ABUSE OF STATE RIGHTS.

Auckland Star, Volume LXVI, Issue 50, 28 February 1935, Page 6

ABUSE OF STATE RIGHTS.

In the Government's stubborn refusal to pay rates on properties mortgaged to it, the country has one of the worst instances of abuse of sovereign rights. Through its various Departments the State has become the biggest of all landlords. Mr. Coates has said that the Crown's liability for rates, if admitted, would take half a million a year from the Consolidated Fund, and lie declares that it would be unreasonable to expect the State to accept responsibility for such a sum. Why would it be unreasonable? Does Mr. Coates think the size of this liability sufficient excuse for repudiating it? Every other landlord, large or small, has to foot his bill. Why should the State be exempt 1 ? If it invests, money and enters into business in competition with others, it should abide by the same rules. There is nothing more grossly unjust than the action of a Government which shelters behind its rights and privileges when it begins to compete with private enterprise. It is no defence to plead that it is unable to pay. Others have to meet their liabilities or go out of business. Inability to pay is no excuse before the law. Nor is it an excuse on ethicai grounds. The Government could pay if it would. This is not a question of means. Like others, it may be hard-pressed for money at the present time, or it may have other uses for its money, but that does not lessen the immorality.

I Now it proposes to perpetuate this injustice, 'so far as existing mortgages are concerned, by handing it on to a National Mortgage Corporation. That is to say, the Corporation is to be given an advantage at the start which is denied to all other lenders. Mi;. Coates contends that no local body would go to any trouble to collect direct from the State mortgagors if it could collect direct from the State. There is 110 ground for the suggestion that the method of collecting would be any different from what it is to-day, but local bodies would be relieved of a burden which for some years has been a heavy drag upon their finances. Tens of thousands have been lost because of the attitude of the State, and this loss has to be spread over the remaining ratepayers. Therefore the load 011 their shoulders is heavier at the very time when they are least able to meet it. And in some areas the authorities have been nearly crippled financially because of their rating troubles. All are not affected to the same degree. The Government invested mostly in the newer districts, and by so doing forced on the development of those districts; then, when loans had been raised for services of all kinds, the revenue suddenly slumped. Are these authorities to be left to get out of this fix while the Government, as the landlord of numerous properties, stands by with folded arms and waits for finances to be restored and values to be raised again to a point where it can sell at a profit? It is surprising that there has not been a louder protest and a morn united demand for the removal of this wrong.