Manawatu Evening Standard. TUESDAY, DEC. 29, 1925. LOCAL BODY INDEBTEDNESS

Manawatu Standard, Volume XLVI, Issue 25, 29 December 1925, Page 6

Manawatu Evening Standard. TUESDAY, DEC. 29, 1925. LOCAL BODY INDEBTEDNESS

The Government Statistician publishes much useful information from time to time relative to the progress of the Dominion and dealing with practically every phase of governmental and local body activity, health, financial, trade and other statistics upon which it is at once useful and, in many respects, desirable for the public to be well informed. The 1926 Year Book has made its appearance earlier than usual and is replete with information of a serviceable character, not only concerning the finances of the country and the public debt, etc., but also on a subject of very considerable importance to those who, as ratepayers, are concerned in the growth of our local body indebtedness, which the Government is anxious to keep within reasonable bounds. The extension of municipal and county council activities of recent years in connection with drainage, roading, transport, power and lighting facilities and improved sanitation, etc., has been responsible for a big increase in local body indebtedness and for the flotation of loans which are assuming big proportions for a country which possesses only our limited population, still considerably under the million and a-half mark. In twenty years—that is between 1905 and 1924 —our local body indebtedness has increased from £10,626,687 to £40,929,813. From £lO 2s lid per head i> 1895 it has gone up to £34 19s 3d as at March 31st, 1924. Within the last ten years the local body debt (the Government Statistician tells us) has almost doubled, 1922-23 adding £0,477,910 to the total. Of this sum the boroughs borrowed over three millions and electric power boards one and a-half millions. Whether the expenditures for which those loans were incurred were justified or not, we are of course unable to say, but it may be presumed that in most cases they were, the extensions of power and lighting, more particularly, having proved of material benefit not merely in the towns, but also in the country districts.' Palmerstonians are certainly better off for the loan moneys expended within the borough, and for the extended services thus made possible; and, so long as they meet the interest and sinking fund payments charge-

able upon them, there is no need to worry over the additional loans of the last four or five years. There is, however, a growing feeling throughout the country that, both in the direction of local body and national expenditures for public works purposes, we are drawing too heavily upon the Bank of Futurity and that ■we have been doing so at a. time when, owing' to the scarcity of cheap money, we should have done better to “hasten slowly.” Where caution should have marked our doings, we have “plunged” rather heavily, and it is becoming necessary to enforce a restrictive policy, entailing ' closer examination of proposals made for additional loan expenditures; the capacity of the people to hear such expenditures and their actual necessity., The Government is moving in that direction, it being paid of its programme to introduce legislation to check indiscriminate borrowing and to ensure a more complete investigation of loan proposals. Thirty years ago the interest charge on local body loans then outstanding was £431,931, or 11s lOd per head of the population. For the year ended March 31st, 1924, it was £2,798,645, or £2 Is 6cl per head (equal to £lO 7s 6d for a family of five) which is paid directly by the ratepayers. Sixty-nine per cent, of this payment is in respect of New Zealand borrowings, so that more than two-thirds of the money when payments are made circulates in this country, instead of being sent abroad. That is the outstanding and best feature of the position, which is far from being as unsatisfactory as the great increase in the debt would seem to suggest. In 1904-5 —that is twenty years ago —only £4,379.642 of the local debt ivas held in New Zealand against £5,638,600 raised outside. The corresponding figures on March 31st, 1924, Avere £26,668,533 held in New Zealand and £13,441,467 abroad.