LOCAL BODIES’ LOANS

Press, Volume LXXII, Issue 21792, 26 May 1936, Page 11

LOCAL BODIES’ LOANS

Operations of Board Reviewed STATEMENT BY MINISTER FOR FINANCE (,I’RESS ASSOCIATION TELEGKAJiU WELLINGTON. May 25. The Minister for Finance (the Hon. W. Nash) has furnished the following information about the operations of the Local Government Loans Board for the 12 months ended on March, 31. 1936. together with comparative figures for the previous years, and a resume of conversion operations connected with the whole of the local body debt in the Dominion, which are now practically completed. The total amount of applications submitted to the board for general loans u.e., exclusive of conversion schemes) during the year amounted to £4,235,926, and of this sum £4,061,076 was represented by new applications and £174,850 by the total of sums which have previously been referred back to the local bodies concerned and again submitted for reconsideration. Loans sanctioned were;—

Redemption loan .. .. 2,051,790 New loans 1,550.690 Referred back and declined 633,446 Of the amount of the redemption loans sanctioned, the total figure given takes the place of a previous debt of £2,196,079. Since 1927-28 the total applications amounted to £32,810,434. Amounts sanctioned were £16,099,550 for new works, and £13,621,034 for redemption loans. The difference, namely £3,089,850, represents the amounts referred back and declined by the board during the period. As £1.625,000 of the amount sanctioned for renewal loans during the year under review vas in respect of two London loans, the remainder of ihe renewal loans for all other local bodies totalled only £428,790, which was a marked reduction on the renewal loans of previous years. In addition to the figures supplied above, a total of £114,181 was dealt with during the year, as representing applications in respect of the disposal of capital moneys and unexpended loan balances under the provisions of section 20 of the Finance Act, 1934, and section 47 of the Finance Act, 1929. Indebtedness Reduced The Minister quoted figures showing the total loan indebtedness of all local authorities in New Zealand since 1915, when Ihe figure w’as £24,538,721. It reached its peak in 1931, when it was £72,686,036, and in 1935 it stood at £71,245,458. The rate of increase had mounted greatly in post-war years, but had fallen away since 1927. when the Local Government Loans Board had exercised a steadying influence in the field of local body finance. The local body debt convertible at March 31. 1933. was £48,456,645. By December 31, 1935, £43,540,169 had been converted and £2,924,241 had been repaid, renewed, or excluded, leaving £1.992.235 outstanding. Of 493 local authorities, 349 had converted their debt. The remainder had either not taken action, or the amounts were too small to warrant conversion. Applications are still being received for conversion.

“The Local Government Loans Board, about 18 months ago, fixed the basic rate at which all local authorities might borrow, at 3J per cent., and it has maintained this rate to the present time.” the Minister said. “It would appear that no great difficulty has been experienced by local authorities in obtaining loan requirements at this rate. Renewed activity of local bodies within reasonable bounds will assist the Government in its policy of providing useful employment for those who are at present unemployed.”