THE GOVERNMENT AND LOCAL BODIES.

Hawera & Normanby Star, Volume XLVI, Issue 7820, 20 October 1903, Page 2

THE GOVERNMENT AND LOCAL BODIES.

The refusal oi the Government to lend money to the local bodies just now is explained by the bill before Parliament entitled an Act to amend the Local Bo.dies Loans Act, 1901. It was provided in that Act that the Colonial Treas'uter might lend to a local body, giving it the option of taking money under one of tlhree conditions as to the yearly rate of interest— (a) 4% per cent per annum if the money were borrowed for a period of 26 years ; ((b) 4 per cent for a period of 32 years ; or (c) 3% per cent for a period of 41 .years. The bill provides that the rate shall be a half "per cent liigher in each case. Perhaps in view of the financial outlook this increase is inevitable. The local bodies which have been able to borrow at 3% per cent 'have all along been getting money more cheaply than the market rate warranted, but the proceeding was justified as an act of .policy an the '.part of the General Government to encourage local bodies to undertake liability for the construction of public works classed as local, but really of general value and importance. We hojie the local bodies will be able to get the money they want at the slightty increased rate provided for, though we must say we are not very confident. The magic has departed from the wizard's wand, and we are beginning to see how Mle have been the boasts about the Government of New Zealand and its policy having cheapened money, except iv a very limited sense. We confess we do not understand the conflicting statements on the subject of the finances. One day we hear that the Government is not hard up, that it (has refused to borrow money offered by certain lending departments ; another day we are told that there is to be an unprecedented surplus this year, and yet the taxation is being increased ; and still another day's story is that tlie Treasurer is " pushed " for public works money, must reduce expenditure, and raise interest to local bodies. Probably these various statements are satisfactorily harmonised to Parliament, but if so the reports do not throw much light on the subject to the general reader. It is a matter of some moment as to what is to become of the Advances to Settlers policy. Is the " struggling settler " who has been offered Government cheap money at a time When private lenders were tumbling over one another in their offers to be left to his own devices just when the private lenders are becoming more conservative ? Turning again to the local bodies, a declaration of the Treasurer that subsidy ought not to be paid to local, bodies unless they rate themselves to the maximum— now fixed at 3d in the jQ—is ominous. In some quarters this is interpreted to mean that no loans are to be ma!de to local bodies that have not rated themselves to their limits of 3d. This latter, we see, is the view taken by Mr Vile, member for Manawatu. Surely that cannot be correct. But, assuming that it was the subsidy to which reference was made, it is almost as bajd, for a local body woiild hardly levy a rate of 3d in order to get a Government subsidy, and practically it would mean a stoppage of subsidies. The extension of the rating power of the local body and the refusal to assist unless that power is used seems to suggest that, difficult as has been the work of local bodies in the past, it is going to be still harder in future ; and that perforce they will have to reduce their numbers and combine in order to economise administrative expenditure.