The Daily News SATURDAY, FEBRUARY 20, 1932. CUTTING DOWN COSTS.

Taranaki Daily News, 20 February 1932, Page 4

The Daily News SATURDAY, FEBRUARY 20, 1932. CUTTING DOWN COSTS.

Mr J. S. Jessep’s suggestion that the local body indebtedness of New Zealand should be consolidated is a very attractive one. He has pointed out that the local bodies owe £70,000,000, which is a huge sum to be added to the national debt carried by a country with a population of one million and a half. The individual responsibility upon the people who have to meet the annual cost oi this indebtedness is great, but there is also a national responsibility inasmuch as for the sake of its credit the Dominion must .be in a position to ensure the satisfaction of all obligations. Already, Mr. Jessep remarks, the State is backing the local loans, for. the Government could not permit a local body to default, and his idea is that if the loans were consolidated and a definite guarantee were given by the State theie might be a reduction of 1 per eent. in the average rate of . interest payable on local borrowing. At present, of course, the State exeicises a measure of control oyer this borrowing, but consolidation obviously would mean the stiffening of the conditions now imposed. It would no longer be possible to raise money haphazardly, as Mr. Jessep says has been done in the past; local bodies would have, in a sense, to pool their requirements. The controlling authority would deal with all applications for loans on a national basis; that is to say, consideration would be given to their effect on the Dominion’s total indebtedness as well as the desires of a local district and its ability to satisfy them. The national advantage to be gained from such a scheme, would be the adequate control of indebtedness as well as the cheapening of its cost, and. locally, of course, most communities would Welcome the prospect of saving money. Mr. Jessep’s idea is but the natural corollary to the proposal so often mentioned by the Government, but not yet translated into action, to take .steps in the direction of reducing the number of local bodies in the Dominion. The need for economy is scarcely less evident locally than it is nationally. The expenditure of local authorities of all kinds has mounted rapidly, and a big proportion of it, as in the ease of the national outlay, is required to meet the fixed charges for interest on loan money. It has been easy to pile up these charges. Every community desires the most modern facilities in the way of public services, and as long as there was no difficulty in borrowing ratepayers were content to allow debts to increase, and with them rates. But the burdens have become excessive, a fact that has been brought home to everyone by the prevailing conditions. The money market has itself checked borrowing, but that is not enough. The problem is to meet the present cost • of the past prodigality, and every possibility of reducing the annual burden should be explored. It is high time the Government set matters in train by instituting its inquiry into the question of local, body economy, and if a commission is to be appointed for the purpose it might well go into Mr. Jessep’s proposal to consolidate loans. It is possible that a commission possessing extensive powers could plan a very far-reaching revision of not only the system but also the methods of local government. The case of local administration may be parallel with that of the Public Works Department. Some months ago the Railway Board recommended the abandonment of certain railway lines then under construction, and Parliament accepted the proposal. One of the reasons why this action was taken was the practical certainty that the various railway undertakings could not pay their way in competition with other means of transport. But behind that reason was another, namely, that the railways coiild not be expected to pay because the cost of their construction was excessive. On the most difficult part of the North Island main trunk railway, completed in 1909, the average construction cost per mile was £13,700. Of the lines which were recently abandoned the dearest was costing the enormous sum of £51,099 per mile, and the cost of the cheapest was £36,276. Wages, no doubt, are a good deal higher now than in 1909, but there has been great development in the use of mechanical labour appliances, and yet the cost of the cheapest railway construction is three times as great as it was less than 25 years ago. It would be interesting to know how the cost of other works compares with that of railway building. Much of the activity of local authorities has to do with the making and maintenance of roads, especially in the case of county councils, and in urban centres there are drainage and water undertakings. It should be worth 1 while to inquire into the cost of these things; that is to say, to ascertain what return is being received for the loan money which local authorities have expended so freely. That is one aspect of the local government problem which awaits investigation. With the help of committees and commissions the Government is tackling the question of national expenditure, and that of local expenditure

is only less important. Mr. Jessep has suggested one way of making a possible saving. His suggestion and all the rest of the questions which wy be asked in respect of local government should form the subject of an immediate and thorough inquiry.