LOCAL BODY FINANCE

Otago Witness, Issue 4041, 25 August 1931, Page 8

LOCAL BODY FINANCE

A SERIOUS PROBLEM.

DEPUTATION TO MR FORBES. WELLINGTON, August 20.

The desperate position facing local bodies throughout the Dominion through inability to collect rates from land mortgaged to the Crown was represented to the Prime Minister (Mr G. W. Forbes) to-day by a deputation comprising several members of Parliament and representa fives of the North Island county councils. The deputation urged that legislation be introduced placing the Crown in the same position as private mortgagees. Members of the deputation emphasised the diffi culty, particularly in regard to areas containing a large proportion of Crown land, where special rating areas had been proclaimed for the purpose of providing roads. It was stated that if the Crown refused to accept liability for rates the local authority would be unable to meet its liability under loan and . there was a further possibility that if the position were not remedied there would be no prospect in future of raising loans for reading purposes in localities where there was any considerable area of land owned by or mortgaged to the Crown. It was also mentioned that local bodies were hampered because of the refusal of the State Advances Office to recognise liability for rates which had accumulated against a property. Mr J. M'Combs (Lyttelton) said that it was not only the counties that were affected, as the problem was worrying many boroughs now that the Advances Department was refusing to recognise arrears of rates against properties over which it held mortgages. The position was so serious that the rate collectors were almost compelled to bring special pressure to bear against those whose homes bore loans advanced by the department. Mr J. N. Massey (Franklin) said that local bodies were getting into a dangerous position. It was represented to Mr Forbes that if the law r was not speedily

amended local body finance would reach a chaotic state with the complete breakdown of some of the local bodies. Should the question of default arise it would be a case of “ putting the receiver in.” Mr Forbes said he recognii >d the position regarding special rates and that the financial. depression had accentuated the problem. Local body finance generally was getting into a difficult position and would have to be reviewed. The Government had been supplied with evidence of the difficulty local bodies were having in meeting interest payments on loans entered into in times of prosperity, and he believed these were not isolated instances. He promised to go into the question, but in view of the Government's own financial difficulties they could not easily accept added responsibilities. In reply to a question by Mr W. J. Polson (Stratford) as to whether the scope of the proposed local body commission could be enlarged to enable it to deal with this problem, Mr Forbes said the matter of local body finance was becoming so pressing that it would have to be investigated in the very near future.