“A HEFTY PROBLEM.”

Star (Christchurch), Volume XLIV, Issue 197, 20 August 1931, Page 9

“A HEFTY PROBLEM.”

Local Body Finance in New , Zealand.

MUST BE REVIEWED. (Special to the “ Star.”) WELLINGTON, August 20. “ The position of local body finance in New Zealand is becoming a very serious problem of its own, and it will undoubtedly have to be reviewed,” said Mr Forbes this afternoon, when replying to a deputation of members and others, representing local bodies. The deputation asked for the passing of legislation to place the Crown in the same position as a private mortgagee concerning the liability for the collection of rates for the payment of interest on special loans, and also general rates. A statement was made that local bodies were in a real difficulty because of the action of the State Advances Department in refusing to recognise rates which had accumulated against property, and the contention was advanced that unless the law was amended a chaotic condition would arise, and there would be a complete breakdown of some local bodies. If local bodies were unable to collect their rates, and the Crown, as mortgagee, refused to accept liability, the question of default would arise, as there would be no funds for the payment of interest on State advances loans, and it would be a case of “ putting the receiver in.” Replying, Mr Forbes said he recognised the position regarding special rates. Previously the Government had set aside special funds to meet rates on the areas of necessitous Crown settlers, and that showed a recognition of the obligation. The position of local body finance had become a heftv problem, and the whole matter would have to be thoroughly gone into. “ This question of finding interest on these loans,” he added, “ must be causing a great deal of anxiety to those concerned, and I will be pleased to go into the matters you raised to see what can be done.” The matter of local body finance, he said, was so pressing that it would have to be investigated as a problem in itself, and inquirv into it could not be postponed much longer.