THIRD STEP

Poverty Bay Herald, Volume LXIII, Issue 19027, 29 May 1936, Page 5

THIRD STEP

FINANCE POLICY -STATE advances bill REVIEW BY MINISTER v>, • . IMPROVED FACILITIES ' MINISTER, IN CONTROL (Parliamentary Reporter.) WELLINGTON, this day. The third of v.hat - were described as the three financial steps ox the Government was taken by the introduction of the State Advances Corporation i Bill, the second reading of which the Minister of Finance, the Hon. W. Nash, moved in the House of Representatives last night. The other steps, he said, were, first taking control of the' credit and monetary system, then, secondly, putting the farmer in a position so that if he worked the. land he would he assured of some reasonable return, while the workers would be provided with the necessary houses, because it was only a house which made a home possible. The Onposition attitude as first expressed t>y the Hon, A. Hamilton, a former Minister of Labour, was one of cautious approval. • “I am not going to say,” lie declared, ‘"‘that, we are opposed to the bill. From our viewpoint it is. not far astray, although we believe that the present system is better.”

■ Discussing the Mortgage Corporation Board, which will go out of office on July 1, Mr. Nash declared that its chairman, Sir William Hunt, had given excellent service. His knowledge of the mortgage position and land conditions was probably unequalled, and certainly not surpassed by any person in the Doniinion. He was satisfied, however, that the view taken by the former Opposition was correct, that it was impossible for Sir William Hunt, with his unsurpassed knowledge and undoubted integrity, no matter how he tried, to be a success both as chairman of the A.M.P. Society, probably the next largest lending institution in the Dominion and also as managing director of the Mortgage Corporation. He was not questioning his integrity, but sooner or later it must happen that there would be a conflict of interest. GOVERNMENT GUARANTEES The other directors, said the Minister, ■were competent men, and the managing directors wsre particularly able, and the feeling of the Government was such that they proposed to continue them as managing directors. What exactly the Government would do a little later in respect td- another director was undetermined. They might take someone from outside, or .they might appoint a civil servant competent in' regard to mortgage' and land questions. “The corporation will go out of being on July 1, said Mr. Nash, “and the procedure will be slightly different in the future. The Government will direct the policy of the corporation through the Minister," and it would be the Government’s policy which will be carried out all the time. Tho board will administer it's agent of the Government.’ The Ministep will control, but not interfere, but if there is a point at which the Government feels that its policy is not being given effect to it will interfere. Its objective is to find competent men who will interpret its policy, and when found they will be given the freedom which should be given to such men.” The Minister did not directly answer questions regarding! the future rate of interest; but he. discussed the margin of security, pointing out that while 66 2-3 Eer Cent was the commercial loan basis, igher proportions could be advanced, but the larger proportion beyond the commercial margin would he guaranteed By’ the Government. These guarantees would be mainly for rehabilitation or farmers and the building of homes, and he considered that guaranteed prices of dairy produce would be a sounder basis of valuation than in the past in determining the producing capacity of land. REPAYMENT PRINCIPLE He was satisfied, he declared in reply to an interjector who reminded him that this aspect was confined to dairying land, that when the advantages of guaranteed prices were realised, every other farmer Would want to get the same stability and link up his income with the productive capacity of his land. . Wherever farmers could legitimately present a case for a higher advance than 66 2-3 per cent, they would get it. - -An interesting new principle in respect to Advances Corporation loans was explained. It would be possible to apply the usual repayment provisions on naif yearly instalments to only half the loan, which would relieve mortgagors of heavy payments, 73 in number, during the term of i the mortgage. This system was optional., but if it, was applied, half the loan would bo repaid at the end of the term and there would be no difficulty in renewing the unpaid balance. Another new principle was that the corporation could require a mortgagor to safeguard his wife if anything happened ' to him by insuring his life, enabling the principal to be repaid in case of his death, and the security would be handed to his widow. Power was also taken to require weekly or other periodical payments in respect of rates, insurance, and maintenance, as many mortgagors found ' it difficult to provide these amounts in a lump sum after paying interest.