PAYING RATES.

Auckland Star, Volume LXV, Issue 221, 18 September 1934, Page 3

PAYING RATES.

LURE OP THE REBATE. ONEHUN-GA EXPERIENCE. j ATTRACTIONS OF 5 PER CENT. A question of interest to ratepayers generally as well as to persons given to studying the correct methods of financing by a local body came before the Onolmnga Borough Council laet night when the town clerk, Mr. H. A. Yockney, submitted a statement showing the amount of rates collected each year at September 12, for the last seven years. The return showed the different results of a rebate of 2A per cent and one of 5 per cent. In the years 19:il-,12, 1033-34 and 193435 the council allowed a rebate of 2A per cent on all rates paid within 30 days of the date of demand. The rates received were respectively £9592, £9261 and £8821. When the rebate was 5 per cent for the other four years, the council received, respectively; £10,045, £14,914, £10.04.3 and £13.909. Mr. S. Vella said the figures wore illuminating. Ho thought the council should allow 5 per cent rebate in the future. Mr. G. E. Ilaydon said that on two occasions the council collected £10,000 each year on a rebate of 5 per cent. This year they received only slightly over half that amount on a rebate of 2J per cent. He argued that it would be a strong incentive to ratepayers to deny themselves in other ways to obtain the substantial relief of 5 per cent. Other Considerations. Another aspect was that some ratepayers who had not paid their rates to secure the rebate might find themselves unable to pay at all at the end of the six months allowed, by law, and that through no fault of their own. Certainly they would have the 10 per cent penalty added to their rates, but what would be the good of that if they could I not pay at all. The council would lose the lot. The arrears of rates already amounted to £17,000. Other councillors thought there wae considerable force in Mr. Eaydon's argument. Xo action was taken. Do Ratepayers Gain? Many ratepayers think that the rates are not duo for six months after they have been struck, and the demands issued, consequently they delay payment as long as possible. This, of course, acts detrimentally on local bodies' finances, and in order to meet tlio liabilities an overdraft has to be obtained from the bank, in some cases at (i per cent. To correct the wrong impression in the minds of the ratepayers as to when the rates are due, and to encourage them to pay up at once, a rebate: is allowed. Now the question is, how much are the ratepayers in pocket when they receive a rebate of 5 per cent? As they are saving, say 0 per cent in interest on overdraft, arc they also saving j) per cunt in rebate, or has the latter to be set oft" against the former? If so, the saving- would be the difference, between the two amounts, 1 per cent. The opinion is held by some that the ratepayers are saving 11 per cent. They add the two together instead of subtracting one from the other. Another view is that, as a 5 per cent rebate is only for live months it is equal to about 12 per cent per annum. Two more suggestions have cropped up in the discussion on the subject First, what interest would a man's rates earn in the bank in six months, if he elected to delay payment and to forfeit his rebate? Second, when a local body is framing its annual estimates does it add the amount of rebate to the total, in order to allow a rebate of that amount to those ratepayers who pay up, and if so, how much does it profit by the addition on the sum actually received from the ratepayers? One thing certain i 3 that no amount of rebate, will enable some ratepayers to find the money for their rates. Because of the numerous appeals from ratepayers for the suspension of the 10 per cent penalty many local authorities endeavour to extend the utmost consideration to those ratepayers who are up against it. I i