RATING PRINCIPLES

Dominion, Volume 21, Issue 186, 9 May 1928, Page 12

RATING PRINCIPLES

UNIMPROVED VALUE

PAYMENT FOR BENEFITS Dominion Special Service. Otaki, May 8. “Those who advocate the unimproved value system of rating claim'that it is an incentive to progress,” said the Valuer-General (Mr. T. Brook), when giving evidence at the opening of the Rating Commission to-day. “They have in view the imposition of a' rate that will either, force the land-, owner, to improve his land and increase its earning capacity,. <jr -will compel him to sell it to one who will improve it.” Mr. Brook said that he believed that, in many eases, the adoption of: the. system had. had results that were beneficial to the district concerned, and to the Dominion as a whole. On the other hand, it had the serious .defect of not providing for differentiation between properties that should be further improved or subdivided, and those that were already well equipped for the purposes for which they were best adopted. The services provided for the people by the General Government, and for the ratepapers by local authorities, might broadly be divided into two classes, he said: (a) Services that have a value which is not quantitatively measurable; and (b) services which confer on the individual a special benefit that is measurable. Many of the services provided by the General Government, were of the former class, and for those there was probably no better basis of payment than “ability to pay. This principle was widely . applied in the Dominion, as was instanced in the graduated income tax, and in the imposition of higher Customs duties on luxuries than on the necessaries of llf Jlany of the services provided by local authorities were of the second class, and in that category came water supply and sewerage. The benefit accruing to the properties should largely enter into the basis of payment for such services. • . ’ One writer on the subject, said Mr. Brook, had put the position very clearlv in the following words:—“lf the Government performs some special service for us there is no reason why the public at large should pay for it. To the extent that the community ,as a whole is interested iu the service, it is proper that it should contribute to the expense. If it is wholly a matter of commop interests, the community should pay all; if it is wholly a mater of individual benefit the individual should pay all; if.it is partly common and partly individual, the cost should be divided, and the individual should pay up to the amount of his measurable special benefit.” In conclusion, Mr. Brook stated that payment for special services according to benefits was what was known in England as “betterment,” and in America as “special assessments. The same idea was embodied in the classification of land for rating in river dis-, tries, and land drainage districts.