STATE ADVANCES.

New Zealand Herald, Volume LXIV, Issue 19762, 8 October 1927, Page 10

STATE ADVANCES.

MONEY FOR .DWELLINGS. DEPARTMENT IN ARREARS. POLICY OF THE MINISTER. "SITTING ON THE BOILER." [BS TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON. Friday " Applications for loans for homes which were lodged in July and August of last year aro now being considered by the State Advances Department, but it will be Christmas before they are cleared up," said the Minister of Finance, Hon. W. Downie Stewart, in the House of Representatives this afternoon when the State Advances estimates were under review. Points made by the Minister were that while the Government could borrow another five or six millions in order to overtake the arrears of applications such action would result in another avalanche of calls for loans and another piling up of arrears. It would also cause an over supply of houses sinco at the ♦ present time there was anything but a shortage of homes in most of the centres " The transfer of money to the rural credits branch has caused a diminution in <he supply of money for settlers and workers through the State Advances fund itself," suggested Mr. W. A. Veitch (Wanganui), after Mr. J. Horn {Wakatipu) had said that many people bought sections in anticipation of loans and then had to sacrifice thetai at heavy loss when the loans were not granted. He went on to suggest that it would be better for the offico to close down for six or twelve months and tell the people that loans could not be granted. "If we cannot find the money we should not keep the people in suspense," he said. Workers' Prompt Payments. Mr. A. Harris (Waitemata) said the position indicated ■ that there was a demand for loans and that the department was under-capitalised. Mr. F. N. Bartram (Grey Lynn) suggested that the repayments should be made at shorter intervals than six months as workers sometimes found it difficult to meet their obligations on the due date when the periods were so iar apart. The Minister: The six monthly repayment is a success. Ninety per cent, of the workers earn the rebate for prompt payment They can pay more frequently :if they want to. It is a remarkable thing that the workers are more careful to bank the amounts needed to make punctual payments. They make a better showing than the agricultural people in claiming the rebate. Respecting the position of the funds generally the Minister emphasised the fact that somebody had to " sit on the boiler to sarve the risk of an explosion." The Government would not go on lending out any amount of money. If it were a solution of the difficulty to borrow an extra five millions and then clean up all the applications it might be favoured by the Government, but that would simply bring on a further avalanche of applications and in a few months after the cleaning up they would get back to the old position of innumerable applications waiting to be dealt with. Workers' Prompt Payments. If the applications now coming in were only from the agriculturists the amount available would probably be sufficient, he continued. There was a danger that in making too many advances people would bo enabled to build houses in places where there were already homes available and consequently the department might subsequently be involved in pretty heavy losses. If the Government provided three or four millions to help to meet urgent cases it would do very well, but he did not think it should be called upon to cope with every application that came in. A man could borrow easily elsewhere if he had ample security. In conclusion the Minister said that last year the department actually paid out £6,172,000 for dwellings and relief to settlers. To 2977 settlers, £3,566,000 was lent, while 2799 workers obtained £2,500,000, local bodies taking the comparatively small amount of £SOOO. This year the loans would reach four millions.