LOANS TO LOCAL BODIES ACT.

Wairarapa Age, Volume XXX, Issue 8869, 1 November 1907, Page 5

LOANS TO LOCAL BODIES ACT.

AN AMENDING BILL. By Telegraph—Press Association. WELLINGTON, Thursday. When the House of Representatives met, this evening, the Premier brought down his long-promised Bill to amend the Loans to Local Bodies Act. The Premier moved the second reading of the Loans to. Local Bodies Act Amendment Bill, which provides for a reduction in the rate of interest on all loans under Part 2 of the principal Act, as follows:—4i per cent, for 26 years, 4 per cent, for 32 years, 3£ per cent, for 41 years.- A local body may choose under which rate it will borrow. Mr W. Herries said the Bill mere- '' ly brought back the rate of interest to what it was s'.x years ago. Mr J. Stevens urged that borrowing powers in the case of several local bodies should be varied so that particular requirements could be met. Mr James Allen thought a further reduction should be *made, as if the •local bodies borrowed more for their own requirements there would be fuwer demands made on th°. Government for grants to local bodies. Mr F. M. B. Fisher stated that the,total indebtedness of local bodies at the endof March, 1905, the latest date for which statistics were available, was £11,302,575. The interest. per annum, on that amount was £515,188, and sinking fund to date j £995,970. He urged that local bodies sinking funds should be in- | vested in Government debentures. I Mr J. A. Hanan considered it was I time the Government devised some i comprehensive scheme so as to make j satisfactory arrangement in regard | to grants to loe«il ' bodies, in order that those who fully rated themselves should "derive benefit, so that encouragement might be given to those bodies who did not collect sufficient rates. Mr W. F. Massey (Leader of the Opposition) said that up to a few years ago it was the custom for Parliament to make it compulsory for a siuking'fund to be- instituted, and he regretted that Parliament had not ad-: hered to that custqm. He was a sti'ong believer in sinking funds, and could wish to see such applied to the dominion itself; but there' were difficulties in the way. He congratulated the Premier on introducing the measure, and he agreed with Mr Fisher in regard to investing sinking funds in debentures. He considered the Commissioners were the best- authorities as to how the sinking funds should j be invested. Mr A. W. Hogg said that wonderful benefit would be conferred on a most deserving class of settlers if, in" connection with the Bill, a provision could be inserted requiring, that special rates should be levied on the unimproved value in, two out of , three counties. In his electorate rates for repayment of loans were I levied on the capital value and the result was that while absentees and speculators who did nothing to improve their properties had their rates reduced,' the farmers who resided on., their hoxestead and assisted by the j i families made substantial improve- 1 | merits were ra?k rated, I The Premier said it iiad not been owing to a..y pressure that the" Government had introduced this legislation, but the financial institutions of the dominion were generally prosperous, and as the country's finances were in a strong position the reduction had been made. He pointed out that longdate loans were being authorised at less rates*Jthan the counties were paying for their own loans. He was quite prepared to give Mr Fisher's*, suggestion every consideration. The second reading was agreed to.