LOANS TO LOCAL BODIES

Press, Volume XLVIII, Issue 14507, 8 November 1912, Page 3

LOANS TO LOCAL BODIES

PUBLIC ACCOTTNTS COMMITTEE'S KEPORT.

DEBATE I_. THE HOUSE

(abbidged press association report.) WELLINGTON. November 6. Ia the House to-night Mr J. A. Hanan moved the following amendment to the report of the Public Accounts Committeo on tho administration of the Stato Guaranteecd Advances Department :— '-That the finding and recommendations m tho committee's report bo struck out with a view to inserting other words" These are to tho effect that tho evidence taken by tho committee and the records of" tho Department, examined by it, conclusively proved:— (1) That tho statement in the Board's resolutions that no political or other influence was at any time used to influence tho Board was true. (2) That members of tho Board were justified for asking for an enquiry into grave reflections on their probity and administration made in the House and Press of the Dominion that money was lent for the purpose of influencing tho general election of 1911. Tho enquiry had completely exonerated tho Board from haying been subject to or moved by political influence in tho dischargo of its duties. (3) That no discrimination or political grounds had been mado in tho granting or refusing of a loan to a local body in any electoral district. (4) That no losses had been sustained through want of security under tho State Guaranteed Advances Act. Losses amounting to £23,000 were incurred duo (a) to the Board's difficulty in finding immediate investment for funds at credit; (b) to the remission of 10 per cent, allowed to tho Department being insufficient to cover expenses and loss of _ interest, whilst tho moneys remained uninvested. (o) The losses referred to in clause 4 wete a triflo compared with those made under tho old loans to local bodies system. (6)' That commitments made for payments of instalments extending over a period of years wero in accordance with tho regulations under tho Act. The Crown Law Officer having now advised that such grants wero illegal, tho Act should bo altered to permit of these instalment advances being made as in tho past. (7) That had tho Post Office fulfilled the promise mado in Juno last to lend the Government £1,500,000 there would have been moro than sufficient to meet all engagements. Recommendations:—(l) Now that moneys may not bo obtainable from the Post Offico, tho Act should bo altered to mako tho interest payable by local bodies the samo as that at which it is raised, when moneys aro payablo to local bodies plus a- reasonable amount for costs administration; (2) preference, should bo given to local bodies whoso financial position and difficulty of carrying out their works entitle them to preferential treatment, and the Act should he amended in tho direction of classifying local authorities accordingly. Mr Hanan, speaking to tho abiendment, said that if tho Public Accounts Committeo had desired to bo fair thoy should havo specially stated in their report that there had been no political influence in connection with the operations of the Advances Board. Unless _.uch a resolution were passed there would remain a reflection on the members of tho Board. Mr Isitt said that if ho did not know that tho report was tho outcome of political heat ho would feel ashamed and humiliated, but recognising that in tho report they had very littlo moro than tho ebullition of bitter party spirit, ho should feel that tho report was far from being a stricture. To him it appeared to be more a stricture on tho men .who issued it. It was a dastardly citejiipt on the ipart of the men who had uttered political slanders in support':.of which they ; had never offered oho' jot or tittle of evidence. Again and.again tho Government had charged tho late Government with political bribery and corruption, , and evidence in support of that charge had not boon forthcoming. Ho contended that tho Minister of Finance^had displayed a hostility towards tho members of' tho Advances Board which was not justified, and all that had been proved against them was that they had granted loans three years ahead. Ho hoped that tho members of the Board would not.be persecuted because they had dared to protest against tho treatment to which they had been subjected. Tho amendment was lost by 39 votes to 28. The following is tho division list:— For tho Amend- Against the Amend-

ment, 28, ment, 39. Atmoro Allen Buddo Anderson Buxton Bell Colviq R. F. Bollard Craigio Bradney Davcy Buchanan EU • Buick Forbes Clark Glover ■ Dickson Hanan Escott Hindmarsh Fisher Isitt "" Fraser Laurenson Guthrio McCallum Harris Mac Donald Herdman McKenzie Herri ea Myers Hfno Parata Lang Payne Leo Poland . Malcolm To Rangihiroa Mander , Robertson Massey Russell A. K. Newman Seddon E. Newman Sidey Nosworthy R. W. Smith Okey Ward Pearce Witty Pomaro Reed

R. H. Rhodes Scott F. H. Smith Statham Sykes G. M. Thomson Veitch "Wilkinson "Wilson ''~ ■ Young PAIRS. For tho Amend- Against the Amendment, ment. Carroll J. Bollard Brown Hunter Tho debato proceeded on the motion that the Public Accounts Committee's report bo adoptod. Sir Joseph "Ward said 75 per cent, of the members who voted on Mr Hanan's amendment had not read the evidence taken before the Committee. They Tvero condemning him unheard. Responsible heads of departments had given evidence that no political influence had been exercised in regard to loans to local bodies.

Mr Allen said again that tho Board would be acting illegally in committing the country to a loan two or three years ahead.

Mr Russell said the Minister should protect Departmental officers. He wanted to know which member of the Board was to be removed according to tho resolution passed by the House. After further discussion, MrJUyers appealed to the Minister to consTuer tbe purport of tho report. The carrying of it must mean the losing of the positions of some of the members of the Board.

Mr R. Smith moved that the question at issuo be referred to a Judge before effect' -was given to the Committee's recommendations.

Mr Fisher contended that the purport of the report was to get ria of the Board, t-ot to embarrass any Civil Sen-ant.

"Mr Allen said he had never imagined or suggested that any political influence had-been used by any member of the Board, but he did consider, in the interests of the country, that the administration of the Department should be changed.

Mr Massey said tho committee could have brought down no other report. He recognised that the Chairman of tho Board was a zealous officer. The only intention of tho report was to replace two members of tho Board by two business men. Mr Smith's amendment was lost on a division by 37 votes to 26 and tho report was adopted by 36 votes to 26. THE BILL PASSED. In moving tho second reading of the State Guaranteed Advances Act Amendment Bill the Hon. James Allen 6aid the Act was in a very unsatisfactory condition, and tho amendments being moved " would go somo way towards rectifying the" flaws. Further amendments would... bo necessary next year, and possibly tho year after. Tho system of tho Advances Board lending out money two and three years ahead, not knowing at tho time the loan was granted what the money would cost, would havo to ceaso. The Solicitor-General had advised that the system was not legal. When ho came into office ho found huge commitments dating ahead of 1914 at 3J per cent. Money could be only got from one source at that price, and ho did not think that_sou.ee —tho Post Office —had i been thoroughly tested. When ho as- j sumed office there were commitments to the extent of £820,320, most of it at 3i per cent. Ho questioned whether tho money could be found at tho prico. Ho could find no record that tho Post j Office had promised to find a million and a half of money this year for loans to local bodies. Ho did not tliink tho j Post Office authorities would bo so in- j discreet as to make such an announce- I ment. Ho doubted whether tho Post Offico could find anything liko tho amount. Tho previous Administration ; had brought tho Department to a standstill by its reckless methods. Tlio Bill beforo tho Houso provided that local "bodies would havo to pay tho rate of interest at which tho money was raised, plus the cost of administration. That cutting down of the maximum to £5000 had been occasioned by the wild commitments—and ho used tho words advisedly—of his predecessors in office. Ho regretted he could not raiso tho amount. What ho had in hand prevented sncli a. course. They wero authorised under tho Bill to raise a million a year, and he wished to do so. Sir Joseph Ward contended that there had not been ono spark of geiuerosity in the Minister's speech. Ho quoted Hansard to show that the present Government, when in opposition in 1910, had voted for a million loan for loans to boroughs, counties, etc. The present Finance Minister had proposed to commit the country to a further loss of £250,000 a year besides, "and yet," said Sir Joseph, "he comes and talks to rae." Tho Minister dare not attempt to administer the Act without making commitments two or three years ahead. New Zealand had £800,000 of gilt-edged securities in London to enable it to get temporary advances. Did the Minister suggest that ho could not get an advance against theso securities? Tho Minister, in Ins reply, main- i tamed that the administration of tho Department had been thoroughly unsound. '

The second reading of the Bill was agreed to on the voices and the Bill was subsequently put through all its stages. The House rose at 9.25 a.m.