Local body finance
Sir, — The statement from the Christchurch City Council treasurer (“The Press,” December 9) regarding investment in local body loans included reference to the reply from the Minister of Finance to a council approach regarding the provision of low-interest Reserve Bank credit for local bodies. The Minister said that such credit would be inflationary’. Assuming local body financing remained stable, the very opposite would occur, because overdraft borrowings at higher rates from trading banks could be reduced. Lower interest bills mean lower costs and that means lower rates or less Pressure for increased local ody income. If anyone can
prove to me that Reserve Bank credit, at 1 per cent interest, issued under these circumstances is inflationary, I shall willingly join the National Party.—Yours, etc., P. NORMAN DAVEY. December 11, 1977.
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Press, 14 December 1977, Page 26
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133Local body finance Press, 14 December 1977, Page 26
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