LOCAL BODY LOANS

Manawatu Standard, Volume XLV, Issue 285, 5 November 1925, Page 2

LOCAL BODY LOANS

GROWTH OF DEBT. SOME INTERESTING FIGURES. AUCKLAND, Nov. 3. Tlio proposal of tlio Government to set up a board to deal with applications from local bodies to proceed with the raising of loan moneys lias been the subject of protest from the Christchurch City Council, which lias circularised local authorities of the Dominion on tlio question, and is seeking their support. The Christchurch Council has, at tlio same time, advocated a board for funding local bodies’ loan requirements. At a, meeting of tlio Auckland City Council tlio town clerk submitted a report, in which he said that the two issues raised by the Christchurch City Council were in conflict to some extent. It was obvious, said Mr Brigham, that approval by the Government of the purpose for which loan moneys might be required by local bodies would bo a condition precedent to an advance from funded moneys that had been or would be raised by the Government. This approval would naturally lie withheld until the merits of the application for loan moneys had been investigated and established, and in his opinion this could most appropriately ho carried out by a board of the nature indicated. The Government’s proposal was, without doubt, the outcome of the alarming rate at which local bodies bad borrowed during the last decade. Figures in this respect were instructive. The gross debt of all the local authorities of tlio Dominion in 1904 was £10,756,062, the annual charges at that time being 12s 7d per head. The debt had increased to £47,126,139, at March 31, 1924, with an annual charge of £2 Id Gd per head. In the five years’ interval from 1918-1919 to 1923-1924, the annual charge had increased from £1 5s 3d to £2 Is Gd per head, equivalent to an increase of over 46 per cent. This was a very much greater rate of increase than at any other period in the Dominion’s history, and it was conceivable that unchecked loan expenditure might easily burden the community for many years to conic with a still heavier annual charge’ for interest and sinking-fund. Indeed, the whole trend of statistical data available pointed in that direction. As to the funding of local authorities’ loan requirements, ,tlic town clerk said he had previously advocated this, and was of opinion that the Government could borrow generally on better terms than individual local authorities, particularly the smaller bodies, who would reap the principal benefit. The council decided to inform the Christchurch City Council that, having no definite information of the Government’s intentions, it was not in a position to come to a final conclusion on the matter.