CANBERRA'S HANDICAP

Evening Post, Volume CV, Issue 127, 31 May 1928, Page 10

CANBERRA'S HANDICAP

LARGE INTEREST BILL WRITING DOWN PROPOSAL (From "The Post's1' Representative.) SYDNEY, 23rd May. Australians are not reeling too sure about their new capital, Canberra. The assertions a short time ago that Can-* berra was going through a period of slump appear to have been, well justified, even though they may have been a little, exaggerated. All the land is held under leasehold tenures, and - the. vali uations are unduly high, made high by the leaseholders themselves who willingly offered large sums because, no doubt, of an impression that Canberra would develop more rapidly than has been the oaso. Now the leaseholders are forfeiting their leases rather than comply with the building covenant. Because of high rents and the high cost of living, as well as the inconveniences of the place, Canberra is' unpopular with the Civil servants, and few people other than Civil, servants havo been attracted. The costs of establishing the city havo been enormous, and proposals are being fairly generally made for a wholesale writing down of values. Mr. A. E. Townsend, an accountant who has ovidently given a great deal of consideration to tho position of the Capital, says that tho1 Commission has had no chance of running the Capital on a businesslike basis. By th» end of this year, ho says, tho liability of the Commission will ' have reached. £9,000,000, on which interest will be payable at the rate of 4 per cent, per annum. The Commission will therefore havo about £450,000 to pay in interest upon its liability. Allowing that, .by tho end of the year there are 3000 adults in tho Capital, they woud havo to bo taxed at the rate of £150 a year, or £3 a week, to meet the debt. It was not tha fault of the Commission. The cost of the Cotter dam for the water supply, for instance, had been transferred to the Commission. That work was done fifteen years ago, and tho headworks alone cost £250,000. Over the fifteen years, during which the darn was unproductive, the. accumulated compound interest amounted to £500,000. The Commission was burdened with that big charge, and who was to pay it other than the Public servants? , Mr. T°wnsend said that the reduction of house and land values would havo to be made, under ordinary competitive economic conditions in any city.. It would havo to be done sooner or later in Canborra unless the Commission or the Government was prepared always to havo empty houses on its hands. Tho cost of the national Capital, over and above the present normal cost in a first-cla^s inland town should be borno by Australians generally and not by an insignificant minority of them. There wero precedents galore for writing down tho values of a city. Trading concern's had no hesitation in writing down values whenever tho'need arose. Tho Commonwealth Government wrote down the value of its steamers a few years ago, and also the value of tho War Service Homes. Tho writing off of fictitious values, made no difference to the real value of the assets. To illustrate his argument, Mr. Townsend said that shop sites in one of the sub-, urbs which brought £1000 to £1200' in 1924 were now rated on a value of £2500 to £3000. Householders in Can--berra were being asked to pay just about twice as much in rates as they would have to pay for similar houses in Melbourne. Many more Public servants in Melbourne have become agitated because of the threat of an early, transfer „to I Canberra. There is no housing accommodation in Canberra for the majority of them, and the Commission is con- | verting empty shops into temporary flats. Naturally, Civil servants do not like the idea of giving up comfortable homes' in Melbourne for these conditions. Another obstacle to thoir peace of mind is the fact that they must sell their homes in a very dull real estate market in Melbourne. .