LOCAL LOANS

Evening Post, Volume CXIV, Issue 38, 13 August 1932, Page 10

LOCAL LOANS

CONTROL BY BOARD

FIVE YEARS' FIGURES

REVIEW BY MINISTER

DEGLINING TOTALS

An interesting review of the operations of the Local Government Loans Board since it commenced to function on Ist April, 1927, was made by the Acting-Minister of Finance (the Eight Hon. G. W. Forbes) to-day in reply to a question raised by the "Evening Post." b Mr. Forbes showed that during the five years ended 31st March last local bodies had sought authority to raise loans totalling £22,115,295 6s 2d. Of these, £13,190,029 2s Id had been approved by way of new loans an& £6,148,603 15s lid by way of renewal loans, while applications involving a further' £3,053,382 8s 2d had been declined or referred back. The following table summarises the board's activities during the five-year period, shillings and pence being omitted as a matter of convenience: APPLICATIONS SANCTIONED.

RECONSTRUCTION LOANS. "It will-be noticed)" said the Minister, "that sinco the first year there has been a substantial reduction in the amount of new loans sanctioned. The figures for the last year would have shown a greater reduction had it not been for the earthquake in the Hawkes Bay district. The loans sanctioned for reconstruction of local body services in this area totalled £253,900. The amount of the Tenewal loans varies according to the loans maturing each year. Under the Local Government Loans Board Act, it is provided that the Loans Board shall not decline to sanction a renewal loan. The new loans sanctioned, however, cannot be accepted as an indication of the amounts actually borrowed, as many loans may be rejected at a poll of ratepayers or may not be proceeded with for other reasons." I INCREASED INDEBTEDNESS. I The following statement shows the j loans raised from 1924 to 1931 inclusive; also the annual increase in the j total local body debt for tho same period. Owing to a number of loans maturing each year and. being partly or fully redeemed, the actual increase in debt is considerably less than the loans raised.

'~ SINKING- FUND PROVISION. "Au important feature of the Loaus Board's operations," said Mr. Forbes is the fixing of the rate of sinking fund to be set asitle for the repayment of loans. Section 6 of the Local Government Loans Board Act, 1926, provides that tho. board shall not sanction ji loan unless'provision to its satisfaction is made by the local authority for repayment within such period as tho board deems reasonable having regard to the probable duration and continuing utility of the works on which the loan is proposed to be expended. The following tables taken from figures published in the Local Authorities Handbook indicate how the adoption of tho principle outlined has affected the accumulated sinking funds and the annual payments thereto. Treasury inscribed loans are omitted, also State Advances loans, as these aro extinguished by repayments during their currency.

"The higher rates of sinking funds imposed by the Local Government Loans Board aro reflected in tho increase in tho percentage of accumulated sinking funds and in the percentage of annual contributions. It is of special interest to note that tho sinking fund contributions for 1930-31 wore in excess of the amount of new loans sanctioned by the Loans Board during the year ended 31st March 1932." ■

: S 1927-28 .'. 4,G3G,(i49 1S28-2!) .. 0,007,045 18211-30 .. 4,218,731 IMO-31 .. 3,840,303 1931-32 .. 3,412,365 £ 3,212.185 3,86G,i>51 3,3ii3,S42 1,7G6,25« 781,193 Bcncn-al. £ 1,048,796 S09.221 »G7,S73 S3a,901 2,483,S10 £22,115,293 £13,190,029 £G,11S,6O3 The value of loans referred l>ack or deferred were:— 1927-28 .... .. -^rn-M SSS :::::::::::::::::;jlg| 1 £3,053,3S2

Loans raised. Increase in debt. £ £ 1024-25 .... — G,813,G33 US'lS '•" <>.153.0G2 o\OG6,288 192G-27 5.623,617 4 592 4S3 392T-28 .... 5,167,047 2.391I925 1928-29 .... 3,801,751 2,800 447 1929-30 .... 4,013,625 1 912V'O 1030-31 .;•:.. 3,259,238 1478407 . "31-32 .... 2,615,407 Xot knotu vet.

Accumulated sinking fund. Loans . Pereenoutstanding tage to STcar. 31st March. Amount, loans & £ 1924 . 39,110,000 4,484,586 1146 L925 . 45,720,794 4,950,267 10 82 L926 . 51,726,897 5,697,348 1101 1927 . 56,412,759 0,305,295 1117 1928 . 58,949,028 7,136,057 1210 L029 . 62,003,786 8,031,094 12 95 L930 . 64,052,021 8,413,055 1313 1931 . 65,692,608 9,323,461 1419 Animal Paymcnts'-to Sinking Fund. Bate per centum Amount. on. loans. £ £ s d lOSl 413,309 112 L925 ., 523,870 12 11 L926 580,200 12 5 L927 ....... 628,750 12 3 L92S 675,510 1 2 11 1929 725,547 13 5 L930 789,821 14 8 L931 806,646 1 '6 5