Tilt EXCHANGE RATE.

Waikato Times, Volume 113, Issue 18930, 27 April 1933, Page 3

Tilt EXCHANGE RATE.

GOVERNMENT SALES TAX. EFFECT ON BOROUGH. HAMILTON RE-ACTION. “In January the banks announced that as a result of Government action they were reluctantly compelled to increase the rate of exchange on London from 10 per cent to 25 per cent and subsequently an Act was passed indemnifying the banks -against any loss to them which might arise as a result," stated the town clerk, Mr W. L. Waddell, in a report to the Borough Council last evening. “In February resolutions to impose a sales tax of 5 fier cent on certain goods imported on manufactured in the country and increasing the customs and excise duties on certain others were approved and the necessary Acts finally became law. "Under the combined effects of the increased exchange and the sales tax practically all supplies required by the electrical department have advanced by 20 per cent and there have been substantial Increases in the costs of gas cookers and appliances, gas and water pipes and fittings, cement, bitumen, and its emulsions, and a host of the other smaller materials required for our operations. "The cost of the increased exchange on Government remittances abroad, plus the cost of re-couping the possible losses of the banks, up--set all the plans previously made to balance the Budget and has also adversely influenced the position of those

looal bodies who have to find large sums In Australia and England for Interest, etc. Fortunately we have no loans domiciled abroad now and so we are not affected by the Increased exchange on our Interest payments, which will be reduced by The Local Authorities Interest Reduction and Loans Conversion Aot. “With the object of reducing the rate of Interest on all securities the Government recently announod a debt conversion scheme covering ordinary Government stocks and bonds, while the above Act was also passed. “Under the Local Authorities Act, from April 1, 1933, Interest is reduced by 20 per cent to a minimum of 4J per cent per annum. Spread over all its accounts, gas, water, electricity, and various separate rates, the amount of interest the council will have to And In a full year will be reduced by £6929, but you will suffer reductions on the earnings of sinking, reserve, renewal and Insurance funds of similar proportions—the full benefit, too, will not be felt this year. “It may be possible under the conversion proposals to increase the net benefits and all the council’s loans and sinking funds will require to be reviewed in the light of this Act as soon as the regulations under which conversions may be arranged have been gazetted."