The Press SATURDAY, JUNE 25, 1960. M.E.D. Profit Raided To Keep Down Rates

Press, Volume XCIX, Issue 29240, 25 June 1960, Page 12

The Press SATURDAY, JUNE 25, 1960. M.E.D. Profit Raided To Keep Down Rates

The citizens of Christchurch generally are less likely to be perturbed by the small increase in City Council rates than by the raid, however small, on M.E.D. profits. It has long been clear that if the council was to take full advantage of National Roads Board subsidies to improve the city’s streets it would have to spend more itself. The ratepayers should consider it good business to spend £1 and get 30s worth of work done. The rate increase is quite small and, because of the revaluation of the city, its effects will vary widely, with some persons actually having to pay less and many having to pay little more. The council in these circumstances would have found it more expedient as well as more proper to take the bold course of adding another small fraction, say, one-eighth of a penny, to the rates instead of timidly dipping into electricity funds. Although the customers of the M.E.D. (including many who do not live in the city) will not suffer much directly from the small transfer they will resent it as a breach of principle. It has become accepted that the department should make profits no larger than necessary for stability and that what small profits do accumulate should be ploughed back into a business that makes continual demands for capital. It is one thing to vote occasional relatively small grants to worthy causes; a different thing to use £45,000 for relief of rates. It is even worse to do so without giving any justification or explanation. No doubt the subject was fully debated gin committee. Why not let the public into the secret?

Some sympathy may be felt for the City Council, oecause, like other local authorities, it has been denied the full relief considered necessary two years ago by the Stanton Commission on Local Government Finance. One of the major recommendations of the commissionreform of the road subsidy system—has been put into effect, with, paradoxically, a seeming increase in the burden on Christchurch ratepayers. The commission also recommended a small residential tax. Though the method of raising this levy was debatable, the principle was widely supported and the need for some such assistance was even more generally acknowledged; Yet the Government, possibly because of its own heavy demands on taxpayers, has taken no action. In the meantime the position of ratepayers has deteriorated further. In 1940 the average rate payment a head of population in New Zealand was £4 14s; by 1956 it was £8 9s, and in 1958 (the commission said) “it is certainly higher now". The average in Christchurch in the current year is about £ll 10s a head. That is the fact that leads city councillors to look round for other sources of revenue; and in Christchurch the M.E.D. is about all they can find. This, however, is no substitute for a comprehensive overhaul of the structure and financial resources of local government. A new investigation, by a Parliamentary committee, is now in progress. Is it too much to hope that the committee will be more successful than its many predecessors in evolving a rational plan that will be put into effect?