Power Authorities Need £6m

Press, Volume CVI, Issue 31224, 23 November 1966, Page 30

Power Authorities Need £6m

More than £6 million is needed to satisfy the immediate capital loan requirements of electrical supply authorities in New Zealand, says a leading article in “Live Lines,” the journal of the Electrical Supply Authorities’ Association. “Present indications are

of local government, the electricity supply industry is experiencing a serious credit squeeze,” the journal says. “The reasons for this shortage are twofold—Government action, which in several ways has been designed to curb inflation, and the high and apparently uncontrolled interest rates being offered to investors by some public companies and financial institutions. “The Government has siphoned off considerable

sums of money which might otherwise have been invested in local body loans by increasthat possibly only half of this sum will be forthcoming. In common with other branches ing the compulsory investment in Government stock by savings banks and insurance companies, by curbing the overdraft facilities which trading banks may offer, and by cancelling the traditional margin of return previously enjoyed by local body loans as compared with Government loans.

“Surely, Government loans enjoy enough attractions without the necessity for removing the only advantage availble to local bodies?” the journal asks. High Interest

“The present very high interest rates being offered by some public companies has caused further havoc among local body loans. Recently, three large companies between them raised slightly over £4 million—and they retained the very large oversubscriptions. This £4 million would have filled the electrical supply authority loans outstanding at the time. “People in local government find it difficult to understand the strict financial restraints placed upon them, when they watch the virtually unrestrained actions of private industry. “If essential work in the electrical supply industry is to be done, if workers are not to be squeezed out of work, and if electricity consumers are to continue to receive a

full supply of electricity, Government action is required immediately. Lack of knowledge of the difficult situation facing local government, as recently expressed by at least one Minister, is no answer to the problem. “The Government holds the key. Will it turn that key in the lock?” the journal says.