The Dominion MONDAY, AUGUST 15, 1932. LOCAL BODY BORROWING

Dominion, Volume 25, Issue 274, 15 August 1932, Page 8

The Dominion MONDAY, AUGUST 15, 1932. LOCAL BODY BORROWING

Local body indebtedness increased at so rapid a rate in the period MW ster« of its of tas to these two inHuenees, it would seem better to leave these years out of account. In the first three years Board’s operations, however, the average of new 19? i annually against a £5 millions average in the six preceding years, IVtO the advent of the Board seems at once to have actedl as a corrective of local body extravagance. Other factors may havejbeen work but the Board can certainly claim credit. Probably its int iuenc took time to gather power and weight but current lessons m local body finance have no doubt, established it firmly and permanently. ' Mr.-Forbes points out that an important fea ure of *e. Board operations is the fixing of the rate of .sinking fund to be resented for the repayment of loans. Certainly it is m this department that the Board appears to have accomplished most. Since its “the rate per cent, of sinking, fund payments has risen stead y £l/2/3 to £l/6/5 per cent., the '-ate last year. Such a gam over the. short period of four years is striking, since old loans would not be subject to the Board’s requirements. J Some such effective check on borrowing was certainly required. The local bodies had been going the pace with a vengeance Even a it is they are overloaded with debt. From 1921 t° 1931 thp tot j • increased by 2i times, from £26 millions to £65 millions. The gross debt now amounts to £4B/2/2 per head of population and the annual charge per head is £3/3/11., The heavy fall in prices and in all incomes has added seriously to the real burden of this fixed charge. Closer control of -borrowing is certainly an important reform 4n local government. But much more than that is required. The whole system needs to be overhauled and rationalised.