charges amounting to £2,798,645". The total annual debt charge on each class of local liability on March 31, 1924, was as follows: Interest on debentures and stock, £1,992,220; sinking fund on debentures and stock, £413,369; charges on State Advances loans, £307,099; and on inI scribed debt due to the Treasury, • j £M.j.937;. a grand total of £2,795,645. I Uf a total indebtedness (other than ' j lo;.ns from the Government) of 1 £39,110,000 as at March 31, 1924, i £2(5,008,533 was raised in New Zealand ' and £12,441,467 abroad, the tendency Leing towards the raising of loans i locally. i Sines 1900 there has been an uninj terrupted increase in the amount of 1 local bodies' debt. The rate per head .of gross local indebtedness rose from £10 4/1 in 1900 to £34 19/3 in 1924. In , other words, the rate more than trebled jin the twenty-four years under review. I From 1922-23 to 1923-24 the gross in- • debtedncss increased from £43,603,449 to ! £47,120,139, which is considerably less ; than the increase recorded during the I two previous years. Electric Power I Boards, with £1,688,565, and Harbour I Boards, with £582,201, contributed most ;to the additional indebtedness. A strikI ing feature is the reduced rate at which I boroughs are borrowing, the increase during 1923-24 being as"low as £317,509, as against during the previous year. As against this growing debt, however, the Statistician points out that assets have undergone a more than corresponding augmentation. In. the case of boroughs, for example, which are responsible for approximately half the debt, the outcome of loan money raised lias been the introduction and i extension of such public utility services as_ electrical works, gasworks, tramways, drainage and water systems, and a multiplicity of similar undertakings. Management Expenses. Of a total expenditure of £16,520,950 in 1923-24, management expenses claimed £533,115. Boroughs, with their multifarious activities involving the receipt and expenditure of huge sums of money, show the comparatively low average rate of 4.81 per cent, while in the case of town districts (dependent), the finances of which are on a much smaller scale, the rate is as high as 23.21 per cent (on revenue). As between local authorities of the same class a similar tendency is in evidence, the four principal centres, for example, showing remarkably low rates as compared with the smaller boroughs. This factor should not be lost sight of in a discussion of relative administrative costs, and, gene- , rally speaking, no just comparison can : : be made, unless the finances of the , authorities concerned are about on a leveL It should be noted also that in , the case of boroughs the average rate , is extremely low by reason of the poudernnce of the figuVes of the four chief cities, in all of which a very low rate prevails. Consequently, because the administrative rate of any particular ; I borough is higher than the average, it does not necessarily follow that such rate is unduly high.