DEBTS OF LOCAL BODIES

Waipa Post, Volume 32, Issue 1777, 1 July 1926, Page 5

DEBTS OF LOCAL BODIES

aiAnwaous increase in five YEARS.

AN INTERESTING REVIEW.

In its first issue of the "Local Authorities Handbook," the New Zealand Census and Statistics Office has compiled in admirable form a mass of

useful information for all interested in the work of (local bodies. Among ~fc*<^ ne inan y interesting items, the most ■interesting of all is probably the loan jßnd,ebtedness of local bodies which is for the period of 1880-1925. NeAv Zealand local bodies started the year 1881 with a total gross indebtedness of slightly over £3,000,000. By 1900 this amount had gradually crept up to just over £8,000,000. During the next ten years the total reached nearly £18,000,000, which again increased to over £30,000,000 in 1920, 'and £54,-' 000,000 in 1925. After deducting sinking funds the net debt during the 45 years under review advanced from three millions to over forty-seven millions. Thi s inr crease may appear startling to many. 1 but can only be judged by an adequate comparison with the progress made during this period of the Dominion's history. ! By far the largest portion of the amount was. of course, borrowed by boroughs* the total of which in 1925 stood at practically £23,500,000. HarTxmr boards with £9,600,000 come next while counties borrowed £2,300,000 in round figures. Of considerable interest, and more in keeping with the general progress made, is the increase which has taken place in tie gross debt and annual charge per bead of population. While in 1920 the gross debt per head was ¥' £lO 4s Id, "with a loan charge of lis 4d per head, the debt had advanced to £39 3s 2d per head in 1925 with a -loan charge of £2 'Bs 3d. 'ln other words, every man, woman and child in the Dominion is responsible for a loan charge of £2 'Bs 3d towards providing interest and sinking fund on local body loans. One of the most remarkable features of local ( body indebtedness is the phenomenal increase which has taken place during the last five years—a period generally looked upon as one of depression. The loans raised during the 1920-1925 period amounted to over . twenty-three million pounds, or as -much as the whole of the loans raised * in the thirty-three years between 1880-1913 Although the indebtedness has grown at a tremendous rate, the fact must not be overlooked that the assets of local authorities have also increased correspondingly during the some period. While the net debt in the last ten years has increased from £21,900,000 to £47,250,000 (an increase of lib T>er cent.) the assets have increased from £26,000,W0in 1915 to £57,000,0000 in 1925, representing an advance of 119 per cent. . To show the extent to which local bodies competed on the local money market, it is only necessary to point out that £29,400,000 were borrowed in New Zealand compared with £16,300,000 ! borrowed abroad. The average rate of interest has gradually advanced from 4:57 per cent, in 1915 to 5.24 per cent, in 1925. Another interesting feature in local body ' finance is the increase which ha 9 taken place in the rates collected by local governing bodies during the last twenty years. The total revenue ' from rates and other taxes in 190 b was £1.258,125 or £1 7s 40. per head of population. By 1925 this had increased to £5,013,132, or £3 16 s 9d per head of population. It will beseen that the figures per head for 1925 are just on two and a half times as great as they were twenty years ago. It is no doubt owing to these resultg that the Government found it advisable to bring down some legislation to place a check on and keep a better supervision over future local body loons.