B—l3

Loans to Local Authorities Loans to local authorities to finance district housing projects are available in terms of the Housing Act. For approved schemes advances carry an interest rate of 3 per cent, and the loans are repayable over reasonably long periods. The call on the funds for these purposes has eased in recent years, but is nevertheless fairly consistent. Housing for Timber-workers The special provisions for the erection of housing accommodation for timber workers introduced by Part 111 of the Finance Act (No. 2), 1946, expired on the Ist September, 1949. For the current year, therefore, applications were received over a period of only five months, and the erection of a further 87 was authorized during the time. This brought the total number of units authorized during the time the scheme was m operation to 738, covering applications from 120 sawmillers. The scheme was successful in achieving its object of providing more suitable accommodation for the men engaged in the industry, this in turn helping to increase the labour force to provide much-needed building-material. As indicated in past reports, the timber industry itself finances the scheme by a levy of 6d. per 100 ft. of sawn timber and by the payment by the sawmillers to whom the houses are supplied of a rental of 15s. or 17s. 6d. per week, depending upon the size of the house. Revenue Account and Balance-sheet The statement of revenue and expenditure is submitted in the usual tabulated form showing the results of the year's operations in the various sections of the Housing Account. A profit is again shown in respect of the sub-accounts where loans have been provided for local bodies and others, and a loss in the three rental subdivisions. It will be noted this year that a separate subdivision has been included to cover temporary housing, as the houses erected under this scheme are of an inferior standard of construction with an estimated life below that adopted for the main housing scheme. There has been a substantial increase of £16,815 in the loss under " Rented Properties (Old)," bringing the loss for the year to £21,930 under this heading, and an increase of £85,453 under " Rented Properties (New)," bringing the loss for the year to £195,545. This over-all result is not affected in any way by any adjustment or alteration in the basis of rents or charges during the year, the loss being due to rentals being insufficient to cover outgoings. As has been stated earlier in this report, some 3,378 new housing units were handed over to the Board for letting during the year, but it will be appreciated that the year's accounts do not reflect a full year's charges in respect of the bulk of these houses. In other words, the loss recorded for the year —£195,545 —is something less than the full loss to be expected when a full year's charges are provided for. It should be recorded here that the revenue Accounts and Balance-sheet of the Housing Account attached to this report are prepared on the basis that the loan capital of £50,850,952 in respect of completed houses bears interest at 1 per cent, on the first £5,000,000 and \\ per cent, on the balance, this being the rate of interest finally decided upon for moneys raised from the Reserve Bank in the earlier years of the housing scheme for the specific purposes of this account. However, since the Ist of April, 1942, all moneys raised by the Crown for national development purposes have been focused through the National Development Loans Account in the Public Accounts, and consequently loan-moneys have lost their identity in that account; and it would not be right to say that from the Ist of April, 1942, any moneys raised from any particular source, including the Reserve Bank, were for the specific purposes of the Housing Account or any other Governmental account. In actual fact, the Public Accounts show that no moneys were raised for housing or any other Public Work from the Reserve Bank or any other source at the Treasury Bill rate of interest in the years ended 31st of March, 1944, 1945, 1946, 1947, and 1949 , and the moneys provided for housing in those years were raised by the Treasury at normal market interest rates. The Housing Account has, however, been charged interest on all capital moneys at the low rates applicable for the initial borrowings from the Reserve Bank. It therefore follows that there has been and still is an additional annual deficiency

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