SUPPLEMENTARY REPORT

Evening Star, Issue 21099, 11 May 1932, Page 3

SUPPLEMENTARY REPORT

PREVIOUS RECOMMENDATIONS REVIEWED. Mr Lowin has also drawn up a sup-* plementary report, as follows: Tho amendments recently made in tho National Expenditure Adjustment Bill, as passed by the House of Representatives on Friday last, make it necessary to review some of the recommendations set out in my report on the estimates under date of April 18, and upon which the Finance Committee came to tentative decisions at its last meeting. REDUCTIONS IN RENT. One amendment to which I especially refer is in respect of the provisions covering tho standard reduction in rents. As originally drawn the provisions of the Bill in their applications to rents were hardly likely to affect tho council’s income from this source. For that reason I considered it unnecessary to provide for any such loss as an offset to tho saving the account would enjoy under the proposals regarding reduction in the interest on oyr internal loans. As amended the Bill certainly calls for somo consideration on this head, as it is clear that the new provisions will call for certain reon* a portion of our existing leases from date to the period ending in March, 1935. An approximate calculation places the figure at between £BOO and £~OO. \ EFFECT OF EXPENDITURE ADJUSTMENT BILL. Then, in respect of the reduction in interest. As stated in my report of last month, and working on the provisions of tho Bill as originally introduced, the saving to the city was placed at about £13,000. The recent amendments contain a provision that conceivably may more ’or less seriously interfere with that calculation. Sub-section 7 of section 43 roads as follows:—“If tho Minister of Finance is satisfied with respect to any person who has paid any stamp duty as aforesaid that the annual income of that person from all sources, whether in New Zealand of sewhero, does not exceed £IOO. exclusive of the amount of such stamp duty, ho may, without further appropriation than this section, refund to such person tho amount of such stamp duty. Where the amount refunded under this sub-section is in respect of interest derived from securities issued by any local authority, tho amount thereof shall be deducible from any moneys thereafter payable out of the Public Account to such local authority.” It is difficult, if not impossible, to evaluate just what effect that provision is likely to have on tho calculated amount, shown as £13,000, that would become available to the Budget for the current year as the result of the stamp duty on interest coupons. Apparently the Minister of Finance is vested with a certain amount of discretionary power, and much depends upon tho true construction of the clause and tho exercise of the Minister’s discretion. I have therefore thought it necessary to inform the committee that the reference to these matters as set out in my previous report must now bo read as modified by the recent amndments to tho Bill. ALTERNATIVE PROPOSALS. Wore it not that the committee may consider it of paramount importance at the present juncture to strain every effort to reduce the rate demand in consequence of the existing state of industry, the prudent course would be to disregard entirely the probable saving duo to the adjustment on loan interest for the present year, and make the adjustment when the actual result shall have been ascertained. That would mean making the general rate 2s Id, or only one half-penny below last year’s figure in lieu of the Is 10-Jd as suggested if we are to budget on the full calculated saving due to the reduction in interest. It would appear, therefore, that the alternatives open to the committee are:— 1. To adhere to its tentative decisions and impose tho rating on tho basis of my earlier report, or 2. Revise the rating basis by providing for somo increase in the basic rates to offset (for this year) either the whole or part of the budget' requirements previously proposed to be met by the saving in interest reduction. APPLICATION OF INTEREST SAVINGS. Here it is pertinent to remark that tho Bill as it stands at the time of writing prescribes that a _ rating authority shall apply tho saving effected in the interest reduction to a reduction of rates. That _ provision is mot by the recommendations set out in my previous report, and no difficulty could arise if speculation regarding the amount involved were not introduced into the consideration of the subject.