HIGHWAYS FINANCE

Taranaki Daily News, 10 April 1935, Page 12

HIGHWAYS FINANCE

QUESTION OF INTEREST CHARGES. MOTOR UNION’S OBJECTION. The charging of interest on money transferred from the Consolidated Fund to the Main Highways Account was one of the subjects on the agenda paper at an executive meeting of the North Island (N.Z.) Motor Union at Wellington, this week.

The secretary tabled a copy of a letter dealing with the subject which he sent to the Minister of Public Works. The letter, stated that some years ago when the Government found it necessary to have more money available for national purposes the motor union raised no objection to the transfer of £500,000 from the main highways account to the Consolidated Fund. It was understood that this was to be a temporary measure only, but the practice had become an annual one.

“We view with considerable disfavour,” continued the letter, “and no little alarm the subsequent developments, particularly the charging of interest on all moneys paid to the construction account and the treating of such money as loan money. For .the year ended 1934, £260,000 was allocated to the construction account, and treated as loan money, and last year the sum of £500,000 appeared .similarly on the estimates. If it is remembered that the moneys normally payable to the highways account have lately been converted to the Consolidated Fund, it seems to us that the charging of interest on moneys subsequently transferred from the Consolidated Fund back to the highways board’s construction account' is unjustifiable, and if continued must seriously weaken the structure of main highways finance.

“Already interest and sinking fund in the main highways construction account has increased to £196,000 per annum. If the practice continues at the present rate for another six years this interest and sinking fund will amount to some £400,000. My union directs me to say that it feels that the Government’s policy in this regard really amounts to the handing back to the road fund its own money as a loan at interest, and that such a transaction is an ungenerous return for what we feel was the helpful attitude of the automobile associations at a time when the Government was facing a serious financial crisis. “My union would like to have your assurance that this matter will be examined by you at the first opportunity, and that the practice will be discontinued.”

Replying, the Minister stated that he fully appreciated the circumstances to which the motor union had drawn attention, but he desired to point out that the .question of what course should be followed in future had not yet been determined. ■;

“The matter is, of course, largely dependent on the general condition of our Dominion finance, and no action will be taken until the Government has had an opportunity of fully reviewing the prospects for the ensuing financial year,” stated the reply. “I may say, however, that I have discussed with the Minister of Finance the subject of your request, and although I regret that I am unable at present to indicate the Government’s intentions, you may be assured that the representations of your union will be given very careful and serious consideration.”

“The only thing we can do is to keep going at them,” said the chairman (Mr. W. “We have not finished with it by any means.”