VIEWED WITH SUSPICION.

Auckland Star, Volume LVII, Issue 182, 3 August 1926, Page 16

VIEWED WITH SUSPICION.

LOANS FOR LOCAL BODIES. PROPOSED CONTROLLING LEGISLATION. In common with other Auckland local bodies, the Mount Eden Borough Coimeil is viewing with suspicion a proposal by the Government to set up a board to supervise the raising of local loans. "A bill to give the Government the right to forbid a local body to place a specific loan before the ratepayers seems to be unnecessary, because since the war the consent of the Minister of Finance had to be obtained before a loan could be issued, and any information required can be obtained from the Government officials." said the Mayor (Mr. E. H. Potter) at a meeting of the council last evening. "It", however, it be thought necessary to embody this power in another Act, there arc some considerations to be submitted. Local body loans have undoubtedly increased, but there is a ' definite reason for this in the abnormal increase of traflic brought about by motor transport. It will not be disputed that satisfactory roads can scarcely be made without capital expenditure. The attempt to carry this out from rates would raise them to an impossible extent, and would throw upon the present time an expenditure which should fairly be spread over an extended period. Roads can be laid down in permanent material and afterwards maintained at small cost, and the interest and maintenance together will be less than the rates required to provide a road which should lie passable, but not equal to ihat built by capital expenditure. The Real Supervision. "A board of experts would undoubtedly furnish knowledge and experience greater than is usually found in a local body official, but against this must be eet the local knowledge of a council engineer and of the ratepayers who are asked to vote for a loan.*' continued the Mayor. "Tbe real supervision would seem to belong n> the ratepayers, who will Invito pay ihe interest and sinking fund on any loan they may authorise. Tbe object which tlie bill desires to obtain might be achieved by decreeing that loans for road construction should be repayable in twenty years, and should carry a linking fund of 2* per cent. If desired, this could be extended to all loans, with a provision enabling the Minister to dispense with it on reason being shown. The proposals in the bill would place the decisions of a local body at the mercy of an appointed board with no local knowledge of traflic or of the wishes of ratepayers. Local Body Debts. '•The local body indebtedness is given as £4.">.000,000, but it is not as great as it appears on the. surface," said tho .Mayor, in conclusion. "Power boards and harbour boards account for £16,000,01)0, and thus it is really reduced to £20.000.000.'' Mr. R. M. Morrison said that it would be better to discuss the matter when a copy of the bill was received. The Mayor: If we wait long enough the bill will go through. It was decided to procure copies of the bill, and to call a special meeting of the council to discuss it.

DISCUSSION AT ONEHUNGA. The Onehunga Borough Council last night considered the proposed legislation in the direction of the appointment of a controlling board for the stricter super\ision of local body loans. The measure hears the title of Local Government Loans Board to consider the loan proposals of local authorities. The hoard is to consist of the Secretary of the Treasury, the Lnginecr-in-Chief of the Public Works Department, and five Other persons appointed by the Governor-General, who will also appoint the chairman. Every local authority which proposes to borrow money, otherwise than ii anticipation of its revenue, will be obliged to submit to the board an application and statement giving information required by the board. No poll of ratepayers can bo taken until the proposal lias received tlie sanction of the board, and this approval has to be printed on the ballot paper. Following tho taking of a poll the result is to be forwarded to the Minister of Finance, who will make his recommendations to the GovernorGeneral in Council for the authorisation of the raising of tho loan. Mr. J. K. Green approved of the measure and quoted several instances where thousands of pounds would 11 ye been saved to tho ratepayers if such a board had been in existence to give expert advice before loans wei■•» obtained. The Mayor, Mr. J. E. Coweil. said he thought the Prime Minister had said that he would solicit the opinions of local bodies before proceeding with the measure. Mr. Green corrected this impression by stating that Mr. Coates would consider any suggestion from interested parties before placing the measure on the Statute Book. As the council had a lot cf bus : uess to transact it was decided to defer further consideration for the present.