GROUND RENTS

Evening Post, Volume CXIII, Issue 110, 11 May 1932, Page 12

GROUND RENTS

TO AVOID HARDSHIP

LOCAL BODY PROTECTION

The new clause inserted in the. National Expenditure Adjustment Bill protecting ground rents from reduction below, 5 per cent, of the' unimproved value of the land was subjected, to jsome opposition before being approved by the House of Eepresentatives; yesterday- / ••-:•.■-

Mr. J. McCombs (Labour, Lyttelton)' said the clause involved a radical alteration and was in the direction of protecting landlords; possibly it might mean total relief of those renting.land. The- Prime Minister (the Eight Hon. G. W. Forbes) said, that few other than local bodies would be, effected by the amendment. -.

The; Minister, of Finance (the Hon. W. Downie .Stewart) 'explaining the reason for the amendment, said that the. Auckland Harbour-Board.had written.to the Government stating that unless a minimum reduction was fixed in connection with the very few ground rents it charged it would, bo involved in a sum of SlljOOO, and would have to raise its'harbonr and wharfage charges, as' it -had huge overseas loans on which it had to pay .interest. , Other bodies were in similar positions; they had fixed low''ground rentals' to encourage building, and would beplacediin a very unfair position unless the amendment were made.

The Prime . Minister stated further that country lands were not affected He defined ground rent as rent reserved when land was leased to a peison on condition that ho erected certain buildings on it. That form of lease was frequently adopted by local bodies. There was no need to mcoiporate the definition m the Bill, as the term was well understood.

Mr. J. A. Nash (Government, -Paimerston) urged the withdrawal of the clause, stating that they had the whole of the Dominion to consider, and that only one particular body had been instanced.

Mr. W. E. Barnard (Labour, Napier) suppoited this" plea. In Napier, he said, relief would be removed by the amendment of which certain'1 lease holders weie in great need. No gteat hardship would'be caused if.-the clause was deforred until next session. : Mr: Forbes, said that a great/deal of hardship would be caused if the amendment was not made.. Many ..other local bodies would be affected as well as one or two harbour boards. Fifty per cent, of the Government' valuation was not an extravagant rental. The Wellington City ■ Council arid "the Wellington Harbour Board had-been' in the forefront of the Representations made, and if the amendment.was-not agreed to their income would bo seriously affected. They had borrowed money on which they had to find considerable interest, and would be placed in a veiy embarrassing position. After further brief discussion, the clauso was agreed'to on %\\a v6iccs.