Prime Minister Denies Promise Made to Hospital Board

Northern Advocate, 12 June 1939, Page 7

Prime Minister Denies Promise Made to Hospital Board

“|1 SEEMS AS IF THE PROMISE IS DEFINITELY NOT GOING TO BE

HONOURED AND WE WILL HAVE NOTHING ELSE TO DO BUT TO APPLY TO THE LOCAL BODIES LOANS BOARD FOR THE MONEY,” COMMENTED MB J. A. S. MACKAY, CHAIRMAN OF THE WHANGAREI HOSPITAL BOARD, WHEN REFERRING AT TODAY’S MEETING TO A LETTER FROM THE ACTING-MINISTER OF FINANCE, MR SAVAGE. CONCERNING THE RAISING OF AN ADDITIONAL BUILDING LOAM,

Previously sanction was given to the raising of a £25,000 building loan', but it was found that, owing to increased costs, another £7OOO would be required. This could not be secured on the same basis as the £25,000, and the board wrote to the Acting-Minister, contending that a promise had been given to the board that the full amount of the loan would be available on the same basis as the initial loan.

Following receipt of the Acting-M mister's letter, the board has made urgent application to the Loans Board for the full loan of £32,000.

Mr Savage's letter to the board &■

staled: —

No Evidence of Promise

“I have ascertained that, arising out of the deputation from the board which approached the Minister of Health in August, 1937, an undertaking was given by my colleague, the Hon. W. Nash, that the money for the hospital, then estimated to be £25,000, would be found. “In order to honour this undertaking, it was necessary to make special arrangements to furnish the amount required, and this was done through the State Advances Corporation on the term applied for by the hospital board, namely 20 years. “The source of those moneys was, however, strictly limited, and it is therefore necessary for the further amount of £7OOO to be accepted on the terms offered by the corporation, having regard to the basis on which that institution obtains funds for lending to local authorities generally.

“In the absence cf Mr Nash, I am unable to say whether he made any promise to make this additional £7OOO available on the original terms, but no evidence is available on the departmental files which would support the hospital board’s contention. Raising of Rate.

“It will be noted, however, that the rate at which local bodies are permitted to borrow has been raised to 4.1 per cent., so that if the hospital board particularly desires to finance on tire terms sanctioned by the Loans Board, it can now go on the market and obtain its requirements in the usual manner. “If this course is adopted it will be necessary for an early decision to be made and for the State Advances Corporation to be notified, as I understand that that institution has the amount set aside and will therefore require prompt advice if the reservation is not taken up.” Remarkable Statement. “The most remarkable statement in Mr Savage’s reply is that there is no record in the file to uphold the board’s contention,” commented the chairman.

“Despite the fact that this promise was made to the vice-president of the New Zealand Labour Party, it is stated that there is no copy of the letter. There must be a copy of Mr Nash’s letter to Mr Barclay. “Verbal promises don’t seem to count very much,” he concluded.

On February 12, 1938, according to the hospital board’s files, a letter was forwarded to Mr Barclay from Mr Nash, reading:— “Following your representations oi yesterday and today relative to the desire of the Whangarei Hospital Board to arrange a further sum of £7OOO to enable them to accept a tender for construction purposes, I am writing to advise you that, subject to the approval of the increased price by the Public Works Department, and subsequent approval by the Local Bodies Loans Board, the amount of the original loan of £25,000 will bo increased to the sum required, £32,000.” “The Prime Minister’s statement is incorrect,” Mr Mac Kay remarked. “The letter could be found if the files were searched.” Less Advantageous Terms. Further reference to the subject was made by Mr Mac Kay in his annual report:— “I regret that, although the Minister of Finance made a definite promise through the member for the district, Mr J. G. Barclay, in writing and later to me verbally that our £25.000 loan would be extended to £32,000, the Government either is unable or unwilling to honour that promise,” said Mr Mac Kay.

“It has therefore boon necessary to approach the Local Bodies Loans Board for permission to raise a loan of £7OOO on very much less favourable terms.”