Cheap loans to farmers mooted

Press, 23 June 1986, Page 2

Cheap loans to farmers mooted

PA Invercargill A Southland finance company has approached the Government with a plan to provide farmers with loans at less than 11 per cent a year. The Southland Building and Investment Society said the plan it had proposed offered tax-free returns for investors and improved cash flows for farmers.

The society’s general manager, Mr Ted Cavanagh, said the proposal called for borrowers to forgo the tax-deductibility of mortgage interest. “The money to be onlent to farmers by the society would come from the private sector investors receiving a taxfree return of up to 9 per cent on their deposits,” he said.

“This proposal would be good for investors and very good for hardpressed farmers and others like them.” The idea had already been put to the Dominion president of Federated Farmers, Mr Peter Elworthy, and Federated Farmers (Southland) executive, and was discussed at regional seminars last week, Mr Cavanagh said. For the scheme to become effective, the Government would have to pass legislation to allow interest on the investment to be disregarded for tax purposes. The proposal has been put to the Government through the Building Societies’ Association. The president of the Southland society, Mr W. T. Adam, said the Minister of Finance, Mr Douglas, had raised some points on what he regarded as faults.