RATE OF INTEREST

Hauraki Plains Gazette, Volume 54, Issue 32628, 1 October 1945, Page 5

RATE OF INTEREST

QUESTION BY MR SUTHERLAND BUYERS OF CROWN LAND In the House of Representatives recently Mr A. S. Sutherland (Hauraki), asked the Minister* of Land, whether the Government would consider reducing the rate of interest payable to the Crown on purchase-money under deferred-payment licences, which now stands at £5l per cent, per annum, with only a 10-per-cent. discount for prompt payment, to a rate in keeping with present-day rates of interest? —This rate was fixed when the current rate of interest was £6 per cent.

Major the Hon. C- F. Skinner (Minister of Lands) replied that the rate of interest of ol per cent, (with a rebate of one-tenth for prompt’ payment)' payable under deferred-pay-ment licences was fixed by the Land Laws Amendment Act, 1926. Prior to the passing of that Act deferred-pay-ment licences were issued for terms of nineteen years, with interest at 5 per cent, payable half-yearly, and subject to the ’payment of a deposit of not less than 5 per cent, of the purchase price. The 1926 Act placed purchasers of Crown land under deferred payments on a sounder footing by providing for longer terms of repayment up to a maximum period' of thirty-four years and a half instead of nineteen years, while the minimum cash deposit was reduced from 5 per cent, to 3 per cent of the .purchase price. The question of reducing interest rates charged under deferred'-payment licences has 'been looked into on several occasions in recent years.

“I am, however, prepared to consider the matter again; but wish to point out that, in my opinion, a rate of interest that has been fixed with a view to its prevailing over a long period of years, should not necessarily be altered because of variations in interest rates in general occurring from time to time,” said the Minister.