LOCAL BODIES AND LAND TAX.

Evening Star, Issue 18058, 28 August 1922, Page 4

LOCAL BODIES AND LAND TAX.

O.vb proposal of the Taxation Committee, which dues not scorn to have been noticed when its recommendations were first brought down, has caused a flutter among those harbor boards which depend on endowments for a main part of their revenue. Tho proposal will strengthen the conviction that the committee, formed of. business men and representatives of the country interests, has been more successful in pointing out the crippling effects on industry of excessive taxation than in making suggestions for its readjustment. Tho recommendation is that land owned and leased by local bodies should bo subject to land tax as if it was privately owned. Presumably this proposal was meant to apply to harbor boards, though tho contention has been urged that such boards are not technically local bodies. But its application to them would have such disturbing effects, without doing anything to lighten the load which makes a grievance of tho business community, that it would be impossible for them not to make the strongest protests against it. Tho endowments that are possessed by various harbor boards were reserved to them, and recognised by etatuls[ solely for the general benefit. If tho boards did not receive rents from these lands they would have no option except either

to increase their shipping dues or 'to obtain and exercise rating powers which are possessed now by a proportion of harbor boards less provided) with endowments than others. The_committeo’B idea would seem to havo been that if a now source of taxation could bo found at the expense of local bodies tho taxes that bear heavily on business men .and companies might ho eased to that extent 5 but a little thought should havo prevented that assumption. By whichever method of those open to them the harbor boards, for example, sought to make up their depleted revenue, tho cost would fall necessarily on the whole community. If tho municipal bodies which derive revenue from endowments had to pay land tax on them the loss-failing a revision of lease terms, which might not be very easily effected —could only be made up by additional rating, end the burden is tho same for the business ijian, when he pays taxation, whether ho pays it to the Government or pays it locally. Municipalities may have only less cause than harbor boards to object to this recommendation of the committee, but it is with its bearing on the latter bodies that wo desire for tho moment to deal.

Tho proposal really suggests that what was given to harbor authorities by statute for the public advantage should bo withdrawn, practically completely in some cases by another statute, not on the plea that endowments are a wrong thing to he possessed by harbor boards, but with) the view to a relief for present taxpayers, which it is quite plain would not result fi'om it. Tlie Otago Harbor Board, which has no rating powers, derives about £19,000 a year from its endowments. When this matter was discussed at tho meeting of the board on Friday Mr Loudon calculated that if it was required to pay land/tax, under the graduated scale, on these lands, .the. amount it would havo to part with would be £9,600 a year. What that would mean to a body which, far from being in the condition of unreasonable opulence, for which land tax on this highest scale was devised, has a difficulty every year in making ends) meet can bo imagined. It might seem unfair that harbor board' reserves should bo able to bo lot at a rout lower probably than that of other land, as a result of their freedom from taxation, hut tho low renis aro an inducement to business enterprise of value to tho-development of the whole province and country, and tho amount of local harbor board land's which is still unlet docs not suggest that they are offered too cheaply. Tho chairman of tho ■Wellington Harbor Board has reckoned that practically its entire annual revenue from endowments £ll,OOO out of £l2,ooo—would bo swallowed up by the requirement which has been suggested. Tho Government might as well take eleven-twelfths of its. endowments from it. A claim to share in the benefits of endowments might ho reasonably asserted by tho central power if it were willing to pay harbor boards for the wharfage and storage of Government (foods, which it insists'on enjoying free of any charge. Such payments, if they had bfecn made to the Otago Harbor Board last year, would have offset the amount which, by Mr Loudon’s computation, might have been charged for land tax, and left a balance of £2,000 to the board’s advantage. In those circumstances wo see small prospect of the Government surrendering any of its immunities. We_ think there is, little danger of the recoin-** mendation of the Taxation Committee being seriously considered by the powers in Wellington. It would bo too unjust to boards- dependent on their endowments, as compared with those which., having rating powers, would he untouched by the requirement. The risk is not one, however, which tho harbor boards care afford to ignore. They will do well to make their protests in good time, lest the Government should) bo tempted to ignore tho wisest suggestions of the Taxation Committee and adopt the most foolish of them. Municipal bodies also should have something to say about a recommendation which threatens them only less than harbor-boards to tho extent that they have ratine powers, by which encroachments on their revenue might be made good, though only by robbing Peter to pay Paul.