PAYING THE PIPER

Dominion, Volume 15, Issue 182, 29 April 1922, Page 8

PAYING THE PIPER

ABOUT THE “ANTECEDENT •LIABILITIES”

THE TASK OF THE LOCAL BODIES

Local bodies throughout New Zealand are preparing accounts in accordance with the provisions of the Local Bodies’ Finance Act,* which came into operation at the beginning of this month. Many of them evidently are finding the task a rather unpleasant one, and requests are being made for the amendment of the Act. It appears that .there is no escape from the compilation of the information in any case, since the returns have to reach the Minister of Internal Affairs before the end of June, and failure to supply the returns will render each member of an offending local body liable to a fine of £lOO. Parliament will not meet until the closing days of June. The provisions of the Act are more drastic than many of the local bodies seem to have realised when the legislation was before Parliament last year. Every local authority is required to provide for the ordinary expenditure of any year out of the revenue of that year. Bank overdrafts may no longer be carried forward from year to year. Then there is a provision that local bodies may not borrow money in the future without legislative authority. The clauses that are causing tho local bodies most concern at the present time relate to existing liabilities. Each local authority is to inform the Minister of the amount of its bank overdraft on March 31 last, and of the amount then due to persons from whom money had been received on deposit. The total of these two sums, less the amount of outstanding revenue far the financial year, is the “antecedent liability” that has been mentioned so frequently of late by Mayors and chairmen. Wellington’s antecedent liability was stated by the Mayor on Thursday night to be about £350.000. The Act stipulates that the antecedent liability shall be extinguished either by a loan or by seven equal annual instalments out of revenue. A local body may raise a loan to cover part of the debt and pay off the balance in instalments. Interest and charges in respect of the antecedent liability have to be paid out of revenue until the debt is extinguished. The Act authorises the raising of loans and the imposition of special rates required to clear away the liability.