LOCAL BODY FINANCE

Manawatu Standard, Volume IV, Issue 222, 20 August 1931, Page 2

LOCAL BODY FINANCE

A GROWING PROBLEM. PREMIER AND NEED FOR REVIEW. Per Press Association. WELLINGTON, Aug. 20. Tlie position of local body finance in New Zealand is becoming a very serious problem of its own and will undoubtedly have to be reviewed, said the Prime Minister, Mr G. W. Forbes, when replying to a deputation representing local bodies, particularly county councils and suburban borougu councils. The deputation asked for the passing of legislation to place the Crown in the same position as a private mortgagee concerning liability for the collection of rates for the payment of interest on special loans and also general rates. A statement was made that the local bodies were in a real difficulty because of the action of the State Advanoes Department in refusing to recognise rates which had accumulated. The contention was advanced that unless the law were amended a chaotic condition would arise in relation to local body finance. If the local bodies were unable to collect the rates and the Crown, as mortgagee, refused to accept liability, the question of default would arise as there would be no funds for the payment of interest on State Advances loans and it would be a case of putting a receiver in. Mr Forbes said previously the Government had set aside special funds to meet rates on areas of necessitous Crown setters that showed recognition of their obligation. The position of local body finance had become a hefty problem and the whole matter would have to be thoroughly gone into. He would be pleased to go into the matters raised and seo what could be done. f‘Of course, when the Government s finances are so short we cannot easily accept added responsibilities, but I recognise that something has to be done. Local body finance is a problem in itself and an inquiry into it cannot be postponed much longer,” concluded Mr Forbes.