THE PRESS THURSDAY, JULY 4, 1985. Rate injustice goes too far

Press, 4 July 1985, Page 20

THE PRESS THURSDAY, JULY 4, 1985. Rate injustice goes too far

A supply of pure water, and the removal of rubbish and sewage, are essential for people who live in cities. In a sense, these things are priceless, for without them life in the city would be intolerable, and even impossible. Local authorities put a price on such things, and supply them. For Christchurch City residents, about 35 cents from each dollar paid in rates goes to pay for these essential services, more than half of it to the Christchurch Drainage Board. Local authorities provide a second tier of services which, while not crucial to survival, do much to make life easier and more comfortable. Among these are the maintenance of streets and street lighting, supervision of premises serving food, and protection from flooding. For these and similar services, Christchurch city residents . pay another 26 cents in each dollar of their rates.

All these services are enjoyed in roughly equal proportions by all households. Demand does not vary widely from suburb to suburb, or from year to year. How, then, can the Christchurch City Council, and other local authorities, justify doubling the amount they charge, from one year to the next, in selected portions of Christchurch? The council must argue that its rate is struck on the value of properties and that the value is fixed by a separate authority. It may add that people facing very large increases in their rate demands must have achieved a very large potential capital gain in the value of their properties. The increase in property values may be true, but is it relevant when the demands of these households on the city’s services are unchanged? Servicing established inner suburbs in the north-west of Christchurch probably costs rather less than providing services in many other areas. Against this, it may be argued that the maintenance of services to the whole city benefits all citizens, regardless of where they live. For example, a road in one area is important to people who live in all others. Because one indicator — property value — suggests that some people are better able than others to pay more for identical services, it does not follow that they should be required to pay more. When central Government is making a virtue of the principle that users should pay the cost of providing services, local authorities have even less excuse for imposing vastly different burdens on people for the same

service. If the Christchurch City Council persists in ignoring the claims of simple justice, its members, and the city’s more fortunate, subsidised ratepayers, might reflect on some of the consequences likely from rate increases of 100 per cent, and annual rate demands of $2OOO and more, on ordinary residential properties in one area of the city. One result is likely to be a ghetto of the very rich, created as ordinary people are forced to sell and move, or give up tenancies for which rents have been increased by rates. A wealthy ghetto is no more desirable than a ghetto of the very poor. Once the process begins, the momentum makes the problem worse. Many families who have chosen to live in modest housing in the inner suburbs do so because of the convenient location. They help to keep the inner city alive. They make far fewer demands on transport and reading than those who live further out. Opponents of motorways might reflect that severe rate increases compel ordinary people to flee to the city’s fringes. No sensible city dweller denies that the local authorities must have adequate revenue to maintain essential services; but the different prices being charged for the same services are moving too far apart. The City Council, like other authorities, needs to find a new basis for assessing at least a proportion of its rates each year. Some local authorities elsewhere have taken account of large changes in valuation by striking rates at slightly different levels for different suburbs. A better approach, that recognises, to an extent, the principle that the user should pay, would be to require a flat amount from all residential properties, sufficient to meet the cost of the essential services provided. A much smaller proportion of rate revenue would then have to be found from rates levied on the basis of property values. More valuable properties would still pay more, on the assumption — not necessarily valid — that people who occupy them can afford to pay more. The differences would be much less. The rating system cannot be changed instantly. The City Council should be considering now what relief it can contrive for next year, and it should be letting residents who are facing crippling rate demands know that their plight is recognised.