Revenue-share rating preferred

Press, 2 August 1985, Page 1

Revenue-share rating preferred

Revenue-sharing is the rating system advocated by the chairman of the Local Government Commission, Mr Brian Elwood. Mr Elwood said yesterday that he believed revenuesharing, practised in Australia, was the most equitable system. The Labour Government had committed itself to revenue-sharing in its 1984 manifesto, he said. Revenue-sharing involves the Government’s redistributing a proportion of personal income tax. In Australia 2 per cent is handed over to local bodies. Mr Elwood said that he had strongly advocated revenue-sharing when he was president of the Municipal Association between 1976 and 1979. The review of rating systems generally was a matter for the Municipal Association, the Counties’ Association, and the Government to “sit down and talk about.”

Nothing had yet been done about the revenuesharing promised in the manifesto, he said. Mr Elwood said that he did not believe that a citizens’ tax was an equitable solution to levying rates. “A uniform tax would have the greatest impact on the least able to pay. The low-income people would be contributing more of their income,” he said. Asked if it were not fair that everyone pay the same for the same services, Mr Elwood said that that was yet another question. “The principle of userpays has been suggested. The costs of services must be identified before that can be done. It is the user-pays principle behind the electricity supply tariff.” Mr Elwood said he believed that the present fiveyearly revaluation of property values, on which rates were calculated, needed revision. “The five-year period was

introduced in less inflationary times. Now land values can be distorted considerably over five years. Under revenue-sharing a regular review of valuations would be needed,” he said. Revenue-sharing was designed to supplement land value rating. Mr Elwood said that rating systems had to be addressed in discussions of the reorganisation of local government in Christchurch. When he said last month that local councils had to look beyond differences over rates to a vision of a greater Christchurch, he did not mean that the rates questions should be ignored, he said yesterday. “Rates are an important issue but councils should be looking at the over-all impact rather than specifically at the effect on individual areas. In any reorganisation a transitional arrangement would be needed to ease in a standard rating base. The inevitable phasing-in needs to be negotiated.” Mr Elwood said the revolt by Merivale residents against rates levied by the Christchurch City Council should not be the dominant argument in the reorganisation discussions. “Other councils in Christchurch face the five-yearly revaluation this year or next. The same property value inflation effect will happen to their ratepayers also.” Mr Elwood will visit Christchurch later this month to talk to councillors.