Tauranga County's Reply To Farmers' Organisation

Bay of Plenty Times, Volume LXXVII, Issue 14916, 2 March 1949, Page 2

Tauranga County's Reply To Farmers' Organisation

Question Of Accumulation Of Reserves Financial Commitments To Be Borne Opposition in principle against the accumulation of reserves altogether for the reason' that even a slight increase in rates involved an addition to the fixed farm expenses which already were considered to be excessively burdensome, was voiced by Federated Farmers (Auckland Province) in a letter received at the monthly meeting of the Tanranga County Council. It was also considered that the existence of reserves in county finances would militate against the success of the Federated Farmers’ policy of total derating of farm lands and that increases in rates under land sales regulations automatically brought about a decrease in the valuations of farm properties. Referring to a letter the organisation had received from the council, it 'was stated that members of Federated Farmers (Auckland Province) considered that the actions of previous councils were not of concern to present ratepayers and could not be admitted to affect the position teday. The surcharge of O.ld in the rate, or an increase of 20 per cent, was considered by members to be excessive and a surcharge of 10 per cent, or 0.05 d in the circumstances would have met the situation. Breach Of Faith

The organisation poi'nted out that rate increases were contrary to the national policy of stabilisation and that from the standpoint of the members of the branch a breach oi faith had been committed by the Government, or the then Minister of Health and his experts, in leading the farmers to believe that no individual would be charged a rate in excess of 0.5 d and that any deficiency would be met by the Social Security Fund. The Council, after the federation’s letter had been read, decided to reply pointing out that as stated in its previous letter to the organisation i't had no intention of building large reserves in its Hospital Rate account and the policy over the last ■few years had been to utilise the reserve built up previously in order to avoid raising the Hospital Rate by an excessive amount in any one year. Referring to the statement that the creation of reserves would militate against Federated Farmers policy of total derating of farm lands, the council agreed to point out that it did not shape its policy in order to assist the adoption of the ideas of any section of the community, but endeavoured, within the limitations imposed by existing statutes,, to carry out its work to the best advantage of all sections of the community.

Replying to the statement by the branch that the actions of previous councils were not the concern of present ratepayers and could not be admitted to affect the position today, the council decided to point out that past policies which failed to create adequate reserves had resulted in the pobowing extra financial commitments having to be borne by present ratepayers - — (1) Interest and principal on plant loans, £3OOO a year. (2) Interest on bank overdraft, £IOOO a year.

(3) Extra cost of having to replace most of the countv plant on a dear market because of lack of reserves £llOO a year estimated for five years; making a total of £SIOO. Legacy From Past

This sum, the council pointed outrepresented a rate of “d in • the £ on the unimproved value and it considered that IT present ratepayers could not be concerned about such a legacy from the past, then they were unlikely to assist intelligently with future policy making. For this sum, seven to eight miles cf subsidised new metalling could have been carried out each year, and subsidised construction was a practical means of securing at least some derating where dialectical methods had signally failed in the past. The surchase Of 0.3 d the council explained was arrived at after careful examination of the position, and as the proper authority appdnted to fix the rate, it was quite satisfied with it.

Two points, it was considered, arose in connection with stabilisation which the council felt should he fully understood. Firstly, the Government through the Minister of Health did not mislead the farmers or any other section of the community who paid hospital rates, as to the id Hospital Rate. At the time the announcement was made, it was perfectly clear to all who examined the position that only a partial measure of stabilisation had been achieved. Secondly, allowances were made in the dairy price for farm costs, and all forms of rating increases had been taken into account when fixing the new prices from year to year.