PARLIAMENT

Hawke's Bay Tribune, Volume XXIII, Issue 71, 6 March 1933, Page 8

PARLIAMENT

HOUSE OF REPRESENTATIVES LOCAL AUTHORITIES’ CONVERSION BILL PASSED. TWO AMENDMENTS TO MEASURE. Wellington, March 4. The House of Representatives passed the Local Authorities Interest Reduction and Loans Conversion Bill through all stages to-day. Only two amendments were made to the bill, these being effected on the motion of the Minister during the committee stage. The first was the addition of a clause enabling local authorities, in order to prevent undue hardship, to purchase, within six months, securities at the market price, but not above par, from persons interested. The second enables local authorities in the case of the Loans Board’s refusal to sanction conversion, to appeal from the board’s decision to the Minister of Finance.

The House entered on the second reading of the bill this morning. After the luncheon adjournment the debate was somewhat uninteresting and followed closely the lines of the morning speeches on the bill.

Mr A. E. Ansell (Chalmers) congratulated the Government on bringing the bill in, because he realised the necessity for local bodies balancing their budgets. He contended that as a result of the measure a saving of nearly £500,000 would be effected for local bodies, and this objective was worth striving for. MR VEITCH APOLOGISES. Mr W. A. Veitch (Wanganui), who also supported the bill, asked whether the country should pay attention to the words of a contract or to facts and realities. Mr W. E. Barnard (Napier): That’s what Germany said. Mr Veitch: Even Germany is right sometimes. That is what Germany said, and the hon. gentleman’s friends were friends of Germany, the enemy of our nation. Mr J. McCombs (Lyttelton) protested against this statement, which Mr Veitch withdrew unreservedly. Later Mr Veitch apologised for making such an assertion. Mr Barnard, who supported the contention of other members of the Opposition that the present position of the finances of the country were due to the past policy of deflation, contended that the control of our currency and credit was in our own hands, and we should see that such currency and credit was equally distributed in order to allow of everyone securing the reasonable comforts of life.

Mr S. G. Smith (Wanganui) stated that the Coalition Government had faced up to the present situation in an honest, straight-forward manner. Some of its measures in time might be found to have been mistaken, but for all that it was a courageous effort to square the position. Local bodies in New Zealand had asked for this bill, and he felt sure that they would welcome it. GRAVE SITUATION PREDICTED. Mr F. Langstone (Waimarino) predicted that if the present Government’s policy of deflation continued it would have to face a much graver situation than it ever had been faced with before. The Rev. C. Carr (Tiinaru) expressed the conviction that the Government was going the wrong way about things, and the relief which local bodies would derive from the bill would be negligible. However, he would give the Government credit that the measure was formulated with the best intentions. Mr A. J. Stallworthy (Eden) considered that the bill included some provisions which contained a very grave danger. It w-as a courageous, honest measure, but still he thought the Minister was making a mistake. Mr Coates, in his reply to the second reading debate, said that the bill was not repudiation, as had been suggested; but, he continued, Parliament had the right to avoid defaults if it were thought necessary. An ultimate saving would be made by local bodies under the bill of some £400,000. He next referred to the present world position, stating that cheap money must be the ultimate solution of our problems. Money was not circulating to-day throughout the world, as was evidenced by events in nearly every country.

There had been complaints during the “debate as to the constitution of the Local Government Loans Board and these, said the Minister, had come as a complete surprise to him. That body was a most efficient and capable board, and had it been in existence before it was it could have rendered us great assistance. PENALTY NECESSARY. He considered that a penalty for objections to conversion was necessary, as one or two objectors could hold up conversion to the detriment of the body concerned and make the position almost impossible. Some had said that small bond-holders, say with an investment of £lOO, would suffer unduly. but he contended that they would not be more adversely affected than the rest. Then there was the suggestion of a flight of capital from the Dominion as a result of conversion. During the last few days, since the Dominion conversion statement had been made, there had been large applications received from overseas for investment in local-body stock. It could thus he seen iVt there was no danger of such a flight of capital from New Zealand. The bill was read the second time and passed into the committee stage. Two amendments were made by the Minister in committee. The first was the addition of a new clause to the effect that, in order to prevent undue hardship. a local authority might within six months purchase securities from persons beneficially interested at the market price, but not above par. He also amended the clause dealing with the refusal of the Local Government Loans 800 rd to sanction conversion. If the board refuses to sanction such an application, the amendment will give power to the applicant to appeal to the Minister of Finance in the matter. The bill pissed the committee ctage with addition of these amendments and was read the third time.

The House adjourned at 11.10 p m. until 2.30 p.m. on Monday. The Prime Minister, in reply to a question by the Leader of the Opposition, stated that he proposed to fix

the discussion on the Unemployment Board’s report for Tuesday. The business on Monday would comprise two finance mt m ures, ADOPTION OF RUSH TACTICS. MR JULL’S COMMENT. (From Our Special Parliamentary Reporter.) Wellington, March 6. Comment on the rush tactics adopted by the Government in securing the passage of the Local Authorities Interest Reduction and Debt Conversion Bill was expressed by Mr A. E. Jull (Waipawa) in the House of Representatives on Saturday. Mr Jull said he considered that the people concerned should have had time to make representations, but Parliament was becoming used to this method of dealing with the country’s affairs. He regarded the Bill more as an interest-reducing measure than as one for conversion. A great deal of work would bo required before the Treasury would be able to turn its attention to local body conversions, and he would not be surprised if the House were asked to amend the present measure. As a member of a local body he had to thank the Government for attempting to assist local bodies in connection with interest charges. Everyone had been a little too free in raising loans and tiie results were now being felt. However, he could not agree with the Labour Party that the present proposals were the direct outcome of the deflationary policy. His view was that the present legislation would help to cushion any deflation effects.

Mr H. E. Holland had complained of the powers given to the Local Government Loans Board and he agreed that it was a “Star Chamber’’ of the worst type. There was no appeal from the board’s decision and local authorities could only make personal representations by the board's courtesy. The Minister would not know what applications even went before the board and its powers required very definite overhaul. Were the position not so serious the board's powers and functions in respect of important questions of local government, in the Dominion would he utterly Gilhertian. Generally speaking, Mr Jull added, he favoured the Bill and appreciated the assistance to be given to local authorities. Although it might be true that Parliament was being asked to rush the Bill through he did not intend to look the gift horse in the mouth