LESS INTEREST TO PAY

Hawke's Bay Tribune, Volume XXII, Issue 68, 3 March 1932, Page 6

LESS INTEREST TO PAY

LOANS FROM AUSTRALIA. LOCAL BODIES TO SAVE £98,000. Auckland, March 2. Savings in interest amounting to approximately £98,000 have been made by New Zealand local bodies by the legislation passed by the Commonwealth and State Parliamepts of Australia enforcing a compulsory reduction of 4s 6d in the pound in all interest payments. According to the latest figures available New Zealand local body loans domiciled in Australia total £8,199,000, on which the interest payable is £436,000, the rates varying from 4 per cent, to 7 per cent.

A ruling that New Zealand municipal debtors must take advantage of the Australian legislation has been given by the Auditor-General, Mr G. F. C. Campbell in response to inquiry. Mr J. Guiniven, Mayor of Takapuna, one of the Jroroughs which has interest payments now due in Australia, said counsel consulted had hesitated to advise the borough to make the deduction of 4s 6d in the pound, and had drawn attention to the possibility of action under section 48 of the Local Government Loans Act 1926, which gave a creditor power to apply to the Supreme Court for the appointment of a receiver if the full interest was not paid by the due date. The opinion of the Audit Department had then boon sought, and this was received yesterday, with the added intimation that any payment of interest without the deduction would be contrary to law. Similar advice was received by the Waitemata Electric Power Board.

In the case of Takapuna, the saving on the interest due this month is £12501 while the Waitemata Power Board will save £1293. In addition, there is the advantage of the exchange position, Mr Guiniven stating that Takapuna had saved £2103 on this account during the past year.