STATE ADVANCES

Sun (Auckland), Volume 1, Issue 91, 8 July 1927, Page 13

STATE ADVANCES

“DOING OUR BEST” REVIEW BY MINISTER RURAL-CREDTS SCHEME (THU SUX'S Parliamentary Reporter.) WELLINGTON, Thursday.

TN giving the House of Representatives a comprehensive review of the operations of the State Advances Department, the Minister of Finance, the Hon. W. Downie Stewart, to-night outlined figures showing the business done in this department, and declared that loan money could not be raised at present for the State Advances purpose on account of the danger of injuring the credit of New Zealand overseas in connection with money required for developmental work, it being felt by people at Home that the money raised on the London market should be used for development. Mr. Stewart said that he had tried to restrict borrowing on the London market for this reason. Mr. Sullivan (Avon): Money for State Advances will not add to the public debt. Mr. Stewart: No; but the general statement has been made for 3’ears that the Dominion is borrowing too much, and people took the view as outlined. Mr. W. E. Parry (Auckland Central) : Are they not prepared to compete with the banks? Mr. Stewart: They are prepared to lend, but our credit is high. Mr. Parry: We are always told that. Mr. Stewart: We are trying to do this for the rural scheme just started. Even when we asked London for £6,000,000 this was considered outside the limit. I had the utmost difficulty in getting loan requirements down to the minimum of the departments requiring completion of their schemes. If we had included everything they asked for we would have had to get £10,000,000. The position will be better in a year or two. when the cost of hydro-electricity will be reduced by £500,000 or more a year. Then we will be able to start raising money for State advances. We are doing our best to finance the department now and have found £1,000,000 in the last year, in addition to money available through the department’s own earnings. TAKING THE PRESSURE “If the rural advances scheme is a success it will take the pressure of this department,” said Mr. Stewart. “We hope it will be a great source of easement to the State Advances Department. I admit there is a big shortage, but during the past four years we have put through £24,000,000 in State advances.”

Mr. A. Harirs (Waitemata): Does this include advances to local bodies? Mr. Stewart: Yes; but that was not much.

Mr. Sullivan: It is all good busing with practically no loss. Mr. Stewart: The only loss is on those loans we gave out at less than we paid for them. Until we try out rural advances I cannot see any chance of catching up. If we cut out those who have good security, who could get the money at P,; favourable terms, and restrict the department to only urgent cases, it might relieve the position, and I have tried to arrange for some of the applications to be considered in this light. Mr. Sullivan: It is the long term that makes it attractive. Mr. Stewart said that the Public Trustee had a bundle of applications being dealt with at the present time. If possible this would be done and State Advances kept for the more necessitous cases. In the past four years State Advances had paid for 9,149 houses, which cost just short of £8,000,000: had purchased homes numbering 3,974, costing £2,750,000; while the repayment of existing mortgages totalled 2,715, costing £1,750,000. This made the total number of homes built .and assisted 15,838, costing £12,250,000. ADVANCES TO FARMERS

Some had said that nothing was being done in the Rural Advances Department, but in this branch applications valued at £796,000 had been received and the board this month had submitted to it applications valued at £435,000, and since April 1, £318,385 had been granted. Not much of this money had yet been paid over, but when all formalities were completed this would take place. Showing that the farmers were hit first in depression periods, Mr. Stewart said that in the repayment, to the State Advances Department workers were ahead of farmers, though if the present unemployment continued the working men must also suffer in their repayment percentage.