The Press. MONDAY, SEPTEMBER 30, 1912. THE STATE ADVANCES SYSTEM.

Press, Volume XLVIII, Issue 14473, 30 September 1912, Page 6

The Press. MONDAY, SEPTEMBER 30, 1912. THE STATE ADVANCES SYSTEM.

Tho sensational statement by tho Minister for Financo regarding tho manner in which money has been lent to local bodies under the Stato Guaranteed Advances Act shows, as Mr Massey said, a record of squandering Buch as this country has never seen before. Between tho dato when the Act authorising loans - to local authorities under tills system camo into operation, rather in ore- than two years .ago, and th<? date when tho present Government camo into office, loans amounting to £2,152,195 were approved, and of this amount £1,481,030 had been paid out. Tho present Minister for Finance inherited, therefore, obligations amounting to somo £070,000. To honour these commitments, most of which have to bo met this year, and to provide for tho further requirements of local authorities up to tho ond of tho financial year, Mr Allen found that he had an unexhausted borrowing authority of £820,000, tho million which may be borrowed for this purpose this year' having already been reduced to that amount, difficult as the situation j*, tho' member for Avon, ono of thoso t»artly responsible for it, took tho opportunity to rail against tho Govern-

Mont for refusing to remore the £5000 limit that was imposed last year upon the borrowing of local bodies, and to move a reduction in tho rote as an indication that tho Government shoald borrow further .sums so as to assist tho local bodies in tho work of colonisation. A few minutes later Mr Russell must have wished ho had kept silent, for Mr Allen forthwith enlightened tho members us to how tho preceding Governments had spent the money. Amid exclamations of amazement and disgust he told how borough councils had been allotted over a million of tho £2,152,000 of authorised loans, how county councils had got less than a third of the total, and how even harbour boards had been lent "Why," asked Mr Allen, "should the State find money for " these wealthy institutions when tho "back-blocks settlers are wanting it?" Somo of the details of tho loans wero astonishing. Timaru in eleven months up to July last year was lent no less than £11fi,970. Blenheim received £70 000, Wanganui £69,000, Miramar £48,000, Onehunga practically £50,000, Newmarket £36,000, and tho Itemuera Road Board £87,000! A great deal of this money was lent in 1911, which by a coincidence was ©lection year, and in some cases the money was provided on the very evo of the elections. All unprejudiced people must agreed with Mr Massey that money so lent was used for purposes for which it was not intended. The local bodies engaged in tho task of opening up and developing the country have the first claim upon tho money available for loans, and not until their legitimate needs have been satisfied would it be justifiable for the Government to lend money to boroughs and other bodies which are, quite capable of raising money for themselves. Mr Mac Donald's assertion ibat up to a certain period! last year every application for a loan by a local body was granted is no defence at all, for by his own showing that openhanded poilcy was followed by tho imposition of tho £5000 limit. Obviously, if boroughs liko Timaru and districts like Remuera had been treated less prodigally, thero would have been so much tho less necessity to cut down tho amount of money which smaller local authorities in tho backblocks could borrow. As it is, large amounts bavo been lent to bodies perfectly able $o raise money in other ways, and in one case at least, which was quoted by tho Prime Minister, £80,000 was lent io a local body which has actually £40,000 in the bank, while others, in undeveloped parts of the country, are unable to get the money for actual neoda. For their unfortunate plight they havo only to thank tho present Opposition, whose interest in the matter may be gauged by the fact that at no time during the discussion on Friday night ware more than otght of the party in the House. The others seerA to.have realised that there was nothing to be gained by attacking tho Government on that point, and that, at that particular juncture, there was no place like home.