CUMULATIVE COSTS

Evening Post, Volume CXXIII, Issue 130, 3 June 1937, Page 8

CUMULATIVE COSTS

Ratepayers will have read with concern the statement of the Mayor to the Hataitai Municipal Electors' Association: "We are raising in rates this year a larger sum than has ever been raised in Wellington, but despite that we are not able to do any more' work than was done last year." Ratepayers may be divided into three classes: (I)'.' Those who want more work done for less rates (probably the biggest class); (2) those who want rates kept down even if. the'work is not done; (3) those who want work done and will agree to higher rating for that purpose. There are none, so far as we are aware, w,h.o welcome more rates for the same work or less. Yet that is what is coming. By collecting more revenue the council can do as much work as formerly, but if costs continue to rise it -will'soon,be.collecting niore and doing less. The Mayor explained that the increase in rates was due to the bigger hospital levy over which the council had no control, to an increase in interest owing to some of the loans having been raised in full, to an increase in the wages bill, and to the. increase in the cost of materials. Wages and materials accounted for about £35,000 of the increase.

The disturbing fact is that these rising costs are cumulative. Higher wages mean more 'expensive materials, increases in wages and materials together mean more costly works, more costly works involve either heavier rates or heavier capital costs in the operation'of municipal business ventures, and heavier rates again put up costs on private enterprisej <while heavier operating charges raise both production and living costs. Then we begin again at the same point.on the circle with higher costs of materials and demands for higher wages, A considerable part of the increase, apart from the hospital levy, is, beyond the control of the City Council. The council cannot regulate'wages or hours; That is in the province of the Government and the Arbitration Court. The council cannot shield the ratepayers from the effects of the Government action. All the council can do is to endeavour to keep costs within bounds by submitting all proposed works to a new test,of their value .in relation to the inevitable higher cost.