LOCAL BODIES AND LOANS

Pahiatua Herald, Volume XXXVI, Issue 10960, 8 October 1928, Page 3

LOCAL BODIES AND LOANS

VALUABLE STATE ASSISTANCE. The Minister of Public Works, in his annual statement, says:— . “One of the very extensive activities that has been thrown upon my Department during the year has been brought about by the passing of the Local Bodies’ Loans Act. Under that Act it is necessary for the Board to obtain experLmeports on almost all the projects Tor which local authorities wish to borrow money, and, while all Departments of State are at th e disposal of- the Doans Board for its purposes, t-he greater weight ct the work falls naturally upon the Public Works Department because the greater number of the loans 0,local bodies are for the ecnserucTim. of works. It is necessary, therefore, for my officers to investigate all 1 ocabodies ’ proposals, not only looking into tlie engineering soundness of the proposals 'technically, but also going into the question of probable life o the asset to be created and its necessity or otherwise for the community at large. Naturally, the sinking fund which it is necessary to <sct aside must be governed by the probable life of the asset, and not. as has been the case in the past, bv the ideas of the local authority as to their ability to pay. or the willingness of th e , money-lender to- wait for his money. “The Local Bodies’ Loans Act was long overdue, and will probably in the future be locked upon as one of the most important Acts ever passed in this country. Most of us knew of instances ef loans that have been raised and spent on works that have never produced am- beneficial result :fcr the ratepayers. The provision of a sinking fund is the great, feature-, but this in some cases presses hardly on the backblocks where the estimated life of the loan, coupled with the, sinking-fund rate, prohibits the raising of v. loan. It might be remarked that what may to-day appear a sound preposition as a metalling loan may in a few years, with the rapidly changing methods of and increased desire to travel, assume a very different aspect and become a burden rather than an asset. “From the point of view of the local authorities, one or the events of paramount importance, was the passing of the Motor-spirits Taxation Act of last session, providing, as this new source of revenue did, a fund from which the construction and maintenance, of the principal ryads of_ the Dominion could be financed without further increasing the already severe load which the local authorities were carrying in the way of local rates. ”