FUND PROPOSED

Evening Post, Volume CXVIII, Issue 35, 10 August 1934, Page 10

FUND PROPOSED

DISCUSSION IN HOUSE

BUILDING BYLAWS

The question of providing a reserve fund to meet losses in the event of earthquake was discussed in the House of Representatives today following on a report by tho Public Accounts Committee on the Earthquako Protection Bill which was introduced by Mr. AY. E. Barnard (Labour/ Napier).

The Chairman of the Committee, Mr. J. A. Nash (Government, Palmerston North) said that tho Committee recommended that the Bill bo not allowed to proceed, as it involved an appropriation, but that on the return of tho general manager of the State Fire" Insurance Office, Mr. J. H. Jerram, from England, where he was investigating the question of earthquake insurance, the Government should set up-a committee to go into the wholo problem j oi' earthquake insurance. Tho Committee appreciated the anxiety of the people pi" Hawke's Bay that something should be done, and when Mr. Jerram returned there should be su'ffieiont data for a committee to work on and bring down a comprehensive scheme. Mr. Barnard said he wished to thank the Committee for its sympathetic attitude towards the Bill. The problem was an urgent one, but one could hardly expect that tho Government would take action while Mr. Jerram was making inquiries in England. Mr. Jerram would, be. returning to New Zealand in October, and it was to be hoped thaj; the Government would consider his report immediately, and if possible bring down legislation before tho end of the session. The Bill was by no moans an academic one, as tho danger of future earthquakes was very real, although it was astonishing that people quickly forgot all about them. Earthquakes came liko a thief in tho night, and those who did not realise their possibilities were living in a fool's paradise. The question was by no means confined to Hawko's Bay. The people of Hawke's Bay did not wish any other part of the Dominion to go.through the experience of that province, where the rehabilitation programme had been left to tho unfettered authority of a committee. Theirs had been a sorry experience. Mr. A. J. Stallworthy (Independent, Eden): In what direction? . INTEREST ON LOANS. Mr., Barnard said that the rehabilitation had been carried out by means of loans, which were carrying an interest rate of 4i per cent., a much higher rate than was ruling today. They did not desire.any other part of New Zealand to be placed in the same position. It had been stated that some parts of the Dominion were immune from earthquake activity, and it might be,pleaded that they should be excused from taxation for the purpose of raising funds, but it was very questionable whether any part of. the country had immunity. Furthermore, it had been shown in the Napier earthquake that everyone was anxious to help in the restoration of tho shattered area. It had been suggested that the fund might be drawn upon by some future Government in need of money. That was a possible danger, but it should not be impossible to tie tho fund up as a trust fund. Probably there would.be a different financial system when tho time arrived lind thcro would bo no reason for ' any anxiety. . ' Tho Primo Minister (tho Rt. Hon. G. W. Forbes): There will bo no money at all, then. Mr. Barnard said that evidence, had been given before the committee concerning the proportion of the fund that should be madb available for relief. Tho Treasury Department had suggested 75 per cent., and the Hastings Borough Council 90 per cent. There was also the problem of tho loss of property, and it had been suggested that a basis similar to that adopted by fire insurance, companies in cases of fire .should bo availed of. It had also been proposed that an insurablo property tax should bo instituted on an optional basis. Investment of fund. Another idea that Imd Wen put forward was that tho fund should be invested outside New Zealand, but in view of tho financial earthquakes that were taking place in various parts of the world this might not be a wise procedure. ■ ■ * Mr. Stallworthy: What is the merit of tho suggestion? .Mr. Barnard said it had been proposed that the fund should be invested in some country that was immune from earthquakes. Ho again urged upon the Government the necessity for bringing down legislation as soon as possible after the return of Mr. Jerram. Mr. Forbes said that he could not understand the complaint made by Mr. Barnard in connection with the rehabilitation of Hawko 's Bay. Mr. Barnard: I was referring to the business people. Mr. Forbes asked whether Mr. Barnard thought that the money should be made available as a freo gift. Mr. Barnard: Not necessarily. Mr. Forbes: The nioupy was lent at a reasonable rato of interest. Mr. Barnard: It might be preferable to charge no interest at all. TEEE TO DECIDE. Mr. Forbes said that the question of assistance had been loft to the business people themselves, who had; been free to decide whether they should replace their businesses or not. For example, if a man who had been running a fruit shop in Napier found that it would not pay him to re-establish his business becanso there had been insufficient business prior to the earthquake, he had not been obliged to apply for a loan. The Government realised that all reasonable safeguards should be taken to minimise the risk of loss of life and property in tho event of earthquakes, a-nd had sot up a Committee which was preparing building regulations. When these were'completed it was hoped that they would provide reasonable protection without involving unnecessary expenditure. Mr. D. G. Sullivan (Labour, Avon): Will these regulations be compulsory? Mr. Forbes said that if local bodies did not adopt them, compelling legislation would be introduced. The Government had a responsibility to see that safeguards were taken by local bodies. IMPORTANT PRINCIPLE. The Leader of the Opposition (Mr. M. J. Savage) said that the principle in tho Bill was'very important, bocause no part of New Zealand knew when its turn would come. The Government should take immediate action. There was a national responsibility, and he contended that the people of Napier should not be asked to pay interest on the money lent for repairing earthquake damage. A Committee of the House, assisted by experts, should investigate the position and make recommendations to tho Government with a view to the passing of legislation. Mr. A. E. Jull (Government, Waipawa) said that the principle of the 1931 Bill had been approved by the commercial sections of the community, yet when tho Bill, which provided for the striking of a flat rato on insurablo values, went before a Committee, it was opposed by the chambers of comnie'reo and tho farming community. Mr. Barnard: And the Reform Party? Mr. Jull: I am not, talking about

parties now. He said that one shilling per cent, on the insurablo values of tho country would produce £200,000 a year. Later it might be found expedient to reduce) tho amount of the premium. Mr. D. G. Sullivan (Labour, Avon) said that tho cities would not object to the scheme, but what would be the attitude of the town boards which had objected to the original Bill? A proper Bill was required as far as insurances were concerned, and a proper Bill was required as far as building regulations were concerned. Mr. A. J. Stallworthy (Independent, Eden) said thcro was a lot to bo said for a set of model bylaws administered by the local, bodies. SOME DIFFICULTIES. Mr. .R. McKcen (Labour, Wellington South) referred to the difficulty of local bodies enforcing model bylaws without the matter being undertaken from a national viewpoint. The Wellington City Council had sent out about forty notices to owners of buildings, with a request that dangerous ornamentations bo removed, but very few owners had complied with tho request. The Government had complied, and the council itself had gone to enormous expense in making its buildings as safe as possible: A ,private ownel* might not be in a financial position to undertake tho work, and unless something were done nationally to compel persons to make their buildings safer, it would never be done. Mr. R. A. Wright (Independent, Wellington Suburbs) said . that the local bodies should be the authorities to deal with the matter. Objection to the payment of an insurance rate would no-doubt be made from districts which seemed to bo immune from earthquakes. He did not know whether there could bo a preferential rate, or whether the districts could be omitted altogether. A large part of New Zealand needed protection, and ho hoped that the Government would set up the Committee as recommended by tho report, with a view to the passage of legislation next session. . The report was tabled.