Delay In Roads Board Amendment Bill Sought

Press, Volume XCVIII, Issue 29004, 19 September 1959, Page 14

Delay In Roads Board Amendment Bill Sought

Proposals in the National Roads Board Amendment Bill were so far-reaching chat the bill should not be passed by Parliament until all local bodies affected had had a thorough opportunity of studying it and making representations, a meeting of Canterbury municipalities’ representatives decided yesterday.

The meeting, which consisted of representatives of borough councils from Waimate to Rangiora and the cities of Christchurch and Timaru, recommended thajt the bill should be referred to a committee of the House of Representatives or have consideration delayed until after the next Municipal Association conference.

Of particular concern to the local bodies was the alteration in the present system whereby local bodies will not be allowed to meet annual charges on reading loans raised after April 1 of next year, or interest charges on loans raised before then.

The meeting was held in private, but the resolution was released later, together with a statement by the Town Clerk (Mr H. S. Feast).

Explanatory notes to the bill said it included provisions giving effect to certain findings of the Royal Commission on Local Authority Finance, Mr Feast said This was correct to some degree, but two major recommendations were not included—that a specific percentage of the Roads Board's income should be allocated for the provision of subsidies to local bodies, and that a uniform rate of subsidy should be adopted.

An important change affecting many local bodies arose from the definition of subsidised works. Mr Feast continued.

“Another major alteration is that local bodies will not be permittted to meet annual charges on roading loans raised after April 1, 1960, or interest charges on loans raised before that date,” he said. “This will materially affect those local bodies who, in order to relieve rates, raised loans for roading purposes in the knowledge that interest charges would be available from the Roads Board subsidy.” He added that in some cases that disadvantage would be offset by the fact that it was understood that expenditure from loans on works coming within the category of subsidised works were classed as such. Commenting on the new basis of subsidies on funds spent by a local authority, Mr Feast said some difference of opinion existed on what the subsidy meant. A sub-clause, however, appeared to make it clear that the subsidy was, for boroughs with a population of more than 6000 £1 for every £3 spent and for other boroughs £1 10s for every £3 spent. “Embarrassment” “The new basis will seriously embarrass many local bodies in the first year of application, particularly as annual charges on loans raised after next April are not regarded as subsidised expenditure. “To earn the subsidy which the Christchurch City Council received on a population basis, it will be necessary for it to make provision on its estimates for the expenditure of nearly £500.000 of subsidised work. On its expenditure on what was regarded as subsidised work last year, the council will receive little, if any. more than it received by way of heavy traffic fees and motor spirits taxation before the passing of the National Roads Act of 1953. in spite of the terrific increases in heavy traffic fees introduced some two of three years ago, and the increased amount of motor spirit used.”

One of the purposes of the 1953 act was to assist local bodies with the formation and maintenance of good roads. The application of the new subsidies proposed in the bill did nothing toward achieving that end or the purpose of the Royal Commission on Local Authority Finance to grant relief from rating to local bodies. A section of the bill required local authorities to submit to the Roads Board estimates of the cost of all subsidised work proposed during a year The estimate must be submitted before the beginning of the financial year or as soon after as possible. While that was a matter of organisation, it could create difficulties for some local bodies which would be required to prepare their estimates for a year before their accounts for the previous year were completed, tone section of a council’s ex-

penditure would be determined without relation to the requirements of other sections. The proposals, while varying in their effect between individual local bodies, appeared on the information available to place many local bodies in a substantially worse position, Mr Feast’s statement concluded. Mr H. P. Smith, chairman of the City Council’s finance committee, said after the meeting that the bil] seemed to have been drafted without regard to practical working. Reference was made to the findings of the Commission on Local Authority Finance, but the bill did not implement them to the extent that the ratepayer was to be relieved of any of his burden he said. The present subsidy of £1 2s a head meant that Christchurch last year received almost £165,000 in subsidy. To receive that in future'it would have to spend three times as much on approved works." Kaiapoi’s Problem

The Kaiapoi Borough Council’s difficulties if the bill became law were explained after the meeting by the Town Clerk (Mr C. W Hodgson). The council had a £20,000 road sealing programme spread over two years, he said Last year, £lO.OOO had been spent and this year it was intended to spend a similar amount. The council had anticipated that loan charges, amounting to £BOO a year for each loan would’ be met by subsidy. In effect, it had capitalised the subsidy. It could be in grave difficulties if the subsidy was not now paid on loan charges. As the sealing work would have been done there would not be a need for a great deal of maintenance, so that the council would be able to claim little in subsidies and would have to call on rates to meet the charges on the work done.