TAXING POWER LIMIT

Evening Post, Volume CIV, Issue 70, 20 September 1927, Page 10

TAXING POWER LIMIT

LOCAL BODIES AND RATES

THURSDAY'S POLL

"I rogara the rejoction of the loan proposals on Thursday last as quite satisfactory, and I must express surprise that Councillor Somple, of all people, should take the opposite view, more especially as there is bo roason whatever why the works in question should bo deferred. I take the view that no local authority should raise a loan until and unless it has gone to the limit of its taxing power, and the Wellington City Council has not done so." ■ This is the view of Mr. P. J. o'Regan, who explained that Section 77 of the Municipal Corporations Act, 1920, provides that a municipal corporation may lovy a general rate of 2d in the & on the capital value of its rateable property, while Section 88 provides that in any district where rating on the unimproved value has been adopted, the rate shall be limited to the equivalent on 2d in the & on the capital value. The general rate in "Wellington is 2.7 din the & on the unimproved value, but if it were imposed to tho legal limit the revenue from that sourco would be increased by £115,000 per year. In other words, the rate revenue last year, using round figures, was £.406,000, but by increasing the goneral rate "to the legal limit, the revenue, even on the present valuation, would rise to £521,0(f0. Thus the city would obtain ample revenue to carry on all its works without borrowing a penny, and in the o<id wo would all bo much the better for it.

"My proposal will startlo many people, of course," snid Mr. O'Began, "but the more it s discussed, the more it will gather support, and accordingly I invite my fellow-ratepayers to consider it. Mrst, it is necessary to remember tha^ every loan must have a special rate to' secure repayment thereof and the interest. Thus every loan means an increase in the Tatea. How much better to increase tho general rate, and have no loan at all.

"Moreover, I am prepared to prove that if the change were made to coincide with the adoption of complete rating on the unimproved value next year, the great majority of the ratepayers would pay less than now. Last year, of the total rate revenue of £,406,000, £140,000 was derived from the annual value. Of course, part of that sum came from the unimproved value, but a simple arithmetical calculation will show that £77,000 of it came from improvements. Next year all that will havo to be levied on the unimproved value. Now, that means a great deal to improvers, that is to say to the great majority of the ratepayers, but if the rate on the unimproved value were increased, as I am suggesting, though the reduction consequent on the abolition of all rates on improvements would be less, there would still be a clear

gain for the majority. Such has {seen the case at WanganuL There the ratepayers turned down loan proposals also, and the City' Council took the courageous course of increasing the rates so as to increase the revenue of 1926, by £39,000 over that of the preceding year. The increased rate coincided with the adoption of the new system of rating, but still —so Mr. Hope Gibbons stated —60 per cent, of the ratepayers paid less than formerly. "What Wanganui did we can do, and accordingly I insist that there is no need whatever to raise any loan. LOWER IN WELLINGTON. "As a matter of fact, the general rate is considerably lower in "Wellington than in other centres —Christchurch, Gisborne, and Napier, for example. Kates are a public necessity— are just as necessary for civilised men as food or clothing, and when they are not levied on improvements, we have the ideal system for everybody except the mere speculator, who is an incubus to the community. Accordingly, I can only conclude that Councillor Semple | has not fully considered the question, and if his views are the views of the Labour Party—well, so much the worse for the party if it voices the views of obseurationists and reactionaries. "This talk about doing things for posterity is really ill-digested nonsense. Directly a loan has been authorised —before a shilling of it has been expended, mark you—the result is to innate the value of land. Thus the speculator will have the first "rakeoff," though that fact is carefully obscured, and reference is made only to the work that will be provided—for mere labourers! If we do our works out of revenue, however, 1 there will be |no inflation, nothing for the speculator, but more for the' worker and for everybody who should count in. the community. CRUSADE AGAINST MOTORS. "Moreover, this sustained rusade against motors and motorists i» amazing, but it is more amazing that motorists should take it all with little or no protest. Long ago, Mr. Eobert Lowe, who was Chancellor of the Exchequer in the first Gladstone Government (1868-74), said that 'taxes on locomotion are the very worst that can be devised,' and he was right. Nothing has done so much to make life pleasant for the people as the. motor. Yet it is being singled out for the most atrocious taxation. I say atrocious advisedly, because there is no need for it whatever. "Who will pay for the roads? The answer is quite simple. A good road, just 'like a railway or a tram line, enhances the value of property. If you doubt that, just read the land agents' advertisements in the daily Press, and you'll soon have all doubts settled. One of your correspondents, I see, demands a road betterment rate instead of increasing the raid on the motorists. But there is no need for that. All you need- do is to increase the general rate and the thing is done. There is" no need for further legislation, because, the Municipal Corporations Act —1 have quoted the very sections — gives all the power required.' LOCOMOTION AND TRANSPORT. "Finally, I would point out that all taxes on locomotion and transport, like all other taxation on the wealth of the people, comes back to the consumer— to the non-ratepayers and the men with families who pay rent. Councillor Sotnple, for instance, is in the coal delivery business. I appeal to him to say whether he is not compelled to pass his motor taxes on to his patrons. Of course he does, and so does any other tradesman who uses motor transport to deliver his wares. Here is my case in summarised form:— "1. The City Council can get all the revenue it requires by increasing the general rate in accordance with the i power conferred on it by law. "2. If it avoids this and chooses to raise a loan instead, a special rate must bo levied as .security for tho loan. Thus it is a question of a loan and incroased rates or of increased rates and no, loan. "3. A loan will inflate tho value of land, even before a penny of tho money is expended, and thus give tho speculator, who renders no useful service to tho community, tho initial 'rake-off.' An increased rate will provide the revenue and enable the mere speculator to take nothing from the community.

"4. Taxes on transport como back on tho public, but there is no need whatever to increase the raid on the pooplo in the guise of motor taxation, provided the general rato is. increased.

"5. If the goneral rate wore incrcasod, as I have indicated, the great majority of the ratepayers would still pay less than now, and the extra taxation on bare land would bo a veritable godsend for the people who are unable to find room to live in the community."