LOCAL BODY FINANCE

Press, Volume XCVII, Issue 28552, 3 April 1958, Page 14

LOCAL BODY FINANCE

Insurance Firms’

Submissions

(New Zealand Press Association)

WELLINGTON, April 2. Inflation and the fear of further inflation have unquestionably made money-raising more difficult for local authorities, in the view of life insurance offices. Submissions from the Life Offices Association were placed today before the Royal Commission on Local Authority Finance. "With the continued loss of purchasing power of the £, fixed interest investments are tending to lose popularity with the general public." the association said in its submissions.

"Unless the inflationary trend is halted, or the lenders' capital erosion is compensated by interest, local bodies will find it even more difficult to interest the private investor. Institutional investors cannot hope to meet the consequent increasing demand on them.”

Figures were produced to show: that life insurance offices in the! last 10 years had been investing' an increasingly smaller proportion of their assets in local body! loans. This decline, said the report, could be attributed to the! pent-up demand for housing, industrial and farm loans and the declining relative attractiveness of the interest return from local (body investments. The report said life offices' funds would have satisfied only a part of the local body demand ‘for loan money. Many offices, in j 1956, had supported the underi writing system so that loans could be floated at times when there I was a reasonable degree of success. The underwriting brokers (provided a selling organisation (for each flotation, and the insurance companies, as sub-under--1 writers, had guaranteed the success of the loans by making up any deficiency in subscriptions, the report said.

LEVYING RATES ON AERODROMES

Exemption Sought For Operational Area

(New Zealand Press Association) WELLINGTON. April 2.

A recommendation that the operational part of an aerodrome be exempt from rates was placed before the Royal Commission on Local Authority Finance today, said the Air Department. An officer of the department, Mr J J. Loftus, made the submission The department also recommended that part of an aerodrome used for business should bear rates in the normal manner. It would be wrong that a local authority should be able to levy rates on an aerodrome to which it may have contributed little or nothing, the department suggested. However, it was also considered that private firms carrying on business for profit should not escape paying rates through being established within the boundaries of an aerodrome.