SYSTEMS OF RATING

Evening Post, Volume CXII, Issue 131, 30 November 1926, Page 10

SYSTEMS OF RATING

"A CHANGE MUST BE MADE"

MR. O'REGAN REPLIES TO COUNCILLOR LUCKIE

Tho statement made by Councillor Tjuckie dn Saturday's issue of "The Post," wherein ho condemned the system of rating on the unimproved value and advocated a reversion to the system of rating on the annual value, has .drawn, a prompt rejoinder from Mr. P. ?. O'Began, who writes as follows: — ''Councillor Luckie has once again inadvertently shown how strong is tho case for rating on the unimproved value of land, inasmuch as he had proved the impossibility of establishing a case against it. It is interesting to have his admission that the system is suitable for country property, because as often as we seek to apply the principle thero,' we are told that it is eminently suitable for town property, but ruinous in its effect on rural land. Such was the contention, for example, of Councillor Luckie's friends in Pahautanui, Paekakariki, and elsewhere when a poll was taken in the Hutt County a few months ago, and Councillor Luckie will probably be candid enough to admit that as a ratepayer of the Hutt County he opposed us. My reply is that the system ■is equally applicable and equally just in either case at any time and everywhere. To say that country land derives its value entirely from its inherent richness is palpably absurd, and can be urged only by a critic who ignores the plainest facts. Everybody knows that proximity to a railway or highway, to a centre of population, or to a harbour is a most important factor in the value of all land. Such is the fact respecting country land, as well as urban property, but it is most strikingly exemplified by the latter. Adjoining tho Dominion Farmers' Institute in this city, and within a stone'sthrow of Councillor Luckie's own office, is a piece of land which a hound could cover in a couple of bounds. Tot it was sold a few weeks back for £10,000, though entirely destitute of improvements! At the present time that section pays rates on the unimpioVed value aggregating 4d in the £. we hope in a few weeks' time to obtain the sanction of the ratepayers to our proposal to increase that rate to 5.7 din the £ by concentrating the special rates of tho city on the unimproved value as well as the general rate. Thereafter the new owner may build a seven-story pile of bricks on it if he likes, and we say that his rates should remain just what they would be if the section remained idle, as it is now. THE PROPOSAL IN" A NUTSHELL. ''Councillor Luekie and his friends ■want to achieve quite tho opposite. Here is tho proposal in v nutshell: The capital value of all the rateable property in the city is £33,057,030, of which the value of improvements' is £17,873,531, leaving- the .unimproved value at £15,173,499. The annual rate revenue, taking last year's figures, is £355,942, of which £248,561 is derived from the unimproved value, and £107,----381 from the annual value. Councillor Luekie desires to spread all the rates over the capital value or £33,057,030. I quite agrea with him that in such event a lighter rate would produce the same amount of revenue, and even a greater revenue, but that is by no means the whole of the story. Councillor Luckie's proposal means that three-fourths of the ratepayers will find th.eir rates increased, and I dare to say that the one-fourth who will be relievecTof their comparatively triflying obligation comprise the richest and least useful people in the city. Seeing that .Wellington has experienced for 25 years » , partial application of. rational taxation, it is unthinkable that the ratepayers will agree to increase their burdens in the interests of a few persons Ttfho regard it as quite legitimate to get rich by blockading the people* land. At any rate Councillor Luckie, if he proceeds with his daring attack on the rights of the people, .may expect Jo hear more of the matter." .... SUBSTANTIAL TAXATION. "It is refreshing to learn that there Sire some points on which Councillor jjuckie and I are in complete accord. I agree that certain costly and beautiful buildings pay less under the system of rating on the unimproved value than .they would under either of the other (Systems authorised by law, but it is not true to say, as my opponent does, that ■'Mr. O'Regan has admitted that the larger premises are escaping their due share of taxation under the present system. . . ." I admit that such buildings as the new Huddart-Parker buildings, the Dominion Farmers' Institute, and those now in course of erection for the A.M.P. Society and the National Bank of N.Z., are benefited by rating on the unimproved value, but I'have never said that they are escaping their proper share of rates. All gueh buildings occupy valuable sites, and hence the sites will always pay substantial taxation to the loQal authority. That they should benefit by a IHrstem which exempts all improvements from taxation will strike everybody as pre-eminently just and fair who realises that there is a fundamental difference between capital applied merely in locking up land and that which is applied in utilising it; In the one case yvo have an example of the abuse of [capital; in the other we see capital applied to its only proper function—the eo-opeTation with labour ia the production of wealth. Tho more buildings jthere are erected and the moro costly nnd beautiful they are tho better for everybody, including tho people to Vhom they give employment, first in jfeheir erection, and afterwards in their maintenance and use. In the meantime i would point out that Councillor Jjuckie is taking daring liberties with accuracy when he talks about 'the wealthy man with a £5000 dwelling on .his section who pays no more than the working man living next door in a four or five-roomed cottage.' In practice it never happens that a working man's cottage is in immediate proximity to a costly residence, and Councillor liuekie is hereby invited to point out one such case in this city. " "The substantial question for each ratepayer, however, is how tho proposed change would affect him, and Councillor Luckie may readily bring this fact homo to every ratepayer by a simple arithmetical calculation. Anyhow, I hereby challenge him to disprovo my submission that his proposal means that 75 per cent, of their ratepayers will have their rates increased. "I agree that tho present system is unsatisfactory, and that a change is both desirable and inevitable. As I have previously explained, when tho system of rating on the unimproved value was adopted in Wellington in [November, 1901, the system was not applicable to certain special rates, and hence the reason why, notwithstanding the adoption of the system then, we Still levy on the annual value—that is [to say, on improvements—for lighting. Water, and hospital and charitable aid rates. Tho law was amended in 1911, however, since which year all rates are struck on the unimproved value in disitricts wherein tho system was subsequently adopted. In those districts ■wherein the system had been adopted previously, however, a second poll is required to give effect to the Act of 1911, and accordingly such a poll will be taken in this city at an early date. Already, thanks to a few public-spirited ftnd enthusiastic workers, we have pro--..

cured nearly the required quota of signatures to the ratepayers' demand. We intend that 75 per cont. of tho ratepayers shall have their rates reduced still more, and that bare sections shall have their rates increased by almost 2d in the £. Wo mean that all the city's rates shall be lovied on the unimproved value; in other words, that £17,057,030 worth of improvement's shall b.e entirely exempted from local taxation. We look forward confidently to a sweeping victory, and Councillor Luckio may rest assured we are ready to stand up to him in his attempt to destroy what has already been won. "I repeat once again that the City Council has no jurisdiction whatever to interfere in this matter by doing anything to promote a poll, that it is one for the ratepayers alone to take the initiative, and that the council's duty is limited to taking a poll if and when the prescribed quota of ratepayers present their demand for a poll. Accordingly, I maintain that all expenditure incurred by the council to promote a poll is unauthorised by law. However, as_we have found it much easier to obtain signatures to our demand since Councillor Luckie enunciated his proposel, the illegal conduct of the council is not without its compensation. "I fully agree that a change must be made, but it must not be on the lines indicated by Councillor Luckie. Of course, I shall return to the subject, but in the meantime I conclude by appropriating one of tho City Corporation's placards as a message to the ratepayers: "Citizens! Protect Your Own Property!"