The Loans to Local Bodies.

had a feature the public should understand. In the Act of 1886 it was provided that the borrowing local bodies should pay the Government 5 per cent, for 26 years on advances, and at the end of the period the principal sum would be wiped out, and the Bill provided for a sinking fund, to be made by appropriation, but this appropriation had never been made. In 1892 Mr Ballance had and that this was bad finance, and he brought down a bill by which 1½ per cent of the interest on the loans should be set page 6 aside together with an additional half per cent from the land transfer assurance fund, for a sinking fund, so that in twenty-six years the outside creditor might be paid off. The fund had accumulated till in March last there was £64,400, and the present year's accretions would make a sinking fend of £85,000 against the Government loans to local bodies. But the Government law officers had discovered that this sinking fund could be appropriated, and appropriated it had been, though opposed by the Public Accounts Committee. There result would simply be that, as matters now stood, all the money so far advanced by the Government to local bodies would become in 26 years an addition to the public debt. Applause). The Auditor-General and the Public Accounts Committee said it was bad finance not to provide a sinking fund, and said he thought they ought to make provision where by the Colony would extinguish its debts at the same time the local bodies paid off their liabilities. (Applause). That was one thing that the Premier said should be left to posterity, but that was one of the points on which he differed from the Premier. (Applause). He would like to refer again to the Customs tarif with regard to the proposed