LOCAL BODY DEBTS.

New Zealand Herald, Volume LXVII, Issue 20602, 28 June 1930, Page 17

LOCAL BODY DEBTS.

UNECONOMIC EXPENDITURE.

REASONS FOR INCREASES.

CHAMBER OF COMMERCE VIEW.

A reply has been made by Dr. E. P. N'eale, secretary of the Auckland Chamber of Commerce, to comments by Mr. S. Gray, of Mount Eden, on the findings of a committee of the chamber' on local body indebtedness. Dr. Neale, summing up tha position, says: " Tour letter has not shaken xss in our general opinion, supported by the evidence of the great recent increase in local body taxation, that there has been a considerable amount of uneconomic capital expenditure by local authorities in recent years. Yet it does not necesßariiy Mow that in the case of any particular local authority such a stricture applies."

In reply to criticism of the qualifications ot the members of the Chamber of Commerce council to pass judgment on local body expenditures, the secretary says: " As business men they are accustomed to weighing tip the burdens of espensa as against the value of improvements, and when all is said and done local body administration is, or should be, a matter of business judgment, net involving in broad issues any. questions of special intricacy. Apart from this suspect of the present members cf our council, approximately one-quarter are serving cr have served on local bodies, and one cf the members of the committee of the chamber, which has been dealing with this matter of local body indebtedness, is actually an ex-Mavor of one of the larger Auckland suburban boroughs." Dr. Neale" s letter then proceeds: "Ton state that it is better business to put down a road in solid material, because the reduced maintenance charges, plus interest and sinking fund, amount to less than tha previous maintenance charges and permit the public to have a better road. Surely the contention that this is invariably the case is unsound, because it would lead logically to the conclusion that if only local authorities would concrete all their reads rates would be reduced.

" The chamber's main point, however, is that local body indebtedness has increased with great rapidity of recent rears, the rat® of increase has been arsater than the rate of increase in the indebtedness of the general Government; and the per capita rata of increase has been greater than the rate of increase in the national income per head of population.

"It is true, 2nd we are aware, that during recent years many new opportunities for expenditure by local bodies have been opened up—through the development of such things as hydro-elect r:c u-ower and the internal combustion engine—but our committee is convinced that in quite a number of instances, at least, loan expenditure has been of a wasteful character, and has resulted from undue pressure from a small number of interested persons, while the majority of ratepayers remain apathetic. " Further than this, the committee is satisfied that in public, as in private life, the desire for additional amenities and luxuries should not be gratified beyond the spender's capacity to pay without undue inconvenience; and it feels that, in many instances, local bodies have proceeded with improvements, probably quite desirable ones, on a scale that relative to means they would hesitate to adopt, in private and business affairs."