LOANS FOR LOCAL BODIES

Press, Volume XCI, Issue 27633, 14 April 1955, Page 12

LOANS FOR LOCAL BODIES

Early Legislation Possible MR WATTS’S HOPE (From Our Parliamentary Reporter) WELLINGTON, April 13. The hope that legislation might be introduced in the next month to assist local bodies with the financing of their undertakings was expressed by the Minister of Finance (Mr J. T. Watts) in the House of Representatives this evening. The problem of local body finance had been raised earlier in the evening by Mr H. Z L. J. May (Opposition, Onslow), who said he had been disappointed with the Speech from the Throne in that there had been no provision by the Government to rectify local body finance. The present position of local bodies raising finance .on the share market was a departure from the principle that used to apply, he said.

“In view of the tightening of available capital, local bodies are competing against each other, with the result that the smaller bodies are finding it difficult to raise enough finance to carry out their various schemes,” said Mr May. Britain had a local authorities’ loan fund, and if it was possible to run it there it was also possible in New Zealand, he said. The time had arrived when the Government should consider the setting-up' of a similar fund. The whole financial ramifications of local body work should be investigated by the Government. The investigation should be by the Government, however, said Mr May. “I have never been able to understand why a local body should be forced to pay high rates of interest when it goes on the market for capital development,” he said. “Problem Not New” Admitting that there was a problem, Mr Watts said it was not a new one. In 1951 the loans sanctioned by the Local Government Loans Board were just over £9,000,000, and for the year ended March 31 last the estimate was £25,000,000. The amounts borrowed were £9,000,000 in 1950 and £19,000,000 in 1564, and he expected that the amertmt would be even greater for 1955. ‘‘There is no need for the setting up of an inquiry,” said Mr Watts. “We are well aware of the problem. The facts are clear, the figures are available, and we are aware of what is involved in it.” The local bodies were well organised in their associations, and their duty was to get together and discuss the problem of finance. “I am doing what I can to help them,” added Mr Watts.- “I have a high official of the Treasury in Auckland to confer with the local bodies on the problems facing them, because if they could raise the money they could not get the work done, and would be competing for the short labour and materials’ available. The metropolitan area of Auckland needs to raise £5,000,000 to £6,000,000 a year for the next five years to keep up with the urgent work they have on hand. “As far as the Government is concerned, we have the matter in hand. A good deal of investigation has gone on, and a good deal of progress has been made. There is a number of difficulties to be overcome, and I hope before the House rises after this short preliminary session that we will have something before us to assist local bodies.”