LOCAL TAXATION.

Evening Post, Volume LXIX, Issue LXIX, 8 March 1905, Page 6

LOCAL TAXATION.

♦ In tho scries of articles on local tnxntion by Mr. J. H. Schooling which appears in tho Windsor Maga/.me, nnd of which n summary appears in nnother column, tho wholo subject is t rented in an exceptionally interesting wny. Ho wn.\cs sarcastic over (lie heading "Sponding Authorities" in tho report of the recent Royal Commission on local taxation, und regards it as aptly descriptive of tho chief characteristic of muniupal bodies, These "spending authorities" havo now tho disposal of an annual rovonuo of £112,000,000, which is considerably largor than the revenue of tho United Kingdom for any your previous to tho Boer'Wur. Of tho total receipts of thoso bodies for the year 1900 01, ho finds .•that no less than 26.7 per cent, was borrowed monoy, and frequently tho loajis aio really iv aid of revenue. His remarks on I rum way flnanco or© especially severe, and aro well deserving of tho attention of tho citizens of Wellington just now. Alter arguing that in addition to ordinary wear and tear, specially liberal alluwatico must Iw mndo in the case of electrical undertakings for the clfoct of new inventions in rendering tho mont costly plant obsolete, he proceeds: "Tho total lifo of this electrical plant may perhaps bo gono in (cay) fifteen yeats — long beforo tho term of the sinking fund has expired. Whut follows? Another loan for a new fit-out, and another sinking Duiid, running concurrently with tho lirst Kinking fund, nnd necessitating a double charge upon the receipts of local spending authorities for tbft payment of loans plus interest; possibly to bo followed by yot a third sinking fund, when the second fit-out perishes, bofore the cost of the original plant has been paid for." While business men having their own money to deal with mnko tho necessary provision for depreciation ns a chargo upon revenue, the " spending authority " enn continue declaring profits and adding to tho rates. Mr. Schooling thereforo contonds thut many municipal undertakings, which do not appear to be worked at n. loss, should really bo classed with those that ore. In tho case of Corporation waterworks, the princely sum of HJ|d per £100 of capital is all that is allowed for depreciation nnd rcnowul of plant. In the enso of electrical installations tho allowance is slightly larger, though proportionately to the actual depreciation still more absurdly inadequate. "Ask an electrical ongineor what ho thinks of putting nsido for depreciation 3s 2£d per cent, of capital in respect of electric machinery which hns cost £12,510,000." Mr. Schooling's estimate is that for tho £193,274 annually allowed for depreciation in all these undertakings, sound finnnco would rcquiro £6,058,500 to bo set aside. Fivo por cenfc. therefore represents Mr. Schooling's oilowonco for depreciation, instead of one-sixth. Tho main tramways loan of this city oxpires in 1932, and it is for the electors to say whether its financing shall bo put in such a, position that tho city will then havo nn asset left lo represent tho valuo of tho loan, or whether tho schemo is to be kept going by the continuous expenditure of fresh capital nnd continuous additions to the rates.