NEW HOUSING PROGRAMME

Southland Times, Issue 22992, 11 September 1936, Page 8

NEW HOUSING PROGRAMME

Government Plans Advanced MONEY FROM RESERVE BANK SUITABLE USE FOR PUBLIC CREDIT (From Our Parliamentary Reporter.) Wellington, September 10. The manner in which the Government proposes to apply its monetary policy by using public credit in financing . its housing construction programme was elaborated in certain respects by the Prime Minister (the Rt. Hon. M. J. Savage) in an interview this evening. The provision, of suitable housing accommodation to relieve the present shortage, Mr Savage said, was obviously a form of State activity in which public credit could safely and legitimately be used. As announced by the Minister of Finance (the Hon. W. Nash) in a statement published this morning the Government has finalized arrangements with the Reserve Bank of New Zealand so that financial accommodation can be made available for the immediate pursuit of its housing policy. Mr Nash also stated that £3,500,000 was to be provided this year for housing construction purposes. “I do not wish to go into all the details of the Government’s proposals at the present juncture,” said Mr Savage, when he was asked to comment on Mr Nash’s statement and to amplify it in certain directions. “We have gone into the matter very thoroughly and I wb are convinced that the use of public j credit along the lines proposed will result in the creation of public assets of at least equal value to the amount expended.” 1000 New Dwellings. Mr Savage said that the actual construction plans had been advanced to such an extent that it was hoped to have 1000 new houses ready for occupation or actually occupied, by the end of the current financial year. The money to be advanced from the Reserve Bank might not be free of interest altogether, as it might be found necessary to levy a charge to meet the cost of service. Whatever obligation remained when the work was completed would be to the Reserve Bank, and not to private lenders. In the actual construction and renting of houses the Government intended to proceed on a commonsense basis. Rents and other payments to be charged would definitely be attractive from the point of view of the tenants, but nevertheless attention would still be paid to the national responsibility involved. Public credit would be used to provide houses for people who were at present in need of houses, but it was only fair and logical that those people should pay, according to their means, for the use of a service which belonged to the whole community. Overdraft Suggested. It was suggested to the Prime Minister that the arrangements made with the Reserve Bank might take the form of an overdraft of £3,500,000 in the Housing Account for this year, and that when that money had been spent on the construction of houses the balance from the rents, after administration and other expenses had been met, might be paid into the account, so that in the long run the liability might be extinguished. Mr Savage declined to comment on this suggestion. “We are going to use public credit judiciously and sensibly,” he said. “In this particular direction we aim at the provision of a national asset and a national money service. We shall see to it that there is full value for every penny of expenditure, and as long as that principle is adopted, the position will be adequately safeguarded.”