HOSPITAL FINANCE.

Star (Christchurch), Issue 19986, 29 June 1920, Page 8

HOSPITAL FINANCE.

BORROWING FOR CAPITAL EXPENDITURE.

Interviewed by a ‘'Star' 1 ’ reporter yesterday, the Hon G. W. Russell, cxMinister of Hospitals, made the following statement:— “ I observe that the Waimairi County Council has passed a resolution in favour of hospital boards borrowing for capital expenditure, and suggested legislation to this end, also that some of the borough councils have passed resolutions in support. As a matter of fact, Section 57 of the Hospitals Act, IDOy, gives full power to boards to borrow for capital expenditure, and to mortgage their properties as security. This matter came prominently under my notice shortly after assuming office in 1915. It was felt to be absolutely necessary to secure the continued expansion of the hospitals of the Dominion, and at the same time to make the levies as light ns possible on the ratepayers and ease the Dominion finance during the war period. All three things were secured. Hospital boards desiring to erect new hospitals or extend existing ones were in every case recommended to apply to the Public Trust Office (ol which I was Minister in Charge during the absences on Imperial of Sir Joseph Ward), for the loans required, and these were granted in practically all cases. The interest charge was treated as maintenance, and consequently secured subsidy. The recommendation in each case was that the loan should be for not less than twenty years, in some cases thirty, with an annual sinking fund payment. The Government siibsidy of pound "for pound was payable annually. Thus a hospital board could borrow £20,000 for •twenty years, and the annual capital charge would be £SOO per year from the ratepayers and £SOO as subsidy from the Department. The, interest, as stated, would be payable as maintefiance, and would draw ordinary rates of subsidy. Under the method which prevailed previously, hospital boards were expected to collect their capital expenditure and draw subsidies within two or throe years. The advantage of lengthened loans on the State advances principle will be apparent. ‘'Mitli regard to the maintenance subsidies, I recognised their inequality, and year after year, without success, endeavoured to adjust them so that the disparity under which the Canterbury Board suffered would bo removed. On retiring from office I left for my successor the draft of a new and complete system lor maintenance subsidies which, if given effect to, will raise the standard of Canterbury to that of Auckland and remove the injustice under which the Canterbury Board and many other boards have laboured for several years past. I presume it will come up for consideration during the present session.’ ’