PARLIAMENT Powers In Local Body Loans Bill Criticised

Press, Volume XC, Issue 27444, 2 September 1954, Page 12

PARLIAMENT Powers In Local Body Loans Bill Criticised

(New Zealand Preu Association)

WELLINGTON, September 1. Criticising the provisions of the Local Government Loans Board Amendment Bill in the House of Representatives tonight, Mr J. N. Massey (.Government, Franklin) said: “I am sorry to be a member of a Government which is handing to the Treasury such extensive powers.” The Treasury was given the power to “override everything,” Mr Massey said during the committee stage of the bill. ‘‘We are going straight back to departmental control,” he said. It had been stated that the board met only at intervals, but now, to overcome delays, it was proposed to give authority to the Treasury to do anything it liked about local body loans, Mr Massey said. The board had done great work in its early stages. Now, however, the Government was passing full responsibility to the Treasury. “I believe we are going a little too far, and for that reason we should have another look at it," he said. Mr H. L. J. May (Opposition, Onslow) also criticised the provision in the bill which would delegate the board s powers to the Secretary of the Treasury. It was a dangerous move, he said. To meet local bodies’ loan requirements, the Government should establish a central fund which could be drawn on for local projects. The Prime Minister (Mr Holland!: That means the Government must find

every penny. Mr May: No; the Government could float a loan.

Mr Holland: You wouldn’t get any government to agree to that, as governments need all the money they can raise.

Mr May said many local authorities, though they went on the market for loans, had substantial reserves invested. These reserves could be placed in a central fund.

Mr E. H. Halstead (Government, Tamaki) said that, if Mr May’s suggestion were adopted, there would not be one penny more available for local bodies, and the problem of local body finance would be aggravated because there would be one authority controlling the flow of loan money to local authorities. With a centralised body, ratepayers would suffer in the long run, he said. “Let us not have a centralised 'loans authority, dominated by a political party,” Mr Halstead added. Ifr R. M. Macfarlane (Opposition, Christchurch Central) said the Local Government Loans Board had always had considerable power, and had varied decisions of polls of ratepayers and even of acts of Parliament He suggested that the bill be delayed for a week, so that it could be considered by the executive of the Municipal Association.

The Associate Minister of Finance (Mr C. M. Bowden) said the Loans Board could not delegate any powers it did not itself possess. Who would provide the capital for the underwriting corporation that Mr May wanted to Mee established? How much better off would local bodies be? Such an underwriting corporation would not increase the supply of money available for local bodies, nor would it make it any easier for them to borrow, said Mr Bowden. The people who lent now to local bodies would be to lend to such a corporaReplying to Mr Massey on the question of delegating power to the SecTreasury. Mr Bowden said it had to be remembered that the secretary was, in fact, the chairman of toe board. Naturally he would get confirmation from the board for any to 0 *" <n>e wholc purpose behind this move was to expedite conajoeration of loan applications from the Mr M. Moohan (Opposition, Petone) said Mr Bowden had done everything possible to cloud the issue. Some of the powers in the bill had been used in the past without authority. When toe Loans Board had been set up, it had never been intended that it should have power to override decisions reached after a poll among ratepayers. With the powers contained in the bill, it could caneel out or stipulate conditions concerning any local body project “Tao Maek Fewer* “I don’t think the Minister intends P° we rs of the local authorities should be so undermined.* said Mr Moohan. “In another clause, these

same powers are given to the Secretary of the Treasury.”

Mr J. K. McAlpine (Government, Selwyn): He has too much power now. Mr Bowden said the Minister of Finance already had those powers. Mr McAlpine: That is entirely different. Mr Bowden said the Governor-Gen-eral, by Order-in-Council, could already vary the terms and conditions of a loan, notwithstanding any poll of ratepayers. Mr Moohan: Are you not substituting the Secretary of the Treasury for the Governor-General? Mr Bowden: No. Mr Moohan: That is what the bill says. Mr Bowden said the powers now given the Loans Board had to be ratified by the Minister of Finance, and that applied also to any powers delegated to the Secretary of the Treasury. Mr H. Johnstone (Government, Raglan) said he believed that a good deal' of the misunderstanding about the bill would have been avoided if it had been referred to the Local Bills Committee. Personally, he thought it was a good bill. The bill had been available for three weeks, and he had sent copies of it to the five local bodies in his area. He had heard nothing from them. It would be interesting to know whether any local bodies had made representations to the Minister. Mr Bowden: I have had none whatsoever.

Mr Johnstone said he thought members of Parliament had a duty to send copies of such bills to the local bodies m their electorates.

Mr T. P. Shand (Government, Marlborough): Speak for yourself. Mr J. J. Maher (Government, Otaki), to Mr Johnstone: We don’t want your advice, either.

Whangarei Instance Cited Mr A. J. Murdoch (Government, Marsden) said he did not want to be contending with the Minister about the bill, though he thought Mr Bowden had made a big mistake in referring to the Whangarei Harbour Board Rill, and the activities of the Loans Board about it*

When the harbour board applied for the balance of its loan for harbour development, the Loans Board said the harbour board cbuld not have toe money till it made provision in its proposals for a cool store, said Mr Murdoch. The Loans Board had exceeded its duty, and said in a later letter to the Minister that it did hot imply that a cool store had to be erectedThe present bin proposed to hand to the Loans Board greater powers than it had now, Mr Murdoch said. There was a proposal to give the Secretary of the Treasury more power. He had too much now. He had to look after Murupara and the price of butter, when he should be looking after the finances of the country . Mr Murdoch said he hoped the Minuter would take the bill back for a day or two, and have another look at it.

Mr R. McKeen (Opposition, Island Bay) said the Minister should accept the suggestion of Mr Macfarlane. and bold the bill up for another week. Mr Maher said the interest of those who had to foot the bill—the ratepay-ers—-deserved study. “We do not want to allow democratic rights to go into the hands of one man—in this instance Secretary of the Treasury,” he

Mr Nash said there was merit in the suggestion by Mr Macfarlane that the issue should be held over till the delegates to the Municipal Association s meeting next week could studv the provisions of the bill. The secretary of the Municipal Association. after investigation, had brought no complaints, said Mr Bowden. Presumably the association was satisfied with the measure. After further discussion, Mr Holland suggested that the short title could go through the committee. The bill could be referred to the Local Bills Committee and “help called in to make jt a better bill.” Mr Iftlland added: “If there is any doubt on the matter, ft would be better to take a little more time." Mr Bowden said he would be glad to adopt the suggestion. After the short title had been passed progress was reported on the bill, h* referred to the Local Bills Committee.