LOCAL BODIES’ FINANCE.

Taranaki Daily News, 28 October 1921, Page 4

LOCAL BODIES’ FINANCE.

The explanatory statements made "by the Hon. W. Downie Stewart on the second reading of the Local Bodies’ Finance Bill, and the discussion thereon in the House on Tuesday, confirm the impressions formed on the measure when its contents were first made known. There can be no question that the main principle of the Bill is one that is perfectly sound, namely, that local bodies should be required to live within their income. The Minister admits that amendments are required, and his proposal that the Bill should be referred to a special committee representative of local bodies should satisfy those directly interested in its provisions that opportunity will be given to make the necessary alterations that would - result in a much-needed improvement in local administration. In quoting the opinion of the Christchurch City treasurer, to the effect that the measure would hamper city finance, Dr. Thacker is not reported as having given any reasons on which the opinion was founded. The Bill is intended to hamper unsound finance and to substitute therefor the necessity for local bodies living within their income from year to year, and compelling them the,

for all money required for work that cannot be financed out of revenue. Under the present lax system, local bodies, as the Min’#er rightly pointed out, frequently expended in one year sums far in advance of their revenue, thereby casting a burden on the income of the following year. The Bill provides for temporary advances, but stipulates that at the end of any year the liability on that head must not be greater than the outstanding revenue. The soundness of that principle cannot be denied. The Minister is averse to the practice of local bodies obtaining money by means of temporary deposits, buL4s prepared to meet a general wish for tne continuance of the custom —if it is evidenced —provided proper safeguards are created. There is nothing to justify the criticism of Sir John Luke that the measure is all in the interest of the banks. On the contrary, by restricting 'the amount obtainable on overdraft the banks will be the losers. A considerable proportion of the members of local bodies have no knowledge of economic principles or of sound finance. So long as money can be obtained they are prepared to resort to expediency rather than principles, hence the difficulties that have arisen of late. It is to extricate local bodies from their present financial muddle and to prevent them falling from grace that the measure has been brought forward, and the taxpayers generally will have good cause to be grateful to the Government for this effort to protect their interests.