LOCAL BODY INDEBTEDNESS

Nelson Evening Mail, Volume LXX, 25 May 1936, Page 5

LOCAL BODY INDEBTEDNESS

MINISTER SURVEYS POSITION LARGE SUMS INVOLVED OPERATIONS OF LOANS BOARD (By Telegraph—Press Association) WELLINGTON, This Day. . The Minister of Finance (the Hon. W. Nash) has furnished the following information regarding the operations of the Local Government Loans Board for the 12 months ended 31st March, 1936 together with comparative figures for the previous years and a resume of conversion operations in connection with the whole of the Local Body debt in the Dominion, which are now practically completed. The total amount of applications submitted to the Board for . the general (i.e. exclusive of conversion schemes) during the year amounted to £4,235,52G and of this sum £4,061,-

076 was represented by new applications ■ and £ 174,850 by the total of sums which were previously referred back to the local bodies concerned and again submitted for reconsideration. Loans sanctioned were: £ Redemption loans 2,051,790 New'loans 1,550,690 Referred back and declined 633,446 Of the amount of redemption loans sanctioned, the total figure given takes the place of the previous .debt of £2,196,079. . A Since 1927-28 the total applications have amounted to £32,810,434. Amounts sanctioned were ■ £ 16,099/550 for new works, and £13,621,034 for redemption loans. The difference, namely £3,089,850, represents the amounts referred back find' declined by the Board during the period in question. RENEWAL LOANS ■Tlie balance of renewal. loans for all other local bodies totalled only, £426,790, which was a marked reduction on renewal loans of previous years. This was brought about largely by conversion operations, which resulted in arrangements being made for complete liquidation of debt then dealt with within the new terms authorised, thus obviating the neces-'. sity for renewal loans. In : addition to the figures supplied above, the total of £114,181 was dealt with during the year as/'representing applications in respect of the (disposal of capital moneys and unexpended loan balances, under pro-’" visions of Section 20 of the Finance Act 1934, and Section 47 of the Finance Act 1929. ■ ■ ( • v The‘Minister quoted figures showing the total loan indebtedness of all local authorities in New,. Zealand since 1915, when the figure, was. £24,538,731. r It reached the peak in 1931, 'when it was £72,686,036 and in 1935 it stood at £71,245,458. ■ The rate of increase mounted greatly in post-War years, but had fallen away since 1927, when the Local Government Loans Board had exercised a steadying influence in the field of local body finance. ' ,£43,540,169 CONVERTED Local body debt convertible at 31st March, 1933 was £48,458,645. By 31st December, 1935, £43,540,169 had been converted and £2,924,241 had been repaid, renewed or excluded, leaving £ 1,992,235 outstanding. . ,\- Of 493 local authorities, 349 had converted their debt. The remainder had either not taken action or the amounts were too small to warrant conversion. Applications areji still, being received for conversion. The Local Government Loans Board, some 18 months ago, fixed the basic rate at which, all local authorities might borrow at 3£ per cent., and has' 1 maintained this rate to the present time. It would appear that no greater difficulty has been experienced by local authorities in obtaining loan requirements at this rate. Renewed activity of local bodies within reasonable bounds will assist the Government in its policy, of providing useful employment for those who at present are unemployed.