Building Society Rules

Press, Volume CIV, Issue 30839, 26 August 1965, Page 8

Building Society Rules

(N.Z. Press Association) WELLINGTON, August 24.

The Leader of the Opposition (Mr Nordmeyer) said there should be two parts to the Building Societies Bill to provide for permanent and terminating societies.

Mr Nordmeyer was speaking in Parliament which tonight began the second reading debate of the Bill. The Minister of Finance (Mr Lake) said the bill was one of considerable social sig-nificance-desire to own one’s home was deeply rooted in the New Zealand way of life. Building societies, by helping idividuals to finance the purchase or construction of homes, performed a valuable social service.

Mr Lake said building societies had a history of 200 years and had been continuously adapting to changing social conditions.

It was equally necessary to adapt the legislation to the Changes in their practices which had taken place since 1876.

The starting date provided by the bill was January 1, 1966.

“Alterations to rules must be made by December 31, 1966 and this is intended also to be the final date for adoption of the standard accounting provisions to be laid down in the regulations. “Some societies have asked for more time to comply with the provisions for trustee status and I have it in mind that the earliest date on which a society might be designated should be July 1, 1966. “There are a number of matters to be prescribed by regulation and at the moment I am considering whether for administrative reasons the bill should not in general begin on the date just mentioned —July 1,” Mr Lake said, wildlife will be destroyed Mr Nordmeyer said he was delighted to pay tribute to the work building societies had done but he considered the bill should have gone to the Statutes Revision Committee.

It seemed to the Opposition that there was a need for two separate bills or two separate parts of the bill, to provide for the two types of societies —permanent and terminating. He realised the purpose of the movement was to encourage people to save and by joint saving provide loans so members could purchase or build their own homes.

And because they were essentially cooperative movements the Government decided that normal tax provisions would not apply. But some of the building societies were little more than finance institutions, said Mr Nordmeyer. It was true that they helped “in a big way” with building programmes, but for commercial and business premises, not homes.

This might be desirable but they should not have the privilege of tax-free operation.

Mr Nordmeyer also questioned the status of some societies that called themselves co-operatives. “This is something the Minister should look into."

An entirely false impression was given if a society called itself a co-operative when in fact it was not, he said.

The Minister of Housing (Mr Rae) said the time had come to lay down a charter and have some yules. This was what the bill set out to do. he said. Dr. A. M. Finlay (Opp., Waitakere) said it appeared a lending limit of two-thirds of the value of a property would be imposed, compared with 75 per cent at present. This would mean less finance would be available to home builders.

Dr. Finlay supported Mr Nordmeyer in requesting the bill be referred to a select committee for consideration. This would give those who still have reservations a chance to make representations. There was also a lot to be said for having two separate bills for the two types of building societies. Sir Leslie Munro (Govt, Waipa) said there was no reason why the two types of societies could not be covered by the one bill. The debate was interrupted by the 10 p.m. adjournment debate.