BORROWING BY LOCAL BODIES

Press, Volume LXXVII, Issue 23414, 22 August 1941, Page 8

BORROWING BY LOCAL BODIES

INCREASE IN LAST YEAR

REPORT TO PARLIAMENT

(P.R.) WELLINGTON, August 20. Applications to the Local Government Loans Board for loans for new works dealt with during the year ended March 31, 1941, showed a considerable increase over the figure for the previous year, the board stated in its annual report to \he House to-day. The increase was due almost entirely to rural housing loan and hospital board applications. In its function of controlling borrowing by local authorities, the board considered applications totalling £5,336,640. Of that amount £5,213,290 represented new applications, and the balance represented amounts which had previously been referred back or declined. Sanction was given to the raising of loans totalling £2,709,505 for new works, and £1,602,670 for renewal of loans, and an amount of £SOO was declined.

"Borrowing for hospital purposes has been sustained at $ very high level over the last few years, and appears likely to continue at a fairly high figure for some years to come,” the report says. "Borrowing for purposes connected with the supply and distribution of electrical energy also shows ,a substantial increase. The other items show normal year to year fluctuation.”

The board observes that prevailing conditions had resulted in an alleviation of the unemployment situation, and the need for local authorities to raise loans for works designed in part to relieve unemployment had practically disappeared. The growth of local body debt to its peak in 1931, and subsequent decline to 1938, since when the figures show a rising tendency again, is traced in the report, which shows indebtedness in 1940 to be £69,486,970, against £24,538,721 in 1915, £72,686.036 in 1931, and £68,061,551 in 1938.. Of the 1940 debt, £12,284,225 is domiciled in London, and £2,264,220 in Australia. “In present circumstances, local authorities generally appear to appreciate the necessity of conserving the capital resources of the Dominion, and are refraining from submitting loan proposals for other thail essential needs,’’ the board reports.