NOT A BIG SAVING

Waipa Post, Volume 46, Issue 3305, 21 March 1933, Page 4

NOT A BIG SAVING

LOANS CONVERSION AND INTEREST REDUCTION.

HOW WAIPA COUNTY IS AFFECTED. Surprise was expressed at Monday's meeting of the Waipa County Council when consideration was being given to economies.

The Hon. A. Young, M.P., Mr D. S. Reid, M.P., and Mr W. J. Broadfoot, M.P., each forwarded a copy of a Bill to reduce the rates of interest payable by local authorities and public bodies on loans raised by them and to make provision for the conversion of such loans.

The clerk presented a summary showing how each convertible loan would be affected. Some of tibiem would not be worth while going to the expense to convert, being either very small or bearing a rate of interest only a fraction above the rate obtainable by conversion. A saving of £l6B per annum could be effected by converting several of the existing loans. Three of them would account for £l3B 9s. By the legislation compulsorily reducing interest rates by 20 per cent the Council would make an annual saving of £832 lis 2d over the whole county. I At present the annual interest on the county debt is £6083 12s lid, and at the new rate the payment would be £5251 2s.

The present interest rate on loans ranges from 6 per cent down to 3 i per cent. Cr Livingstone: I am rather surprised that we are not going to make much of a saving. Some people have the idea that the county would benefit by a very substantial sum. It was mentioned that the small amount saved was really an indication of very sound management for many years, for loans were raised at a low rate. Some other counties had raised their needed loans at a high rate, and thus conversion to a uniform 4J per cent would effect a big economy.

Cr Onion said he had hoped there would be such a considerable saving as to make it possible to reduce the coming year's rates, but he now realised that each riding would gain only a very small sum. It was decided to forward the clerk's figures to the Prime Minister, to show him that the Council would not be benefited a very great deal—certainly much less than many other counties.