MORE BORROWING

New Zealand Herald, Volume 78, Issue 24049, 21 August 1941, Page 11

MORE BORROWING

LOCAL AUTHORITIES HOSPITAL NEEDS AND POWER TREND OF APPLICATIONS (S.R.) WELLINGTON, Wednesday Applications to the Local Government Loans Board for loans for new works dealt with during the year ended March 31 showed a considerable increase over "the figure for the previous year, according to the annual report of the board, presented to the House of Representatives to-day. The increase was due almost entirely to rural housing loan and hospital board applications. In its function of controlling borrowing by local authorities, the board considered applications totalling £5,336,640. Of that amount £5,213,290 represented new applications and the balance amounts which had previously been referred back or declined. Sanction was given to the raising of loans totalling £2,790,505 for new works and £1,602,670 for renewal of loans. Demand for Hospital Purposes "Borrowing for hospital purposes has been sustained at very high level over the past few years and appears likely to continue at a fairly high figure for some years to come," the report says. "Borrowing for purposes connected with the supply and distribution of electrical energy also shows a substantial increase. The other items show normal year-to-year fluctuation." The board observes that prevailing conditions have resulted in the alleviation of the unemployment situation and the need for local authorities to raise loans for works designed in part to relieve unemployment has practically disappeared. Growth of Local Body Debt The growth of local body debt to its peak in 1931, and subsequent decline to 1938, since when the figures show a rising tendency again, is_ traced in the report, which shows the indebtedness in 1940 to be £69,486,970, against £24,538,721 in 1915 and £72.686,036 in 1931. Of the 1940 debt, £12,284,225 is domiciled in London and £2,264,220 in Australia, the balance being in New Zealand. "Tn present circumstances local authorities generally appear to appreciate the necessity of conserving the capital resources of the Dominion," the board reports, "and are refraining from submitting loan proposals for other than essential needs."