OVERSEAS LIABILITIES

Otago Daily Times, Issue 22326, 28 July 1934, Page 11

OVERSEAS LIABILITIES

LOCAL BODY INDEBTEDNESS POSTPONEMENT OF NEW CLAUSE SOUGHT (From Oob Parliamentary Repoiteb.) WELLINGTON, July 27. A plea for the postponement of the clause in the Finance Bill affecting the sinking funds of local bodies with overseas indebtedness was made in the House of Representatives during the committee stages of the Bill early this morning. An assurance, however, by the Minister of Finance (Mr Coates) that only a limited number of local bodies were affected appeared to satisfy the members who had urged delay. Mr Stallwnrthy suggested a postponement of the clause for a week or so. He said that some of the sinking funds had been built up when the exchange rate was at par, and even in norm-xl circumstances they would have fallen short of the amount required for domption. That was unfortunately true of many of the loans in the Auckland province. But with the exchange at 125 the sinking funds wore hopelessly inadequate and the local bodies were put in a bad position. Further the local body estimates for the year had been passed and that should be taken into consideration as any disarrangement for the next 12 months would put some local bodies in "queer street.” It might easily affect the tramway fares in Auckland. , „ , . Mr Sullivan said the clause affected counties as * well as municipalities—-in fact, all local bodies with overseas liabilities. It was only fair to hold over the clause to give the local bodies a fair chance to examine it. Mr Sullivan said he hoped that members would not let down their local bodies merely to oblige the Minister of Finance. Mr Coates, replying later, said that Mr Sullivan had tried to alarm all the rural local bodies. As a matter of fact, no rural local bodies were affected at all by the clause. Mr Sullivan: What about electric power boards? Mr Coates: They are not affected. Mr Sullivan: That is not correct. Mr Armstrong: What about the Southland Power Board? Mr Coates: It is not affected. Mr Stallworthy; Is Auckland affected? Air Coates: The Auckland City Council is affected to the extent of £6OOO, the Dunedin 1 Drainage and Sewerage Board to the extent of £5500, and the Christchurch Tramway Board to the extent of £6600. This discussion took place on the short title, which was later passed with" out opposition. When the clause itself came under review, however, Mr Stallworthy called for a division. The clause was retained by 34 votes to 28.