LOAN FINANCE

Poverty Bay Herald, Volume LXV, Issue 19700, 4 August 1938, Page 15

LOAN FINANCE

LOCAL BODY OPERATIONS DOMINION BORROWING I NCR MAKING TREND ST’RYEY i:V MINISTER (Parliamentary Reporter.) WELLINGTON, this day. An interesting review of the operations of the Local Government Loans Board for the year ended March 31. 19:18. was given by iho Minister of Finance, the Hon. W. Nash, in the House of Representatives yesterday. He stated that the total applications that came under the purview of the board during the year amounted to £3.077,423, being now applications amounting to £3.362,173, and amounts referred back for modification oi amendment, totalling £315.23(1. Sanction was given to loans for new works amounting to £3,098,445, and redemption loans were approved to the extent of £122,758. Since the board came into being in 1927, the total applications had involved £43.037.991, and the loans sectioned had totalled £23,160,043 for .new works and £16,225,895 for redemption purposes. Hospitals Head List? During the past financial year hospitals headed the list for new loans, a total of £755,430 being sanctioned. Electric-power board loans amounted to £689,110, city and borough works £506,025, harbour works £407,000, and 3 per cent, housing loans £256.920. Other loans included those for waterworks, roads, bridges, tramways, firej boards, overdrafts, and miscellaneous items. The Minister set out the method of redemption payments, showing that from £849,815 in 1938 the repayments would increase year by year to £1,521.135 in 1955, and then decline to £11,400 in 1973. In addition, loans totalling £11,693,389 were on the instalment repayment system, and the repayments under that heading increased progressively each year. The gross debt, said the Minister, reached its peak in 1931, when the figure stood at £72.686.036, whereas six years later it had dropped to £68,559.750. Arranging Own Finance "It is significant,” stated Mr. Nash, "that the figures regarding the domicile of local body debt indicate that there is a tendency in modern times for New Zealand to arrange its own finance within tire country." He pointed out that the amount of debt out-

standing in .the United Kingdom and Australia had steadily decreased and, as at 'March 31, 1937. the amount domiciled in the United Kingdom was shown as just under £ 14,000,000, while the amount in Australia was slightly over £2,000,000, against £85,000,000 in 1931. At the present time, the amount domiciled in these two countries was probably even smaller still. The Minister stated that the rest o£ the debt was held within the Dominion and. in view of the present policy of authorising the raising of new loans only in New Zealand, the tendency would be to increase still further the holdings in .New Zealand and reduce the overseas indebtedness as the existing loans fell due and were paid off from sinking funds. A certain number of oversea loans would no doubt still be required to meet loans falling due overseas, in respect of which the sinking funds were inadequate, although in numerous such cases redemption loans

j-.ad in recent years been raised m New Zealand to pay off oversea indebtedness.