The Press WEDNESDAY, JULY 25, 1945. The Crown and Rates

Press, Volume LXXXI, Issue 24627, 25 July 1945, Page 6

The Press WEDNESDAY, JULY 25, 1945. The Crown and Rates

i Two local bodies, the Christchurch City Council and the Riccarton Borough Council, on Monday night turned to the old question of the Crown’s exemption from local rating. The Deputy-Mayor of Christchurch, Cr. Lyons, reported that the Crown during the year has acquired property of an unimproved value of £35,000. This appears to bring the total unimproved value of Crown property in the City to about £350 ; 000, all of which is exempt from rating—except as the Crown has agreed to pay rates on housing property while it is occupied and the rent is paid. Whether this agreement, within its unsatisfactory limits, is working smoothly appears to be doubtful, since the Riccarton Borough Council’s quarrel with the Internal Marketing Department has arisen over the rating of house property connected with the department’s dehydration factory. The borough may and the council will go further; and it is to be hoped that the agitation will not be dropped until redress is assured, on all points. The general exemption of Crown offices, trading establishments, and so on is one. The limited liability accepted for Crown housing properties is a second. The exemption of areas taken up for land development schemes and native lands schemes is a third, of special importance to rural bodies. The Crown’s refusal to pay the rates or apportioned rates on leased properties is a fourth. There is a stock answer to the protest of local authorities: that if the Crown paid these rates and relieved the ratepayer, it would merely have to recover them from him again in the form of taxes. The stock answer is quite unfair. It assumes an ultimate identity between taxpayer and ratepayer, which is in'practice fictitious. Taxes are levied in one graded incidence; rates, in another. The burden of the Crown’s exemption on the ratepayers necessarily varies from area to area, in accordance with the nature and extent of the Crown’s activity. The burden which the Crown would transfer to the taxpayers by paying the rates would be otherwise and equitably spread. Five years ago, When the Minister of Finance was told that the Crown’s exemption in Wellington cost the Wellington City Council a sixth of its general rate—the proportion must now be higher—he varied the stock answer by saying that, if Wellington were weary of the advantage of being the chief centre of State offices, “15 other “cities" would be glad to accept it, with all its handicaps' and that, if the State were to pay rates, then municipal property would have to pay land tax and municipal trading concerns income tax. Mr Nash appeared to think this prospect of taxation too appalling to be faced by the municipalities. But, as the Deputy-Mayor said on Monday night, it would pay them—or at least it would pay Christchurch —to close with the Government on the bargain. The further the State advances its enterprises, the more attractive the prospect becomes and, ft reasons of fiscal equity, the more desirable.