FINANCING STATE ENTERPRISES

Press, Volume LXXVII, Issue 23401, 7 August 1941, Page 6

FINANCING STATE ENTERPRISES

New Account To Be Created

PROVISIONS OP BILL

(P.R.) WELLINGTON, August 6. State enterprises grouped under the heading of national development are to be financed from a new account, the national development loans account, to be created under the National Development Loans Bill, which was introduced and read a first time in the House to-night. The Minister for Finance (the Hon. W. Nash) said the measure would result in a saving of interest, as there would be borrowing for one account instead of for a series. The bill is scheduled to come into fMce on April 1, 1942. “This bill places national expenditure in its correct perspective," Mr Nash said. “It provides for the raising of money for national development purposes, and abolishes the old public works fund, and keeps the Consolidated Fund in its present position. There will be one account, and one only, into which will go all money borrowed, and out of which shall flow to various activities associated with the State all money required by them." Funds or accounts to which money may be transferred from the national development loans account during the first three months of the year ending March 31, 1943, shown in a .schedule to the bill, are the general purposes account of the public works fund, the electric supply account, the land for settlements account, the main highways account, the State coal mines account, the State forests account, the housing account, and the iron and steel industry account.

Mr Nash said that there were others, including the linen flax industry account; The Minister said that money would be borrowed under'the authority of the House in the ordinary way, and would go into this loan account. Under the authority of the House there would go out of the account money necessary for public works and various other activities. The purpose of the bill was to bring into being a new procedure in connexion with the raising of money and the showing of the money to the House and to the country. Mr W. J. Poison (Opposition, Stratford): Will the Public Works continue to administer the fund? ‘Mr Nash: No. It will continue ■to administer the public works fund. The Electric Supply Department will administer the electric supply account, and the State Housing Department the State housing account. Saving of Interest

Mr Poison: Will that not lead to duplication of engineering?

Mr Nash: No. There will be a saving of interest just by accountancy procedure, because of the fact that we borrow for one account only, instead of borrowing for a dozen accounts, and having to keep balances in them. The Leader of the Opposition (Mr S.'G. Holland): Do you hope to create any new money this year? Mr Nash: The authority for raising money this year will be provided for in a finance bill.

The bill empowers the Minister for Finance to borrow sums not exceeding the aggregate authorised, all money to be paid into the public account to the credit of the national development loans account. One clause provides that where an appropriation act has authorised the transfer from the national development loan account of an amount to another account, there may be transferred during the first three months of the succeeding financial year any balance of the authorised sum not transferred, plus a further amount equal to one-quarter of the total authorised. The bill authorises the transfer during the first three months of the financial year ending on March 31, 1943, of sums not exceeding £4,000,000 from the national development loans account to the funds and accounts mentioned in the schedule. If the Minister considers that the amount authorised by an appropriation act in any year to be transferred from the loans account to any fund is not sufficient, there may be transferred during the year such further sums as the Minister may direct, provided that the sums transferred under this section in any financial year are not more than 10 per cent, of the total authorised to be transferred. It is further provided that a statement showing sums transferred under this section in any financial year, and the funds to which they have been transferred, certified by the Audit Office, shall be laid before Parliament within 10 days of the beginning of the first session of Pflrliament in the next financial year. The measure provides that money transferred from the loans account to any other fund, except the Consolidated Fund, shall be a capital liability of that fund to the Fund, Interest on capital liability under this section is to be paid from the appronriate fund to the Consolidated Fund at a rate of interest to be prescribed by the Minister. Different rates may be fixed for different sums.