ADMINISTRATION STATE LOANS

Evening Post, Volume LXXXIV, Issue 112, 7 November 1912, Page 3

ADMINISTRATION STATE LOANS

CHANGE IN PERSONNEL OF BOARD RECOMMENDED COMMITTEE'S FAIRNESS ATTACKED. CHARGES OF RECKLESSNESS. The subject of the allocation of loans to local bodies under the State-guaran-teed Advances Act was debated at great length in the House of Representatives last night' and well into this morning. MINISTERIAL STATEMENT. . (The Hon. 3. Allen moved the second reading of the New Zealand Stateguaranteed Advances Amendment Bill. The Act, he said, was in a very unsatisfactory condition, and the amendments being moved would go some way towards rectifying the flaws. Further amendments would be necessary next year and possibly the year after. The system of the Advances Board lending out money two and three years ahead, not knowing at the time the loan was granted what tho money would, cost, would have to cease. The Solicitor-General had advised that, the sy&tem was not legal. When he came into office he found huge committments dating ahead to 1914 at 3i per cent. Money could be only fot from one source at that price, aiid c did not think' that source— the Post Office— had been thoroughly tested. When he assumed office there were committments to the extent of £820,320, nlost of it at 3£ per cent. He ques» tioned whether the money could be found at the price. He could find no record that the Post Office had promised to find a, million and a-half of money this year lor loans to local bodies. He did not think the Post Ofiice authorities would be so indiscreet as to make such an announcement. He doubted whether the Post Office could find anything like the amount. The previous Administration had brought the Department to a standstill by its reckless methods' The Bill before the House provided that local bodies would have to pay the rate of interest at which the money was -raised, plus 'the cost of administration. The cutting down of the maximum to' £5000 had been occasioned by - the wild committments — and he used the words advisedly — of his predecessors' in oftce. He regretted he could not raise the' amount. What he had inherited prevented such a course. They proposed next session to bring down -a Local Government Bill, j which would provide for proper classification of local bodies according to their needs and reauirements. They intended to do away with the roads and bridges votes'. 'They were authorised under the Bill to raise a million a year, and he hoped to do so. SIR JOSEPH WARD IN REPLY ' "NOT ONE SPARK OF GENEROSITY." - Sir Josoph Ward -contended that there- had not been one spark of generosity in the Minister's . speech. He quoted Hansard to show that the. present Government when in Opposition in 1910 had voted for a million loan for loans to boroughs, counties, etc. The present Finance .Minister had proposed to commit the country to a further loss of £250,000 a year besides— "and yet," said Sir Joseph, "he comes and talks to me." Mr. Allen had said that not a loan had been raised tin'der,the loans to Local Bodies Act, but he would show the hon. members from the backblocks what the Minister 'proposed to do in the Bill now before the House. The Minister dared not attempt to administer the Act without making commitments two or three years ahead. The j Bill proposed to raise the interest -on a body by 2 per cent. Dlustrating' this point, he instanced a body starting an important work on the vote of the ratepayers and finding it necessary to raise further money. The Minister's proposals would mean a loss of £376,000 in, ten years on the Consolidated fund in interest. ( The Minister could im pose any rate of interest under this Bill. He predicted that there never would be a Minister of Finance who would ask local bodies to take in a lump sum the moneys required for a period of years. New Zealand hati £800,000 of gilt-edged , securities in London' to enable it to get temporary advances against these Imperial guaranteed debentures. Did the Minister suggest that he could not get an advance against these securities ? The Minister was only beginning his career as a Alinister.of Finance, but he .(Sir, Joseph) had several years of experience Before the debate was over if he found it necessary he would tell the House and the country what he had to do- at a. time of. great risk and when the chest was so hollow, that you could hear, it SQUnding from the North Cape to' the Bluff. He^referre'd ,to his visit to England and the railing' of money which relieved the financial -stringency in this cduntry. Still, he Was criticised in his absence. He ' admitted that no personal attack was made on him by the Minister of Finance, but he had been charged .with all sorts of abuses by various papers in New Zealand. (Sir Joseph's speech was cut short by the time limit. ' • CHARGE OF DISPARAGEMENT. JMr. W. D. S. Mac Donald said that since Mr. James Allen was appointed a .Minister of the Crown he had done his best in every speech he delivered to disparage his predecessor. He was the only Minister who had done so. It was left to the preseut Minister of Finance to persecute his predecessor. He defended the administration of i*>urtty council affairs, and said that tho whole of the criticism recently levelled at the Department was intended to discredit' the party previously in power. To say that the finances of the country were being hampered because Timaru got a 1 large loan. was too childish arid absurd to imagine. Ho claimed , that every transaction entered into by the Department had been absolutely satisfactory. He hoped that when the present Heavenbq'rn Minister Of Finance left office he would leave the country in as satisfactory a position as he found it when he entered on Ministerial rank. The Minister of Finance was more concerned about himself and his own reputation than he was about the advancement of the settlers of this country. He advised the Minister to have a more optimistic outlook and to. cease crying "Woe!" He hoped the Minister of Finance woujd .do something in reality for the country. RESULT OF PLUNGING. .* Mr. J. B. Hine said' the speeches of the last two speakers had been tv blacken the attempt of the Minister to strengthen the position of the State Guaranteed Advances Office. The, report Of the committee proved that, and the amendment moved by the Opposition proved the same thing. It had been stated that there had been no exti^va|ant expenditure by the Department. \fcte quoted from a return presented to the^enquii'y. committee with a view to showing that the expenditure was abnormal before the election- Why was the £5000 limit .put on immediately after the election was over? A member; Why is it on now?. Mr. Hine: Because of a -plunging Ministry. He went on to explain the difficulties under- which he sa,id the present Minister for Finance took up hie position in regard to the Advances Act, i

and to the commitments he had to face when he embarked on his duties. Finally he made a plea for the requirements of the back-blocks settlers. "A CALAMITY HOWLER." Mr. H. G. Ell ' regretted* that little had been heard about the Bill, and that practically the whole discussion from the Government benches had been an attack on the late Minister of Finance. The Minister of Finance had always been a "calamity howler." Mr. Allen had never bad a word to say in previous [ years oT the establishment of the Depart- | Qient. He had always stood for generous assistance of the back-blocks. MORE CRITICISM. Mr. Atmore reminded the House that the present Minister of Finance and the Minister of Railways in the past had condemned the Ward Government for raising money from the Post Office at a leeser rate of •"interest than it could t? ??' °H tside - Yefc iil6 fil ' st a cfc of "!?. ¥ on - Mr. Allen, when he came into office, was to get a loan of £800,000 from the Post, Office at 3£ per cent. Mr. J. Craigie, speaking in regard to allocation for local bodies, asked how he was going to discriminate between -one body and another. MINISTER REPLIES. The Minister replied that a Bill would be brought down next year to classify the local bodies. As to the Bill, there had been- no criticism but there had been personal attacks on himself. He did not mind these because they did not represent argument. It had been fiaid that he had disparaged his predecessor Was a man, when he came into office, and found himself in a difficult position, to say nothing of wrongful administration? He maintained that the administration of the Department had been thoroughly unsound. If the previous Minister had known that the losses in regard to local bodies' loans were occurring why did he not make, provision for them? He had never taken a. step to make provision for the loss. The criticism levelled at sec tion 3 of the Bill had been very unfair. No rate of interest was mentioned. There was no compulsion on local bodies to raise the money at the higher rate of interest unless they wanted to do so. The policy of Sir Joseph Ward was to lend money at a less rate of interest than the country paid, and he objected to that policy. If .the .policy of Sir Joseph \vard of borrowing money, from the Consolidated Fund '.was to^ be carried out it could only mean increased taxation. The second reading was agreed to on the voices.