TAXATION FOR HOSPITALS

Dominion, Volume 32, Issue 256, 27 July 1939, Page 11

TAXATION FOR HOSPITALS

County Councils Feel Rate Is Too High

NEED FOR ATTENTION TO ROADS

County councils were unanimous in stating that too much money was being spent on hospitals and not enough on roads, said the president, Mr. C. J. Talbot, in his address to the biennial conference of the New Zealand Counties’ Association, which opened in Wellington yesterday. Mr. Talbot said the counties felt that there was little justification today for any increase in taxation on the land to meet the cost of the rapidly-increasing social services, specially since the prices paid for primary products were unstable and comparatively low.

The burning hot question of the day among all county councils was that of hospital rating, due to the steep ascent of hospital board financial requirements. From inquiries made from various hospital boards, the main causes of the Increase in hospital expenditure were found to be:—

(1) People were becoming more “hos-pital-minded,” as the bias against entering a public hospital was fast disappearing. Consequently extra hospital accommodation was required.

(2) Increase in staffs, with the resultant increase in wages and salaries. (3) Increase in cost of provisions and drugs. One hospital considered that provisions showed an increase of 50 per cent, during the last five years. Another considered that the cost of drugs had risen 20 per cent, during the last year. (4) Demand for better surgical and medical equipment. In a few years, most expensive plants became obsolete. (5) Renovations of some of the hospitals. During the depression of 9 or 10 years ago, much maintenance work was left in abeyance. Increase in Expenditure. The increase in hospital expenditure had its r, epercussions on the individual ratepayer, who at the moment had reached the limit of his taxable capacity. To show the marked increase in individual levy, he quoted the case of a Taranaki farmer who paid £3/16/11 as hospital rates in 1938, and £5/8/3 in 1939, an increase of £l/11/4, or 40 per cent, in one year. To the 80,000 farmers dotted all over the Dominion, the aggregate increase in hospital rates must have amounted to a considerable sum. During the last year the executive formulated the following policy to meet the situation: — (1) That the whole basis of hospital rating be reviewed as a result of the Social Security legislation. (2) That till the basis had been reviewed the Government be asked to increase its hospital subsidy to 2-1. If that increased subsidy had been in vogue in 1937, there would have been a decrease in county levies of about £185,000. About the middle of last March, a combined deputation from the Municipal Association and the Counties’ Association waited on the Minister of Health and placed the above policy before him. It was also pointed out to the Minister that the alarming increase in hospital levies had a serious repercussion on road and bridge finance. The Minister, in reply, said he could hold out little hope of the Government increasing its subsidy to £2 to £l. With regard to a suggestion that perhaps the whole of hospital finance could be obtained by increasing the Social Security to 1/2 or 1/3, the Minister replied that that might mean the abolition of hospital boards—a result that both he and his Government did not wish to see, as they believed local government to be the bulwark of democracy. Survey of Counties. The association’s policy regarding amalgamation was clear-cut. Six years ago conference decided to approve of amalgamation of local bodies, where it could be shown that substantial economies without loss of efficiency could be effected. As an aid toward investigating the sources whence economies could be effected, the conference, two years ago, asked for a Commission of Inquiry to make thorough investigations in each district. The speaker was convinced that before any systematic amalgamation planning was undertaken a thorough survey of the whole of the counties should be made. The association had also asked for a thorough investigation into the incidence of hospital rating, and he said he felt sure that the same tribunal could ably carry out the dual investigation with reduced expense to the country. Social Security Scheme. “I am fully convinced, from an unbiased point of view, that if the complete change-over to the Social Security system had been spread over four or five years, as advocated by this organization, the Government would have found fewer and less stiff financial hurdles to jump, and this spread would have made the change-over more palatable to the general public,” said Mr. Talbot. It must not be forgotten that the Social Security legislation was designed not as a means to give relief in taxation to anybody, but as a means of increasing taxation to give additional benefits to those able to participate. In his opinion it would not be fair to make the land responsible for any increases in hospital taxation due to the operation of Social Security; the Social Security tax should meet any additional burden which the scheme created. IMPROVEMENT IN REVENUE Complaint About Growth Of Hospital Levies During the last year or so there had been evidence of a general improvement in the receipt of rating revenue and, with the completion of the work of the various commissions under the mortgagors' and tenants’ relief Act, a 1 more stable condition should be expected, said the president of the New Zealand Institute of County Clerks, Mr. F. H. Hudson, in an address at the biennial conference of the institute in Wellington on Tuesday. In the process considerable amounts Jiad been written off in rates on Crown

securities and in certain instances the rates sustained would take a fairly long period to clear up, said Mr. Hudson.

“In our capacity as treasurers, I feel that I am correct in stating, there is one factor which gives rise to a real problem and that is the growth of hospital levies. The primary function of rural development in the way of improved access to the more remote parts of counties and the contending with the necessity for a higher standard of road surface in those areas subject to fast moving motor traffic, is to some extent retarded, as the hospital levies absorb an increasing proportion of rating revenue.

“It appears that the rural lands should be assisted in some way if they are to meet with modern methods the road standard necessary for the increasing density of motor traffic. I acknowledge that the fair and proper way to determine the method or measure of assistance is not easy to find. In another direction any movement or policy which tends to reduce the contributing revenue in the way of licence fees, only adds to the difficulty unless a suitable quid pro quo is provided.”

REQUEST FOR REVIEW OF SYSTEM

A remit that the whole basis of hospital rating he reviewed as a result of the proposed Social Securitiy legislation was carried by tlie New Zealand Counties’ Association at its biennial conference in Wellington yesterday.